LOCAL AUTHORITIES ENABLING) BILL.

HC Deb 10 March 1939 vol 344 cc2519-99

Order for Second Reading read.

11.5 a.m.

Mr. Leach

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

May I begin, Mr. Speaker, by expressing the pleasure of the House and myself that you are back in the Chair this morning, and the hope that you have not unduly risked your health by coming this morning, and that you are strictly obeying doctor's orders.

The Bill to which I ask the House to give a Second Reading is a permissive Bill. If it becomes an Act of Parliament, no local authority will be under a legal obligation to put it into force. It is obvious that if the services asked for in the Bill are being successfully and efficiently performed in any city, the local authority will have difficulty in setting on foot trading enterprises of this sort. The Bill is the same in all particulars as one that was introduced on 4th March, 1938, by the hon. Member for Mansfield (Mr. C. Brown), and, therefore, its terms are probably familiar to most hon. Members.

Subject to plentiful safeguards, the Bill extends the powers of local authorities to carry on certain new businesses. These include savings banks, the sale of milk and cream, the sale of coal, brickmaking, bread shops and bakeries, and the treatment of all manner of waste products. As to the safeguards, they ought to be sufficient to satisfy the most severe and most suspicious critic. For instance, Clause 12 empowers the Minister to order the discontinuance of any of these businesses in the event of a continued financial loss extending over three years. Such losses, it must be borne in mind, would be computed after interest and sinking fund charges had been met. No private business is under an obligation of that sort when it has a loss to declare. Clause 9 limits the borrowing powers to 5 per cent. of the total rateable value of the authority concerned. No local authority with a population of less than 150,000 may, under the Bill, start a savings bank, and no authority, or group of authorities, with a population of less than 50,000 will have these powers at all.

Under Clause 3, objectors to any of the enterprises shall be heard and in Subsections (2) and (3), it will be seen that 20 rate-paying objectors are given power to make things exceedingly awkward. Moreover, for all proposals, there must be a two-thirds majority on the council, and the fullest publicity in advance must be given to any proposals to set up businesses under the Bill. An authority, having established any such business, may find itself, after some eccentric election result, with a majority hostile to that business; and in those circumstances, Clause 8 empowers such a hostile majority to sell out if it so wishes. Stringent provisions are also made regarding proper book-keeping and auditing. We have indeed, in the Bill, striven hard and gone far to meet every objector, even of the most timorous kind.

I am one of those who believe that the municipality is much more important to the personal well-being of the citizen than is the State. Although Parliament created the municipal machine 100 years ago, it has never trusted it. In certain continental countries, local authorities are able to do anything that is not expressly forbidden by the law of the country, but with us it is exactly the other way round—the British municipality may not do anything without express legal powers granted to it by the House of Commons. This suspicious, no-confidence attitude is all the more strange by reason of the marvellous record of the municipalities and the outstanding fact that in the whole history of human advance, no agency, private or public, has done so much to promote the well-being and comfort of our people, and to succour them, as the municipality.

We have had municipal government now for 103 years. The first Local Government Act was passed in 1835 at the instigation of Lord John Russell—and he was a Whig of the Whigs. At that time, such local authorities as there were spent less than £10,000,000 a year; today the municipalities spend at least 40 times that sum. One hundred years ago, the local authorities conducted no trading enterprises whatever. It was the day of cholera, typhus and other plagues. The streets were narrow and filthy. Cock-fighting, rat-pits, and bare-knuckle pugilism were the national sports. In Manchester, the average age at which people died was 20, and in Liverpool 17; to-day the age is over 60, if the League of Nations' Statistical Handbook is to be trusted. One hundred years ago, the uncovered water courses of this country, privately managed, were incredibly polluted. The water supply was both impure and inadequate, and citizens had to carry it to their homes in buckets and other receptacles. There was no system of main drainage and no organised disposal of refuse. In Preston, the infantile mortality rate was 500 per 1,000 births. The average age to which cotton operatives lived was 18. Not one person in 20 could read or write. Education was a private trading business, conducted for profit. The roads—we should not call them roads to-day—were also a trading affair, conducted through toll bars.

Here I would make a point what I regard as important. My Bill is concerned principally with the extension of municipal trading rights. It is to be noted that throughout the past 100 years the municipalities have taken over many trades which then began to lose all elements of trading and became public services. That particularly applies to education, to roads, to sewage disposal, to libraries, to medical services and to midwifery, among other things. Water and electricity supplies are fast losing their commercial trading aspects and becoming public services. Some day we may decide to levy a general rate or tax to cover both and make them of universal application, with great possibilities of national advantage. Such a line of approach would cheapen administration and make for all-round enjoyment of benefits. I hold in my hand two pictures which were reproduced by the "Yorkshire Observer" a month ago and which illustrate vividly and accurately the amazing benefits accruing from the extension of municipal powers. They relate to what used to be a trading business and is now a vast municipal service. The first is a picture of school-children attending the Wellington Road School, Bradford, 60 years ago. The second is a picture of children attending that school to-day, and the difference is marvellous. The first picture registers unhappy faces, poor clothing and underfeeding. The second registers the exact opposite in every particular. The story told by these two pictures is not peculiar to Bradford. It is of nation-wide application. In transforming trading enterprises into public services the municipalities have revolutionised the social conditions of our country. They have divided the death rate by four; they have cut infant mortality by four; they have raised public morality; they have trebled the length of life of our people; they have abolished cholera, typhus and smallpox. Despite these magnificient results, Parliament has always hesitated to trust them.

Let us consider the methods of the municipalities in their conduct of trading enterprises. I am aware from reading former Debates on similar Bills that there is a fear, expressed from time to time by hon. Members opposite, that municipal trading will deprive respectable citizens, in a good many cases, of their livelihood. It is almost a groundless fear. The citizens mostly penalized are the shareholders of superseded companies who have to exchange their shares for municipal scrip at a lower, if fixed rate of interest. I do not feel that there is need to waste sympathy on them. Those actually engaged in the industry to be taken over, keep their jobs, usually under much improved conditions. Under the new municipal administration the profit incentive recedes and the public weal comes forward. A public authority never robs its clients; it never deals in adulterated goods; it never promotes bogus enterprises, nor issues false balance sheets. All its work is done in the full light of day. It is, in fact, the cleanest thing in British industrial life.

Many times in this House I have listened to high tributes paid from both sides to the sterling excellence of the great Civil Service of this country. I have warmly agreed with those tributes. But I would say from long knowledge and experience that the officers of corresponding degree in the municipal services are not one whit behind in skill, in probity, and in devotion to duty. As far as human fallibility allows, they are altogether admirable. Quite as much care is taken in their selection as in the selection of Civil Servants. Municipal enterprise, like private enterprise, has to depend for its success on human implements, and, as human perfection has not yet been reached, it will always be possible to discover flaws. Such cases have no bearing on my argument. Municipal achievements of the kind I have mentioned stand proof against minor criticisms. My Bill to-day asks for an extension of municipal powers and rights. Nothing is more certain than that the great municipalities are ready for these extensions. In their services are the nation's best engineers, architects, surveyors, lawyers, administrators, and workers of all branches. Every one of the new powers asked for is already possessed by any private citizen. He can start a bakehouse, a milk depot, a coal store or a savings bank any time he cares to do so. He may be a crook on the make, or just a person seeking profit. He may fail in his adventure and cause misery and distress to others. It is galling in the extreme to know that powers of this kind possessed by the individual are denied to the great public authorities. It is profoundly irritating to realise that from those fields the municipality is warned off by the law.

A century ago, when municipal government began, the industrial revolution was in full swing. The owners of industry were not then afraid of the new municipal machine. They welcomed it and made the fullest use of it. They wanted cheap water and gas, good roads, sewerage schemes, organised police, fire protection, educated employés, and other services, and they were not getting any of those things, because profits in each of them were failing. So they manned the local councils and proceeded to get what they needed. In doing so they built better than they knew. In process of time they awoke to the discovery that they had shown the nation a new way to do things. They had, without realising or indeed wishing it, raised the issue of private profit or public well-being, and we have much to thank them for.

Unfortunately, their descendants of to-day who own industry now have mostly ratted on their forbears. They are afraid of that which their ancestors created. In some measure they still contrive to man the local councils, but they now go there for quite a different purpose. On the election platform they tell the electors quite frankly that they do not believe in municipal enterprise, and then they request the right to go and administer it. Such charming frankness seems to disarm a good many electors, who give them the opportunity of doing that which they ask to do, and permission is blindly granted. The unfortunate ratepayer never realises that he has given to a municipal atheist the right to put sand in the wheels of a very splendid machine. In those circumstances it has always surprised me that municipal enterprise can succeed at all. I have heard members of a municipal tramway committee gleefully announcing a loss on the year's balance-sheet and suggesting that the time has therefore come to sell out, yet that loss was patently due to the fact that that undertaking catered for scattered out-districts at very low fares and that the department was selling its services under cost.

I would say, in conclusion, that I am very confident, despite the grave handicaps to which I have referred, that the future prosperity, health, and well-being of the people of this nation, dependent so largely as they are now on the operations of local government, will depend on them still more largely in the future. A survey of municipal achievements in the past 80 years will convince the people at large that we must foster, we must protect and we must develop municipal work on a scale not yet dreamed of.

11.28 a.m.

Major Milner

I beg to second the Motion.

I do not think a very long speech will be required from me after what has been so excellently said by my hon. Friend the Member for Central Bradford (Mr. Leach). Perhaps I look at this Bill from a rather different point of view from that of many people, but I assume that in this House, at any rate, the majority of the Members would agree that it is not necessary at this late stage to argue the general question as to municipalisation. That question has been settled for many years, and immense powers have been conferred on municipal authorities. In my view, all that this Bill seeks to do is, as a matter of convenience and saving of time and trouble, to give local authorities certain powers to extend that principle, already so well established, in certain specified directions and with the appropriate safeguards which are set out in the Bill. The principle of the Bill is extremely simple. The Bill says in Clause I, which is really the only operative Clause: It shall be lawful for the council of any county borough or any county district to establish and carry on any business which, in the case of that borough or district, is an authorised business within the meaning of this Act. All that that means is that it is permissible, subject to safeguards set out in the Bill, for a local authority, in its discretion and when the need is there, to establish and carry on the businesses set out in the Bill. My hon. Friend has pointed out that that is a right which every individual, every limited company, and, indeed, every body of persons in this country has, but it is a right which is denied to municipal authorities in this country, and the Bill would give them the freedom—we hear a great deal about freedom in these days—or the liberty, or the option, when they thought proper, to establish and carry on such businesses. There is no question of compulsion, no question of giving carte blanche. The matter is left, in the cases set out in the Bill, to the judgment of every democratically elected local authority. They have to go through certain formalities so as to ensure that full publicity is given to their proposals, and at, I think, two meetings they have to obtain a two-thirds majority in support of their proposals. Put in that simple way, what possible objection can there be to a matter which has to be decided democratically by the elected representatives of the people and which is a mere convenience, a mere appurtenance, a mere addition to the powers that the local authorities have to-day?

We all know to-day that if a local authority wants to establish one of the businesses, for example, set out in the Bill, it has to come to this House, to incur an expense of many thousands of pounds, and to take up the time of this House which the House can ill spare. These matters are very largely decided on political grounds, and I submit that it is reasonable to give these large local authorities—ànd the Bill, for the moment at any rate, is restricted to the large local authorities—the right to decide what is needed by their people in the restricted matters included within the Bill. Let me say at once that I would not advocate, nor do I think any of my hon. Friends would advocate, that in all cases wholesale municipalisation is desirable. I would myself, and I believe that any responsible local authority would, of necessity, apply a certain test before utilizing the powers sought to be conferred by this Bill. That test, which is a perfectly reasonable one, and one to which no hon. Member in any part of the House could take exception, would be whether the existing facilities are sufficient and whether they give the best service at the lowest price. If they do not, in connection with either milk, or bread, or coal, then there is a case for the use of the powers which this Bill seeks to confer. If those facilities are sufficient and give the best service at the lowest price, there will be no reasonable case for the application of this Bill. If that condition is not fulfilled a local authority should have the right to supply the needs of its inhabitants which are not being met by the existing facilities.

One might almost stop at this point because that is the simple case for the Bill. If the facilities existed, a responsible local authority would not need the powers, but if they did not, a local authority would be fully justified, and it would be doing its duty in supplying the needs that would otherwise be lacking. It always seems necessary in these Debates, however, and, I rather regret it, to say a little more. It always seems necessary to attempt some justification of our belief that in appropriate cases a municipal service is likely to give the best service. I use the term "service" advisedly, for in the event of this Bill becoming law any undertaking that is taken over under it will become a public service. In the great majority of cases a municipal service or undertaking is likely to give the best service to the people. There is no inducement to do otherwise, for there is not the inducement of profit. The profit motive is wholly eliminated, and in a municipal service the public expect to receive the best that it is possible to give. Not only that, but I believe that prices, all other things being equal, in a municipal service would always be less than those of private enterprise.

Strange to relate, the costs of a municipal service—and there is a good deal of prejudice of mind on the part of those who think the opposite—are usually lower. The reasons are obvious. The capital costs a great deal less to a municipality, for local authorities can borrow at almost half the rate at which ordinary trading undertakings can borrow. In addition, under the law local authorities are under an obligation to put a certain amount away to a sinking fund year by year, so that eventually the whole of the debt is discharged. Then the costs become still lower. An individual or a company is not under any obligation to take that step. The administration costs, too, are less, and again the reasons are fairly obvious. The administration costs of a local authority are spread over a common establishment. The work of the town clerk covers all the departments of the corporation and include in its purview all the public services, including any that would be commenced under this Bill. The chief officials of local authorities, who are as my hon. Friend said, some of the most capable individuals in their particular line in the country, are paid less than officials of private concerns with an equivalent turnover. In a company there is a board of directors who expect to be, and usually are, paid, but in the local authority there are councillors giving free service to the community.

I admit that municipalisation generally means some form of rationalisation or, in the last resort, a monopoly. If the market for milk, for instance, is supplied by competing units, as is frequently the case, each with its own plant and distributing system and its own heirarchy of personnel, it is obvious that more plant and more human effort are utilised than would be necessary if that market were served by one single municipal unit or system. In these days, when we hear so much about efficiency, that is a consideration which ought to be borne in mind by this House, and certainly by local authorities contemplating making use of the powers of this Bill. In private enterprise there is no scientific adjustment of supply to demand. There is obvious waste on every side. One method of avoiding that waste in the matters dealt with in the Bill would be to put them in charge of the local authority. That would have the additional advantage that any reduction in cost would be passed to the consumer. We hear a great deal of the rationalisation of industry, but we rarely see any advantage passed on to the consumer. The advantage usually goes to the shareholders or those making profits. In municipal services any reduction passes to the consumer either by a reduction of prices or a contribution to the rates.

I have no doubt that it will be suggested that municipal or local authority administration is less efficient. There is no ground whatever for any such assumption. It is due to mere prejudice, and no proof has ever been forthcoming of its truth. Officials of local authorities are known. They are surveyed and supervised, and fully controlled by elected representatives. Many of them are consumers, and there is no reason why such administration should not be at least efficient as that of a limited company supervised by a board of directors. It will, no doubt, be said by my hon. Friend the Member for West Middlesbrough (Mr. K. Griffith) that difficulties will be created for private traders. I should have thought more of the arguments of my hon. Friend and of his party in this matter, which they have put forward previously, if I had seen any action on their part directed to relieving private traders of the difficulties under which they suffer by the growth of multiple firms. That growth is much more dangerous to private traders than any extension of municipal service can be. If municipalisation of any particular service comes at once, there will be compensation. If it starts as a competitor it may not be possible to lay down compensation as a general principle, but there is no reason to expect in these circumstances any wholesale devastation among private traders. The process of absorption will be gradual. A municipality could, in proper cases pay out and compensate a private trader, and, in any case, the workers in the industry would be employed in the municipal instead of the private trade.

Mr. Kingsley Griffith

Where exactly in this Bill are the provisions about compensation?

Major Milner

My hon. Friend knows very well that in the case of an enabling Bill there is no obligation to set out either that or any other detailed principle. As the hon. Member for Central Leeds (Mr. Denman) is aware, many property owners are compensated by local authorities. So far as I am aware, there is nothing to prevent any local authority compensating a private trader; indeed, it is done repeatedly in connection with slum clearance work in my own city of Leeds.

Mr. Denman

Under statutory authority.

Major Milner

That may be. Let me say at once that doubtless this Bill does not provide for every possibility and contingency, as is frequently the case even with Bills introduced by a Government, and if the House were advised that any special provision were needed in that respect, I am sure we here should have no objection to introducing it. However that may be, the necessity for the Bill is surely clear. Little by little local authorities have had their powers extended, and surely as a matter of convenience on the one side and of justice on the other, there is a case for giving local authorities permissive powers to take over or to start businesses or undertakings such as I have indicated. To-day any group of capitalists can combine for any conceivable object, but when a group of local consumers wish to combine and supply themselves with commodities which are not already provided, or not supplied efficiently, or are not of the best quality, they find themselves under the necessity of seeking Parliamentary powers in every individual case.

