HC Deb 18 November 1947 vol 444 cc988-1101

Order for Second Reading read.

3.35 p.m.

The Minister of Health (Mr. Aneurin Bevan)

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

I believe it will be generally accepted by all right hon. and hon. Members that the Bill which I am proposing to try to explain is a very long and complicated Measure, and I shall only be able to achieve even a modest measure of success with the co-operation of hon. Members in all parts of the House. I therefore hope that we shall confine the Second Reading discussion, if I might be allowed respectfully to suggest it, to the general principles of the various parts of the Bill and to leave the many points of detail to be discussed when the Bill enters Committee, because there are so very many incidental by-products of the main principles that if we pursued them all we should not have a coherent picture. Although I know many of these incidental matters are important and intriguing, I hope we shall apply a self-denying ordinance to ourselves and keep our minds fixed all the while on the main principles.

From time to time the House of Commons is asked to consider the apportionment of financial relationships between local government and the central Government, because ever since the establishment of the county councils in 1885—[An HON. MEMBER: "1889."]—the truth is somewhere between the original statement and the interruption: it was 1888—it has been accepted that there should be central assistance for the purpose of enabling local burdens to be carried. This has, of course, been modified from time to time and the obligations of the central Government increased by virtue of a number of reforms, as for example, the partial derating of agricultural hereditaments in 1896. When we come to 1929, the most important of all the changes took place by the derating of three-quarters of the industrial hereditaments and the complete abolition of the rating of agricultural land and buildings. Then, of course, also occurred the transfer of the Poor Law and rural highways to the county councils.

All these changes had a profound influence upon the financial relationships between the Treasury and local authorities. It was recognised at that time that it was necessary in providing additional financial assistance that regard should be had to the relative wealth of local authorities, and as an old member of local government and as one who took, I think, a quite considerable interest in the matter at that time, I want to pay my tribute to the architects of the block grant formula. I was never convinced that there was any necessary organic relationship between the derating of industrial hereditaments and the redistribution of central moneys to local authorities in order to deal with relative wealth. The one could easily have been accomplished without the other. It could have been possible for industrial rating to continue and at the same time for the Treasury or the Ministry of Health to accumulate a sum of money and to distribute it in accordance with the weighted population formula quite independently of derating; but that was not done.

Nevertheless, it is quite clear that that formula of distributing money, not merely on a percentage basis but in accordance with the relative needs and wealth of local authorities, was a very important departure in local government, and the devisors of it showed considerable ingenuity. I remember how much we were frustrated and cheated by trying to find a principle which would attract money from the centre to the periphery in some objective and dispassionate fashion. However, that principle is now dated. If we revised the block grant formula in accordance with the old principles, it would produce gross injustices, because the test of relative wealth has been changed by a shift of function. In the first place, the able-bodied unemployed have been transferred to the Assistance Board, and when the Bill which is to be presented shortly becomes law and a further transfer takes place, many of the burdens now carried by local government will be transferred to central funds. There will then have matured a long campaign which has been carried on, particularly by hon. Members on this side of the House, so that central responsibility for certain hardships will be accepted and local responsibility will cease. That, of course, at once undermines the block grant formula.

Furthermore, there will be transferred on 5th July next year local financial responsibility for the hospital system. There will also be a number of other relatively small transfers. When the hospital services are transferred to the central government, it will be found that the consequences of the transfer are especially unequal. The reason is that very many local authorities have never been well off enough to undertake hospital responsibilities. Some local authorities in some better endowed parts of the country have expanded their hospital systems much more than others and so, when the whole is transferred, more relief will be given to some than to others. Therefore, this transfer produces an exceptional degree of inequality, and we could not possibly continue it.

I think there will be common agreement, in spite of the Opposition Amendment on the Order Paper, that it would be impossible for any Minister of Health today to defend the continuation of the old block grant on the existing principles; there would have to be some modifications. The questions therefore arise as to what should be those modifications; on what principles should the central grants to local government now be based? Here I confess at once that we have encountered, and must encounter, certain difficulties. We have to deal with the situation as we find it. We have not got an ideal situation, we cannot start off de novo; we have to start oft with existing obligations after the rearrangements have been made. We have to start off with the historical hangovers, we have to start off with a concrete and specific situation, and we either have to postpone the redistribution of central assistance for some years or we have to accept a certain amount of temporary untidiness as an inevitable consequence of setting about the job at the present time.

In order to distribute the funds available from the centre, it has been decided to take rateable value per head of the weighted population; that is to say, we have accepted—I think students of local government will agree with this—two factors as being largely responsible for the difference in the distribution of local government burdens; that is, the number of children under 15 years of age producing a whole variety of services which I need not detail at the moment—such as educational and child welfare services—which are well known to everybody, and also the scarcity of population in rural areas. Those two have always been regarded—and I have not heard a single argument to the contrary that is valid—and those two stand as the main causes of the additional weight which falls upon some local authorities. Therefore, we take the weighted population and divide that into the total rateable value, and so discover the average rateable value per head of the population.

At once that gives us something to work upon. Some local authorities will be below the average per head, and some will be above. Those who will be above the average per head will obviously be the more prosperous areas. I would ask hon. Members to bear in mind all the while that what we are trying to accomplish, strictly in accordance with one of the original purposes of the block grant, is to bring about an equitable distribution of central assistance; in other words, we do not want local authorities to attract more money from the centre merely because they can afford to spend more money locally, since that would merely mean the fat ones getting fatter, as, indeed, has occurred over the last 20 and 30 years, and it is one of the reasons why we are struggling in this Parliament, and were struggling before the war, to try to mitigate the most evil consequences of failure to share local government burdens equitably.

I would make this point in passing: we are not concerned primarily with the local authority; we are concerned primarily with the ratepayer. I have heard most piteous complaints by representatives of local authorities that this or that authority is being badly treated. Now it is impossible to treat an authority badly; all you can do is to ill-treat a person. This is the perfect illustration of displaced terminology. We are primarily concerned with what happens to the individual, and what we should find out, therefore, is whether two citizens of equal substance in different parts of the country have to make an equal contribution for the same local services. That is the formula. That is the basis. Therefore, I say beforehand, that it is no use for hon. Members in the course of this Debate to make long dissertations upon the monstrous injustices inflicted upon this or that authority. They will only be able to prove their case if they can show that those injustices afflict the individual citizen in those local authorities; otherwise we shall be wasting our time.

Therefore, we take the average rateable value per head of the population, and all those below the average attract a share of the block grant. They attract a share of the block grant in this way, that the Exchequer will step in and become a ratepayer to the extent that the local authority's rateable value is below the average. Thus, the local authorities will precept upon the Exchequer in exactly the same way as upon their own ratepayers. In other words, the Exchequer becomes a ratepayer to the extent of the deficit.

Sir William Darling (Edinburgh, South)

The taxpayer becomes the ratepayer.

Mr. Bevan

That is even a better way of putting it—that the taxpayer will become the ratepayer to the extent of the deficit of the rateable value, although I regret very much that the hon. Member for South Edinburgh (Sir W. Darling) is undermining his right hon. Friend's speech even before he makes it. The Exchequer becomes the deficit ratepayer, and very important consequences follow, which I think hon. Members have not quite digested or they would not have put down their Amendment, but would have phrased it very differently. I make no objection, as the Bill is difficult to follow, and I am sure that after I have finished the right hon. Gentleman will see that his Amendment is entirely unnecessary.

There is a further provision of a rather complicated kind, but I hope I shall be able to make it clear. It is always possible for the average rateable value per head of the population to become the actual rateable value per head, because, as we bring about a redistribution of industry, as local authorities tend to approximate to each other in comparative wealth, and as we bring about, as we hope subsequently to bring about, uniformity of valuation, there will be fewer authorities below the present average figure, and they will tend to approximate to a new average. Therefore, unless something is done, the Exchequer would benefit because it would step in as a ratepayer less and less as the number of local authorities below the average decreased. That would be an extremely unfair proposition, because it would mean that the Exchequer would not be finding the same amount of money in subvention of local expenditure. In order to avoid that result, we shall make a nominal increase in the national average rateable value per head so that more authorities will benefit. The Exchequer would thus pay what it paid in the first year. In the first year the rateable value on which the Exchequer will pay will be about 16 per cent. of local actual rateable value, and at no time will the Exchequer pay less than that.

This principle and formula have the further advantage that the amount is adjusted year by year, and not every five years. One of the weaknesses about the existing situation is that local authorities suffer disabilities for four years before they are redressed. In this case, so resilient is the effect of this new principle, that assistance is adjusted year by year, because the Exchequer is the annual ratepayer on the deficit rateable value, and we get very considerable advantages from that. There is a further advantage, which I shall mention later when we come to the Amendment, because it appears to have escaped the attention of the Opposition.

As a consequence of all these changes, this financial position results—the total value of the transferred services, to which I have referred, amounts to £63 million in England and Wales; the total block grant is £57 million, so that at once there is a gain to the local authorities of £ million. Here again it is necessary to emphasise that the Exchequer accepts responsibility for providing services which now cost the local authorities £63 million, but the amount out of the central fund given under the block grant is only £57 million. Therefore, the central fund has accepted a burden of £6 million more than the block grant. This £ million is left with the local authorities and we propose to add the sum of £33 million in new grants. I would like to take advantage of the opportunity of expressing my appreciation to the late Chancellor of the Exchequer for his generosity and imagination in dealing with this problem. It means that we are able to find an additional sum of £39 million which can be used as an equalisation grant in the fashion I have described. The effect of this is remarkable, and reveals the inequalities that exist at present between different local authorities—or, if I may use my own language, the gross inequalities between ratepayers in different parts of the country. Although I know there are one or two replies to this, I do not think they completely answer what I am claiming.

We have issued a White Paper, Cmd. 7253, which gives hon. Members a full description of the financial consequences of these adjustments assuming they were in operation in 1946–47. It is always essential to be on guard against using the figures too much because they depend entirely on what the local authority does. A local authority may use some of its increased grant to expand its own local services, and no doubt in many cases they will do so, because one of the purposes of giving the increased grant is to enable them to do so. Many local authorities have not been able to give such services because of their poverty. To pass the money in the form of a straight rate reduction in those areas would not be giving what other people are having because the other people are enjoying the services, and those areas are entitled to have those services also.

However, I hope that some of the increase will find its way to the relief of the ratepayers. Merthyr Tydfil, on this assumption, would receive a rate reduction of 15s. 8d.; Walsall, 9s. 3d.; West Bromwich, 9s. 2d.; Stoke, 8s., 9d.; Hull, 7s. 11d.; Cardigan, 13s. 6d.; Monmouth 9s. 10d.; Glamorgan, 9s. 2d.; Holland, 7s. 5d.; West Suffolk, 6s. 6d. I wish to make it clear that the fact that the Welsh counties receive such financial assistance is a purely arithmetical relationship, and not an a priori principle. Nevertheless, if so much additional money goes to Wales now it shows how greatly ill-treated Wales has been, and I am very pleased indeed to be the instrument of bringing about more justice.

