HC Deb 09 May 1944 vol 399 cc1790-7

It it appears to the Minister that the transfer by this Act to the local education authority for any county of functions formerly exercisable by the council of any county district is likely to bring about in the county excessive variations in the incidence of rates during the period immediately following the commencement of Part II of this Act, he shall, if application is made to him in that behalf either by the local education authority or by any such council, cause an investigation to be made in accordance with the provisions of Part I of the Eighth Schedule to this Act, and, subject to the provisions of Part II of that Schedule, may make an Order for the county under the powers thereby conferred. —[Mr. Ede.]

Brought up, and read the First time.

Mr. Ede

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

This Clause is so bound up with the new Schedule on the Order Paper that I doubt whether it is possible to say anything in explanation of it unless I use the Schedule as an example of the way in which it will work. It may be for the convenience of the Committee if we discuss the two together.

The Chairman

I understand the hon. Gentleman will refer to the Schedule, which is quite in Order.

Mr. Ede

On 1st April next, the Part III education authorities will disappear, and inside the county areas the county council will become the local education authority. The Part III education authorities have levied their own rates in respect of elementary education and the county council has, in the past, levied a rate in respect of elementary education for that part of the county which was not covered by a Part III education authority. For instance, if I may take two examples, I see in front of me my hon. Friend the Member for Llanelly (Mr. J. Griffiths)—the borough that gives its name to his constituency is a Part III authority—and my hon. and learned Friend for Carmarthen (Mr. Moelwyn Hughes) represents a borough, with a large part of a surrounding county, which is also a Part III education authority. Those two boroughs levied their own elementary education rate [An HON. MEMBER: "What about Newcastle?"] Newcastle, although a city and county, has not a county council for this purpose. The county council has levied an education rate in Carmarthenshire for the whole of the county except Llanelly and Carmarthen. When the new arrangement comes about, there will be one rate levied for the whole of the county of Carmarthenshire and the county council will precept on the boroughs of Llanelly and Carmarthen in the same way as they have hitherto precepted on the other rating authorities in the county and, in some areas, this will mean that rates go up and, in others, that they will go down. Some of the increases and decreases will be fairly substantial, and it might cause a very substantial grievance if, in fact, the increases were levied straight away.

My right hon. Friend has given a great deal of attention to this matter, and has endeavoured to arrive at a scheme, whereby the increases in the rates shall be made more gradually, and the machinery for securing this is set out in the new Schedule to the Bill which is to be found on the Order Paper. It is impossible to take the rates for the current year as representing, over the whole country, the real burden that normally falls on an area. Evacuation, bombing, devastation, and the influx of population have so altered the whole situation that the year 1944–45 would be a very unsafe year to take. My right hon. Friend has, therefore, taken the year ended 31st March, 1939, for the standard year and he is making, in respect of every elementary education authority area in the country, a calculation as to what was the rate-borne expenditure in that area during that particular year. That is called the "standard rate-borne expenditure." He then assumes that in that year the proposals for making the county council the local education authority for elementary education had been in existence, and he calculates what would have been the rate for the whole county if that had been the case. That is to say, in the example I took, he assumes that Llanelly and Carmarthen were inside the county. He then makes a calculation, as to what the uniform rate would have been for the whole county, and this is called the "notional rate expenditure." Where an authority's rate would have been increased had the notional rate been in operation, the amount of that increase of pence in the £ is called the "rate disadvantage" and where the rate would have fallen had the county rate been in operation it is called the "rate advantage." In some areas the difference is not very great, in others it is substantial. My right hon. Friend proposes to ignore all increases under 6d. in making any arrangement for bringing in a new scheme, but where any one of the various authorities will have a rate disadvantage of more than 6d. the scheme in the Schedule may be applied to the area.

The action that will be taken after that will be this. The authority with the highest rate disadvantage will be considered, that is to say, the authority whose rate would have been raised most had a county rate been in operation in 1939. The number of pence in £ the by which its rate would have gone up will be divided by six. Assuming, therefore, that an authority's rate would have gone up by 16 pence, that number will be divided by six, and the answer will be two and a fraction. All fractions are ignored and two is taken as the figure to apply to the whole of that county. A scheme is then made in which that rate disadvantage, in the case I have taken, would disappear in two years. It will be applied to every separate rating authority in the county; that is to say, those rating authorities who would suffer a rate disadvantage have that disadvantage brought upon them gradually and those who would gain a rate advantage also get the benefit of the advantage gradually, and the terms of years over which this will work may not exceed five. That is to say, it would have to be a rate disadvantage of 30 pence or more in the £ before you would get the maximum number of years. The calculations will be made by adding one to the number you get by dividing the largest rate disadvantage by six, and then that will be the fraction by which the rate disadvantage will be reduced each year.

Mr. Logan

Is this to be a new system of arithmetic to be taught in the schools?

Mr. Ede

The children will benefit, but this is the kind of exercise that we worked out in the offices of the county councils—

Mr. James Griffiths (Llanelly)

With varying results.

Mr. Ede

—I have no doubt with varying satisfaction to the rating authorities. I know it sounds rather complicated, and I apologise to the Committee for having to deal with it. It is, however, a very genuine effort to deal with what might have been a very serious grievance. May I say, it is so complicated that I shall be much helped if hon. Members will reserve their comments till the end. If we take the example that I originally took, of a rate disadvantage of 16 pence, that will disappear in two years in this way. By applying the fraction provided for in Part II of the Schedule we reduce the rate disadvantage each year by 5⅓ pence. For the first year, therefore, where the authority had a rate disadvantage of 16 pence, its rate will be 10⅔ pence lower than the general rate for the county. In the second year, it will be 5⅓ pence lower than the general rate for the county, and in the third year, the year after the Order has ceased to operate, the two will merge. Of course, similarly, but in the reverse direction, the result would work out the same, if it was an authority which had a rate advantage. Its rate advantage would disappear in the same proportion. In each county, each separate Part III authority will have a separate figure that will have to be increased or diminished, but it will be increased or diminished lay the same fraction each year.