Mr. Wakefield

Are not the co-operative societies bodies of consumers combined together for the mutual supply of goods?

Major Milner

Certainly, and I am greatly obliged to the hon. Member for reminding me. The co-operative societies, which have the approval certainly of the whole of this party—I do not know how many Members opposite are members of co-operative societies, but I am one—fulfil a very useful function, and where that function is performed efficiently and adequately, on some such test as I have attempted to apply, in my view no responsible local authority would seek to compete with a co-operative society. But there are many place which have no co-operative societies, and there are, perhaps, a few places where co-operative societies do not supply efficiently, or at the cheapest price, or of the best quality. There are places where, undoubtedly, that state of affairs exists, and I think I am expressing the co-operative view when I say that they would have no objection to the powers in this Bill being exercised in those places where at present the provision of commodities or services is not adequate.

To-day municipalities own vast undertakings. They have property, undertakings and services of the total value of more than £3,000,000,000. They own more than 1,000 waterworks, 300 gas undertakings, 200 electricity works, 174 tramway and bus undertakings, 150,000 miles of roads, thousands of schools, libraries, museums, art galleries, parks, markets, piers, cemeteries, race courses, corn exchanges, textile conditioning houses, oyster fisheries, and ship canals; they run concerts and restaurants; they make tar, paving stones and a hundred and one other things. And there is hardly a single instance, certainly in the matter of water, gas, electricity and transport undertakings, of any business which has once been taken over by a municipality ever being handed back to private enterprise. To-day many of our people lack the commodities set out in the Bill—milk, coal and bread, and I submit that where private enterprise has failed, municipal enterprise should have the right to step in and supply the deficiency. I have suggested certain tests. I have explained that I have reason to think that co-operative societies agree with those tests. It will be noted that the Motion for the Second Reading of the Bill has been moved by one Yorkshire Member and seconded by another Yorkshire Member, and in conclusion I would express the belief that what Yorkshire thought yesterday the rest of England will think to-day.

11.51 a.m.

Mr. Lewis

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 should like, first of all, speaking on behalf of my hon. Friends on this side of the House, to endorse what has been said by the hon. Member for Central Bradford (Mr. Leach). All of us, in all parts of the House, are exceedingly glad, Mr. Speaker, to see you back in that Chair, and we hope very much that it will be a long time before illness obliges you to be away again.

In moving this Amendment I wish at the outset to express my sympathy with the hon. Members who moved and seconded the proposal that the Bill should be read a Second time to-day. They have a very thankless task. Not only is it an exceedingly bad Bill, but it has a most unlucky history. I believe this is the tenth time that a Bill substantially the same as this, if not always in precisely the same terms, has been brought before the House. Seven of those Bills got as far as a Second Reading Debate, but in six of those cases the Bill was rejected by this House. The Bill was rejected in 1920, 1923, 1924, 1925, 1927 and again last year. On only one occasion has the Bill had a Second Reading, and that was, so far as supporters of it were concerned, perhaps the most melancholy occasion of all.

I should like to remind the House of what happened in 1930 when a Bill similar to this was given a Second Reading. At that time we had the somewhat doubtful benefit of a Labour Government. The Bill was moved by a member of the Labour party and he had the mortification of hearing his own colleague—"comrade", I believe, is the technical term—the then Minister of Health, now the right hon. Member for Wakefield (Mr. Greenwood) rise and say that in his opinion the subject was suitable only for a Government Bill and not for a Private Member's Bill. When, following its Second Reading, the Bill went to Committee upstairs, so many and so drastic were the Amendments upon the Order Paper that the promoters of it took fright and withdrew it altogether. That is the somewhat melancholy history of this Measure up to date. We shall see in due course what happens to the Bill to-day.

I suggest that there are five principal objections to the Bill, apart from such criticism as may be rightly directed to the details of it. I want to say a word or two on each of those five points and to tell the House what, in my opinion, they are. The objections are: First, there is no evidence whatever that local authorities as a whole want the Bill. Secondly, the Bill would put too great a burden on the members of local authorities. Thirdly, it would be unfair to private traders. Fourthly, it would be disastrous for the co-operative movement; and, fifthly, it would be more likely to increase than to diminish the burden of the rates. With regard to the first objection, it is very striking that neither the Mover nor the Seconder of the Second Reading should attempt to bring before us any evidence that the local authorities on behalf of whom they claim to speak want the Bill. The reason is that the societies which have the right to represent important groups of local authorities have never asked for the Bill and never wanted it. Without any further argument that should be an exceedingly good reason for rejecting the Bill.

My second objection was that the Bill would place too great a burden on the members of local authorities. Whatever our party differences may be, we are all proud of our general system of local administration. The hon. Member for Central Bradford paid a tribute to that system in his speech. We are undoubtedly very grateful to those public-spirited men and women of all parties and opinions who give their time to serving on the local authorities. It is common knowledge that there is increasing difficulty in getting candidates of the highest qualification to serve on those bodies. [Hon. Members: "Oh!".] I thought that was common knowledge. After all, we do not want those authorities to be composed entirely of people who have retired from their vocations. Some proportion of people in all walks of life and in their full vigour should be members of them, but. usually these are people with something else to do, and who, therefore, can give only a part of their time to their service upon the authorities. Local authorities are already burdened with many heavy duties, and this House should hesitate long before giving them a further series of complex and difficult duties. Every further such duty means further commitments for those who serve upon them, and makes it increasingly difficult to get the best type of representative.

My third objection is that the proposals are unfair towards the private traders. Every local authority that has the power to levy a rate is in the position of a sleeping partner in every enterprise within its bounds. It seems, on the face of it, exceedingly unfair that a local authority should use the power it possesses owing to the credit of the rates to enter into competition with some of its own ratepayers. The question is, what should be done? Are the people who pay rates to a local authority actually to see that authority entering into competition with them, using the strength gained from the credit of the rates? The hon. Member who seconded the Motion for the Second Reading laid stress upon that question and pointed out how advantageous it was to a local authority to borrow at favourable rates because of the security of the rates. That is the very point I am now putting to the House, and I ask whether a great element of unfairness would not come in if this Bill were allowed to pass. The Seconder, no doubt unwittingly, endeavoured to mislead the House on the question of compensation. There is no proposal in the Bill that any compensation should be paid, and there is no intention on the part of those who promote the Bill that compensation should be paid.

Now I come to the question of the Co-operative Movement. Hon. Members opposite were rather amused when I suggested that one objection to the Bill was that it would be disastrous to the Cooperative Movement. What commodities are the promoters of the Bill particularly anxious that municipalities should deal in? Let us look at what is done by the co-operative societies. I have not the absolutely latest figures with me, although I have no doubt that some hon. Members opposite can supply them. I think I can say without fear of contradiction that in the course of the year the co-operative societies of the country handle not far short of 2,000,000,000 gallons of milk and something considerably more than £20,000,000 worth of bread. A serious attack upon those two trades would prove absolutely crippling to the Co-operative Movement. If it is not seriously intended that the powers proposed should be used, what is the use of putting them into the Bill? Where is the right hon. Member for Hillsborough (Mr. Alexander)?

Mr. R. J. Taylor

Where is the Prime Minister?

Mr. Lewis

When a similar Bill was debated last year, the right hon. Member for Hillsborough was also prevented from being present—at any rate, if he was in the House he did not speak or vote upon the Amendment. The Bill aims directly at the principles of the Co-operative Movement, whose spokesman in this House, for reasons which no doubt appear good to him, does not trouble to put in an appearance. I am very sorry that he is not here. I should have liked to have heard what he had to say about the Bill from the co-operative point of view.

If the right hon. Gentleman is not able to give us his views, we can find out from some other sources what the people in the Co-operative Movement think about the Bill. Last year when a similar Bill was debated, the Parliamentary Secretary to the Ministry of Health quoted a pamphlet issued by the Co-operative Movement, Limited, and entitled "Municipalities and the Co-operative Movement." As his quotation appears to be very apt I will ask the House to allow me to repeat it. This is what it said: 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 scapping the vast organisation of the Movement, with the prospect of an era of experimentation for which municipalities have no machinery nor adaptability.

Mr. Leachrose——

Mr. Lewis

Would the hon. Gentleman allow me to finish the quotation? It goes on to say: 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.

Mr. Leach

May we now take it that the hon. Member is a warm and enthusiastic co-operator?

Mr. Lewis

I hope there is no doubt about that. It is true that I have had occasion to argue in this House that co-operative societies, like other trading societies, should pay a fair share of the common burden of taxation, but I have never said, either in this House or outside, that the co-operative movement is one which should be destroyed or even hampered. On the contrary, I believe that it has done and is doing very good work.

Mr. Leach

Are you a member?

Mr. Lewis

As to the attitude of the co-operative movement, I have a quotation which is more up-to-date than the last, and which is particularly authoritative. I would ask hon. Members opposite if they would be so kind as to give it their particular attention. The quotation is from an address by Mr. J. J. Worley, it being his presidential address to the Seventieth Co-operative Congress at Scarborough on 6th June last year. He said: The collectivist proposal for municipal trading in bread, milk, coal, and other articles was not socially desirable. A co-operative food supply, which was already in being for one-fourth of the nation's supplies in certain foodstuffs, was more practicable than municipalisation. In the regretted absence of the right hon. Gentleman the Member for Hillsborough, that would appear to me to be the most authoritative pronouncement of the opinion on the part of the co-operative movement with regard to this Bill that it is possible to obtain. I come now to the last general objection which I suggest, and that is that the Bill is more likely to increase than to diminish the burden of the rates. I submit that there is no reason whatever to suppose that the profits, if any, of the trading organisaions which it is suggested that municipalities should run, would be sufficient to make up for the loss of rateable value which by their competition they would destroy.

Mr. A. Jenkins

Do I understand that the hon. Member is suggesting that such competition would have the effect of destroying rateable value?

Mr. Lewis

If you drive a trader out of business, to that extent you destroy a certain amount of rateable value.

Mr. Jenkins

Is the hon. Member arguing that any competition on the part of a local authority would drive out of business everybody who happened to carry on business of that kind in the particular locality?

Mr. Lewis

No; I do not suppose it would drive out everybody; but obviously it would damage very seriously the people who are now carrying on the business in question, and would thereby reduce rateable value. I do not want to burden the House with figures, but any hon. Member who is interested can look at the statistics which are provided each year in the Annual Report of the Ministry of Health, and which show that, if you take the trading services of the municipalities all over the country as a whole, year after year, you always find that, after setting off the profits which may be made in some cases against the losses made in others, the total result over the whole country is a loss. I do not wish to spend much time on the details of the Bill, but, having suggested the general principles on which I think the Bill should be rejected, I would mention in particular two items. One is the proposal with regard to municipal banks. I would point out that in 1928 a committee on municipal savings banks investigated this proposal and reported against it, and there is, so far as I know, no other judgment by an impartial body on the subject. I do not think there is any case for extension of municipal savings banks. Traders have no need of them; they have access to what is, I think I may say, the finest banking system in the world. Small depositors have no need of them, for they have the Post Office Savings Bank and the trustee savings banks; and the municipalities themselves have no need of them, because they can already borrow money in the market at advantageous rates. I suggest that, particularly at a time like this, when interest rates are low, it would be impossible for any municipal bank to give to depositors the rates which are given by the Post Office Savings Bank and by trustee savings banks.

Mr. Poole

Is the hon. Member aware that many local authorities today are carrying hundreds of thousands of pounds of debt which is standing at seven and even eight per cent. interest?

Mr. Lewis

That is very likely, because that was the rate at the time when they borrowed it. The value of money goes up and down.

Mr. Poole

If they had had the provisions set out in this Bill, the money would have been available to them at a considerably lower rate of interest.

Mr. Lewis

I do not think there is any evidence of that at all. The other item that I wish to mention is the proposal with regard to bricks. I should have thought everyone knew that at the present time the trouble of the brick trade is not that bricks are not available, but that there are redundant brickfields, and I can imagine nothing more crazy than to suggest at the present time that more people should be encouraged to go and put up fresh brickfields. It seems to me that the fact that that proposal is in the Bill shows how completely divorced the supporters of the Measure are from any appreciation of the trading and industrial position in this country. I ask the House to reject the Bill because there is no evidence that local authorities want it, because traders are opposed to it, because it will be ruinous for the co-operative movement, and because it will be an added burden to the ratepayers of this country.

12.15 p.m.

Mr. Bull

I beg to second the Amendment.

The first question I would like to ask of hon. Gentlemen opposite, and I ask it in all sincerity, is whether they are honestly serious about this Bill, or whether it is one of those Measures which they prefer to introduce when they are not in office? I can remember this Bill being introduced once before during the time I have been a Member of this House. That was a year ago almost to the day, on 4th March, 1938. I have been interested also to read about the fate of a similar Bill which was introduced when the Opposition were in power and which was sent to a Standing Committee upstairs. I suggest that if they had passed that Bill at that time, as they should have done if they wanted the Bill, we should not have been wasting the time of the House with it again to-day.

Mr. Messer

Is the hon. Gentleman aware that the combined tactics of the Liberals and Tories at that time destroyed the Bill in Committee?

Mr. Bull

The hon. Member and his party were the ones who chose the Liberal support when they formed the Government. I was not in Parliament then. I take responsibility for my own actions but cannot be blamed for the mistakes of others. In 1930 after the Bill had been upstairs to Committee the hon. Member for Mansfield (Mr. C. Brown) said in debate, on 4th March, 1938, that the experience of the Bill in Committee "was rather inglorius." I suggest to the hon. Member that he was putting the case very midly indeed. I ask him now to what extent this Bill incorporates the Amendments which were suggested by the then Minister of Health, the right hon. Gentleman the Member for Wakefield (Mr. Greenwood). The Bill, after all, deals, as he said, with "the same broad question," and I hope that the right hon. Member for Wakefield will favour us with his comments on this Bill to-day. I would like to know whether he approved the Bill, seeing that he was so eloquent about a similar Bill when he was in power. If, as has been said in this Debate, the right hon. Gentleman stated, "This would be more appropriate as a Government Measure," I hope the right hon. Gentleman, if he favours us with his views, will tell us why he did not introduce the Bill as a Government Measure in 1930.

There is only one thing I can see in the Bill from the Opposition's point of view. It is an extremely easy Bill to introduce. It is indeed a lazy type of Bill to introduce. I have noticed that there has been no serious attempt made to-day to answer the criticisms of the Bill in last year's debate. I would ask hon. Gentlemen opposite to tell us when the Bill now before us was drafted. Whenever it was drafted, it is the same Bill to a word as the Bill which was before the House this time last year. However good hon. Members opposite may think the Bill to be, they have had a year to think matters over, and surely there must be one or two words of last year's Bill which they would have liked to change. I suggest that it is something lacking in respect to the House to produce the Bill again in its present form without any serious thought having been put into it. Hon. Gentlemen opposite have had a year in which to determine the attitude of the co-operative societies to the Bill. As to this we asked a question last year and we still have not had an answer. The co-operative societies are very strong in my Division. I have no quarrel with them. The right hon. Member for Hills-borough (Mr. Alexander) is not here to defend their interests, and I am at least entitled to make an inquiry as to their attitude, because obviously the Bill will affect their interests.

I feel certain that hon. Members opposite have studied the Bill and have made inquiries as to the support it will get. For the guidance of the House will they tell us how many local authorities there are in the country, and how many are supporting the Bill. Then we can see the proportion of local authorities who are in favour of the Bill. Perhaps hon. Members have some letters from local authorities and will read them. We all know the time which numbers of local authorities give to their many duties, now further increased by A.R.P., and it is essential to know whether they want the Bill. I wonder how hon. Gentlemen opposite have explained this Bill to the co-operative societies. Have they said to them, "Well, we shall have to do this some time and it will be better to introduce it now when it is certain to be defeated and so cannot do you any harm at all"? I notice that in the Debate last year the remarks made on this Bill were of a general character. Let me, therefore, deal particularly with some of the Clauses of the Bill. In Clause 2, on page 2 of the Bill, there is a reference to authorised businesses, the sale of milk, and so on. It simply means that if the undertakings are successful the taxpayer will have the pleasure and privilege of seeing his own money put to work against him. If the undertakings are not successful the taxpayer will pay the losses. In line 32 on page 2 are the words, "the Minister." If "the Minister" has to undertake all the duties which are given to him under the Bill he certainly will be "the Minister", and will be an extremely busy man. In line 35 we have this sentence: The expression 'sale' includes both sale by retail and sale in wholesale quantities. Then if other traders cannot be forced out of business by competition we come to the eloquent little word in line 42, "acquire." I would like to have a precise explanation of what is meant by this word "acquire." Sub-section (1) of Clause 3 I simply cannot understand, and so I shall not comment on it. In line 20 we see the word "object". If this right of objection to an application is retained we shall have a series of what are called public local inquiries, as mentioned in Subsection (2). I would ask how many members there are to be on these public local inquiries, how much the members are to be paid or whether hon. Members opposite have ascertained that the members will enjoy doing the work for nothing.