It is obvious from those figures that the method we are adopting will have the effect of enabling many local authorities to do what they cannot do now and the county districts, the urban and rural councils, will benefit by virtue of the reduction in the county rate, but of course they will be entitled, as they are now entitled to, a flat rate grant per head of the population, and they will receive this in the normal way. This operates at the present time, and it is proposed to continue it, because county districts, urban and rural, must get their share from the central subvention. I am not going to explain that because it is unnecessary. There will, however, be county councils above the line who will receive less from the central fund than is necessary to provide the capitation rate for the county districts. In that case the county council will levy a precept, and make up the deficit to the poorer districts which will bring about a redistribution by means of the county precept, so that better-off districts will assist the poorer. There will thus be some measures of relief for the poorer county district just as there is in the national scheme for poorer counties and county boroughs. That is an extension of the system applied in some parts now. That is the essential feature of the redistribution of the block grant scheme.

There will be a special scheme for London because the position in London is peculiar. A much larger sum of money was left in the possession of the London County Council after the transfer of the hospital services than the amount that London was getting from the block grant, but it is obviously essential that the Metropolitan Boroughs should get relief as well. A scheme has now been agreed between the representatives of the Metropolitan Boroughs and the London County Council for a redistribution inside London which will have roughly the same effect as the scheme for the country as a whole. I want to pay my tribute to the sagacity and imagination of the leaders of the London Metropolitan Boroughs and the London County Council for the way in which they have worked out this scheme. This will come into operation on the lines negotiated within recent weeks.

It is obvious to everybody that if we are to redistribute central assistance to local authorities by means of rateable value per head of the population, there are certain weaknesses which immediately emerge, because if the assessment of rateable value is not carried on by a uniform method, then there is a non-uniform result. This exists now. It happens now in county districts that because urban districts have different valuation authorities, there is inequality within counties, inequalities which have given rise to a lot of heart-burning. If we are to allow local authorities themselves to value their own property, and if their valuation is going to be the basis for the distribution of central assistance, then they will be determining the size of the spoon with which they will be eating out of the national pool, and there will be a tendency—I say no more than a tendency—to increase the size of the spoon. It obviously requires considerable self-discipline to make one's spoon as small as the other man's.

We have come to the conclusion, not only on that basis but for other reasons which I think are almost equally good, that the time has come for the central government to accept responsibility for the valuation of property throughout the country. This was recommended as far back as 1914, and I hope it will not be regarded as an invasion of local government functions, because the present local authorities have had those functions only for a very short time. Moreover, it is not properly a local government task, it is a professional job. It is the basis upon which local authorities base their revenue, but it is not a service in itself. It seems to us that the time has come for us to have a central valuation. I know some people have said "Why not transfer the whole of the valuation of property to the county councils and county boroughs?" That would produce equality as within the county, but it would not necessarily produce equality between county and county and borough and borough, and the difference in the level of rateable values would still determine the amount of money attracted from the centre. Furthermore, if it were left to the county councils to promote a scheme which was agreed upon, there would still have to be some supervision from the centre, but if there is to be supervision from the centre it must be sufficiently detailed and sufficiently uniform to prevent the abuses that we fear, in which case it would be reproducing very largely the local valuation officer. We say in reply to that, "Why cross the river in order to fill the pail?"

If we are to have effective central supervision, why not have effective central valuation, and do the whole thing in one piece? We, therefore, recommend to the House that there shall be central valuation. Obviously this cannot be done at once, but in any case neither could the local authorities do it at once. In fact, it is doubtful whether the local authorities could do it before 1951–52. The assembly and the operation of the machinery would probably take rather a year more than the local authorities, but as the present valuation lists are 12 to 14 years old, one year does not make much difference. Therefore, the proper thing to do is to start off at once with central valuation machinery and get this job out of the way. It will be the duty of the Inland Revenue to carry out the valuation, but in doing this they will, of course, employ the local government valuation staffs so as to make use of the pool of experience and knowledge which exists at the present time. It will involve the abolition of the Central Valuation Committee, which has done extremely valuable work, and nothing I have said should be regarded as a reflection upon what they have done. They have brought about very much more uniformity than existed before 1925.

There will be arrangements made, as set out in the Bill, for local panels for appeal purposes. Counties and county boroughs will appoint panels of persons who can listen to appeals against valuation, and there will be arrangements made for appeals to county courts, and not Quarter Sessions, for those who are dissatisfied with the decision of the earlier court. It is proposed to bring about all these changes as early as possible. I warn the House that it will not be possible for some years, but as this is inherent in the situation we either have to postpone the whole operation for some years until central valuation has been brought about, or in the meantime accept the existing inequalities and assemble the machine for ironing out differences later. I hope, therefore, that the central valuation authority will be accepted.

When we come to valuation of property, there is a great difficulty which was recognised by the Government before the war. I refer to the difficulty of valuing cottage property. In 1938 it was obvious to the Government that applying the then principles of valuation to cottage property would produce such appalling injustices and an Act was passed postponing the valuation. The Government in 1938 refused to face the problem. I do not blame them, because the valuation laws applying to cottage property are weird and wonderful. Indeed, I refuse to believe that they are laws at all. They are not sufficiently objective to be capable of ascertainment. As far as one can gather, they can just as easily depend upon the emotions of the valuer as upon the property he is considering. He is expected, under the existing law, to find some fugitive called the "hypothetical tenant." The valuation officers have been trying to track this man down for the last 25 years but they have never been able to discover him.

Mr. Sydney Silverman (Nelson and Colne)

Just like the "economic man."

Mr. Bevan

As my hon. Friend says, it is like the economic man. We have never been able to find this entirely one-dimensional person. The result is that the local valuation authorities were completely at a loss to know upon what principles they should value cottage property. Of course, this was made enormously worse by the Rent Controls Act. Some houses remained in control, some passed out of control and went back in control, and a lot of the houses were owner-occupied. It was quite impossible in a street composed of similar cottages, with decontrolled rents at 25s. and controlled rents at 6s., to find out what would be the rent, and therefore the rates, of houses occupied by the owner-occupier, because then one had to find out what was the hypothetical rent for his house assuming he was not in it. Would it be 25s. or 6s.? If it was 25s., the consequences would be appalling. The rates would be entirely indefensible. So this search for the hypothetical tenant, frightened, quite properly, the Government of 1938. They recognised that if they applied the law as it was interpreted by the pedants, all cottage property valuations would go up at once. That would be quite indefensible because cottage property would bear a disproportionate burden as against industrial and other forms of property.

Nevertheless, so long as we have got rating and so long as the ratepayer remains the basis of local government finance—and no one has yet suggested any other method which would still preserve the vitality of local government—it is necessary to tackle this problem of cottage valuation. I want hon. Members to appreciate that, if the existing laws apply, all cottage property at once goes up in value and far greater burdens will be carried by cottage property than are carried at the moment. Therefore, some method must be found of valuing cottage property, which keeps its total value in reasonable relationship with other forms of property. In considering the level of valuation, it is essential to bear in mind that the absolute level of value is of no interest to anybody. I know, of course, that there are some people who pay more attention to the rate in the £ than to the number of pounds upon which the rate is levied. I knew one cynical old alderman who told me that he could always reckon upon being returned if he argued to keep the rate poundage down. Nobody bothered if the rateable value went up because they attached much more importance to the rate than to the valuation.

Mr. Medland (Plymouth, Drake)

That is an old Tory trick.

Mr. Bevan

My hon. Friend may have Mr. Speaker's permission to enlarge upon his observation later. At the moment I am trying to keep my remarks on a purely expository basis. I did not even say whether he was a Liberal, Labour or Tory alderman. I said that he was a cynical old alderman.

Obviously, what really matters in valuation fundamentally is equity—whether two citizens occupying property of the same sort in different places pay the same kind of contribution for the same sort of social services. That is what we must get at all the while. The absolute level of valuation is of no importance at all. The relationship between the level of cottage property as against other properties, is important. That is the reason why the law must be altered to keep the general level down. The relationship between one class of cottage property and another must be carefully weighed, because that determines the relative weight of local burden. But providing that there are two cottages with comparable amenities, then those two cottages ought to carry the same contribution to the same volume of social services.

Cottages fall roughly into four groups. There are the cottages built before 1918. They are fairly easily valued because, as a general rule, they are controlled and, as a general rule, they are rented. If, therefore, one takes their general rents in 1938 into consideration—not a specific rent, because if that is taken into account we are after our friend the "hypothetical tenant" again, and after the house where the rent is too high—one deals equitably with that class of property. There is another class of small cottage property which was built after 1918. That falls into two classes—the local authority houses and the owner-occupied houses. The proposal is that the Minister shall be responsible for identifying a block of local authority houses in a district, taking the 1938 cost of construction, because in 1938 housing costs had reached reasonable equilibrium. Then he will take the cost of the sites but disregard the excess costs of the site where special subsidy had to be paid for specially expensive land. He will take 5½ per cent. of that, which will give an economic rental, and that will be be the gross value.

This is by no means original. As a matter of fact, when I was a member of a rating authority many years ago and we were faced with this problem, this was the illegal decision to which we came. It was quite illegal. What we did was to take a norm, a standard house which is identifiable everywhere, and we fixed upon that house a purely arbitrary rateable value. Then we added or reduced that rateable value for other houses in so far as they possessed or did not possess additional amenities. This worked out quite equitably. In fact, we had fewer appeals against us than had most other people, because we were not fixing our mind all the while on the problem of finding out pedantically what the local rateable value should be. When we asked guidance from the authorities on that, they said we should ignore unreasonably high rents and unreasonably low rents.

So we were back where we started. That was a purely subjective test. Therefore, we said that we would take this norm. As the local authorities' accounts are always available, there is nothing obscure. It can be found out exactly what it cost to build those houses in 1938, what it cost to get the land, and, by taking 5½ per cent. of that, one gets the gross rateable value and something to which all other property in the area can be related. That seems to me to be a perfectly defensible proposition, and one which would work almost automatically and would reduce the difficulties of valuation.

Then we come to the owner-occupied house. I apologise to the House for going on so long, but I am bound to do so. In the case of the owner-occupied house—so many of which were built between the wars—I am talking about a small cottage now, not about a big house, not the manor house or the grange, or the house the owner of which has managed by some legerdemain to get himself attached to a farmhouse and call it "agricultural hereditament "—there is only one difference. In those cases, it is not proposed to take the site value of 1938 as the basis, but the contemporary value. The reason for that is a practical one. The 1938 value of a site is usually unascertainable. One of the reasons why it is unascertainable is that one of the practices of speculative builders was to keep the price of a house fairly low, but to charge excessive ground rents. Very often, in point of fact, the owner-occupier would lose if solely the 1938 value was taken into account. But, of course, we shall be told that the value of these sites has appreciated in the meantime. Even supposing they had appreciated, 100 per cent., it would only make a difference of, say, £2 in the rateable value. The fact is that the additional site cost would not be an important consideration, but, by taking the contemporary site cost into consideration, and relating its amenities to other forms of property in the area, a much more equitable assessment for the owner-occupier is reached. Therefore, we have decided in that case to take what it would have cost a local authority to build that house in 1938, with a contemporary and not the 1938 site value as the additional basis.