Mr. R. C. Morrison (Tottenham, North)

Has the hon. Gentleman any information as to how many authorities will be affected by this?

Mr. Ede

I understand that there may be about 30 counties in which there might be some scheme of this kind, but it will not operate in any county unless an authority suffers a rate disadvantage of more than 6d. in the £. I thank the Committee for the courteous way in which they have listened to this somewhat involved explanation and I commend the Clause and the Schedule to the Committee in the belief that they will ease the bringing into operation of this Bill very considerably.

Mr. J. Griffiths

My hon. Friend was good enough to take my county as an example. I know already that in Llanelly the rate disadvantage will be well over 16d., and will probably be over 2s. 6d. Could my hon. Friend apply this formula to concrete cases and circulate them to Members, because it would help us very much?

Mr. Ede

The difficulty about doing that is that we have to get a certificate from the auditor as to what was the product of a id. rate in the £ in each of these areas in 1939. We know within a little what it was, but we have not got a certificate and, therefore, anything which was circulated might be misleading. I think it would be best if I circulated, not perhaps specific cases, but examples of the way it would work, using letters to indicate various local authorities.

Mr. Moelwyn Hughes

My hon. Friend has taken the example of how this works out with regard to a rate disadvantage of 16d. in the £. Would he work out a similar example now for a rate disadvantage of 36d. in the £?

Mr. Ede

Six into 36 goes six. [Laughter.] Apparently that is the same both in English and Welsh. But no scheme is to run for more than five years and this scheme may not run for more that that time. Therefore, the denominator of the fraction will be six—that is five, Plus one. In the first year the rate, if it is a rate disadvantage, will be 30d. less than the rate for the county. In the second year it will be 24d.; in the third year it will be 18d.; in the fourth year it will be 12d. and in the fifth year it will be 6d. less, then in the year following the period of the order it will merge into the county rate.

Sir J. Mellor

Is it not possible, under the Schedule, that a Part III authority whose educational functions have been transferred to the county might have to pay more than their share to the county education rate?

Mr. Ede

No. That is a point I should hardly have thought it was necessary to have argued at this time of the day. In the past, Parliament decided that the unit for educational administration should be, in the case of the Part III authority, the borough or urban district. Then, inside that borough or district one ward would pay more for education than it received. Parliament has decided in this Bill that the unit, in the future, shall be the county and the county borough. It is true that some districts in counties are wealthier than others, some have less children than others, and it may well be that one county district will pay more into the county fund than it receives, just as under a Part III authority one ward paid more into the educational fund than it received. I hope we shall recognise that this is a question of what is the appropriate unit. Parliament has decided, I think rightly, that the county is the appropriate unit and, therefore, there will be some areas which will pay more into the county education rate than they get out, just as some pay more into the county lunatic asylum rate than they get out.

Sir J. Mellor

The Parliamentary Secretary seems not to have grasped my point. I was referring to the poundage basis. It will be possible for ex-Part III authorities, under the county precept, to have to pay a higher amount on a poundage basis for a short period of years than other parts of the county. That is unfair. First you deprive them of their education functions, and then you say that, by virtue of the fact that they used to exercise those functions, they may have to pay a greater share, on a poundage basis, than other parts of the county.

Mr. Ede

This Clause and Schedule are efforts to reduce that disadvantage by bringing it upon them gradually. This is a genuine effort to deal with some areas which otherwise might be faced with a very steep increase of rates at once. Abstract justice would mean that from 1st April next the county should levy the rate and that people should have put upon them at once these steep increases in rates. Following the general rule that has been applied in local government for a good many years, what we propose is as good a way as possible of alleviating grievances, although it will result in some people paying for up to five years a little more than they otherwise might have paid.

Sir J. Mellor

If you take away the educational functions from Part III authorities, you ought not to penalise them by virtue of the fact that they used to exercise those functions. I submit that no Part III authority, on transfer of its educational functions to a county council, ought to pay any more than anyone else in the county on a poundage basis, under the county precept.

Mr. Ede

The only way to achieve that would be to indicate that from 1st April next the education rate throughout the county should be uniform. But that would have the effect, as has been indicated, of increasing some education rates by 2s. 6d., or more, at once, and that is not in acordance with the practice of this House when dealing with the transfer of functions.

Mr. Messer

Is it not a fact that you cannot get equalisation without somebody having to pay more?

Mr. Moelwyn Hughes

Is it not the case that looked at from the poundage basis, that is to say, the rate in the —,these Part III authorities will not pay any more than the county? They may be paying less for a time.

Mr. Ede

No, in some cases they will, in fact, be paying more during these five years than they otherwise would pay.

Mr. Moelwyn Hughes

I am not suggesting more than they are paying now. Suppose the education rate for the county is 9s. in the £. None of these Part III authorities will be paying a bigger education rate than 9s.

Mr. Ede

Not in Carmarthenshire, but there are counties in which some of these authorities are, at the moment, paying a higher education rate than the county rate, and they will get a substantial benefit at the end of the five years, or whatever period it is, and between now and the end of this period of calculation they will be paying, each year, something more than the current county rate.

Question, "That the Clause be read a Second time," put, and agreed to.

Clause read a Second time, and added to the Bill.