Mr. Silverman

It would be a pity for the hon. Gentleman to spoil an extremely amusing speech by false premises. The local inquiry is, obviously, the sort of local inquiry that the Ministry of Health now hold in connection with a variety of matters, such as slum clearance. They are conducted by inspectors sent down by the Ministry.

Mr. Bull

Will the hon. Gentleman let me know when he has finished?

Mr. Silverman

Yes. At these inquiries witnesses are examined, and both sides are heard.

Mr. Bull

I still think the hon. Member may have a chance of getting called if he waits his turn.

Mr. Silverman

My object was to give you information.

Mr. Bull

I am very pleased to receive it.

Mr. Silverman

You do not look pleased.

Mr. Bull

I do not think the hon. Gentleman has a great deal of information to impart, but I accept what he has given me. In Sub-section (3) of Clause 3, we find that Parliament will have still more to do if these objections are made. That will mean less time for hon. Members opposite to discuss foreign affairs, and I do not think that will please them. In Clause 4, we find that a proposal to carry on such businesses must be approved by a resolution of the council passed by a majority consisting of not less than two-thirds. This is rather like the death warrant of King Charles I which we show parties when they come to the House. They want as many people as possible to be responsible, so that when the day of reckoning comes these people will all be in trouble. Under paragraph (b) they will not be able to plead that they were not given time to think this matter over. On Clause 6, I would like to know the meaning of the words: appropriate any land which for the time being is vested in them. It will take a great deal of money to get the councils started in all the undertakings mentioned in paragraphs (a), (b), (c) and (d) of that Clause. If the Bill is passed, do the Opposition intend the country to spend less on rearmament or on the social services while these businesses are being established? In Clause 7 we come to monopolies. Sub-section (4) deals with the case of two or more councils combining. I will read a few more words from the Bill. On page 6, line 5, we find these words: regulate their election meetings. I would like to know more about what is meant by those words. The public might not want any regulation of their election meetings. In Clause 8 (1), power is given to lease or sell authorised businesses. Having forced every one else out of business, a council may lease their business or sell it again. The Clause does not say how long it will be before they can go into business again. In line 24, we find again mention of public inquiries, but still no reference to what pay those who hold the inquiries will receive. In Clause 10, we find it stated that those who carry on an authorised business shall keep separate accounts. That is reasonable enough under the circumstances. In Clause 11, we find that any deficiency of income in any year shall, so far as it is not met out of a reserve fund, be charged upon and payable out of the general rate fund. That is very interesting to the taxpayer. In Clause 12 we find the words: so far as regards their borough or district, that business shall cease to be an authorised business… But that does not restore to the private traders what they have lost. Clause 13 says: In the application of this Act to Scotland, 'royal, parliamentary, or police burgh' shall be substituted for 'borough and urban district' and 'Secretary of State' shall be substituted for 'Minister'. I am not certain that those are the words that Scotsmen will use in referring to this Measure. But at least it is a suggestion. Clause 15 says: This Act may be cited as the Local Authorities (Enabling) Act, 1939. It may be so cited, but I doubt whether it always will. In any event, I hope hon. Gentlemen opposite will explain the Bill in full to their constituents, who will then be better able to judge the merits of the Bill, and the capacity of hon. Members who introduced it to govern the country. I have no doubt what choice they will make. I do not want to keep the House any longer, although I could go on; as it is very tempting to make a long speech, particularly on such an important subject. For all the reasons I have mentioned, I hope the House when it arrives will refuse to give this Bill a Second Reading.

12.34 p.m.

Mr. K. Griffith

I am sorry that I cannot preserve a popular front on this Bill; but in joining with the two hon. Members who preceded me in asking the House to reject the Bill I do not take the view that it is not taken seriously by hon. Members above the Gangway. On the contrary, I think they take it intensely seriously. It is part of their general philosophy that trading is best carried on in this way, and that view I look upon with the greatest possible respect. The hon. Gentleman who moved the Second Reading was inclined to find in Parliament a suspicious attitude—an attitude of "no confidence"—towards the local authorities. I think he is mistaken in that. I do not think we are suspicious because we think that there are some things the local authorities are well qualified to do, and others that they are less qualified to do. I should not be expressing a lack of confidence in the London County Council if I said that I did not want them to carry on business as registered moneylenders. That is not their function. In dealing with the local authorities I am fully content that they should undertake some kind of responsibilities of a trading nature, even of a very extensive kind, including tramways, gas and electricity. I would generally distinguish these services which by their nature are almost bound to become a monopoly. Where there is a monopoly service, I am content that local authorities should have the power to acquire that service or to run it themselves. But this Bill goes a very great deal beyond that. It is not only that there are these specified services which can be carried on, but there is power to be given to the Minister, who might be a Minister from the party above the Gangway and therefore, friendly to the extension of these powers, to increase the schedule of authorised businesses very considerably beyond those actually specified in the Bill.

The hon. and gallant Gentleman the Member for South-East Leeds (Major Milner), in seconding the Motion, suggested that there was not really any danger, where the services were being adequately and properly carried on by local enterprise, that a sensible local authority would step in and try to take them out of their hand. He suggested that that was some kind of test or safeguard. It is a very illusory safeguard. I take the hon. and gallant Member himself as a very favourable example of the kind of member who might be on these local authorities. He would always approach the question of the acquisition or the setting up of any business by the municipal authority with a strong prejudice in favour of doing so. He said so himself. He explained to us that these businesses were always—he did not mince his words—better carried on municipally.

Major Milner

No.

Mr. Griffith

The word "always" was used—"always better." I am within the memory of the House when I say that that was what was said.

Major Milner

The hon. Gentleman must not misquote me. I pointed out the grounds for believing that, in the majority of cases, that would be so, but I certainly did not use the word "always."

Mr. Griffith

If the hon. and gallant Member will look at his speech he will find the word "always," and if he chooses to correct it, that will be all right, but at the present moment I am satisfied that he will find it there. He said, with regard to the various advantages he put forward, that in all these cases there would be cheaper and better services provided by the municipality than by private enterprise. I was pointing out that there will not be this safeguard of sensible authorities not trying to interfere where there is already a satisfactory service, because they will never believe that the existing service is satisfactory. They will never be happy until they have their municipal service. I cannot help thinking that both the Mover and Seconder of the Bill have not really grasped what its main purpose is. They kept on speaking as if it were a matter of taking a business and buying it out. That can be done. There is an incidental power in subsection (2) of Clause 2— A power to establish any authorised business includes a power to acquire an existing business of the like character. That is there, but it is quite an incidental purpose. The main purpose of the Bill is to engage in business that is in competition with existing businesses carried on by private enterprise. That competition is to be a subsidised competition, because there is power given in the Bill to make good losses out of a general rate, in so far as the losses exceed any reserve fund. Therefore, it would be quite possible for a municipally-owned business to go in for deliberate price-cutting in order to drive private enterprise out of business, making good any losses out of rates. I cannot help agreeing with hon. Members opposite that it is a grossly unfair proceeding that ratepayers should see their own businesses taken away from them by the assistance of the very rates which they pay themselves.

I also take seriously the point about the co-operative societies. I do not know what charge can be levelled against the hon. Members who have immediately preceded me with regard to their attitude to the co-operative society, but I, at any rate, on every occasion since I have been in this House for the past eleven years, whenever any vote has come up in which the payments to be met by the co-operative societies have been in question, have always given my vote in favour of the co-operative societies, and no one can accuse me, therefore, of being hostile. But surely the threat is a serious one. The hon. and gallant Member suggested that where there was a proper co-operative service in existence the municipality would not try to enter into competition. I would point out to him that the actual authorities who come under this Bill, at least the main operative parts of it, are those which have a population of more than 50,000. Surely authorities with a population of more than 50,000 have almost always a co-operative society available for supplying the needs of the district. I could understand it if we were dealing with small authorities. The point would then be a good one. It is with the larger authorities, and with them only that we are dealing.

I would ask the hon. Member who moved the Motion not to imagine that all those who are hostile to his Measure are people with improper ideas with regard to the position of the municipal authorities. He even went so far as to talk about municipal atheists. According to him, anybody who is on a local authority and does not hold these very wide ideas as to what their functions ought to be, is stigmatised as a person who has no right to be there at all.

Mr. Leach

Surely the hon. Member does not apprehend what he is saying. I said that when a candidate goes on the platform at election time and says, "I do not believe in municipal enterprise, therefore send me to administer it," he is in effect a municipal atheist.

Mr. Griffith

I am really at a loss to understand why the hon. Member rose to interrupt me. I was dealing precisely with the point he has just mentioned. I was not misunderstanding him in the least, but representing to the best of my ability the argument which he has just interjected to the House. He is saying that unless a person believes in municipal trading, he ought not to present himself as a candidate for election to the municipal authority, and is a municipal atheist. That is an absurd proposition. A man may be doing just as good service for the municipality to which he has been elected by trying to restrict and to restrain its activities from going beyond those for which it was originally intended as he may be by taking the most advanced views as to what municipalities can properly do. I view this Bill as part of a tendency which I regret. It is not only in municipalisation or in nationalisation, but everywhere that I see more and more obstacles being placed in the way of the small business man and the small trader. I believe that it is true to say that a big chain store might also act in a similar way in regard to the small man.

Major Milner

There is no question of compensation there.

Mr. Griffith

There is in all this a gradual elimination of the class of people, who, in trade, and on the land as smallholders or in some small way, are with a rugged independence, making their own way, are a most valuable element in the country. I do not want to see further obstacles placed in their way, and these services, which, I believe have been of great value to the nation, brought under any form of monopoly, whether it is municipal, or State, or any other kind. For that reason, and for the detailed reasons I have addressed to the House, I hope that this Bill will be rejected.

12.45 p.m.

Mr. Lipson

I join with the hon. Member who has just spoken in agreeing that it would be a calamity if we continued still further the process of crushing the small trader. In particular, I would remind the House that the small trader in the past has made a very valuable contribution to the public and social life of the town in which he has lived, and anything which tended to his disappearance would be a great loss to any town. It has been suggested that the Government, or those on this side of the House, are not very serious in their sympathy for the private trader, because they have done nothing to protect him from the very serious competition of the multiple firms and chain stores; but it is proposed by this Bill to add still further to the threat to the private trader, and I do not see how hon. Members can bring it as a reproach against those who are trying to defend him from the greatest threat of all, that they have not intervened where the law of the country at the present time does not allow them to.

It was suggested by the mover of the Second Reading that local authorities are in an unfair position compared with the private trader, in that they are not allowed to do something which the private trader can do. The answer to that, surely, is that the private trader when he goes into any enterprise is risking his own money, but the local authority is risking the money of the ratepayers. That is an entirely different position. If legislation of the kind contemplated by this Bill were to be carried it would cause very bitter resentment among large sections of ratepayers in this country, because they would feel, and rightly so, that it was unfair legislation. Power would be given to local authorities literally to take the bread out of the mouths of many of their own ratepayers. The ratepayers would be called upon, in fact, to subsidise their own execution, because they would be compelled—as they are not required to do at the present time in the face of any other kind of competition—to finance their own competitors. No trade could reasonably object to fair competition, but I submit that the kind of competition he would have to face under this Bill, which would have behind it the security which the ratepayers themselves had helped to build up, would be very unfair and unreasonable.

Mr. E. J. Williams

I am sure the hon. Member must realise that that point was answered by my hon. and gallant Friend who seconded the Bill. He said that the question of compensation, although it was not in the Bill, was a Committee point which could be dealt with. I suggest, therefore, that that matter should be reserved for the Committee stage.

Mr. Lipson

Apart from the fact that the Bill does not provide for compensation, is it possible to give to any trader adequate compensation for the loss of his livelihood? It would mean that his whole life's work would be taken away from him, and it is not really facing the facts to suggest that it is possible to give com- pensation to traders for the loss of this. It may be urged that the traders likely to be affected by the proposals of the Bill are in the minority in any community, and therefore, if it is in the interests of the community as a whole, legislation of this kind is justified. I suggest that minorities have rights and that it is not fair for a majority to pass legislation which is obviously unjust. It would be bitterly resented by the minority affected, and if legislation of this character came into being it would cause a very serious breach between the local authorities on the one hand and the traders affected on the other, which would have a very harmful result upon local government.

Tribute has been rightly paid to the part which local government plays in the national life, and I think we ought to be extremely careful not to do anything to destroy the confidence which the people have in municipal government. If the local authorities were given powers which in the opinion of a large section of the community were unfair it would have a very harmful effect and would more than outweigh any possible advantage of a financial nature which could come to the community by the passing of a Bill of this kind. Such powers would be harmful to local government in another direction. It would mean that the issue at local elections would be whether the council should or should not exercise these powers of municipal trading, and I say in all seriousness that is not and ought not to be the principal issue in local government.

Hon. Members in all quarters of the House will agree that the other part of local government must be far more important than any work that the local authority does by way of municipal trading. Municipal Government has built up its great reputation in other fields and it would be a very bad thing for this country if attention was diverted from the more serious issues of local government to those of less importance, that would inevitably be the result of the passing of the Bill. It would hamper the work of the local government in other ways. Local authorities already have a burden of work and responsibility which they find extremely difficult to carry. New legislation is continually adding to that burden and responsibility, but there is this to be said for the nature of that responsibility, that for the most part the new responsibility is of the same kind as the old; it is an extension of local government on similar lines, whereas municipal trading for most local authorities would lead them into an entirely new field and one with which by training and experience their officials are not particularly competent to deal.

If the advantages of municipal trading are as great as the promoters of the Bill make out, why should they restrict its benefits to the commodities mentioned in the Bill? The same arguments which apply to coal, bread and milk as being legitimate matters for municipal trading are equally applicable to sugar, tea, clothes and all the other requirements of citizens. Perhaps the real reason why these latter are not included is that this Bill is the thin end of the wedge, and if local authorities are given the power to deal with the commodities mentioned in the Bill we should be called upon later to extend the powers. But the promoters realise that if they put the full implications of the Bill before the House and the country, they would have no chance of obtaining substantial support for it. They have, therefore, adopted the old Roman principle of "divide and dominate." and are trying to give the impression that the Bill will affect at the most only a very limited number of traders in any community, and that the others need not be concerned.

It is obvious that if you add to the work and responsibilities of local authorities in this way, in view of the difficulty already experienced by the elected representatives on local authorities in finding time to give adequate attention to local government matters, the result of this Bill would be that the control of local government would pass more and more into the hands of officials. I speak as one who has very good reasons to appreciate the work done by local government officials. Officials are very good servants but very bad masters; and it would be a very serious setback to democratic government if we tended to make our local government service less democratic and more bureaucratic. It has been suggested that the Bill will only apply where private enterprise has failed. What evidence have the promoters put forward that private enterprise has failed?

Mr. Messer

Two million unemployed.

Mr. Lipson

The proposals in this Bill would throw on to the labour market a still larger number of men by adding many who at present find a livelihood in private trading. This is a Measure for rationalisation, as the proposers themselves agree; and if there is one effect of rationalisation about which there is no dispute, it is that it tends to reduce the number of people employed, and therefore the Bill would inevitably increase the number of the unemployed. There is no guarantee, however, that rationalisation would bring any benefit to the consumer. Such experience of rationalisation in industry as we have shows that the benefit has not been passed on to the consumer, and I see no reason to assume that municipal trading would have a different effect. I rather believe that the expenses of administration would increase. It would be in that direction and in palatial offices that any savings effected by rationalisation would be expended, and the consumer would find that he was not getting his product any cheaper.

Another and an obvious answer to many of the speeches made in favour of this Bill is that every requirement is now being met either by ordinary private traders or by the co-operative societies. We are told that there are certain districts where co-operative societies are either non-existent or inefficient. I am sure that will be cheering news to members of co-operative societies. But the answer to that argument is not municipal trading but the extension of the sphere of influence of co-operative societies into areas where they do not at present exist, and if they are inefficient they should be made efficient. This Bill is dangerous in its implications, because it represents a serious menace to the livelihood of private traders, and it is a danger to our local government, in that it will place upon it numerous responsibilities of a kind which it is not particularly fitted to bear. It would thereby endanger our system of municipal government and in so doing would be destroying one of the great bulwarks of British democracy.

1.4 p.m.

Mr. Messer

I listened with very great interest to the speech which has just been made, and at one time I found myself almost changing my views on the Bill, particularly when the hon. Member said that it would throw on to the Unemployment Fund private traders who would be squeezed out of business. I do not want to do anything to add to the number of the unemployed, and if I thought that was a possibility I would vote against the Bill. But the hon. Member cannot have paid attention to the classes of business dealt with in the Bill. How many private traders on a small scale are there now who are responsible for the distribution of coal? Are we to hear the argument of the poor widow whose business will be crushed by the competition of the municipalities? Coal is dealt with by big organisations, and there is no likelihood, if the municipalities had power to distribute coal, that they would use that power unless there were local reasons for so doing. In some parts of the country there are big agencies for the distribution of coal. They overlap one another, and they are inefficient, mainly because the people to whom they have to deliver coal are scattered. In such circumstances, there would be justification for giving to local authorities the power to do what private enterprise is not doing.