When we come to large houses, it would be perfectly proper to take into account the rent paid in 1938 because, in the case of those houses, there was a reasonably free market and the rent paid would reasonably approximate to the value attached to the house by the person who rented it. Therefore, in the case of the fourth category—the large houses—we think that is the best way of dealing with the matter.

Mr. W. J. Brown (Rugby)

Judging by what the right hon. Gentleman has said so far, it seems to me that the owner-occupier of a small cottage is going to be relatively worse off than the occupier of a municipal cottage, on the one hand, or a large house, on the other. I shall be glad if he will make the point clear.

Mr. Bevan

What I say is that we should take the owner-occupied house—we have already taken the local authority house—and see what it would have cost a local authority to build that sort of house on 1938 standards. That at once gives us an objective case. The only addition—and it may be a subtraction—is that we take the existing site value, because the 1938 site value is not always ascertainable and because there would be a large amount of quarrelling as to what it was. We add the contemporary site value and then take 5½ per cent. on the total, and we arrive at the gross rateable value. That would not be unfair. But it would be unfair, in many cases, to take the 1938 value—if we could find it—of the owner-occupied house because, quite often, the existing site value has been reduced by contemporary developments. I think that will turn out to be a just way of doing it.

It is true, of course, that the assessments of some cottages are bound to rise. But all cottages cannot fall, because if all cottages fell in rateable value, none would fall. Obviously all we would be doing would be to reduce the global sum on which the rates would be levied, and all that would happen would be that there would be a higher rate poundage. Therefore, we must take it that, in some cases, the rate on cottages will rise and, on others, that it will fall. What will happen is that, in different parts of the country, there will be adjustments because of the procedure of the Central Valuation Authority. But I am satisfied, after having seen several instances worked out—and I am prepared to consider this, and to explain it in much more detail when we come to the Committee stage—that the effect on the assessment of cottage property will be such as will please hon. Members in all parts of the House.

Mr. Derek Walker-Smith (Hertford)

In order that the House may follow the right hon. Gentleman's exposition—he has referred to four groups, one of which is the pre-1914 small house and the fourth group which is large houses in general—would he make it clear that they are, in fact, to be valued on the same basis, and that both those classes are covered by Clause 77 of this Bill?

Mr. Bevan

Yes, they are, but with this difference that, when we come to the pre-1914 houses, they are invariably rented, and come within the Rent Control Act. In the case of such houses we should have regard to the general level of rents, but when we have to compare the rent of a castle, we cannot compare comparable rentals because there are very few comparable castles.

Mr. Walker-Smith

In that case, would the right hon. Gentleman explain how it is intended to interpret the words: by reference to the rents for comparable dwelling-houses in the locality"?

Mr. Bevan

In the case where there is no comparable dwelling-house we would, necessarily, have to take the actual rent paid as our only guide. There is nothing illegal about that. Obviously, if we have not got a comparable rent for a manor house, the only objective basis for the rent is what the perfectly willing tenant was able to pay for the occupancy of that very draughty place in 1938. I do not think we would have very much trouble over that.

One of the advantages of the machinery of this Bill is that we are able to get rid, for the first time, of very complicated methods of valuing canals, electricity undertakings, and railroads which require a very highly skilled, technical, and expensive staff. We propose, in the future, to pay the rate contributions into a central pool, and to distribute that to the local authorities in accordance with their respective rateable values.

Sir Harold Webbe (Westminster, Abbey)

Would it not be more of a puddle than a pool?

Mr. Bevan

The hon. Member can get his own nomenclature; it is a pool before he enters it, but it is a puddle when he leaves it.

It has obviously been an indefensible procedure to take railways, rate them, first of all, globally and then break them down piece by piece into the number of miles of railways which exist in a particular local authority area. It is frightfully complicated, and very litigious; it has produced quarrel after quarrel, vast sums of money have been spent on it, and it is all nonsense. Now, however, that the electricity undertakings are in one central authority and the railways are in one central authority, it becomes practicable to end this nonsense. So we are taking a lump sum of money from those bodies and sharing it out among the local authorities according to their rateable values. This will immediately produce certain anomalies, because there are some local authorities where very large establishments are situated, whose rateable values have been artificially boosted by the presence of those undertakings. Therefore, if we took it all away at once we would do some injustice. However, it will have this benefit, that in a county area, when the rateable value falls, the average rateable value per head of the population falls and attracts more grant. Where the undertaking is liable to suffer too sharp an increase in the local burden I am perfectly prepared to look at it and see what we can do to ease the situation, but obviously it would not be just to allow one or two anomalous cases like that to prevent us carrying out this very necessary reform.

I now come to another part of the Bill, and if what I have to say appears to be disconnected, it is because the Bill itself falls into a number of different parts. For some time it has been apparent that local government in this country has in many places been devitalised by the fact that large numbers of otherwise eligible people are not able to stand as local candidates because they have lacked the means. As the House will recall, my right hon. Friend the Secretary of State for Scotland and I appointed a Committee under Lord Lindsay last year in order to report on this subject, and I would like to express my thanks to Lord Lindsay and his colleagues for the very excellent Report which they made. The majority Report recommends that there shall be payment for loss of remunerative time. It states the view, which I think will receive universal acceptance, that while local authority members ought to be prepared to make sacrifices, those sacrifices ought not to be so onerous as to amount to hardship.

Furthermore, they consider that it is undesirable that men who otherwise would be excellent members of local authorities should be deterred from standing because they cannot afford it. They say that this situation brings about a distortion of local government, that the local authorities are improperly weighted as regards different sections of the population, and that if we are to have in local government a cross section of the population—a diversification essential for good local government—all sections of the community ought to be allowed and able to serve. This point of view has been accepted on this side of the House for many years.

On the other hand, there runs concurrently with that, a principle of equally universal acceptance, and that is that local government must not become a professional service. It must remain a voluntary service. If it becomes a professional service it is destroyed and most of its best features will disappear. We shall have to try to marry those two principles. That we have attempted to do by putting in the Bill a modest provision, mandatory upon the councils for loss of remunerative time. There we disagree with the minority Report of the Committee. It did not seem to us to be reasonable that a majority on a council should be allowed to withhold statutory benefit from the minority on the council, because one of the purposes of the provision is to enable people to stand as candidates who could only serve as councillors if they had this relief. That would be frustrated if a local authority could deny benefit to individual councillors. A prospective candidate would never stand as a candidate, and we should not get what we want. There would also be a great deal of unnecessary bitterness. Furthermore, there is no obligation on the individual to claim the benefit. There is an obligation to pay it if he claims it properly. That amounts to only £1 for a full day and 10s. for half a day. It is very moderate but, nevertheless, it would be very acceptable in some cases.

In many parts of this country—in mining areas, steel areas, textile areas, and in many industrial districts in Great Britain—Labour members are only able to serve on local authorities because their colleagues in the trade unions help them to serve as councillors. But for such help, I would never have been there as a miner, Perhaps it was a misfortune, but, nevertheless, I would never have been there as a miner if the South Wales Miners Federation had not been able to give help—very modest, but it was some help—because most wage earners and salary earners cannot afford to lose money. The same thing applies to an even greater degree in the rural areas, where the distortion of representation upon the local authorities is very considerable as a consequence. Therefore we decided to make that provision.

The safeguard we have made is that a member must declare his claim and must put it in the minutes. It must be available for scrutiny. That is absolutely essential. We know very well that there will be a good check. It does not matter if a man is a wage earner or a shopkeeper; if a shopkeeper finds that he has got to pay out money to somebody to look after his shop when he is at a council meeting, he is entitled to claim it, but he has to declare that he has actually paid it. His neighbours can check him, and I know of no more bitter auditor than local gossip.

Mr. Beverley Baxter (Wood Green)

Since this £1 or 10s. allowance is to take the place of money which would otherwise have been earned, will it be subject to Income Tax?

Mr. Bevan

That is a question which must be directed to my right hon. and learned Friend the Chancellor of the Exchequer. It is a point, but it is not for me. It is a point for Income Tax law. We merely make the payments. Whether those payments are liable for Income Tax is a matter for the Chancellor and not for me. Where it replaces earnings, is it to be regarded as earnings? I agree that that is a point. We call such payments allowances or expenses. There are other provisions relating to the payment of allowances and travelling expenses, but I do not propose to weary the Committee because it would occupy me far too long, and I have already presumed on the patience of the House too far.

Now I come to the Amendment. I am astonished that so beneficent a Measure does not appeal to the Opposition as well as to the Government. The Amendment says that the Bill: provides no adequate means to deal with the continued rise of rates due to the ever-increasing expenditure which local authorities are required to undertake. I said earlier that I do not blame the Opposition, because when drafting the Amendment they did not understand what was proposed. But if the Exchequer enters as a ratepayer, and if the Exchequer, therefore, pays such rates as are levied by the local authority, if the local authority increases it rates—its claims— the Exchequer pays more; because the Exchequer pays on 16 per cent. of the total rateable value. It is, as I said earlier, a ratepayer to the extent of a deficit. Authorities who gain less than sixpence get their sixpence; but they lose that in five years Those below the line have the Exchequer for a ratepayer, and if they levy higher rates, then, of course, the Exchequer pays more. So that here we have at once a self-balancing factor. We shall also not really be getting rid of the old percentage grant altogether, which was, I think, what hon. Members opposite had in mind; we still give help for health and education, and so on; and we are actually introducing a new block grant, the very opposite of what the Opposition complains. It was the Opposition's principle that contained the principle of rigidity. It was unfertile for five years. This operates yearly, and, as a local authority's expenditure increases, the Exchequer pays a higher contribution; so that, in fact, it is the opposite of what the Opposition contends.

The Amendment goes on to say that the Bill establishes no direct relation between local expenditure and Exchequer assistance, and by the inadequacy of the proposed equalization grants deprives many authorities of this type of Exchequer assistance altogether.

I warned the House earlier of the un-wisdom of using this term "authority." The person to keep in mind is the ratepayer—not the authority. The ratepayer gets more genuine assistance under these proposals than that he gets under any Measure provided by any Government in the last 30 years.

Mr. Orr-Ewing (Weston-super-Mare)

If the right hon. Gentleman is going to use the expression "ratepayer" instead of "authority" will he also use the expression "taxpayer"?

Mr. Bevan

Certainly. I do not know whether the hon. Gentleman was in just now, when the suggestion was made previously. I suggest to him, as I suggested to. another hon. Member opposite that he should not increase the embarrassments of his right hon. and learned Friend. I will come to that point in a moment.