Let us consider another important commodity—milk. How many small distributors of milk are there now? In London there are three main milk-distributing agencies—the United Dairies and the Co-operative Society being the most important. Certainly, I should not get any support from among my friends for anything that would close down cooperative enterprise. But if there were an efficient distribution of milk, if it could be shown that there was no reason for displacing the existing organisation, I cannot conceive that any local authority would take the power to do so.

Let us consider the question of savings banks. Either the financial world benefits from its work or it is a philanthropic organisation; either the savings banks, as they exist, pay the people who run them, or they do not. If they pay, there is no reason why municipalities should not benefit as a consequence of organising savings banks. If hon. Members take the trouble to read speeches made in the past, they will remember one that was made by the present Prime Minister, in which, when taunted with the fact that the establishment of a municipal savings bank in Birmingham was Socialism, he said, "You can call it what you like, but it is in the interests of the people of Birmingham." It is interesting to note that the strongest supporters of the Prime Minister are now opposing a principle in which he believes. Does any hon. Member suppose that the power to start a savings bank would throw out of employment any body of people? Of course it would not. Certainly, we should hear less about the hardships of the ratepayers if local authorities had power, to a great extent, to deal with the raising of finance in other ways than by going to the Money Market for it, and if they could get money without having to pay the rates of interest which they now have to pay. I remember that on one occasion a Minister of Health pointed out in this House that he was compelled, in his housing schemes, to charge rents which could be nearly halved were it not for the amount that he had to pay for the money. I am referring to the late Mr. John Wheatley. Therefore, a strong point can be made for giving to local authorities who want it the power to set up municipal savings banks.

It has been said that the ratepayers ought not to be put in the position of having to meet competition that would be subsidised from the rates; that ratepayers in business ought not to have to pay rates which would assist a rival organisation. Reference has been made to the fact that there is in the Bill no provision for compensation. That is true. Let us face the facts. This Bill is a Socialist Bill. It recognises that our social system is kinetic and not static, and that we have arrived at a certain state of evolution and cannot remain still. It is my belief that, whether it be of our own volition and direction or whether it be as a result of the sheer force of circumstances over which we have no control, we shall be compelled to take a further step in the direction of eliminating competition by establishng public control over what is now done by private enterprise. Competition is disappearing. Individual capitalism has given way to company capitalism, trusts and monopolies. Yet we do not hear from hon. Members opposite any of those lachrymose pleas on behalf of the poor little trader who is frozen out of business by the big combines. We do not hear anything about the little tea shop that has to close down because of the A.B.C. and Express shops, which are run more efficiently, and take the place of the little tea shops. There is no question of paying compensation to the private trader who is the victim of the onward march of progress. If the benefit of the mass of the people demands that somebody should suffer, while personally I do not want to see anybody suffer, nevertheless I maintain that it must not be held that the benefit of the majority of the people shall be sacrificed to the interests of the few. Rather let us erect some machinery whereby our social conscience will cause us to compensate everybody who is a victim, whether it be as a result of the automatic processes of altered circumstances that are bound to come with the changing systems or as a result of any other cause.

What are the arguments against the Bill? So far, they are that we must not interfere with private enterprise. When private enterprise "delivers the goods," I do not think anybody wants to interfere with it, but when it fails to do so, it is the duty of all those who are in places of authority to do that which private enterprise does not do. Let us consider another one of the businesses referred to in the Bill. Can any hon. Member imagine any poverty-stricken little brick maker going out of business if this Bill is passed? Cannot hon. Members understand that if public authorities were in a position to supply a greater part of what they demand, it would save a great deal of the ratepayers' money? Take the case of a county authority having housing powers. Does any hon. Member say that there is no profit to be made out of brick making? Why cannot such a profit be passed on to the ratepayers? Does any hon. Member suggest that anybody would suffer to a great extent if local authorities were to mind their own business to the extent of providing themselves with the material which they want for their housing schemes, their new hospitals and institutions? Incidentally, when it is argued that where municipal trading already exists, there has been a loss, I must reply that that is not exactly true. It is only in a minority of cases that local authorities have shown losses when they have had the power to run businesses, and, therefore, that argument cannot be sustained.

Then it is said, "If you allow a local authority to go into business, it will not be able to get on with its job". What is the assumption? Is it assumed that, a borough council having been elected, the fact that a system of milk distribution, or coal distribution, or a brickfield is taken over by that authority means that the individual councillors will be responsible for the management of that business? Of course they will not. What happens now when a company takes over a business? It buys the brains to manage that business. A local authority would do the same. It would have that industry or enterprise organised, controlled and managed by people who do such work now. It is not to be expected that those who are giving their time to local government will do the detailed work of those businesses. It is absurd to suggest that such would be the case. The London County Council have run a very big business undertaking. They have their supply department and they have a large number of men working under ordinary factory conditions engaged in manufacture. The London County Council are saving money by doing work directly instead of buying from private companies.

Sir Isidore Salmon

What sort of work?

Mr. Messer

Wood-work and furniture.

Sir I. Salmon

Do the County Council make furniture and sell it?

Mr. Messer

They sell it to themselves.

Sir I. Salmon

Do they make it?

Mr. Messer

I thought it was well known that for years the London County Council had their works department in which they made the very desks that went into the schools. I see no reason why they should not have sold such furniture to neighbouring authorities, who were probably buying it from private concerns. In the Bill there is specific provision for dealing with the case of bread. I can understand that that is a delicate subject. I know a local authority which has, at present, its own catering department but is not allowed to make its own bread. It has arrangements in its parks and at its "Lido" to cater for the people who frequent those places, but I understand that that authority would not be allowed to bake bread and sell it to the public. Why not? I see no reason at all, if they can do it efficiently. But if such distribution is already being done as efficiently as the local authority could do it, and with no injury to anybody, then I do not think there is any question of that local authority taking over powers such as are here proposed.

I cannot reconcile the two objections, first, that of the people who deplore that the rates are too high, and, secondly, that of the people who oppose a Measure of this kind which might have the effect of lowering the rates. I repeat that if it were a question of injuring the small trader in the high road in my division; if it were a question of injuring the poor old woman who keeps a chandlers shop; if it were a question of injuring those people who work harder than the average working man in a factory; if it were a question of injuring the owner of the one-man shop—then I do not feel that I could support this Bill. But it is not a question of doing anything of the kind. It is a question of enabling a local authority to undertake a business which it believes to be in the interests of the people whom it represents. To that extent, I hope the House will give the Bill a Second Reading. If we do not get a Second Reading for this Bill to-day, we shall get a Second Reading for such a Bill eventually, because, you cannot interpose material barriers in the channels of men's ideas, and whether hon. Members like it or not, the demand for a Measure of this kind will continue. I am not at all pessimistic about the prospects; I believe that this House will, if not now, at some future time, witness the passing into law of a Public Authorities Enabling Bill.

1.22 p.m.

Sir I. Salmon

I have the greatest admiration for our local government, and I should be very sorry to see anything done which might reflect in any way on its administration. At the outset of the few observations which I propose to make on this Bill, I should like to have it clearly understood that I am a great admirer of the officials who administer the work of our local authorities very well indeed. But when it comes to the question of running businesses then, I submit, we are confronted with a totally different proposition. Both the Mover and Seconder of the Motion rather suggested that the officials of local authorities were heaven-born people who could run a multiplicity of retail businesses. I was a member of the London County Council in 1907 when they had a works department. That works department was closed because it was demonstrated beyond all doubt that a large proportion—I will not put it any higher than that—of the work which it undertook in connection with the building of schools, fire stations and the like, cost more than the price at which it could otherwise have been done. The works department quoted prices against competition, and in many cases it got the job, but in a large percentage of those cases, when the job was finished, the cost was found to be infinitely more than the price originally quoted by contractors. This was so clearly demonstrated by the party in power at the time that it was decided to close the works department of the London County Council.

This morning the Seconder of the Motion said that when a similar Bill was before Parliament previously, it was not passed because his party was then in a minority, but that analogy does not apply in the case of the London County Council. The party opposite for the last six years have been the dominant party across the river, but they have not re-introduced the works department because they know by inquiry, and by the experience of their officials, that by competition they can get the work done as cheaply as the works department did it. I noticed to-day that the Mover of the Second Reading very carefully kept off the question of the making of bricks, and, after all, Bradford was one of the first municipalities which started making its own bricks. But what happened with regard to the bricks that the last speaker, the hon. Member for South Tottenham (Mr. Messer), referred to as being so much cheaper if you made them yourselves for houses? In Bradford they do not now use bricks which they make themselves for their housing work, but they buy them in competition, because they found that they could not make bricks at the Bradford municipal brickfield any more cheaply than they could buy them in open competition. The consequence is that all the bricks that they are using in connection with their building schemes are bought in the open market.

One hears these pretty tales about municipal trading, but when one delves down into the details, it seems that the question of municipal trading is not so easy as a lot of hon. Members opposite appear to think. It is often thought that you can run technical businesses without knowing anything about the details. It is true that you can run them, but you do not make a success of them, and that is exactly the position that would eventuate if local authorities had the powers sought to be conferred upon them in this Bill. It would have the effect of losing large sums of money for the ratepayers, which I do not think the local authorities have any right to do.

The hon. and gallant Member for South-East Leeds (Major Milner) made a great point about local authorities being able to obtain money much more cheaply than can private enterprise. The hon. Gentleman who has just sat down also referred to the large amount of interest which the late Mr. Wheatley said that housing authorities had to pay for the raising of money. May I remind those hon. Members that the money that was obtained was obtained on the credit of the British Government, and no doubt the rate was higher because a Labour Government was in power at the time. The fact remains that they only paid what was really the market price. Again, the Seconder of the Motion for the Second Reading laid great stress upon the fact that if a municipality were running a business, it could run it much more cheaply because the capital money could be borrowed at so much lower a rate. But it is not a question, I suggest, of the half per cent. or the one per cent. more that you pay for your capital. The questions are how do you administer the job that you are undertaking; what does it cost you for production and for supervision?

Talking of supervision, has it not been found that if you want to run economically an administration such, for instance, as education, the larger the area you have for your administration, the cheaper, the better, and the more efficient it will be? Why? Because you can afford, if your area is large enough, to pay a higher salary to the officials that you engage. Is it suggested that in running these businesses within a local area you would be able to pay the salaries that would be necessary to give very efficient results? Hon. Members opposite say that their administration would be much cheaper than in private enterprise because they have a very large administration already. They get up and suggest, in all sincerity, that things can be run more efficiently and more successfully by municipalities than by private enterprise, but that impression is entirely due to their lack of knowledge not to their lack of sincerity.

When it is suggested that because a local authority runs a concert hall it should also be able to make its own refreshments, that is quite a different proposition from running in competition with ratepayers. I suggest that it is not fair to utilise the ratepayers' money to kill the small trader or even to kill the large trader. After all, who pay the rates? I cannot see that because a successful business is being run that, as the hon. Member for South Tottenham suggested, should be a. reason why a municipality should take it on. He said that if there is a profit to be made, the local authority should make it.

Mr. Messer

Does the hon. Member not remember my saying that, in my view, where a business was being efficiently administered, there would be no need for the local authority to do it?

Sir I. Salmon

Yes, but has any hon. Member opposite who has spoken shown that there is any real desire on the part of local authorities to get permission to start municipal trading such as is proposed to be given them in this Bill? Further, what justification is there really for asking the House to grant these powers? I think the cat was let out of the bag by the hon. Member for South Tottenham who was much franker than some other speakers, when he said that the great idea of the Socialist party was to acquire and to run most of the businesses of this country under nationalisation and municipalisation. That is an outlook that I think would have to be discussed in connection with the question of unemployment, because I think we should find a much greater number of unemployed under such administration than we have to-day.

I cannot conceive it possible that you would be able to run a business with any vision, because the larger the thing you undertook to run, the greater control would the Treasury and your own finance people have over you. One of the great troubles to-day in any Government Department is the question of getting a free hand to be able to do what you can do in private enterprise. The mere fact of having all the committees that some hon. Members have just referred to is itself a damper on the enthusiasm of anyone trying to run a particular business. In running a business some vision is needed, and you do not want to have to go from one committee to another before you can get anything done. Therefore it will not be so easy as some hon. Members seem to think. I have great admiration for municipal administration, and especially for the permanent officials. Although I do not think it is the desire of hon. Members, the result of such a Measure as this would be disastrous from the point of view of cleaner action in local affairs. We would introduce by this system Tammany of the worst kind. It would give facilities to people who are putting up for election to local authorities to go to their constituents and say "If you elect me, your coal or your milk will be supplied so much cheaper."

If a municipality went into a business and it was found they had made a mistake, they have under Clause 8 of the Bill the right of selling it. They could sell it, for instance, to the Co-operative stores for a song because they were losing money, and the council could make an arrangement that the co-operative stores would continue to support the council in the local elections. I do not think that that is the intention of the promoters of the Bill, but that would be the danger. It is undesirable that we should have anything of this kind introduced into local elections. We are proud of the methods of election in this country, and it would be a great pity if a Bill were passed which might cause such a thing to happen. It is within the recollection of hon. Members that a few years ago it was thought necessary to take unemployment assistance out of the realm of party politics and to have an independent body to administer it. That was done because it was thought to be in the best interests of everyone concerned.

Mr. Stephen

Except the unemployed.

Sir I. Salmon

It was considered at the time to be best by the majority of the people. It is very well run, and it must be admitted generally that it is an improvement.

Mr. Stephen

Nonsense.

Sir I. Salmon

I would urge the promoters of the Bill not to be too sanguine of its success if it were passed. It has been pointed out that a public company which provided money for an enterprise might lose it. It is not, however, provided under statutory powers like rates, which people are compelled to pay. If people put money in a public company they do it with their eyes open, and if they lose it they alone are the losers. It is a different proposition when a rate is levied for the purpose and everybody is compelled to pay the losses. The representatives of the ratepayers should not be entitled to gamble with the ratepayers' money in this way. It would be a great mistake, and would not be in the national or local interest that it should happen.

1.40 p.m.

Mr. Stephen

I desire to support the Second Reading of this Bill. I was not in the least convinced by the special pleading of the hon. Member for Harrow (Sir I. Salmon). It was evident that he himself, in spite of all he said, has no great confidence in the possibilities of capitalist enterprise in competition with public enterprise. His speech was throughout a pitiful plea that we should not put our hands upon the ark of the covenant of private enterprise in which he has done so well. I would ask hon. Members who are making this special pleading against the Bill why, if their arguments are correct and the local authorities are not in a position to run business successfully, they are concerned about the local authority getting the power? If the local authorities are not able to do it, there will be no danger in giving them the power.

Sir I. Salmon

It would, however, be a great shame if a large number of small people were thrown out of business while the local authority was making a mistake and trying to run the business.

Mr. Stephen

The hon. Gentleman fears that there might be cases when a lot of small people would be thrown out of business. I would ask him to realise, however, that before a local authority undertook anything under the enabling powers of this Bill there would have to be a general opinion in the community that the local authority should do it. No local authority would enter into such activities without very serious consideration. Those who argue about the number of small people being thrown on to the employ- ment register do not realise that if such an enterprise were run by the local authority many of these people would become employés of the authority. I have noticed in every district that ordinary men who are in private enterprise are greatly concerned on behalf of members of their families that they should be able to get a corporation job or a job in the Civil Service. Those who plead on the lines on which hon. Members opposite have been pleading to-day are the very people who are anxious to get members of their own families into the public service, knowing that there they will have safe positions, with a good income and a good pension.

Mr. Wakefield

Does the hon. Member suggest that services staffed in that way will be able to supply the consumer at lower prices?

Mr. Stephen

It is quite plain that that would be the case. If the hon. Member wants proof of it I have only to point out that for the defence of the country we have a public Army, a public Navy and a public Air Force. We do not hand over such services to private enterprise, because it would be too expensive to run them under private enterprise. They can be run by the State much more efficiently and much more economically. There is the answer to the hon. Member. When the new air-raid precautions service was set up there were no hon. Members opposite who said that in order to secure vision and imagination we must hand over the service to be run by private individuals. It is obvious that if it were handed over to private individuals there would be complete inefficiency and corruption, such as is characteristic of the general capitalistic system of the country. Hon. Members cannot have it both ways. An hon. Member interrupts me to say that they can. I am afraid I was expressing myself rather badly when I said they cannot have it both ways. They cannot have it both ways logically, though illogically they can, and generally they do have it illogically both ways.

If it were true, as hon. Members opposite say, that local authorities cannot run these businesses successfully then the people for whom they are pleading will be in no danger. The hon. Member for the Harrow Division (Sir I. Salmon) who, I am sorry to say, went away before I had the opportunity of dealing fully with his argument, referred to the experience of the London County Council with their works department, and taunted Members on this side by saying that although there is a Labour majority on that Council now they have not set up the old department again. One great difficulty in the way of doing so is the fact that the local authority is cribbed by not having powers such as this Bill proposes in some measure to give. What is the position in my own city of Glasgow? Glasgow Corporation run a great tramway system. The hon. Member for Harrow would have said that Glasgow could not get people with sufficient vision and imagination to run a great transport system, but they have done it, and moreover, they make their own cars. They have a works department and the cars built there will compare with any which can be produced by private tramcar builders. The Glasgow Corporation have now added to their transport undertaking and run buses as well as trams, but they are not allowed to build their own buses and must give the orders for them to private enterprise, so that friends of hon. Members opposite who are in the bus-building business will be able to get a cut off every bus that runs through the city of Glasgow.

Hon. Members opposite know perfectly well that if local authorities got the powers which would be conferred by this enabling Bill they themselves would not be able to carry on their private enterprise and make profits. They cannot face up to the possibilities of the situation that would be created by authorities having these enabling powers, and that is why they block every effort which is made to give the community the opportunity to develop these public services. They ask, "Is the town clerk, or the medical officer of health, or the director of education, to run the business of coal distribution in a city?" No one on this side suggests anything like that. There are people of enterprise and ability who will be only too pleased to become servants of local authorities to run the businesses which we say ought to be within the control of local authorities. They would employ such people and give them security of tenure and they would have a far better opportunity of doing real creative work than they have at present in the service of the various capitalist concerns.

The hon. Member for Harrow said that an ordinary company appeals for its money to the public and that if it fails nobody is hurt but those who have subscribed that money. He evidently forgot that we have before the House a Bill to prevent share pushers operating. All the time hon. Members opposite are coming to this House to get legislation in order to allow them to carry on this skin game more successfully. There are people who are in a powerful position to do the skinning and who are getting legislation through this House in order to prevent them from having competition from other skinners who want to get into the game. Hon. Members opposite who speak of the incapacity which local authorities would display if they were given the enabling powers under this Bill ought to be ashamed of themselves, because there is practically not an industry in this country which is not coming to this House saying, "Give us a subsidy or we shall go out of business. We are not able to carry on." The tragedy of the position is that many decent people are unemployed because we do not run the country in a really scientific and businesslike way. The present arrangements are preposterous and only shows that there is still a great deal of lunacy in humanity allowing the present waste to go on.

I would like the Bill to be much wider than it is, but the hon. Members who drafted it evidently came to the conclusion that they might get away with a little. They should have known that hon. Members opposite give nothing away that will interfere with the rights of the small section of the community to make a profit out of the community. I would like to have seen much wider powers in the Bill than those which are there, but I ask hon. Members to vote for giving even these limited enabling powers to the local authorities, if they are not afraid of what could be done in the way of developing great public services to supply the needs of the people. We should be able to see what hon. Members could do in their private concerns in real competition with public effort. They could not compete, and so they use the majority, which has been gained in great measure because of the material resources which they can bring to bear for influencing the electorate, in order to keep the people in subjection. I do not look very hopefully to this House for a Second Reading of the Bill, but I am confident that in the future those hon. Members who are groaners for subsidies for private enterprise will be swept away at no very distant date, and that we shall have public services in every locality in this country.

1.58 p.m.

Mr. Higgs

The Mover and Seconder of the Motion for the Second Reading were far more moderate in their speeches than are the contents of the Bill. I note that speakers do not seem to be coming forward rapidly from the Benches opposite in support of the Bill. The hon. and gallant Member for South-East Leeds (Major Milner) said the Bill was permissive and not compulsive; if it is permissive and nobody wants it, what is the good of having the Bill at all and wasting the time of the House on it? Hon. Members on the other side have not supported the Bill in a wholehearted manner. [Interruption.] I repeat that, generally speaking, it has not been supported.

Mr. Stephen

I have always supported it

Mr. Higgs

In the eyes of hon. Members opposite it seems to be a crime to run a business at a profit. Hon. Members do not seem to realise that businesses that make a profit are in competition with other businesses, and that it is the other businesses which prevent that profit rising unreasonably. An hon. Member referred to coal distribution. In my division I could introduce him to dozens of people who make their living by distributing coal in congested areas. The Bill would put those people out of business.

Mr. Messer

Would the hon. Member not agree that it is overlapping, wasteful and inefficient that there should be dozens of distributors in a congested area?

Mr. Higgs

The more there are of them the more efficient they are, because of the competition among them which keeps their prices down. As far as I know, they supply coal at competitive prices to the co-operative societies. I have noticed that Co-operative Members are not present in great numbers this morning. I suppose they dislike this Bill as much as we do. The hon. Member for Camlachie (Mr. Stephen) referred to the desire of hon. Members on this side of the House to get their sons and relatives into the Civil Service. I could introduce him to many men in the Civil Service who would very much like to be back in competitive industry.

Mr. Stephen

I agree that that is so, as long as they take their pensions with them. After they have finished in the Civil Service, being considered at the superannuation stage, they are regarded by private enterprise as such good men that they can get good salaries—for example, Lord Stamp—even when they are drawing their pensions.

Mr. Higgs

I am not confining my remarks to people who are about to receive their pensions, but to the younger fellows. Opportunities do not exist in the Civil Service as they do in competitive industry. The hon. Member referred, also, to air-raid precautions, but he forgot that the manufacture of the equipment is practically all carried out by private enterprise. He mentioned the manufacture of cars in Glasgow, but there, I think, the hon. Member is wrong. Glasgow makes the bodies and not chassis or electrical equipment. Their manufacturing capacity is confined to body-building only. Therefore, the statement which the hon. Member made was incorrect.

This is an impossible piece of legislation. On many occasions I have opposed Bills brought forward by hon. Members opposite, but I have done so with a certain amount of reserve. On this occasion I have no reserve whatsoever, with the exception of one line in the Bill to which I will refer later. The Bill is the worst of a long series of Socialist Bills. The other day I was talking to the secretary of a large organisation and asked his opinion of the Bill. He said he was not troubling about it as it was not worth his time to consider it, because he knew it would never become an Act of Parliament and he had far more important business to do. That was the opinion of a man who really is interested in this Measure. Hon. Members regularly receive correspondence and advice from their constituents concerning Bills, but I do not think anyone in this House has received correspondence worth referring to concerning this Measure. Local authorities do not want it, and certainly the traders do not want it. It would be a step in the elimination of private enter- prise. The hon. Member for Central Bradford (Mr. Leach) retired from business 17 years ago. He made his money out of private enterprise. I wonder whether he would have liked this Bill to have been introduced when he was in industry and would have had to compete against the possibility of industries being established by corporations, as would be made possible under the Bill.

In the election of 1929 the Labour party advocated a similar Bill. It was introduced in 1930, with what, result? The hon. Member for Colchester (Mr. Lewis) referred to what was said by the right hon. Gentleman the Member for Wake-field (Mr. Greenwood) and which was: This is a Measure which ought to be a Government Measure; and it is a Measure which will need a good deal of revision if and when we come to consider the various Clauses."—[OFFICIAL REPORT, 14th February, 1930; col. 869, Vol. 235.] That is the admission of a supporter of the Bill. The small trader is the nation's good will. It is from the small trader that big businesses are built. By the process of elimination those people who are not capable go out and the stronger ones carry on. Most businesses to-day are run by men who were originally engaged on a small scale. The question has been asked—not this morning, but I have noticed it in other debates—why do we on this side argue in favour of the small man? Many of us on this side have been small men, and most of us have the honour of representing small men today. How can we, when we boast of our freedom, defend bringing in a Bill of this description, which would cripple freedom to the maximum extent? If this Bill became law, local authorities would be able to engage in trade in food, clothes, and even printing and newspapers, so that hon. Members would then have the opportunity of expressing their opinions at the public expense. If the financial responsibility goes, as it would, the real incentive to produce efficiency disappears.

We have heard a great deal this morning about public utility companies and their successful trading in gas, water, electricity and so on. These commodities are supplied both by public companies and by private enterprise, but there is no one governing factor in this connection that has not been mentioned, and that is that, when way-leaves are necessary, it is probably desirable that the commodity should be provided by a public authority, because permission has to be obtained from various landowners for the purpose of distributing the commodity, and it is more easily obtained by a public authority than by a private organisation. The exceptions, possibly, are transport, housing and education, but it is possible to reason on the same lines with regard to these. Attention has been called on many occasions to the success of municipal gas and electricity departments in supplying equipment for use in private houses, but the profit on that equipment is not made on the sale of the equipment itself, but on the sale of the commodity, such as gas or electricity, which the equipment uses.

With regard to the Bill, I see on page 1 a provision that municipal banks shall be permissible in districts with 150,000 inhabitants. I come from Birmingham, and the hon. Member for South Tottenham (Mr. Messer) says that the strongest supporters of the Prime Minister are now opposed to a principle in which he believes. I am one of the exceptions. I said earlier in my speech that there is one item in the Bill with which I agree, and that is with regard to municipal banks. If the Bill had been brought in on that one subject only, as a private Member's Bill, I should have supported it. I have had considerable experience of the municipal bank. It is very beneficial, and it is a great pity that that principle is not applied in many more towns than it is. I understand that Sheffield tried the distribution of milk years ago, but some people will not learn by experience. The distribution of milk in Sheffield was an absolute failure, and surely we must take note of that fact. I do not see why the Bill should refer particularly to milk, cream, coal, bread and bricks, when further on it has the words "any other business." Moreover, Sub-section (1, iii) of Clause 2 is not confined to useless matters; it also includes surplus matters, and it seems to me that a corporation could engage in the manufacture of cider or jam when there was a surplus of apples or plums. They could also deal in animal byproducts, while, according to the provision at the bottom of page 2, if the corporation succeeded in making a few petrol engines, it could take over a firm like the Austin Motor Company. There is another great objection to manufacturing piecemeal. The electricity industry, which is one of our great exporting industries, exported something like £23,000,000 worth of goods last year, but, if such commodities are manufactured in small quantities, it reduces the competitive force of the remaining manufacturers in the world market.

With regard to Clause 12, a 1d. rate in Birmingham produces something like £26,000 or £27,000. I do not quite understand, from the wording of the Bill, whether under Clause 12 the corporation would have to lose in total a 3d. rate, or whether it might lose a 3d. rate on each item in which it deals. It rather strikes me that the latter is the meaning, and in that case, if the Birmingham Corporation dealt in three items for three years, it could lose something approaching £750,000, while if it lost something just under a 3d. rate—say 2¾d.—it could go on trading indefinitely. That is simply subsidising industry out of public funds, as has been said so many times this morning. Further, it is exceedingly difficult to check the allocation of overheads.

I cannot even give the supporters of the Bill credit for bringing forward electioneering propaganda, because this sort of stuff will not go down with the average elector. I cannot understand why this type of legislation is brought in year after year without any thought or reasoning. This is exactly the same Bill that was brought in last year. I am under the impression that that may be partly due to the shortness of the time given to Members in which to select a Bill. I cannot believe that the supporters of the Bill are serious. I notice that among its backers are some very prominent back-bench Members of the Opposition, and it strikes me that they are not really serious about it, but hope as much as we do that the Bill will never become law.

Mr. H. G. Williams

On a point of Order. May I ask, Mr. Deputy-Speaker, whether it would be in order for me to move the Adjournment of the Debate owing to the absence from the House of any representatives of the great Co-operative Movement, which owns the bulk of the shops?

Mr. Kennedy

How long have you been here? Five minutes.

Mr. Deputy-Speaker (Colonel Clifton Brown)

That is not a point of Order, and, in any event, I could not accept such a Motion.

2.14 p.m.

Mr. Leslie

I am rather surprised that a representative of Birmingham should oppose a Measure of this kind, because Birmingham is one of the greatest examples of municipal enterprise that we have in this country. An hon. Member has told us about Bradford bricks but he did not inform the House that in 10 years Bradford was enabled to pay off all the capital it had put into that enterprise, and to make a profit in addition. The hon. Member seemed very concerned about the ability of local authorities to run these enterprises efficiently, but local authorities can buy brains just as well as any company, and they certainly have shown in the case of gas, electricity and so on, that they can do it more efficiently than companies and supply these services at a cheaper rate to the consumer. I know that in every community there are two schools of thought. One is opposed to municipal enterprise and would confine councils to the merest elementary things necessary to the community. In principle it is against a local authority doing anything that private enterprise can do at a profit. The other school of thought, to which we on this side belong, believes in communal ownership and control, and holds that profits should go to the community to be used either to reduce rates or to be passed on to the consumer in lower prices or better service.

The three greatest examples of municipal enterprise in this country are Birmingham, Sheffield and Glasgow. The Bill seeks to give power for the purchase of land. I think it should be the duty of every municipality to acquire all the land it can and so safeguard the amenities of a district. Nowhere in the whole world is the evil of land monopoly so bad as it is in this country. Some City Fathers of the past were wise in their day and generation. For instance Liverpool leased 1,000 acres for 999 years at a fixed rental of £30. By 1837 that land was worth £3,000,000, and the city benefits to-day by £100,000 a year. Newcastle bought land 100 years ago for £12,000. To-day it produces £12,000 a year. These examples show the advantage of a local authority purchasing land. I happened to be a member of a certain local authority which got the opportunity of buying glebe land at a reasonable figure. When the Moderates controlled the Council they refused to carry out the contract, and then they appointed an independent valuer, who valued the land at £6,000 more than the figure at which it had been offered to the Council. Fortunately the ratepayers, having held a public meeting, urged the Council to purchase the land, and it was ultimately purchased. On that land they now have open-air baths, allotments, football pitches, tennis courts and so forth, and they have protected the amenities of the district.

Mr. H. G. Williams

Was the transaction a speculative purchase of land or a purchase for a particular purpose?

Mr. Leslie

One reason was to maintain the amenities of the district and to prevent the land being built on. But there were other reasons. The primary object of municipal undertakings is not to make profits but to give service as cheaply as possible. Nevertheless, good surpluses are often obtained. Take the case of Birmingham. In one year the surplus from the electricity undertaking was £184,012, and £31,000 went to relief of rates. No one would suggest that Birmingham should hand over its electricity supply to some private company. Then take the case of Sheffield. It had a surplus of £72,441 in one year and £60,787 went to the relief of rates. In the case of Birmingham gas there was a surplus of £86,397 and £41,200 went to the relief of rates. It is a well known fact that municipal electricity and gas undertakings beat companies hollow both in price and in service.

Glasgow has been mentioned. Glasgow has been under Labour government for a number of years, and it has the finest tram service in the world. There you can travel 25 miles for 2d. That would not be possible under any private company. It is a fast service as well as the best. Glasgow does quite a lot of the things that in this Bill we ask that other Corporations should have facilities for doing. Glasgow runs markets for cattle, fish, meat, vegetables, cheese, birds, dogs and clothes. The slaughter-houses there are models for the whole country. From the city refuse Glasgow has an annual revenue of over £20,000; that is from road sweepings, tins and bottles. In Birmingham slaughter-house and fish waste is converted in one year into 1,000 tons of feeding meals and fertilisers, with a turnover of £10,000. Surely that is of some value to the ratepayers of Birmingham. Why should it be handed over to private enterprise?

The hon. Member for South Croydon (Mr. H. G. Williams) seems to find a great deal of amusement in this subject. Surely what Birmingham can do other Corporations should be enabled to do. Birmingham gas undertaking produces 10,000,000 gallons of tar, 28,000,000 gallons of ammoniacal liquor, 400,000 tons of coke and its exports of sulphate of ammonia are world-wide. That is the municipal enterprise that hon. Members opposite condemn. I could go on with a great deal more about Birmingham's municipal enterprise. But let me turn to the question of housing. A local authority of which I happened to be a member for 12 years wanted to build 200 houses and advertised for tenders. We discovered that there was not £50 worth of difference between all the tenders. We therefore decided to build by direct labour, and as a result we saved not less than £22,000. Glasgow saved £154 per house by direct labour, Derby £50, Lincoln £60——

Mr. H. G. Williams

Can the hon. Gentleman say why it is that the Glasgow Corporation has been so singularly unsuccessful in supplying sufficient houses for the people of Glasgow?

Mr. Leslie

That question has been answered in this House by Glasgow's representative on more than one occasion. The advantages of direct labour are that it saves the additional cost of supervising private contractors, it ensures that all materials used are sound and helps to force down private contract prices. It is clearly an obligation on local authorities to make the most of their administrative powers for the benefit of the people as a whole, and that is what the Bill would enable them to do.

2.24 p.m.