Sir H. Webbe

Would the right hon. Gentleman explain how, if a local authority gets no assistance whatever under the equalisation grants, the ratepayers in its area are going to get any benefits whatever?

Mr. Bevan

The ratepayers in that area will be obtaining local government services for no more than is paid for them by the ratepayers in another part of the country. Hon. Members must avoid this confusion of displaced terminology. They must speak in terms of the ratepayers and not of the local authorities. If the ratepayer belongs to a local authority above the line he will get no share of the Exchequer assistance, but the very fact that he belongs to an authority above the fine is evidence of the fact that he is a reasonably prosperous person. I hope that that is clear.

Colonel Wheatley (Dorset, Eastern)

It would be quite clear if all ratepayers were of the same prosperity.

Mr. Bevan

Hon. Members will get it in time. They are really hurrying me too much. It is perfectly true that, if the taxpayer is the same person as the ratepayer, nothing has been done—which is the point of an article written in the "Daily Telegraph" by the hon. Member for Hertford (Mr. Walker-Smith).

Mr. Walker-Smith

Part of the point.

Mr. Bevan

Part of the point. He used that novel illustration of Peter and Paul. I would say this to the hon. Member. Take, for example, two counties, Durham and Glamorgan. Under this proposal Durham will have new money; after making all allowances for the shifting of the hospitals, and so forth, it will have a net gain of £1,051,000. Glamorgan will have a net gain of £1,237,000. The argument of hon. Members opposite would be perfectly valid if it did show that it is the taxpayers of Glamorganshire and Durham who find the money. But does anybody believe that. Does anyone believe that a taxpayer in those areas is the same person as the ratepayer? Everybody knows very well that the reason for their deficiency in that area is, that they have poor ratepayers and poor taxpayers. That is the whole point. Therefore, it is perfectly just to say that it is the taxpayer who is coming to the assistance of the ratepayer. As taxpayers are unevenly distributed over the country it is necessary to get at some taxpayers in some parts of the country to relieve ratepayers in other parts of the country. I have not yet seen it proven that there are as many prosperous taxpayers in Merthyr Tydfil as there are at Frinton-on-Sea.

Mr. Medland

Or in Weston-super-Mare.

Mr. Bevan

Yes. In point of fact, hon. and right hon. Gentlemen opposite have not looked at this Bill in order to find out its merits. They have said to themselves, "Here is a major Bill brought by the Government. We must oppose it. How can we oppose it?" That is a very dangerous way to approach any Measure. It can be done successfully only if the Opposition are sufficiently fertile to find good reasons. However, they have not been able to find any good reasons at all. All they can do is to frighten people once more by making allegations that are un-provable. They can try to prove that it is possible to relieve local government burdens by not increasing anyone else's burdens. That is, of course, a good story from the taxpayers' point of view. From the point of view of local government it is extremely injurious. I am satisfied, and I think that the majority of the House and the nation will be satisfied, that in these proposals we are revitalising local government in parts of the country where it has been devitalised for many years, and that we are bringing a very great measure of laggard justice. I am confident that, when the facts come to be known, the Bill will receive the overwhelming support of the country, as I hope it will receive the overwhelming support of this House.

4.59 p.m.

Lieut.-Colonel Elliot (Scottish Universities)

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof the words: this House, while recognising the necessity of a measure for revising the current system of Exchequer grants so as equitably to relieve and adjust the burdens of ratepayers, declines to give a Second Reading to a Bill which fails to achieve those objects, inasmuch as it provides no adequate means to deal with the continued rise of rates due to the ever-increasing expenditure which local authorities are required to undertake; establishes no direct relation between local expenditure and Exchequer assistance, and by the inadequacy of the proposed equalisation grants deprives many authorities of this type of Exchequer assistance altogether; presupposes uniformity of valuation which, owing to the unsuitable machinery provided cannot be achieved for at least four years; and, in its proposals for valuation of dwelling-houses, discriminates unfairly between ratepayers in similar economic circumstances. I do not complain at the length of time which the right hon. Gentleman took, for this is a Measure, undoubtedly, of very great importance. I think, perhaps, he was happier when explaining his own Measure than he was when trying to understand our Amendment. I do not blame him. His powers were flagging a little at the end of a long and intricate explanation, and, of course, he could not be expected to do so. But it is true that we are indebted to the Minister for a very thorough and careful exposition. We welcome the fact that the Minister has turned his great talents to these urgent day to day matters, matters affecting his own great office. Local government and local traditions are part of the very foundations of our country. He said, quite rightly, that it was a complicated Bill, and that he would have to make considerable drafts on the time of the House to explain it.

I would point out, however, that the House is working under a very great disadvantage here, and a very great disadvantage as compared with any it may have felt when considering other Local Government Acts. This Bill is brought forward at relatively very short notice. The financial papers concerned were only completed and in the hands of hon. Members on Saturday morning, yet the Bill is being read for a Second time on Tuesday. I consider that that is treating the House with scant courtesy.

Mr. Bevan

I must protest at once about that, because the paper which appeared was produced by me at the very last moment in reply to a Question by the right hon. and gallant Gentleman's hon. Friend the Member for Hertford (Mr. Walker-Smith) and really contained no principles at all. It merely showed how the principles operate in particular local authorities.

Lieut.-Colonel Elliot

I said, and I repeat, and surely the right hon. Gentleman will admit, the financial papers concerned were completed only on Saturday morning—[HON. MEMBERS: "It makes no difference."] It makes a very great deal of difference, as I shall show. The first time that we had the hypothetical figures, from which we could check what the right hon. Gentleman has just been saying about the financial advantages which would come to certain local authorities, were not complete until Saturday morning. Indeed, it is not only I who have complained about this, or my hon. Friends, but the local authorities also. The local authority of, for instance, Glasgow, and urban district councils in England and Wales have complained that these negotiations were confidential all through the summer; that it was only when the Bill was printed that they were released for general consumption. The local authorities themselves are finding great difficulty in submitting considerations on these very technical matters in time to be of advantage to hon. Members in bringing forward various points of view; not merely Party points of view, but points of view of general administration which should be brought before this House. In the earlier part of his speech the Minister mentioned the Local Government Act, 1929. Hon. Members will remember that the proposals then were brought forward and circulated in the form of White Paper memoranda; these were fully considered and open to public discussion; they were considered by local authorities, and the Bill was founded upon them.

There is another point I would put to the Minister. He has unnecessarily added to his difficulties here by not merely making a Bill—if I could have his attention—which in itself is a complicated Bill with very many Clauses, but in stitching into this Bill another Bill dealing with another country entirely—a Scottish Bill. When we were discussing this matter before, the Bill for England and Wales was submitted to the House and had, if I remember aright, three days upon the Floor of the House, and the Committee stage was taken upon the Floor of the House. Then the Scottish Bill had, if I remember aright, two days for Second Reading, and was considered in Committee by every Scottish Member. The Minister now proposes to take this joint Bill to a joint Committee, upon which, of necessity, only a small number of Scottish Members will be able to sit. I would ask him—and more particularly his right hon. Friend the Parliamentary Secretary of State for Scotland—how he can possibly defend the stitching together of those two separate Bills, bundling them up and then asking the House to dispose of them both in a day and a half.

The right hon. Gentleman said that in the course of his remarks he would do his best to confine himself to the general principles, and I will do my best to confine myself to them, too; although if I, like him, am led away into illustrations, I hope it will be taken as merely illustration; for to discuss this whole vast Measure in anything like a reasonable manner would clearly be outside the bounds of our present time and space. As the Minister said, truly, the main purpose of the Bill is to authorise a new system of financial assistance from the Treasury in substitution for the block grants of 1929. For these are to be substituted equalisation grants, and as equalisation demands a high degree of uniformity, Part III centralises valuation. Incidental to that, he provides for a revaluation of dwelling houses on a new basis, and Part V continues this for railways and electricity undertakings.

I think the right hon. Gentleman was perhaps a little cavalier in his remarks as to the great advantage of sweeping away what he called "all that nonsense," referring to the attempt by the local authorities to ascertain the value of such properties within their areas. Now that they are the property of the Government, of course, all that is swept away. The Minister thinks of a number, and tells the local authority what it is to be. That is a great advantage from the point of view of the Minister. It is also, perhaps, or might be, of great advantage from the point of view of some of his hon. and right hon. Friends. For instance, the Minister of Transport might find it a great advantage at some time that rates for the railways should be settled in the recesses of the Cabinet room rather than discussed in the open. From the point of view of the Government we accept that; that is their point of view; they think democracy is all wrong, and that if things are settled by Ministers it is of very great advantage; that it should not be subject to criticism is of additional advantage; and that both of these things should coincide in a nationalisation enterprise, is, of course, the acme of perfection. These are their views, and we do not complain.

The right hon. Gentleman truly said that rating remains the basis, as it must remain, of local government revenue. He and I would both agree that government without revenue is not government at all. For a local authority to be a local authority and to have power, it must have the power of the purse; he who holds that purse holds power, and in so far as a local authority gives up its power of raising revenue it will diminish in authority, and finally wither away altogether. Therefore, rating. Now rating, local revenue, has always been mainly and essentially a local matter for local residents. I agree with him, the difficulty of supplying adequate revenue while preserving the local power of the purse has always been a dilemma for those concerned, both with the adequacy of local revenue and with the preservation of local administration.

The first device, and the most powerful, was the grant in aid. The Webbs—who are famous figures in local government as in so many other fields of British administration—always held that by dint of a grant in aid one could do practically anything one wished; they thought the grant in aid by far and away the most powerful administrative device the central authority had ever discovered. But then that involves a great deal of central control, and as one who has, for nearly all my Parliamentary life, been concerned in the working of local government, I have always found the local authorities objected to being cabined, cribbed and confined by over-much central control. It was their desire to have a little free money, a little housekeeping money of their own, upon which they could work; and they desired, quite rightly, that they should have this free money drawn, not merely from the area within which they happened to operate but also from the larger resources of the nation.

Those were points to which the late Mr. Neville Chamberlain addressed his attention; and it was a landmark and a watershed in administration when he, in the 1929 Act, produced the principle of the block grant. The two features of that grant were, first, that it should provide 22½ per cent. of the aggregate of rate-borne expenditure plus the grant, and should be revised every five years to maintain this rate. The present Minister of Health says that his is, a superior method to that. I hope to be able to show him that he is wrong. The second point was, that it should aim at adjusting the balance between different communities by means of the new device of the weighted population. Now, the weighted population dealt with known factors, and that is where the right hon. Gentleman has gone astray. His new formula deals with known and unknown factors, and he is unable to make as firm an estimate with it as the late Mr. Neville Chamberlain was able to do.