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

It has been my pleasant duty on more than one Friday, when private Members' legislation has been brought forward, to be able to advise the House to give a Second Reading to a private Member's Bill. There has been in those debates an atmosphere of cordiality and even of geniality that to me has made a Friday afternoon almost indistinguishable from a Sunday afternoon, except for the absence of the somnolence. But the Bills upon which I was able to pronounce the Government's blessing dealt with some specific and detailed reforms. This Bill is of a very different character: it goes to the roots of the political philosophy of the party opposite; and, whatever they may think about the merits of their proposals, I am sure that, on reflection, they would be the first to admit that this Bill is of so wide a character that it is not suitable for Private Members' legislation. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) said as much when the Bill was brought forward when the Labour party were in office. He 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 hope there may be one day."—[OFFICIAL REPORT, 14th February, 1930; col. 868, Vol. 235.] The hon. Member for South Tottenham (Mr. Messer) said that this Bill was given a Second Readng when the Labour party were in office, and that it was killed by a combination of Liberals and Tories. That is not correct. The Committee stage did not occupy more than four columns of the OFFICIAL REPORT. The Parliamentary Secretary to the Ministry of Health, Miss Lawrence, proposed a series of Amendments. The promoter, Mr. McShane, said: I have seen the Amendments the Government have felt it necessary to table, and in view of their number and character, and in view also of the obvious impossibility, in the present congestion of business in this House, for this Bill to proceed very much further, I beg, therefore, to withdraw the Bill, as I do not propose to go further with it."—[OFFICIAL REPORT (Standing Committee B), 21st May, 1930; col. 2220.] I do not think the blame for the fate of that Bill can be laid on hon. Members on this side of the House. The promoter said to Miss Lawrence, in the words of Lady Macbeth, Infirm of purpose! Give me the daggers. It is argued that this Bill introduces no new principle, but I cannot accept that. It is admitted that in everyday life we are constantly assisted by the proceedings of local authorities. If we switch on the electric light or board a trolleybus, and the services are satisfactory, we ought to say, "God bless the town council." But the hon. Member for Sedgefield (Mr. Leslie) appeared to think that because the municipalities, in very many cases, managed these services efficiently, they ought to extend them and go in for services which are in competition with private enterprise. I would suggest to him that the undertakings he mentioned in his speech have little relation with what is proposed in this Bill. If we examine the history of these undertakings, we find that they came into existence for one of two reasons: either there was no provision for these services at all or, in the case, for instance, of the tramway trolleybus, the purchase of an existing undertaking involved no competition with any other private venture. But these considerations do not apply to the services mentioned in the Bill.

Mr. Leslie

Municipal transport undertakings very often have to compete with private undertakings.

Mr. Bernays

The Glasgow Corporation tramway is not run in competition with a private tramway.

Mr. Marshall

Is the hon. Member not restricting this to one comparatively small system of transport, in the tramways, as against buses? When I used the word "transport," I mean the whole of transport. The bus transport systems established by municipal authorities have encountered, and are encountering to-day, the fiercest opposition from private interests.

Mr. Bernays

Not over the some route. The considerations mentioned do not apply to the services mentioned in the Bill. The sale of milk, cream, bread, and so on, is all being carried out efficiently by private enterprise. For a local authority to enter into the market would be for it to enter into competition with private enterprise, and, what is more, it would be a competitor with unfair advantages. I hope the hon. Member for North Camber-well (Mr. Ammon), who, I understand, is to conclude the Debate for the other side, will address himself to this point. The losses, instead of coming out of the pocket of the private trader, will appear on the demand note of the ratepayer. That is the answer to the hon. Member for Central Bradford (Mr. Leach), who said that corporations should possess the same powers as individuals. The difference is that if the individual loses money on an enterprise it is his own money, and if a corporation loses money it is the ratepayers'. This Bill, if passed, would gravely injure the small trader. There has not really been any attempt to answer that by any hon. Gentleman on the other side. The hon. and gallant Member for South East Leeds (Major Milner) could say nothing better than that there would be no wholesale destruction, that the process of absorption would be gradual. That is not much comfort.

Major Milner

I said that the private trader would be compensated under the Bill. The point I wished to make was, first, that there would be compensation, and, secondly, that there would be employment found for those at present engaged in the industry.

Mr. Lyons

Does compensation not mean more compensation from the rates?

Major Milner

I do not understand the interjection. I mean precisely what I say, that, just as a combine now takes over a business and buys out the present proprietors, so would a local authority do so. It is not true to say that the private trader pays out of his own money. In 99 cases out of 100, it is a limited company which pays out the shareholders' money, and hence public money.

Mr. Bernays

I do not accept that. The hon. and gallant Member is very anxious to deny his words, but he did say that there would be no wholesale destruction, and that the process of absorption would be gradual. If he examines the OFFICIAL REPORT to-morrow he will discover that these were the words he used, and now he gets up and says he did not use them.

Major Milner

The hon. Gentleman said that these were the only two reasons I had given.

Mr. Bernays

No, I never said so.

Major Milner

I advanced two additional reasons, and, I admit, also the reasons which the hon. Gentleman said I advanced.

Mr. Bernays

Perhaps the hon. and gallant Gentleman will allow me to proceed with my speech. He then said that there would be something in the nature of compensation, but when challenged under what Clause compensation would be paid, he was unable to say, and no one has been able to say. There are references, I admit, to acquisition, but there is no suggestion that there would be compulsory powers, nor is compensation mentioned throughout the Bill. I cannot understand the arguments of the party opposite. I can understand this argument, and I wonder why they have not had the courage to put it forward—it is a perfectly reasonable and legitimate argument—What does it matter if the small trader is injured as long as the community is bettered? I thought that it was one of the great arguments of Socialists to Say that you may injure the small trader, but the community as a whole would benefit. But that argument has not been put forward.

Major Milner

The hon. Member for South Tottenham (Mr. Messer) used it.

Mr. Bernays

I am glad it has been used. That seems to be the only way to defend a Bill which would undoubtedly severely damage the small trader. I want to address myself to that argument. Would, in fact, the community benefit under the Bill, and, if so, how? I will take two instances—milk and bread. Milk is prominently included in this Bill. If local authorities have the power to run a milk factory and to take over milk supply, would it, in fact, benefit the community? Even if it were true that there was waste and inefficiency under the present system, how would this Bill help? The present Bill would not give local authorities power to do more than to enter into competition with existing traders. It contains no direct attempt at securing a more rationalised system of distribution. The present system would remain, with the addition of another class of traders at a time when it is generally believed that one of the main difficulties in the milk trade is that there are too many milk traders already.

Mr. Quibell

Of course, there are.

Mr. Bernays

You are proposing to add to them. I cannot see that the efficiency of milk distribution could possibly be assisted by means of the haphazard intensification of competition causing a further disorganisation of the existing system. Is it suggested that local authorities should artificially reduce the price of milk by the medium of the rates? One of the arguments used is that it would mean cheaper milk. It could only be cheaper milk at the expense of the rates, and that seems to be a very odd proposal. Am I to get my milk cheaper in Westminster because the ratepayers subsidise it? Surely, if there is money available for reducing the price of milk, it should be applied to those most in need of it, boys and girls at school, nursing and expectant mothers, and the young children. That is the policy of the Government.

Mr. Muff

At the expense of subsidy.

Mr. Bernays

But the subsidy is going to the classes most in need of it.

Mr. Muff

Certainly, and we do the same.

Mr. Bernays

By taking over these commodities, would you be able to sell them cheaper? Take bread. Where would be the advantage of the municipality turning itself as a sideline into a great baker's shop? I have heard it argued that it would mean cleaner bread. If the municipalities sold bread, it would not alter the present position in the slightest so far as clean bread is concerned. The local authorities have the duty of supervising the purity of bread now, and all that would happen under this Bill would be that they would have to look at their own loaves as well as those of their competitors. I cannot believe that it could be seriously argued that the local authorities cannot look after the purity of bread unless they become bakers themselves.

I have waited carefully for some case to be put forward with regard to a particular commodity that the extension of municipal trading would make for greater efficiency and cheapness. The only single success that can be put forward is the Birmingham Municipal Bank, and certainly it has been a success. But the conditions under which it was set up were radically different from the conditions that exist to-day. When the Birmingham bank was established, it could get five per cent. for its money. How could a similar bank come into existence to-day? Money prudently invested cannot produce more than three per cent., and, after allowances for administration expenses and reserves, a municipal bank could not pay more than 2½ per cent. I admit that the Birmingham bank still continues successfully, but it still continues to reap the benefit of its original investments. It had a flying start. It now requires less money for management and reserves. No other local authority has, in fact, set up a municipal savings bank.

Mr. Leslie

You would not allow them.

Mr. Bernays

There are two cases where power was given. Cardiff and Birkenhead sought and obtained these powers, but neither has used them. [Interruption.] When they get them they do not use them. Local authorities are practical men of business. They are not political theorists, and they know that, in the present circumstances, the setting up of a municipal bank is bad business, and they are not prepared to do it.

Mr. Leslie

The hon. Member seems to argue that conditions are always rather out of date. This is an enabling Bill to enable local authorities to take up banking whenever they might want to do so. Suppose we had another war, as was the case when the Birmingham bank started, would that be an appropriate time to take up banking?

Mr. Bernays

The hon. Member says that it is an enabling Bill, but if these powers are sought they are going to be used, otherwise there is no point in having, the Bill. I am saying that it is bad business for a local authority to start a municipal savings bank, and that, in fact, the two local authorities that did obtain the powers have not used them.

Mr. Stephen

The hon. Gentleman has made a very serious statement. Can he say whether the Government will give facilities to Glasgow to get an enabling power to set up a municipal bank, if Glasgow Corporation give a guarantee that they will carry it out?

Mr. Bernays

The hon. Member has been long enough in the House to know that a Parliamentary Secretary cannot give such an undertaking. I stand by every word I have said. Cardiff and Birkenhead asked for these powers, and when they got them they did not use them.

Mr. Quibell

When did they ask for them?

Mr. Bernays

In 1930. Where is the evidence that the local authorities desire such a Measure? We have had no resolution in support of it from any association of local authorities. That is not surprising, because they are not using to any extent their existing powers. It is always open to them, if they wish to do so, to present a Bill and try to get these powers. How many have done so? I have spoken about the municipal banks. Birmingham, Birkenhead and Cardiff got powers. In regard to milk, there was the Sheffield Act, 1920, but I am informed that by 1922 the Corporation had made such a heavy loss on the supply of milk in Sheffield that they sold their business to the Derbyshire Pure Milk Supply. In regard to bread, I can find no evidence that any local authority has sought powers. In regard to bricks, power was given in the Birmingham Corporation Act, 1919, and powers were sought by West Bromwich and St. Helens, but the proposals were subsequently withdrawn. As to coal, there were proposals in two Bills promoted by Liverpool and West Bromwich, but both were subsequently withdrawn.

I say, therefore, that the existing powers are not being used, and that seems to me a formidable reason why they should not be extended. The local authorities as a whole do not want them. They have quite enough to do already, without becoming shopkeepers on a great scale. They are already heavily burdened with work. How often at Question time, in reply to Questions asking for information not readily available, have I to say on behalf of my right hon. Friend that he is most reluctant to overburden the already hard-pressed local authorities. Those labours are being constantly increased. Every King's Speech contains some proposal for laying fresh responsibilities upon the local authorities. With the development of civil defence, a whole series of vital new responsibilities have been laid upon them—air raid precautions, evacuation arrangements, hospitalisation, nurses, ambulances, and so on. Never in the history of local government have so many responsibilities been entrusted to the local authorities, and any further work might impair the efficiency of local government and cause something like a breakdown of it. I fully agree with the hon. Member for Central Bradford when he said that the municipalities were often much more important to the welfare of the individual than is the State. There is a great deal in what he says, and that is why I am so anxious that the efficiency of municipal government should be maintained and that the local authorities should not be given additional burdens which in present circumstances they cannot shoulder.

Mr. Quibell

You are doing it every Session.

Mr. Bernays

We do not want to multiply it unnecessarily. The party opposite are unable to keep up with the pace of our times. They are unable to move with the spirit of the age. The difficulty is that they say: "What we said in the '90's we say now, and no hon and learned Member for East Bristol is going to stop us from saying it." This Bill represents the Socialism of 30 years ago. Here it is. "The Common Sense of Municipal Trading." [Laughter.] Let hon. Members wait a moment. Listen to the name of the author. Bernard Shaw. I understand that Mr. Bernard Shaw is under something of a cloud among the faithful, and that there is a movement to expel him from the Labour party. I would ask hon. Members opposite while they are about it, to do the job properly and not merely to expel him, but to expel his programme as well.

Hon. Members will have the opportunity of making up their minds on the merits of the proposals laid before them. It is, of course, open to them to vote as they like, and no doubt my hon. Friends will have given attention to the arguments put forward on the other side. All that I can say further on behalf of the Government is that, in our view, there is no demand for this Bill from the local authorities, no case has been made out for it, it is hopelessly out of date, it has no relation to the needs of our times, and if it became operative it would put a monkey wrench into that private enterprise upon which the prosperity and the standard of living of this country depend.

2.53 p.m.

Mr. Ammon

My hon. Friend the Member for Central Bradford (Mr. Leach) has had a long and very honourable career in connection with municipal service, and whether opposed to the Bill or not, I imagine that all those who were privileged to hear him will pay tribute to the really brilliant speech with which he brought the Bill to the attention of the House. I should like, in passing, to deal with an unworthy reference to my hon. Friend by the hon. Member for West Birmingham (Mr. Higgs), who said that my hon. Friend had been retired from business some years and that he would not have thought of bringing forward such a Bill if it had been likely to come into conflict with him in his private capacity. I happen to know that when my hon. Friend was engaged in business in Bradford he was as ardent a supporter of this cause as he is at the present time. That, surely, is a sufficient answer to the charge made against him.

I wonder that the opposition to the Bill has not seized on a point that occurred to my mind, and that is that the Bill is safeguarded so much that it could almost be rendered inoperative if and when it became law because of the safeguards. So anxious are we that the principle shall be tested, as one always has to do in matters of progress in this country, that we seek experience and then on that experience we seek to advance still further. That, I suggest, is why my hon. Friend has made great concessions compared with the Bill originally introduced in 1930. My hon. Friend in his excellent speech drew attention to the fact, which is not denied, of the great hold that our municipal government has on the country, and of how it is admitted everywhere to justify its existence and to be a very important part of the government of the country. He pointed to what it had done for the health, happiness and well-being of the people. It has added to the longevity of the race by the measures of improved sanitation it has introduced.

But all these reforms, be it remembered, were brought in in the teeth of bitter opposition by representatives of the party opposite, no matter whether it was in connection with improved sanitation, better water supply, better roads, better housing or better lighting. In not one of these directions has legislation been obtained without meeting with the opposition of hon. Gentlemen opposite. That has been the whole history of local Government. And when the Parliamentary Secretary just now produced the book of George Bernard Shaw, in so doing he condemned people of his own way of thinking, because that book contains the story that I am trying to relate of how for 30 or 40 years progressive people have had to hammer against the opposition of people like himself in order to obtain the necessary powers from local authorities.

My hon. Friend referred to the fact that there is a great deal of suspicion and a refusal to entrust the municipalities with some of the powers which this Bill proposes to give them. That, again, is just another chapter of the same story. The various services which have gradually been entrusted to the municipal authorities have been won when it was realised that private enterprise was no longer serving the community in the best manner, but that its chief concern was the making of profits for shareholders rather than giving efficient service to the people. We have thus built up over the years municipal services that will compare with any service in the world; so much so that it is recognised by many Civil Servants in Whitehall and elsewhere that there are increased possibilities for their talents in municipal service, and not a few leave the Civil Service in order to find positions under local authorities. Such a Bill as this is becoming increasingly necessary, for this House is feeling more and more the need for the decentralisation of much of its work. It is overloaded at present with a great deal of legislation with which Parliament did not concern itself in former years. It is an anachronism that a great local authority should have to come to this House for powers to lay down a length of drain or to carry on enterprises which it is prepared to undertake, and to waste the time of Parliament and the money of the ratepayers in promoting legislation which is very often blocked upstairs by mere political prejudice.

The hon. Member for Colchester (Mr. Lewis), who can always be relied upon where there is any reactionary work to be done, advanced a number of points in opposition. He said there is no evidence that the local authorities want these powers. I would remind him that a large number of local authorities are of the same political complexion as himself, and might, therefore, not be expected to feel over-anxious to possess these powers. But again and again when reforms have been introduced the momentum behind them has come from enlightened people who saw further ahead than their fellows, rather than from those who had been the victims of the existing state of affairs and had neither the power nor the opportunity to attempt reforms. The greatest agitators for the abolition of slums are not slum dwellers; they are people outside who see the danger of the slums.

It is said that the Bill would place too heavy a burden on local authorities. Well, that has yet to be proved. It is true, as the Parliamentary Secretary said, that increasing burdens are placed on the local authorities every year. I have protested in this House against that. Burdens have been placed on the local authorities—burdens involving expenditure—which ought to have been borne by the State, in order that the Government might escape the cost. It is also said that with such heavy burdens on the members of local authorities qualified people will be unwilling to come forward as candidates for membership of municipal councils. Well, that is a matter of opinion. There was a time when the town hall was considered as a club and social rendezvous. That sort of thing has gone. The municipal council is now a business assembly, and the people who used to seek office expecting an easy time when they could revel in a certain amount of social glamour, no longer find that attractive. There need be no doubt that there will always be a sufficient and an increasing supply of enlightened people who will be willing to give their services for the benefit of the community, more particularly When they find there is work to be done in which they can use their powers of reasoning, and such qualities as they have.

The hon. Member for Cheltenham (Mr. Lipson) said the Bill would be unfair to private trade, and I wondered what the hon. Member for Harrow (Sir I. Salmon), who was sitting at the other end of the Bench, thought of that. Surely he and the company of which he is the head are representatives of the very great improvement that has been brought about in trade by the system of multiple trade. It is the multiple traders who have wiped out the small trader on whom so much sympathy has been expended, without any thought of compensation. That is the story that runs right through the whole of industry to-day. Hon. Members opposite talk about preserving free competition. The Parliamentary Secretary has still some glimmerings that he was once a Liberal. They used to talk about competition 30 years ago, but competition has long been wiped out of the realm of industry by the multiple stores. The capital of the various multiple industries of this country is £175,000,000, and they are carrying on a ruthless war against the small traders. Let us be fair to them. They are also making a better article, and what we say is that the same could be done, and in some instances better, by the municipalities, and the profits which at present go in directors' fees and in bonus shares and dividends could be devoted to the common weal.

It has been said that if this Bill were passed it would be a disaster to the Co-operative Movement. That argument was put forward by the hon. Member for Colchester, who spoke about the disruption of the democratic forces. Surely, he is here for that purpose. But the hon. Member need not worry about the Cooperative Movement, for we on this side will look after that. Then there has been the argument that the Bill, if passed, would lead to an increase in the burden of rates. We have heard that argument before. It has been made whenever any proposal has been brought forward for an improvement in health services and in the conditions of the people. We have always, at, such times, heard the old parrot cry of increased rates. The best answer to that argument can be seen across the river, in County Hall, where for the second time, in this capital City, there is a Socialist majority. The community sent back that Socialist majority because it was able to deliver the goods. Admittedly, the rates went up, but the community was so satisfied that it was getting good value for its money that it sent back the Socialists with an increased majority. People were sick of the monument of Tory inefficiency a broken backed bridge in the centre of the greatest capital in the world. For eleven years the Tories were there, and they could never do anything because of the increased' burden that would be put on the rates. The ratepayers showed their disgust with that sort of thing and kicked the Tories out, and they are likely to remain out for a good many years.

It is amusing that hon. Members opposite should oppose municipal savings banks when there is such a striking example of the success of a municipal savings bank in the city represented by the Prime Minister. I do not wonder that the Prime Minister does not put in an appearance to-day, for he would feel very uncomfortable to hear strictures on municipal savings banks. It is worth noting that the hon. Member for West Birmingham has pledged himself to support a Bill, if one is brought forward, that is confined to the establishment of municipal savings banks. At any rate, we have made one breach in the opposition of hon. Members opposite in that connection. The hon. Member for Harrow (Sir I. Salmon) made some criticism with regard to a brick works established in the City of Bradford. He rather led the House to believe that that brickworks has been a failure, and that it is not serving the purpose for which it was established. I have made inquiries, and I have found that, far from that being the case, the brickworks is very successful. At a time when building costs were at their highest, the municipality bought a quarry and decided to make their own bricks. Within 10 years they had paid off the capital sum, and since then they have been supplying the greater part of the bricks they require at a cost which is less than the cost of bricks supplied from outside. One hon. Member said that there is an over-supply of bricks. Probably there has been an over-supply, and too much competition in a certain way, so that the brick-making firms have wanted the supply to be reduced in order that the price could be maintained against the public. One of the purposes of the Bill is to deal with that.

A great deal of capital was also made by the hon. Member for Harrow—I am sorry that having delivered his speech he has left his place—about the closing of the London County Council's works department. The truth of that is that the works department all along was bitterly opposed by the Conservative party. In those days predecessors of the hon. Member for West Middlesbrough (Mr. K. Griffith) who were Liberals and Progressives, were responsible for that works department, and an excellent institution it was. One will always remember the disgusting campaign which was then conducted by the Tories against the Progressives and the cry of "It is your money they want." That campaign resulted in the Progressives being turned out and one of the first acts of the Conservative party when in power on the London County Council was to abolish the works department. That is altogether different from the impression which the hon. Member tried to convey, and the same thing could be exemplified in other parts of the country, though possibly in a lesser degree. The hon. Member went on to express the view that it was impossible for a municipality to run a technical business with success. Surely most of the existing public utility services are technical businesses. Until recently tramways were run by many municipalities and I suppose still are in some parts of the country like Glasgow. There must be a certain amount of technical business in connection with tramways, but these services were and are run very efficiently.

The hon. Member for West Middlesbrough agreed with what had been said about the excellence of the present municipal services, but he objected to any extension of them. We are glad to find on this occasion a united front between the Liberal on this side of the House and the Liberal on the other side. The hon. Member said the municipalities were doing good work at present, but he did not desire them to have further powers. May I remind him that there is a provision in the Bill whereby the Minister can interfere if he considers that these services are not being properly and efficiently conducted? Indeed, one of the things of which I complained in the beginning about this Bill was that there was too much scope for interference in it. But there it is, and all this, I submit, shows that the opposition is not so much to the Bill itself, as to the whole principle of a municipality doing anything in relation to the extension of its services.

The hon. Member for Cheltenham (Mr. Lipson) said that the reputation of municipal government had been built up in ways other than those proposed in the Bill, but that is not the case. Municipal government only came into public notice and public favour when it took to itself the power to control public services which were essential to national and municipal well-being. It was only when municipal government began to control sanitation, lighting, housing, road-making and things of that sort that it began to loom large in the public eye and to come into the credit which it now rightly enjoys. The fact is that as municipal authorities have more and more invaded the realm of private enterprise, so more and more have they found favour with the public, because they have indicated the success that they can make of it, and there is hardly anything, as has already been said whether it be in transport, water, or what not, in which it has not been shown ultimately that that was the wisest and best course-to follow.

It was said by the Parliamentary Secretary, I think, that this matter was one that should be dealt with by a Government Bill rather than by a private Bill. Do I understand that he is making some promise that there might be a Government Bill? If so, I will at once cease and say "Thank you." But let us assume that he does not mean that. How many Acts are on the Statute Book which first of all had to be brought forward as private Measures in order to draw public attention to their subject-matter and to get something done, and which their promoters had then to be asked to withdraw, so that the Government might take some step in the matter? We had one only the other day, when the hon. Member for Jarrow (Miss Wilkinson) brought forward a Bill dealing with building societies, and it was suggested that if that Bill were withdrawn, the Government would take some action in the matter. I think it was the hon. Member for Camlachie (Mr. Stephen) who referred to the Bill dealing with share pushers. We had a good deal of trouble raised about that before the Government would do anything with regard to it. I can remember my right hon. Friend the Member for West Stirling (Mr. Johnston) raising that question in this House again and again, and it took a very long time before the Government took any steps with regard to it. There is therefore no point in that argument whatever. Again and again reforms have had to be pushed in this way, and it is only as and when public opinion has grown to a volume of indignation that the Government have taken the necessary steps themselves to bring in a Bill.

The hon. Gentleman the Parliamentary Secretary ventured to say that business under the control of municipalities had no competition with other industries of a similar character. Unfortunately, I am old enough to remember the fight between the omnibus and tram companies when first the London County Council took over the trams. I can remember the fight that the private companies made to prevent trams running over Westminster Bridge so that people should be brought nearer to their work. That has been the story all along, until such time as it was found necessary to take over the whole transport problem, as was done in this instance, and now the buses also are under some sort of public control. The public services proposed to be dealt with by this Bill are under such safeguards as have already been taken as to giving the Minister or whoever may be responsible full opportunity to weigh up the question whether or not they are necessary and whether or not they can be run to the advantage of the community.

There is no weight in the argument that says to us that in the case of a private company failing, the individual loses his money, but that in this case it would be the ratepayers who would lose. We are losing millions of money at the present time through subsidies paid to private enterprises that are unable to carry on their businesses efficiently or properly. What is more, we have not even the advantage of any control over them. If the electors thought they were being let down badly by those who were representing them, they had the power to eject them as soon as the opportunity presented itself. These people, however, are on our backs for all time, and they are kept there with the connivance of the Government who find it well to keep in with their friends in this way. The Parliamentary Secretary said that we were to add milk as one of the things to be supplied, and that it would be impossible to put that in because of a monopoly. Am I wrong in thinking that the Government introduced a Milk Bill some time ago which they had to withdraw, and that in it there was embodied the principle of monopoly?

Mr. Bernays

My point was that under this Bill, if the local authorities went into the milk trade, they would not create a monopoly, but would intensify the competition.

Mr. Ammon

Now we have a further recantation of Liberalism. Part of the argument against this Bill has been that we are doing something to eliminate competition and now there is an objection because we are not eliminating it. The hon. Gentleman must decide which horse he will ride. Numbers of measures have been brought before the House in which we have endeavoured to give further powers to local authorities to find the necessary funds to carry on their work and to see that the burden of taxation falls on the right shoulders. This House rejected a taxation of land values Bill which the London County Council introduced recently because they saw only too well that an unfair burden was being placed on the ratepayers.

I ask the House with confidence to vote for this Bill, although I have not confidence that it will be carried because I know that, as in times past the forces of privilege and reaction against progress are still entrenched on those Benches. Just as those who went before us had, year after year, to bring forward their measures of progress until such time as they ultimately got through, so hon. Gentlemen opposite may rest assured that we shall continue in this policy. Gradually the need for it will become less because municipal bodies and the Government are more and more making concessions along the road that we want to travel. An opportunity is given to Members of the House to show that they have progressive minds above personal and vested interests, and that they have some concern for the general well-being. Because of that, I ask them to give the Bill a Second Reading.

Mr. H. G. Williams

Would the hon. Member tell me why he is including milk and bricks in the Bill and is leaving out beer and tobacco?

Mr. K. Griffith

Will the hon. Member deal with the question of compensation? I should like to know where there is in the Bill any power to compensate, except in the rare case where an existing business is acquired.

Mr. Ammon

I did not deal with compensation because it is not in the Bill, but nevertheless there is nothing to say that it shall not be. The Minister has power to be satisfied as to the terms and conditions under which an undertaking shall be acquired, and that will be sufficient safeguard.

3.25 p.m.

Mr. Denman

My colleague the hon. and gallant Member for South-East Leeds (Major Milner), who seconded the Bill, asserted that it was expressive of the good sense and practical capacity of Yorkshire. We have had a rather different expression of Yorkshire's thought from the hon. Member for West Middlesbrough (Mr. K. Griffith), and I should like to add a contribution from the centre of commercial Yorkshire. Like my hon. Friend the Member for West Middlesbrough, I do not for one moment doubt the success of municipal enterprise in this country; I think very few people in this House do. The story of municipal success in transport is one of the things of which we are proud, and talk of municipal inefficiency, or possible inefficiency, leaves me entirely cold. Equally, I do not dispute the soundness of municipal finance. On the whole, I think our municipal finance is about the soundest form of finance in the country, and I often wish that our railways had been financed on the same principle as our local services are. I believe that our present transport difficulties would be far less if railway finance had been as sound as that of the municipalities. Still less would I dispute the wastefulness of competitive enterprises. Everyone who has considered the problems of milk and coal distribution knows that the consumer has to meet unnecessary charges before he receives those commodities. But I am afraid I cannot support this Bill, because I think it would be the wrong way of doing what is needed.

Mr. Stephen

Did not the hon. Member vote for a similar Bill in 1930?

Mr. Denman

I am almost certain that I did, but a municipal authority is nowadays not the best organ of public ownership. We have passed beyond the time when we thought it was. I was once a keen municipal trader, and in the days before municipalities were so heavily overworked there was a great deal to be said for it, but we have advanced since then. I remember one example which roused special enthusiasm among all who were interested in municipal trading, and that was the attempt of Manchester to organise a milk distribution system. I mentioned that effort some years ago to a young Socialist about half my age and he said "What, you still believe in municipal distribution?" He regarded me as already out of date, as indeed, I was.

If there is any reference to antiques I would remind hon. Members that antiques are of two kinds. There is the kind which matures and ripens until we are ready to accept it. There is the other class, that is left behind by the march of events. This wide extension of municipal trading is one of those cases; the theory of public ownership has advanced beyond it.

Let me give reasons, one political and one economic. I will not stress the political argument. We all know the risk of giving elected bodies power of control over commodities. Does anybody here with experience of local government want to be faced with an election in which one side or the other is offering a halfpenny off the loaf of bread? I do not say that local authorities are corrupt or that their standards are lower than those we have here, but that the appropriate economic conduct of a business is certainly liable to be deflected by merely political consideration.

Mr. Stephen

I am not quarrelling with what the hon. Member said, but he did not realise that those things were being said in 1930, and did he answer them in 1930?

Mr. Denman

I do not think I did answer them, but increased experience in local Government and at the elections persuades us all that there is a political risk, and that the true economic management of these matters could not be maintained. I attach equal importance to the economic argument. The real fact is that local government area are, rarely appropriate areas for distributive businesses.

Mr. Duncan

On a point of Order. Is it in Order for an hon. Member to read a newspaper in the House of Commons?

Mr. Speaker

I did not notice that any hon. Member was doing so, but if an hon. Member is reading a newspaper it is not in Order.

Mr. Denman

A municipal area is not an appropriate area for the conduct of business. What co-operative society confines its distribution area to a borough boundary? The thing is absurd. What it means in fact is that you have a tendency, when regulating distribution within a municipal area, to skim the cream off the business for the benefit of that municipality and to the injury of surrounding areas. Hon. Members will remember the example of electricity. The McGowan Committee reported what was well-known from other sources, that the electrical distribution of this country has seriously suffered because the supply areas were wrong from the consumers' point of view. There were packed areas which could be well and cheaply supplied while all round were areas which could not get a supply without paying far more than ought to have been paid, and would have been paid had the distribution area been appropriate to the supply of electricity. Even in the case of water that is so. There has been a good deal of talk in modern times about the need for a water grid, in which the water supply would not be confined strictly to municipal boroughs.

Therefore, when you are expanding public ownership in these days you need the specialised authority which owns and controls the businesses in respect of areas appropriate to them. For example, for milk and electricity you need quite different areas. Hon. Members may suggest that local authorities could join for these purposes, but you might get together two neighbouring local authorities, or even three or four, and still not have the appropriate area for the purpose of the business.

One other point relates to compensation. Hon. Members cannot assert that this is a minor point which can be safely left to Committee. I wish they would not bring in Bills and omit all reference to compensation if they still hold to the old Labour doctrine that where you take over a private person's business you give him reasonable compensation. That was the old Labour principle which ought to be asserted by all legislation respecting public ownership. If hon. Members opposite want to make public ownership thoroughly hated among the people they will do it by these threats to property. When the interests of people suffer they make their sufferings widely known. As to compensation, the Bill not only makes no suggestion about it, but it is implicit in the Bill as it stands that the municipality will undertake the business on its own account, and simply wipe out the small man. As was said by the hon. and gallant Member for South East Leeds (Major Milner), an effective monopoly will be the result of municipalisation. But driving people out of business and creating a monopoly without compensation is very hard; it would be widely resented, and would make the idea of public ownership thoroughly detested.

Mr. Messer

Does not big business do that?

Mr. Denman

Yes, but still the competion remains. The big business and the small man are in competition——

Mr. Quibell

And the small man goes to the wall.

Mr. Denman

I admit that he has a very hard time, but he is in competition with firms who, like himself, are endeavouring to make a profit. In competition with the municipality, however, he would very probably be up against the competition of a body that would deliberately avoid making a profit—that, according to the accepted theory on these matters, would be attempting only just to pay its way. That kind of competition is obviously much harder for the small man to face than the competition of the big combine, which, ex hypothesi, is attempting to make as large profits as it can. The two kinds of competition are not really comparable.

Mr. Stephen

Does not the hon. Member realise that the small man will become a municipal employé, and that the money required to support him will come from the fact that multiple businesses will go out of existence or will not be making big money?

Mr. Denman

I do not know whether the hon. Member received any deputations of milk distributors in his constituency when the Milk Bill was before the House, but, if so, he will have found it very difficult to persuade them that they would be absorbed as workers under the Milk Board.

Mr. Quibell

That was your own Government's Bill.

Mr. Denman

There is one more point in connection with compensation. Whatever may be the intention of the Bill in regard to compensating the small men or the co-operative societies who are driven out of business, it makes no provision at all, nor have I heard it suggested throughout the Debate, that the taxpayer shall be compensated for the loss of taxes which will be involved. At present these businesses, and more especially the big combines, pay very large amounts in taxation——

Major Milner

So do local authorities.

Mr. Denman

Certainly, but the local authorities will not make big profits, and the amount that they will pay in Income Tax will be very much smaller than the amount that is now paid by these businesses, while, of course, they will pay nothing in Surtax. How is the State to be compensated for the loss of the income which it has long been receiving, and which it may reasonably expect to receive from the continuance of these businesses? I do not say that these things cannot be got over, but there is no provision for them in the Bill. I am sorry that I cannot give my support to the Bill.

3.40 p.m.