The factors which the 1929 block grant dealt with were known factors—population, children under five, sparsity and the needs for distress, which was based on the unemployment statistics. Working on these, he could give a firm undertaking, and he could carry out a firm periodical review. The first feature is being departed from; the second feature, weighted population, remains. The factors are not the same. Undoubtedly, they have to be modified. We are all agreed upon that. A certain review of the factors is necessary as the economy of the country develops. The new feature is that the Exchequer contribution is not to be free money, but is to be equalisation. Money grants are to be made to county and county borough councils, if their financial resources do not reach the average rateable value of weighted population. But this figure does not yet exist. There is no average rateable value. Does the right hon. Gentleman deny that? He is setting up a machine to produce an average rateable value, but that machine will not bear fruit until 1952. Then the whole revaluation is to come into force simultaneously. The right hon. Gentleman very wisely takes power under Clause 33 to postpone the coming into operation of this universal guillotine which is to fall upon the neck of every ratepayer in the country. I have had some experience of the coming into practice of new assessments, and I warn the right hon. Gentleman, or whoever is sitting in his place at the time, that he will have some very anxious moments before he determines the day on which to bring into effect a new valuation covering the whole of the country. The grant is to start off at 16 per cent., which is a considerable reduction from the previous grant.

Mr. Bevan

That is 16 per cent. of rateable value, not of expenditure. The right hon. and gallant Gentleman is confusing the percentage of rateable value with the percentages of expenditure. I was speaking of 16 per cent. as being the percentage of rateable value which would fall as a deficit to the Exchequer, and which would be credited to local government.

Lieut.-Colonel Elliot

The previous figure was 22½ per cent. of the expenditure, plus the grant. That was something which could be ascertained, but the Minister is dealing with this unknown factor of the rateable value, which he has not yet ascertained. That is going to be his difficulty all the way through. It rather makes nonsense of his other argument that you have to deal with the individual and not the hypothetical authority. The Minister made great play with the fact that we had to deal with the actual ratepayers, and not a hypothetical authority, but he must know that if he adopts that generally, he will find another set of anomalies arising; because the rate poundage, as he knows, bears no close relation to the amount the individual ratepayer is paying. He gave certain examples of high rates, but in doing that he himself was falling into his own fallacy of misapplied terminology. If he is going to stick to the individual, he must do it all the way through. The rates for Bournemouth are low, standing at 9s. The rates for Merthyr Tydfil are high, standing at 29s. But, the payment per head in Bournemouth is £6 13s., and the payment per head in Merthyr Tydfil is £4 16s. He escapes simply by saying that Merthyr is a poorer place than Bournemouth; but Merthyr is paying a lower rate than Bournemouth per head, although the rate per pound is much greater. The right hon. Gentleman will find it a little difficult to adhere to the contention he put before the House, that we must stick in every case to consideration of the individual and not to consideration of the authorities. These authorities are entities which will have to be brought into consideration as well as the individual, because if we keep merely to the individual, we shall find ourselves in another set of anomalies and difficulties too long to go into here.

Let us take the effect on authorities. In England and Wales, seven counties out of 61 do not get any grants, and 28 county boroughs out of 83 do not get any grants. In Scotland, two counties out of 31 do not get any grants, and two of the large boroughs out of 24 do not receive any grant. That is excepting the transitional grant which is to disappear in five years—that is 6d. in the case of England and Wales and 4fd. in the case of Scotland. That has brought a good deal of uneasiness among the local authorities. It is quite true that there is an immediate diminution of expenditure already in prospect for all local authorities. That comes from the fact that the right hon. Gentleman at an earlier stage murdered the health committees of the local authorities. He says, having killed these people and taken over their property and liabilities, that he is a great benefactor to the local authorities. But they do not all regard it in exactly the same light, just as in the case of the murder of other important committees by other right hon. Gentlemen, such as electricity and transport committees. It does not seem to all the local authorities so great an advantage as it does to hon. Members opposite. We do not complain, because these are their theories—destroy local government, nominate the people who are to carry out the work, and thereby you have produced centralisation and great advantage to all. All we say is that everyone does not look at it in the same light.

The Exchequer is to take over the liabilities, as the right hon. Gentleman said, amounting in England and Wales to about £63 million. The Exchequer saving is about £24 million. That is on the figures for 1946–47. The net savings to the rates for that year would have been about £39 million a year. The figures the right hon. Gentleman gave are all for 1946–47; but these figures have already been put gravely out of date by developments which have taken place since then. The Minister is trying to legislate in the midst of an earthquake. This burden he is taking away is being promptly replaced by others, and the rateable value remains the same. It is estimated that the cost to the local authorities of the Fire Services Act will be about £12 million. In the Financial Memorandum to the Education Act, 1943, it was estimated that the increased cost to the rates would be nearly £30 million; it is working out very much higher. These two sums alone wipe out the whole of the money that the right hon. Gentleman is talking about.

This seems to shock the Minister. Well, if he thinks that these are merely figures in gross, and might be misleading, let us have an examination of figures from a city which he will not comment upon adversely, either because of its working-class character or the nature of its representation here—the City of Glasgow. The officers of that city have examined the effects of the new Bill on their finances. There are four cities in Scotland, all of which I happen to represent in some degree—Edinburgh, Glasgow, Aberdeen, and Dundee. The estimated improvement on the 1946–47 basis, according to the White Paper—and we only got it on Saturday morning; it does not give us much time in which to check up these matters—would have been 5d. for Edinburgh, 4s. for Glasgow, 1s. 6d. for Aberdeen, and 2s. 2d. for Dundee. It is clear that the City of Glasgow is standing in the most favourable position. The City Chamberlain states, in a letter written on 29th October: The Government's figure of 4s. is intended to represent the net gain, but as has already been stated this is based on the 1946–47 figure, and so takes no account of the substantial increases in expenditure, which are estimated at £1,114,000 for 1947–48 alone. It is anticipated, therefore, that the reduction in the rates will be substantially less than 4s., that it will be probably between 1s. and 2s. That is for the most favourable city, that with the greatest gain.

Mr. Medland

Can the right hon. and gallant Gentleman tell us for what service other than the fire service?

Lieut.-Colonel Elliot

The Education Act, £30 million. If the City of Glasgow already sees the prospect occurring—and this comes from their permanent officials; it is no party statement—of a benefit of only 1s. to 2s., following a statement, published on Saturday, showing a saving of 4s., it is clear that the figures published on Saturday are already out of date. It would be unfair to base our contention on one city alone, and I therefore go to a group of local authorities—the Urban District Councils' Association of England and Wales. In a letter written as recently as 17th November, so short is the notice on which they have to work, and to submit arguments to Members of this House, they say: The Association has taken part in confidential discussions with the Minister of Health and his officers in connection with the new Exchequer grants and the other financial matters dealt with in Part I of the Bill. The Minister will say that these and other parts of the Bill have been prepared in consultation with the local authorities, but this is only partially true. Although details were discussed between the financial officers representing the Association and the financial officers of the Ministry of Health the meetings with the Minister himself, or his Parliamentary Secretary, at which the objections of the Association were expressed, could hardly be called consultation as the Minister adhered throughout to his Ministerial proposals. We do not complain of that; we know what the purpose of consultation is in the minds of right hon. Gentlemen opposite. It is, tell the people they meet what the Government's proposals are, and then to stick to them. That may be described as consultation or information. I do not know that it could not be better done by a public relations officer than by a busy Minister. The Urban District Councils' Association go on to say: It has apparently been found impossible to prepare any other scheme at this stage for the distribution of the block grant among local authorities on terms which will be equitable in the circumstances which will prevail in the immediate future. … The Association has decided to raise no objection to the general principle proposed in Subsection (1) of Clause 2, but they consider:

  1. (1) That the amount of the proposed grant is inadequate.
  2. (2) That the proposals of the Bill are not sufficiently flexible to meet the requirements of local authorities in the future."
The Minister made great play with the fact that the Opposition have put down an Amendment in similar terms, and said that we desired to find grounds on which to attack his Bill. He can scarcely bring that accusation against the urban district councils of England and Wales. The letter goes on: (3) That the rateable value per head is not a suitable test of the financial needs of a local authority. (4) That there are likely, both at the present time and in the future, to be such variations in standards of valuation throughout the country as to make rateable value, or rates per head, quite unsuitable as the measure of the financial need of a particular local authority. These submissions cannot be brushed aside by the Minister as mere party points; these are matters to which any Minister would have to devote a good deal of thought and attention. I have here numerous complaints from other local authorities, and certainly, as the Bill develops, these complaints will become more numerous.

The 1929 grant, as I say, was working on fixed facts. The new one is based fundamentally on a notional figure—the present rateable value per head. The Minister himself complains of its inadequacy. He has brought into existence the means of altering the determining authority and making a uniform system throughout the country. He does not leave his Measures until this indispensable preliminary has been put through. He puts through the Measure first, and then determines the basis on which he is to work afterwards. It is said that it is difficult to learn to bicycle on a plain constantly convulsed with earthquakes. The Minister is attempting to ride a bicycle across a plain mostly composed of porridge—

Mr. Bevan

Of what?

Lieut.-Colonel Elliot

Of porridge, a yielding substance. I apologise for using a metaphor with which the right hon. Gentleman is perhaps unacquainted. Perhaps I had better say "a strong and nourishing soup," for which his country is justly famous.

That brings me to Part III of the Bill—the valuation and rating procedure. The Minister sets out an ambitious programme in Clause 32, which says: Valuation lists shall, instead of being prepared and amended by the bodies and at the times … in accordance with"— previous Acts— be prepared and amended by officers of the Valuation Office of the Inland Revenue Department … and (a) assessment committees, county valuation committees and the central valuation committee shall cease to exist … That is, of course, the principle on which the right hon. Gentleman works. The local bodies are to be swept away, and a centrally nominated body substituted. I think he should tell us how he proposes that these complicated transactions can be carried through in time, for it is a closed book to all the professional associations who have to operate it. Those associations have unanimously represented that it would be very difficult or, indeed, impossible for them to carry through these operations in time. If they are not carried through in time what becomes of the Minister's statement that these new valuations will be a firm and sound foundation on which to base all these complicated proposals? The new valuations will begin to go out of date. The Minister has given himself four years in which to carry this through; he will find it difficult even if he allows himself an extension to five years. If it is not possible to do it even within that time, imagine the confusion which he will cause to local government machinery.

The new lists, says the Minister, cannot be enforced until four years after the equalisation grants start. They are to come into operation on a single day. Does the Minister really think that is practical politics? He did not really explain to us the complicated machinery necessary. He brushed it aside by saying that the central authorities will take over the local government full-time valuers. But what about part-time? Does he think that it is possible to put this through without taking into the scheme some of the valuation firms who have been conducting this sort of work for many years? What sort of valuation will arise if you sever altogether the existing valuers of the country from the people who are to carry out these artificial examinations upon which the Minister hopes to base so much?