Mr. Wakefield

The hon. Member for North Camberwell (Mr. Ammon) referred to the closing down of the London County Council works department and in giving the history of that matter suggested that the hon. Member for Harrow (Sir I. Salmon), who originally raised the subject, did not put a true picture before the House. The hon. Member for North Camberwell led us to believe that it was political prejudice and opposition which was the reason for the closing down of the works department. But he did not answer the point made by the hon. Member for Harrow, which was that a Socialist majority has been in power for some years on the London County Council and it has not re-established the works department. Furthermore, the hon. Member for Harrow pointed out that when the works department was in operation losses were incurred, and that frequently when contracts were entered into and competitive prices were obtained the final price when the work was completed by the works department was far higher than the original competitive contract price of private enterprise.

Mr. Ammon

I am sorry I omitted to deal with that point, but the answer is easy. The local authority had to provide for sinking fund and other overhead charges which did not apply in the case of the private competitor, and opponents used this fact as a means of showing that the works department price was very much higher. With regard to the second point, there is plenty of time yet for the London County Council to act. It has been dealing so far with those things which it things are most essential, and it must be remembered that the Council has been burdened a good deal by the legacy left by its predecessors—housing and so forth. First, things first. We have every hope that it will take action in this matter.

Mr. Wakefield

I understand that the various charges that were required for allocation of overheads and so forth, to which the hon. Member has referred, were included in the price. But, be that as it may, one would have thought that if indeed it was a useful and profitable thing to have a Works Department running, now that the Socialists are in a majority on the London County Council they would re-establish the department so as to help them further in the building work to which the hon. Member has referred. I have sat through the major part of this Debate and there is one thing that has stood out more than anything else. It is that the work which local authorities have now to undertake is of such a magnitude that to give them further work to do would throw upon them an almost impossible task. I know that among my own friends who serve upon local authorities there are those who state that they are finding it impossible to give both to the council work and to their own businesses that attention which they consider necessary. Quite clearly if so much work is required of them that their businesses have to be neglected, they will have to give up voluntary public work. You cannot continue indefinitely to increase the work of local authorities, otherwise there will be nobody with the capacity to undertake this work available to carry it out. It should not be the job either of central government or of local government to undertake and run businesses. It is the job of local government, just as it is of central government, to provide the right kind of conditions for private enterprise to flourish. If central government and local government provide the right conditions, such as security, through the Navy, the Army and the Air Force centrally and the Police locally, trade can prosper and the standard of living can improve. It is the job of local authorities to provide the necessary social services, but surely it is not their duty to run businesses.

The hon. and gallant Member who Seconded the Bill suggested that we would be preventing people from joining together to provide a mutual service if we prevented this Bill from coming on to the Statute Book. We are doing nothing of the sort. There is nothing to prevent people in this country joining together to provide a service, either for themselves or for other people, either individually or as a collection of people. It can be done by forming a company, by forming a co-operative society, or by forming a partnership. I am surprised that we have had no statement from the other side as to the attitude of the cooperative societies to this Measure. Statements have been made from this side that the Co-operative Movement is utterly opposed to municipal trading, yet we have had nothing said, either by the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) or by anybody else representing co-operative societies, as to their view. Quite clearly, this Bill must attack the trade of co-operative societies as it will that of the individual traders. I am sure hon. Members would like to have some information on this very important matter. The hon. and gallant Member who seconded the Bill suggested that when local authorities undertook a service they did so without profit, suggesting that there was something very evil about profit-making. I do not know where this country would be if no profits were made.

Mr. Messer

There would be no unemployment.

Mr. Wakefield

But surely it is only out of profits that the capital becomes available for creating further industries and further employment.

Mr. Messer

Where does the profit come from?

Mr. Wakefield

From providing a satisfactory and efficient service to the community. If you do not provide a good pair of boots or a good suit of clothes, to the satisfaction of the community, you will not make a profit. The whole test of satisfaction or otherwise is whether a profit can be made or not. If you did not make profits you would not have any of your £500,000,000 available for social services nor any funds available to make this country secure from outside aggression. I should like to know what sort of place this country would be if all our businesses and industries were run either by the State or by local authorities. Where would the money come from to provide for our Defence services and our Social services? That question has not been dealt with. The hon. and gallant Gentleman who seconded the Bill pointed out that, if the local authority ran a service or and undertaking, prices would obviously be lower because the overheads could be distributed. For example, he said that part of the town clerk's salary could be so distributed. What does a town clerk know about selling boots, or making bricks? He pointed out that a committee of voluntarily elected councillors were as competent to run some specialised technical service as a board of directors. Surely, in the majority of cases—I admit not in all—the board of directors are highly competent men with special qualifications for running or operating a particular business.

Commander Bower

Not in the co-operative.

Mr. Wakefield

I am not familiar with the working of the co-operative society, but in the majority of cases in industry boards of directors are there for special purposes because of technical knowledge or specialised qualifications. It is clear that if you extend distributive services and manufacturing industries to local authorities you will set up a great bureaucratic machine which it will be impossible for the elected representatives of the people to control. A committee of local councillors have not the time or qualifications to control or operate, even though the details be carried out by civil servants, highly organised distributive or manufacturing businesses. We see the results when such a business is run by municipal servants, perhaps well, perhaps badly, but without the proper control that is necessary. Often you get losses instead of gains, and you find that the business has to be handed back to private enterprise.

Reference has been made to the fact that no compensation is to be paid to traders under this Bill. I can well conceive that if this Bill were placed upon the Statute Book there would be no intention to pay any compensation to traders, because the local authority would set up a trading concern, and because of its financial position with regard to the rates, it would not matter in the first year or two if it made losses or not. It could undercut and squeeze out the small trader with the assistance of the which the small trader contributed to the rates. Having made him bankrupt, it would be in a monopoly position and able to charge what prices it liked without competition.

It reminds me rather of the Chinaman who was brought before a magistrate. The magistrate said to him "You are accused of playing games of chance. What have you to say about it?" The Chinaman replied, "Me no play games of chance; cards all marked, dice all loaded, no chance at all. Me win every time." It seems to me that that is the position in which the poor local trader will be placed if this Bill becomes law. There will be no chance for him in carrying on his business.

A Bill of such magnitude and such ramifications is not fit for a Private Member's Bill. If a Bill of this kind is found to be necessary, it ought to be brought in by the Government. In listening to the debate today I have heard no evidence at all that the Bill is wanted. I do not know whether my experience is borne out by the experience of other hon. Members, but whenever a Private Member's Bill comes up I invariably have a lot of correspondence about it. I get a a number of letters from interested people asking me to support the Bill and a number of letters asking me to oppose it. In this instance I have had one or two requests to oppose the Bill, but not a single request to support it. If that is the experience of other hon. Members, it is sufficient reason for us to reject the Bill on Second Reading and put it where so many Bills in the past have been put.

3.57 p.m.

Commander Bower

There is one point on which I wish to underline what has been said by several hon. Members on this side of the House, and that is that whereas usually on Friday afternoons when we have these Socialist Private Members' Bills brought forward, there is at least one member of the Co-operative party present. The right hon. Member for Hillsborough (Mr. Alexander) is most assiduous in his attendance on these occasions, but he is not here to-day. We have not had one voice raised on behalf of the Co-operative party to-day to say what they think of the Bill. The reason is perfectly obvious. In the absence of the right hon. Member for Hills-borough I can say without any fear of contradiction that the reason is that the Co-operative party hate this Bill like poison, and that the alliance between the Labour party and the Co-operative party on this matter is not working.

One further point. I cannot see why hon. Members opposite should wish to bring in this Bill at this moment, when

there is a General Election impending, and when they hope that they will be in office shortly. When they have got into office I understand from a publication by the Leader of the Opposition, entitled "Problems of Social Government," that the local authorities are to be supplanted by commissioners. He calls them commissars. The commissar would find himself, if this Bill became law, having to sell milk, coal, bread, and carry on any other business, and also to deal in bricks. All I can say is that he would not have to buy any bricks; he would get all he wanted without buying them.

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

The House divided: Ayes, 96; Noes, 156.

Division No. 63.]	AYES.	[4.0 p.m.
Adamson, W. M.	Hayday, A.	Price, M. P.
Ammon, C. G.	Henderson, A. (Kingswinford)	Pritt, D. N.
Attlee, Rt. Hon. C. R.	Henderson, J. (Ardwick)	Quibell, D. J. K.
Banfield, J. W.	Henderson, T. (Tradeston)	Richards, R. (Wrexham)
Batty, J.	Hills, A. (Pontefraet)	Ridley, G.
Bellenger F. J.	Jenkins, A. (Pontypool)	Robinson, W. A. (St. Helens)
Benn, Rt. Hon. W. W.	Jenkins, Sir W. (Neath)	Sanders, W. S.
Bevan, A.	John, W.	Silkin, L.
Burke, W. A.	Jones, A. C. (Shipley)	Silverman, S. S.
Charleton, H. C.	Kennedy, Rt. Hon. T.	Smith, Ben (Rotherhithe)
Cluse, W. S.	Lansbury, Rt. Hon. G.	Smith, E. (Stoke)
Clynes, Rt. Hon. J. R.	Lathan, G.	Smith, Rt. Hon. H. B. Lees- (K'ly)
Cocks, F. S.	Lawton, J. J.	Sorensen, R. W.
Cove, W. G.	Lee, F.	Stephen, C.
Daggar, G.	Leslie, J. R.	Strauss, G. R. (Lambeth, N.)
Dalton, H.	Lunn, W.	Summerskill, Dr. Edith
Davidson, J. J. (Maryhill)	Macdonald, G. (Inc.)	Taylor, R. J. (Morpeth)
Devies, R. J. (Wasthoughton)	McEntee, V. La T.	Thorne, W.
Davies, S. O. (Merthyr)	McGhee, H. G.	Thurtle, E.
Day, H.	MacLaren, A.	Tinker, J. J.
Dobbia, W.	MacMillan, M. (Western Isles)	Tomlinson, G.
Dunn, E. (Rother Valley)	MacNeill Weir, L.	Viant, S. P.
Ede, J. C.	Marshall, F.	Walkden, A. G.
Edwards, Sir C. (Bedweilty)	Mathers, G.	Walker, J.
Flateher, Lt.-Comdr. R. T. H.	Messer, F.	Watkins, F. C.
Frankel, D.	Morgan, J. (York, W.R., Doneaster)	Whiteley, W. (Blaydon)
Gallacher, W.	Morrison, Rt. Hon. H. (Hackney, S.)	Williams, E. J. (Ogmore)
Gardner, B. W.	Muff, G.	Wilson, C. H. (Attercliffe)
Greenwood, Rt. Hon. A.	Noel-Baker, P. J.	Windsor, W. (Hull, C.)
Groves, T. E.	Parker, J.	Young, Sir R. (Newton)
Guest, Dr. L. H. (Islington, N.)	Parkinson, J. A.
Hall, J. H. (Whitechapel)	Pearson, A.	TELLERS FOR THE AYES.—
Hardie, Agnes	Pethick-Lawrence, Rt. Hon. F. W.	Mr. Leach and Major Milner.
NOES.
Adams, S. V. T. (Leeds, W.)	Broadbridge, Sir G. T.	Crookshank, Capt. Rt. Hon. H. F. C.
Alexander, Brig.-Gen. Sir W.	Brocklebank, Sir Edmund	Cross, R. H.
Allan, Col. J. Sandeman (B'knhead)	Brooke, H. (Lewisham, W.)	Crossley, A. C.
Astor, Hon. W. W. (Fulham, E.)	Brown, Brig.-Gen. H. C. (Newbury)	Cruddas, Col. B.
Balfour, Capt. H. H. (Isle of Thanet)	Bullock, Capt. M.	Davidson, Viscounless
Barrie, Sir C. C.	Butcher, H. W.	De laBère, R.
Baxter, A. Beverley	Campbell, Sir E. T.	Denman, Hon. R. D.
Beamish, Rear-Admiral T. P. H.	Cayzer, Sir C. W. (City of Chester)	Doland, G. F.
Beaumont, Hon. R. E. B. (Portsm'h)	Cazalet, Thelma (Islington, E.)	Duckworth, Arthur (Shrewsbury)
Bennett, Sir E. N.	Channon, H.	Duggan, H. J.
Bernaya, R. H.	Clarke, Colonel R. S. (E. Grinstead)	Duncan, J. A. L.
Blair, Sir R.	Cobb, Captain E. C. (Preston)	Eden, Rt. Hon. A.
Bossom, A. C.	Cooke, J. D. (Hammersmith, S.)	Edmondson, Major Sir J.
Bower, Comdr. R. T.	Cox, H. B. Trevor	Elliston, Capt. G. S.
Briscoe, Capt. R. G.	Croft, Brig.-Gen. Sir H. Page	Emrys-Evans, P. V.
Entwistle, Sir C. F.	Macdonald, Capt. P. (Isle of Wight)	Sandeman, Sir N. S.
Foot, D. M.	McKie, J. H.	Sanderson, Sir F. B.
Fox, Sir G. W. G.	Macnamara, Lieut.-Colonel J. R. J.	Sandys, E. D.
Fremantle, Sir F E.	Maitland, Sir Adam	Scott, Lord William
Furness, S. N.	Makins, Brigadier-General Sir Ernest	Seely, Sir H. M.
George, Major G. Lloyd (Pembroke)	Manningham-Buller, Sir M.	Seiley, H. R.
Gluokstein, L. H.	Margesson, Capt. Rt. Hon. H. D. R.	Smiles, Lieut.-Colonel Sir W. D.
Goldie, N. B.	Markham, S. F.	Smith, Bracewell (Dulwieh)
Graham, Captain A. C. (Wirral)	Marsdon, Commander A.	Somervell. Rt. Hon. Sir Donald
Grattan-Doyle, Sir N.	Maxwell, Hon. S. A.	Somerville, A. A. (Windsor)
Gridley, Sir A. B.	Mayhew, Lt.-Col. J.	Southby, Commander Sir A. R. J.
Griffith, F. Kingsley (M'ddI'sbro, W.)	Meiler, Sir R. J (Mitcham)	Spears, Brigadier-General E. L.
Grimston, R. V.	Mills, Major J. D. (New Forest)	Spens, W. P.
Guest, Lieut.-Colonel H. (Drake)	Mitchell, H. (Brentford and Chiswick)	Stanley, Rt. Hon. Oliver (W' m'ld)
Harris, Sir P. A.	Mitchell, Sir W. Lane (Streatham)	Stourton, Major Hon. J. J
Hasiam, Sir J. (Bolton)	Morgan, R. H. (Worcester, Stourbridge)	Stuart, Hon. J. (Moray and Nairn)
Hepburn, P. G. T. Buehan.	Morris-Jones, Sir Henry	Sutcliffe, H.
Herbert, Major J. A. (Monmouth)	Nail, Sir J.	Tate, Mavis C.
Higgs, W. F.	Nicolson, Hon. H. G.	Taylor, Vice-Adm. E. A. (Padd., S.)
Hoare, Rt. Hon. Sir S.	O'Connor, Sir Terence J.	Touche, G. C.
Holmes, J. S.	Ponsonby, Col. C. E.	Tufneil, Lieut.-Commander R. L.
Howitt, Dr. A. B.	Pownail, Lt.-Col. Sir Assheton	Wakefield, W. W.
Hudson, Capt. A. U. M. (Hack., N.)	Radford, E. A.	Walker-Smith, Sir J.
Hulbert, N. J.	Raikes, H. V. A. M.	Wallace, Capt. Rt. Hon. Euan
Hume, Sir G. H.	Rankin, Sir R.	Ward, Lieut.-Col. Sir A. L. (Hull)
Hurd, Sir P. A.	Reid, Sir D. D. (Down)	Waterhouse, Captain C.
Hutchinson, G. C.	Reid, W. Allan (Derby)	Watt, Major G. S. Harvie
Keeling, E. H.	Remer, J. R.	Wedderburn, H. J. S.
Kerr, Colonel C. I. (Montrose)	Ropner, Colonel L.	Wells, Sir Sydney
Kerr, H. W. (Oldham)	Rosbotham, Sir T.	Whiteley, Major J. P. (Buckingham)
Kerr, J. Graham (Scottish Univs.)	Ross, Major Sir R. D. (Londonderry)	Williams, H. G. (Croydon, S.)
Keyes, Admiral of the Fleet Sir R.	Ross Taylor, W. (Woodbridge)	Willoughby de Eresby, Lord
Latham, Sir P.	Royds, Admiral Sir P. M. R.	Windsor-Clive, Lieut.-Colonel G.
Law, R. K. (Hull, S.W.)	Russell, Sir Alexander	Wise, A. R.
Lennox-Boyd, A. T. L.	Russell, R. J. (Eddisbury)	Young, A. S. L. (Partick)
Lipson, D. L.	Russell, S. H. M. (Darwen)
Liewellin, Colonel J. J.	Salmon, Sir I.	TELLERS FOR THE NOES.—
Mabane, W. (Huddersfield)	Samuel, M. R. A.	Mr. Oswald Lewis and Mr. Bull.

Proposed words there added.

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