I beg the Minister to reconsider this whole section of the Bill. It is a Bill in itself. When Mr. Neville Chamberlain, who spent a lifetime in local government, was bringing in his valuation proposals he did so in a separate Bill, so that in addition to having a full Debate on the local government proposals, the valuation proposals were debated separately, and even then they did not receive, as the events proved, as much examination and as close a consideration as would have been to the advantage of all concerned, and more particularly to the advantage of the party with which I happen to be associated. I warn the Minister that he is touching a red-hot poker when he touches this subject of valuation. I advise him to grasp it by the handle and not by the business end.

The professional associations did not simply confine themselves to destructive criticism. They have reckoned that under a new system proposed by them approximate uniformity can be obtained not later than 1950 by using existing machinery and strengthening the powers of control of the county and central valuation committees. The Minister says, "If you do that, why not do the whole thing yourself?" I think that is one of those logical falsities into which his over-logical mind is sometimes apt to betray him. It is not the same, doing the whole thing yourself, as operating through existing machinery. In general, I think that time should have been afforded, especially on this valuation aspect, to enable us to obtain the considered views of the local authorities, and others. The Minister will excuse me if I hurry on, because I cannot ask for the same ration of time form the House as he very rightly was afforded.

I would now refer to the question of the small dwelling house. Part IV of the Bill says, as I understand it, that post-1918 non-council houses are to be valued on the basis of 5½ per cent. of the 1938 cost of construction, and for other houses the actual 1939 rents are to be taken. The Minister made great play about the rating authorities. Using what he called a hypothetical tenant, he drew a vigorous picture of the pursuit of this imaginary figure up and down the land. For the imaginary tenant, the Minister substituted an imaginary builder. He is the figure now to be chased about the land—a person who built a set of houses in 1938, built all the houses in one street in 1938—built all the houses, so far as one can see, not merely in that street, but throughout the country. The Minister said, "I will take the responsibility of designating the block of property, and using this block of property built by some hypothetical builder in 1938 as a standard "—a standard which is already nine years out of date—

Mr. Bevan

I am sure that the right hon. and gallant Gentleman does not wish to mislead the House. It was not a hypothetical builder; it was an actual builder, and the actual cost of land and houses and everything known to local government records on which subsidies are having to be paid. These are not hypotheses but actualities.

Lieut.-Colonel Elliot

That is with regard to local authority houses, certainly, but all these other people's houses are also to be valued. This hypothetical builder was also the person who built the other people's houses, and the suggestion that the local authority builder in every case and the houses built for the local authorities are to be taken as a standard of cheapness by which everyone else's houses are to be judged, does not agree with the facts of the case. The Minister ought to take a class in the facts of life. The idea that the person building for a local authority is always the person who is the cheapest builder in any set of circumstances is really not, I think, one that examination would bear out.

The difficulty of taking a nine-year-old period as his basis is a further difficulty which the Minister will find growing in time, and this is the basis he has decided upon to be his standard for a long period. The cost of living index we know has fallen out of date. The working of the builder who built houses in those distant years will prove more and more troublesome to him and to his valuers as times goes on. My information is—I have not had the time to verify all these things—that taking typical houses there will be increases in both groups A and B averaging 20 per cent. to 25 per cent., and, in some cases, up to 50 per cent. This will be very disturbing if proved to be true, and I hope that the Minister, at an early date, can submit for the advantage, at any rate, of the Committee who is going to consider this, typical values got out on the basis he has been describing to the House. When it comes to flats, as I understand the position, the flats will be subject to a considerable increase in valuation, but, perhaps, the Minister would go into that between now and the Committee stage. The figure we have is that flats will come in for almost twice as heavy an assessment as they have previously.

The other parts of the Bill may be more briefly disposed of. The Minister has explained the advantages, and I have done my best to explain to the House what I think are the disadvantages of the new system which he proposes for the valuation of the great transport and electricity undertakings. It certainly will have some very odd effects. Counties which have no railways such as Bute will be getting a subsidy, and areas which have previously had railway valuations, such as York and Doncaster and Bournemouth, will find their railway valuations widely divergent—Bournemouth going down to under £1,000 and York and Doncaster continuing to receive several thousand pounds. I think that the Minister will receive some very fierce representations from local authorities on points such as these.

On the last section of the Bill I think that we are at one on both sides of the House that the local authorities should be able to draw on the past knowledge and skill of all these citizens who are within their areas, and for that reason it is reasonable that compensation for loss of remunerative time should be paid. I think that the Minister will find himself in difficulties if he makes this mandatory on local authorities. It would seem in some ways the essence of democracy that local authorities should decide these things for themselves—especially now that they are working on a vastly extended franchise. Furthermore, he himself would get into difficulties because under his own formula loss of remunerative time will not apply to the housewife at all.

Mr. Bevan

Oh, yes.

Lieut.-Colonel Elliot

It will on occasions apply to housewives if they can prove that they themselves had had someone else in to cook the dinner while they went to the council meeting. I suggest that is a somewhat invidious position in which to put housewives. If a woman councillor's daughter cooks the dinner the councillor will not receive any remuneration, but if she brings in somebody from outside she will. If two daughters of two housewives exchange and each goes to the other's house the remuneration will be paid, but, if they each cook their own father's dinner the housewife will not get any remuneration. The right hon. Gentleman will find difficulties arising. I do not say that it should not be sympathetically examined, but it will certainly need examination and he will not complain if we have to put Amendments down to this part of the Bill when it comes before us in Committee.

I trust that the Minister will agree that the arguments which he brought against our Amendment do not in any way hold water. I do not blame him for a cursory reading of our Amendment any more than he would blame me for the short time I have been able to devote to the study of this Bill. However, I hope I have proved to the House that the contentions which the Minister advanced against our Amendment are erroneous and that our Amendment is well founded both on consideration of the principles and on the details of the Measure which he has laid before us. The fact is that the Minister, as is so often the case with this Government, has been attempting by a short-term Measure to deal with a longterm difficulty. There is the difficulty of the increasing strain upon the finances of local authorities and upon administration, a difficulty which inevitably our century will have to grapple with on several occasions. It would have been very much better if on this occasion, recognising the transitional nature of the period in which we are now, the Minister had brought forward a transitional Measure, because this will be in practice no more than transitional, and recognised it as such instead of bringing forward a Measure which he claims is a long-term Measure whereas it is impossible that it should turn out to be so. On the question of the block grant proposals there has been great criticism by the local authorities; his valuation proposals will prove unworkable and unjust; and the subsequent provisions of the Bill are such that would properly demand legislation of their own, not this stitched together series of Bills in one which he has brought before us this afternoon.

My last word is that I have said nothing about the Scottish aspect of it, because that will be considered tomorrow. But believe me, if the Minister thinks he is expediting business by bringing a Scottish Bill which has no relation to the English Bill, and putting the two before the same Committee, he is very much mistaken. I see the Minister of Pensions sitting on the Treasury Bench. I tremble to think what he would have said when he was on the back benches if such a proposal as this had been brought before us, and there was every possibility that he would be expelled from or not admitted to the Committee which was considering matters of such great importance to his own country. It is with very great pleasure that I move the Amendment standing in our names.

5.35 p.m.

Mr. Binns (Gillingham)

I think the right hon. and gallant Gentleman the Member for the Scottish Universities (Lieut.-Colonel Elliot) was trying to prove altogether too much, for he has been against every proposal in this Bill. He first endeavoured to say that, in fact, the local authorities had not been consulted in regard to the matter. In the capacity of chairman of the Metropolitan Boroughs Standing Joint Committee—a local authority organisation—I have taken part in very many discussions upon this matter with the Minister and his officers, and, frankly, I would say that there had been no difference whatever in the way in which this matter has been discussed. Discussion has taken place on every occasion in a better manner than I have known in my time in this Parliament. Certain points which were put forward by the local authorities were agreed to by the Minister. I remember in my municipal capacity sometimes listening to a previous Minister of Health who, to show his connection with local government, used to say that his mother was an alderman. I think the right hon. and gallant Gentleman's great grandmother must have been a borough-reeve or something of that sort.

The point I want to make is that on this Measure the local authorities and the local authority organisations are not in complete agreement. My association absolutely stands by my right hon. Friend in this Bill. We have some minor matters which we shall naturally raise, but our main endeavour is to support the Bill on equalisation, which appeals to us very much indeed. As regards the total sum of money which is being devoted by the Minister to the local authorities, there were in the discussions which took place, some who could not see any logical reason for having an extra £10 million. I would be delighted if the right hon. Gentleman would enable us to have an extra £10 million. However, I have no doubt that the local authorities and the local authorities' organisation would argue that, in fact, the Minister, by giving them more money, was taking more and more of their rights away, because those who pay the piper must call the tune. I have heard such a point raised.

In London we have a special arrangement whereby the Minister is treating us as a separate entity for this purpose, because everything in London has a general similarity and it is possible for us to devise means whereby we can get even greater equalisation than that given to us by the Bill. In that connection I should like to give the House some figures to show what actually will be the benefit if this Measure is carried. The variations in rates in metropolitan London in 1946–47 were 9s. 8d. in the pound as the lowest to 19s. in the pound as the highest. Under the Minister's proposal the lowest would have been 7s. 10d. and the highest 17s. 4d., but in negotiations with the London County Council we have arrived at a basis for further equalisation, which is acceptable to the Minister and we have now come to this point when, in fact, we will expect our rates to vary from 7s. 11d. to 13s. 7d. on the 1946–47 basis. In other words, we have brought equalisation down to the degree that, instead of 19s. being the highest in London, the figure would be 13s. 7d.

I have a further point which I should like to impress upon the right hon. and gallant Member for the Scottish Universities. This idea that there should be equalisation was not confined to Labour Members; it was a completely unanimous decision. The citizens of London, through their representatives, were, quite properly, of the opinion that this county should be treated as one unit, and that throughout that unit we should try to secure the maximum equalisation that we thought reasonably possible. There was no party basis in it. We are all quite content and happy about the arrangement that the Minister has put forward in the Bill. I would recommend my right hon. Friend to pursue the matter of including a safeguard against excessive expenditure on the part of the authorities, as we have done. Because of the tremendous amount which would be given to them from the central fund we might find that they would be more liberal in their expenditure than they need be. I see no objection to such a safeguard being included in regard to the country as a whole.

I think we should talk about valuation a little. Again, the right hon. and gallant Gentleman said too much, because he said that the methods laid down by the Minister were not reasonably applicable. Perhaps the right hon. and gallant Gentleman will allow me to tell him that, in fact, the Central Valuation Committee do not make any protest about 85 per cent. of the recommendations, because they think that the 85 per cent. of the cases are reasonably and properly covered. They, whom we may look upon as experts in this matter, do not hold the views of the right hon. and gallant Gentleman. On that basis, we can again look upon the Bill as a great advantage to the local authorities. The only doubt that comes in here with many local authorities is how the Minister of Health will be able to arrange to have a central authority actually conducting the valuations. My association is quite definite about this. We think that the principle of State valuation is inevitable. If we are to have a system of equalisation grants, we must have a common basis of rating. I am sorry for the Central Valuation Committee, which has tried hard, with the very inadequate powers given to them by those who were in office in those times.

I have served on finance committees, assessment committees and every committee that could possibly deal with this matter, for many years now. I have always thought it wrong that one member of a council should sit on a finance committee levying the rate and another member of the same council should sit on the assessment committee, while the town clerk should very often be the clerk of both. That is absolutely indefensible. It might be taking away the functions of local government if we deprived local authorities of that phase of their operations, but I would gladly see it go, as gladly as I would see a large number of functions decentralised so that the human factor could be applied to them locally. That in its turn should come.

So far as valuation is concerned, we, as Metropolitan boroughs, are quite favourable to the proposals of the right hon. Gentleman, but many of the other authorities are not, because they back the Central Valuation Committee. We have one proviso, and I should mention it because it not only gives something to the Minister, but to the right hon. and gallant Gentleman. The experts in this field, the actual financial officers concerned in these matters in London, happen to be under the impression that if they work very hard they will be able to produce the new valuation by 1951. That is a long time from today. I am willing to accept what they say, but my own view is that there will be nothing much more than a year, or at the most two years, between the central valuation being carried out by the State or by the existing machinery. I would like to see, if it is possible, some sort of synthesis between the present machine and the new machine to enable us to cover the intermediate period. I want the State to have the job of valuation, but it might be possible for us to devise some means whereby we should have no hindrance in getting to the next quinquennium. If something like that could be done we should be very pleased indeed.

I should like to touch on other things in a very minor way. One thing that probably every party represented in the negotiations was disturbed about when they came to see the Minister of Health—Labour and Tory alike—was why we still carry on with derating. I point that out because there are certain functions of local government in which the ordinary party policies and politics do not appear. On one platform one may be in favour of derating and, on the other, one is not in favour of it. In my own municipal association we have not had any division on party lines for eight years. We find it possible to work in that way because my colleagues on that body, whatever their politics may be, have a sufficient sense of responsibility in relation to local government—a greater sense than I find applied to national government.

I gave evidence before the Lindsay Committee and I was glad to see implemented the sort of idea that my association had. There are too many trade union officials and small shopkeepers on councils throughout the country, because they are the only sort of people who can find the time to be there. I do not think that that consortium is representative of the people. It is not only a question of paying money to people in order to overcome that difficulty. I appeal to employers of labour to make it easy for their men, whatever their politics may be—I could give instances where politics made all the difference—when they are selected by their associations, or wish to stand independently, by letting them have the time to do so. The Bill will enable employers to give such time to their men, without sacrificing anything of importance.

There is much more I could say about the Bill, but I conclude by saying that I congratulate the Minister of Health upon it and sincerely hope that during its progress through the Chamber we shall have discussions by people who understand local government business, and not merely from party politicians.

5.48 p.m.

Mr. Medlicort (Norfolk Eastern)

The first point on which I should like to touch has been mentioned by both the previous speakers, and is in regard to the amount of time which has been available for the study of the Bill. With all due respect to the hon. Member for Gillingham (Mr. Binns), I do not think that he has quite the same kind of experience as hon. Members who are on county councils and other provincial bodies. He is much more closely in touch with Ministries and with London discussions. A minimum of six weeks to two months is by no means too much for studying a Bill of this magnitude in the case of provincial members. The Bill was presented to us on 27th October—about three weeks ago. It would be helpful if there were enough time for us to discuss the Bill in its full form with members of county councils and other provincial bodies, who do not have the advantage or disadvantage of meeting daily as we do, but meet, broadly speaking, once a month. I feel sure that if we could have that little extra time for discussion and consultation with them it could not fail to add to the value of our discussions in this House.

The broad principles of the Bill have been touched upon already and it would be out of place for me to attempt to keep the House except in regard to certain specific points to which I would like to refer very briefly. One of the defects of this Bill is that there is no provision for a minimum contribution by the central Exchequer towards the cost which will fall upon local authorities in the matter of the education scheme. I wonder whether the country yet realises the enormous cost which that scheme will entail and whether we can afford at this time to embark upon it to the extent which seems to be implied. What seems to me disturbing is that there appears to be no limit upon the maximum level either of taxation or of rating; and this Bill is, after all, in some respects merely a device for shifting the burden from one foot to another. It contains a number of ingenious and elaborate devices to that end, but the total goes on increasing. It is treating the poor citizen like a donkey which is overloaded with two panniers. Its master keeps on shifting the burden from one side to the other but although it may look better, the load is all the time increasing and may ultimately become too great to be borne.

We were interested in the references of the Minister to the comparison between the rate in the £ and the rateable value. He seems to feel that there was no particular merit at all in trying to limit the rate in the £ because he suggested that the valuation could be adjusted almost automatically. It is not quite as simple or as quick at that. The assessment obviously takes a considerable time to be adjusted, and I suggest that we should always bear in mind the importance of endeavouring to keep the rate in the £ down to a certain maximum. All these items have their influence upon the cost of production and the devices by means of which we sometimes hide these factors affecting the cost of production are perhaps not as meritorious as we are led to believe.

Most of us welcome the provisions for some payment to local authority members in respect of their duties. It would indeed be churlish if we in this Parliament were to withhold a gesture of this kind having regard to the remuneration which we have voted to ourselves. There are some ways in which the work of a conscientious member of a local authority can be extremely onerous. After all, he is perhaps even more in touch with his constituents than we are. Indeed his public work can become very absorbing and only done at the cost of damage to his daily occupation. One therefore welcomes these proposals in principle. I am particularly glad to see that the parish councillor is being brought within the range of these payments. I am not quite sure why he is to be excluded from being paid for duties done inside the parish, but that is a Committee point which will be elucidated later on. As far as the principle is concerned, anything we can do to raise the status of the parish councillor is a good thing, and to that extent the provisions are very welcome.

I turn now to a Clause which is tucked away towards the end of the Bill—Clause 117—and I hope that the Minister who is to reply will be able to give us a little information on how much is intended to be covered by that Clause. It appears to be very innocuous and may indeed be so, but if one looks at paragraph (a) one sees that it gives power to publish information, by which presumably there could be power to publish newspapers. Whether such an extension of local and municipal enterprise is contemplated is not clear, but I for one would regard it as most unnecessary and wasteful. In paragraph (d) there is power to make films. There may be a case for it, but I should rather doubt whether at this stage there is any real need for the time, attention and money of local authorities to be absorbed upon such enterprises as newspapers and films. I believe that everything that can be done should be done to increase the interest in their activities, but that I would hope would flow from the activities themselves rather than from these somewhat artificial means which can be so expensive and may well prove not to be worthwhile at all.

There is also Clause 120 which I imagine is brought in as common form. One imagines that the draftsman hardly gave a second's thought before deciding to include it and, indeed, I see no reason why this principle should not be included. It is the one under which the Minister can give compensation to those who lose office by reason of the provisions of the Bill. There may well be a number of people who will be deprived of office. Those who are referred to are officers of the Central Valuation Committee, the Railway Assessment Authority and other bodies. All I wish to say, however, is that this kind of Clause ought not to be accepted without at least a thought for the way in which the scales are being weighted more and more on the side of those who hold an official position. I agree that these people are all servants of some public authority and are there-fore entitled to proper treatment, but I think we ought not to pass this kind of thing without sparing a thought for those who do not receive one atom of consideration if they do not happen to be a part of the official class.

The House might object if I were to do more than merely mention the latest example, but, without for one moment wishing to drag in the main problem of petrol, we know that a large number of people have lost a great deal and have suffered considerably as a result of Government action over the basic petrol, and yet no sort of compensation or even the thought of compensation seems to enter into that. I mention this as illustrating the danger that we are increasing more and more the size of the great State Juggernaut car. It is becoming more and more important for people to climb on it in order to secure for themselves salaries, compensation and pensions. I feel that when we agree to pass this principle in this Bill we ought to give some thought to whether the same kind of principle should not be extended so that we do not get this enormous disparity between the advantages on the one hand of belonging to the official party and on the other hand of being merely a private citizen and endeavouring to make a contribution to the national wellbeing on one's own.

Finally I would say, as has been said by the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot), that it seems a great pity that such a complicated Bill has been presented, and I thought his expression apt when he said that the Bill seemed to have been stitched together. There are many subjects in it which one would have thought merited treatment in separate Bills. It is for that reason that I join with him in saying that we cannot welcome this Bill.

6.0 p.m.

Mr. Asterley Jones (Hitchin)

I wish to congratulate the Minister on the extremely able attempt he has made to solve what is almost an insoluble problem. The reason why grants are payable to local authorities at all, is often in question and there are three reasons. First, a local authority is, in the nature of things compelled to rely on one source of taxation only, and that is the occupation of real and leasehold property. For that reason, when the expenses of that local authority increase, it is inevitable that they should seek their finance from some other source. We have to admit to ourselves now that there is no other sort of taxation which could be located within the area of a local authority so as to make it identifiable and attributable only to that local authority. Therefore, with all its demerits, it is inevitable that we should continue to accept the principle of rating of immovable property, in spite of the fact that it is unfair in its application in that the person with a large house, inevitably if he has a large family, pays more rates than the person with a small house and small commitments. However, as far as I can see, there is no way out of that impasse.

The second reason why it appears to me that these grants are necessary is that there is still great diversity of wealth between different authorities, and while this diversity exists on grounds of equity it is necessary that there should be some distribution. It follows from that, if we are to accept that principle in full logic, that there should be no rates at all and that all finance of local authorities should be derived from the central exchequer, raised from the community as a whole, and distributed to local authorities in accordance with their need. However, as I have pointed out, we do not accept that because, as the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) said, government is not government unless there is some form of financial responsibility. For that reason we must accept a considerable amount of financial injustice if we are to preserve this principle of local government.

The third reason why we contemplate paying grants is that some of the services rendered by local authorities are essentially national and not local in character; at all events they have a big national complexion rather than a purely local one. There the Minister has merely been following a trend which is altogether healthy, and the Government as a whole have followed out the logical compulsion of events by transferring to the national exchequer the burden of paying for services which are essentially national services. Hospitals and the relief of destitution are two of the services which should have been national services a long time ago, and the attempt which has been made in recent years to preserve the facade of local responsibility and at the same time devise ways and means whereby the national exchequer should come to the rescue, has in my view been quite rightly abandoned.

In view of all these factors it is obviously essential that there should not only continue to be a substantial block grant from the national exchequer, but that also the existing block grant should be revised as well as the basis of distribution. At present the formula is based upon unemployment, sparsity of population, children under the age of five, and rateable value. So far as assessing the needs of an area are concerned, unemployment at present plays very little part, and, therefore, we are left with the other factors. The Minister has selected the factor of rateable value and given it prominence over and above the others, and that, as the Opposition point out, is essentially dependent upon uniformity of rating being achieved throughout the whole country. That cannot be achieved for some years. Therefore, is the Minister to wait until it is achieved before he introduces this new system, or is he to evolve some other formula for the intervening five years? In my view, and that of most of my hon. Friends, it is essential to accept the disadvantages of the intervening five years rather than to work out some other formula, which would inevitably have to pay some attention to rateable value, until the new formula could be brought into existence. At the same time we must not exaggerate the differences which exist in rateable values. That they exist cannot be denied, but I believe there is a tendency to exaggerate them.

Now I pass to one or two smaller points raised by hon. Members and one in particular, included in the Opposition Amendment is that no consideration is given to the increased expenditure which has taken place in the present financial year and is expected in the future in the realm of education. Of course, it is perfectly true that the Minister, in giving weight to the children under the age of 15, indirectly at any rate pays attention to the burden of education. Under the old formula the weight was given to the children under five, and, therefore, he has retreated a little from the strong position which he was otherwise occupying, because there is a specific percentage grant payable by the Exchequer in favour of education authorities and specifically attributable to their education expenditure. In view of the fact that expenditure on education is bound to increase, I should have thought it would have been much better to increase the education grant than to attempt to take it into consideration on this Bill. On Fire Services again, there is a specific 25 per cent. grant payable under the Fire Services Act. Admittedly the expenditure of local authorities will have gone up, even taking that grant into-account, compared with prewar but if that grant is not considered to be sufficient, then I think that it should be considered on that specific service rather than confuse the situation by trying to pay out this Exchequer grant based upon the fire-services.

Another point which has been raised outside this House is the situation of district councils within a county which will receive no Exchequer contribution under these proposals. The situation is that in the past this grant has been paid as a capitation grant out of the general Exchequer contribution to district councils within the county. It is just as much a grant from the central government to relieve local authorities generally of expenditure as it is to pay them the money to spend on services. Therefore, it is a grant to relieve them of the expenditure on hospitals and public assistance, and so the county council will be better off to that extent. And just as the county council is better off to that extent so, as the Minister pointed out forcibly, will the district council and the individual ratepayers be better off because they will not have to pay so much to the county rate. Although it appears on the face of it to be a somewhat absurd situation in the case of county districts in a county which receives no Exchequer contribution that they should be precepted first, and then have the money handed back to them, it is, in fact, a perfectly just procedure for the redistribution of the county rate within the county. For that reason, the loss which appears to fall on district councils is apparent rather than real and, as the Bill provides, it will be essentially a bookkeeping transaction.

The Local Government Act of 1929 enabled the Ministry of Health to threaten local authorities, all of whom were in receipt of some share of the block grant, with the withdrawal of that block grant if they did not keep their public health services up to a certain standard, and generally if they were extravagant. That threat is also contained in this Bill, but it is of no effect at all in those authorities, including the county in which I reside, which do not receive any Exchequer contribution at all. Admittedly local authorities are somewhat reticent about making this point because they do not like being bullied by my right hon. Friend, but, nevertheless, in most cases, I do not say all, there are sufficient default powers existing independently of this big stick to enable my right hon. Friend to apply such pressure as he may think fit. It is a point to bear in mind, and I trust that some attention will be given to it.

Complaint is made by many local authorities, in fact, I suppose, by all local authorities, about the fact that this Bill makes no change in the rating of industrial and freight transport hereditaments. Admittedly in the original general Exchequer contribution under the 1929 Act, this loss as a result of derating was a factor which played its part in assessing the total amount of money which was made available, a matter of £22 million, or thereabouts. This grant now having been taken away, and replaced by a new one, local authorities think that in fact they have lost something, whereas, as I have sought to show, they have not lost something, because the removal of their liabilities is equivalent to a grant. In fact, they have gained something, and something very substantial, because, if industrial hereditaments in a local authority's area, its rateable value will, by reason of that and of other facts, fall short of the average, and it will be entitled to the compensating amount of rateable value which is credited to it. I do not regard that argument, therefore, as a very strong one. In fact, the Minister has gone a long way to make substantial redress for the injustice which certain local authorities undoubtedly suffered.

In my view, in the view of my hon. Friends, and in spite of the Amendment, in the view of many hon. Members opposite, I think, this Bill is a courageous attempt to meet the situation. I do not regard the criticism that it is a patchwork Bill as being of great validity, because many Bills deal with a variety of subjects. All these subjects are concerned with local government. If we were having another consolidating Bill, to consolidate the Acts of 1929 and 1933, no doubt it could be arranged in better order. But, when we are not consolidating, it is reasonable that all these matters, which have a correct relation to local government, should be discussed together. I make no mention of the case regarding Scotland, of which I profess no knowledge. I know there have been difficulties in the past when it has been sought to attach a Scottish Bill to an English Bill, but no doubt the Minister will be able to sort out the difficulties.

6.16 p.m.

Mr. Turton (Thirsk and Malton)

I regard Bills dealing with local government from the attitude of how far is the Bill going to allow a local authority to govern itself? How far is that government going to be local? I disagree with the hon. Member for Hitchin (Mr. Asterley Jones) who regarded some of the functions which the local authority wielded as a mere facade. It is most important at present that we should decentralise administration. I regret very much that this Bill has a contrary tendency. I am not going into detail on the first part of the Bill beyond saying that I think it is very hard to work out the financial effect until we have seen the redistribution proposals for local government, which will entirely alter the whole of the White Paper, which has been presented to us.

On the question of centralisation of valuation, I agree that the present method is not completely effective. The Central Valuation Committee requires greater powers, and to regard the system of valuation, as the hon. Member for Gillingham (Mr. Binns) regarded it, as an executive act, seems to neglect what is the most important question, a judicial act, which has its final determination at present in a Court of Quarter Sessions. I believe that if the Minister had worked on this local basis of valuation—because it is the local knowledge that assists in making a correct judicial determination—and used his appeal—with which I entirely agree—instead of having the old Court of Quarter Sessions, using the county court, then he would have a quick and able framework for valuation. Instead of that, he has put forward a central valuation, which will be very cumbrous and slow. He has to assemble a great army of new officials, and no provision is made for compensating those dispossessed of employment. I regard that as very unsatisfactory.

On the valuation of dwellinghouses, the Minister, with his usual wit, described the present system as "weird and wonderful." I cannot improve on his adjectives to describe the manner in which he is replacing the old system by this hotch-potch. If the dwellinghouse is owned by one person, the local authority, it will have one system of valuation, but if by another person an entirely different system. If, on the other hand, the house is an agricultural cottage, we have to go back to the system under the 1928 Act. If, however, the house is of a certain size, we go back to our old friend, the "hypothetical tenant." Surely, the time has come when we, as a Parliament, should devise a fair and equitable system of valuation, based not on the size of the family, nor of the house which we are forced by economic circumstances to occupy, but based much more on earning capacity, and ability to pay. We want to have one system of valuation for all ratepayers, taking no account of who owns the house or on what particular date the house was built. I do believe this House should pay great attention to this question in Part IV of this Bill.

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

I was interested in what the hon. Member said. I would be even more interested to hear what principle he would have for this uniform valuation about which he is now talking.

Mr. Turton

I certainly think it should be weighted by family allowances. A man with eight children should pay on a lower valuation, taking into account the fact that he has eight children—in other words, a system of family allowances related to rating.

Mr. J. Edwards

I understand that, but what I am interested in is what would be the hon. Member's first principle of valuation?

Mr. Turton

My first principle would be based on the former hypothetical tenant of this desirable residence.

I want to spend most of my time talking about Part VI, because I was the author of the minority Report of the Lindsay Committee, and I wish to explain my attitude to it. I make no complaint that the Minister is taking the democratic method of adopting the majority Report in this matter. I wish he would do the same with the Hobhouse Committee's Report in regard to which he has taken the advice of the minority and done nothing about it, but then I realise that he has got a certain standard of conjugal fidelity to obey in the matter. As I see it, the whole importance of this question of local government is this: when one travels abroad one finds charges of corruption levelled at people in public life. As an instance of this, when I was abroad early this year I found that a certain country's president, who had been elected by the Communist Party, had, after his election, handed out the oil ration to the members of the Communist Party. That is highly undesirable. If the Minister of Food handed potato rationing over to the party represented by the hon. Member for West Fife (Mr. Gallacher), I can imagine that my constituents and the constituents of many other hon. Members, would get very few potatoes.

Mr. Piratin (Mile End)

The hon. Member has made reference to my party. Would he be courageous enough to state which country this was?

Mr. Turton

I was referring to President Gonzalez Videle of Chile who, after his election with the support of the Communist Party, handed out the oil ration to the Communist Party.

Mr. Piratin

On a point of Order. May I ask you, Mr. Speaker, to ask the hon. Member to withdraw what he has just said? The House will recall that he distinctly spoke of the Communist Party who had elected the president, and he distinctly stated that a Communist president had given out certain posts. He certainly made those remarks, and unless he withdraws them they will be quoted from HANSARD. He has now stated that in a South American Republic, with the help of the Communist Party, a certain president was elected and he makes an allegation that the head of a foreign Government has given out posts. Is it in Order for an hon. Member to make an allegation of that kind?

Mr. Turton

I must have been misheard. I have never alleged that any foreign leader gave out posts. I am saying that the oil ration in Chile was handed out to the Communist Party. This is a fact which the hon. Member can find out. All I know is that I happened to be in Chile, and was informed that the President had rescinded his decree because this oil rationing was not working satisfactorily. The point I am endeavouring to illustrate is this. Whilst one has this unsatisfactory state of affairs abroad, we in this country have, with great pride, a great reputation for the standard of integrity in public life, and we must take great care to do nothing to alter that. The men in our public life, our local councillors, are men who have a deep interest in local administration without any hope of gain, and I say this especially of England. Therefore, I think we want to secure men of—

The Joint Under-Secretary of State for Scotland (Mr. J. J. Robertson)

The hon. Member said "especially of England." What about Wales and Scotland?

Mr. Turton

I said "especially of England." I agree that I should have included Wales. I am going to talk about Scotland later, and therefore I wish to reserve my remarks on that topic. The sacrifice of time, of time and interest for local government is, I believe, a good motive in public life. Let us admit that such a system of sacrifice may debar men who are very busy at their occupations, and men who are paid such low wages that they cannot afford to give up the time to serve on local authorities. That is a case when sacrifice would become a hardship, and as I recommended in my minority Report, I do believe we should meet such cases by providing for these exceptional circumstances.

I want to warn the House that if they make one general provision for securing that all who suffer any loss of earnings or undergo any additional expense will get their £1 a day, we shall be turning our local government into a form of salaried service, which is highly undesirable. Let me remind the House that this provision already exists in Scotland, where the county councillors can be remunerated for the loss of employment, and the evidence to which I listened on the Committee has convinced me that the method employed in Scotland is not desirable. For one thing, it is inflicting a large burden on the ratepayers. To give an example of one county council in Scotland, the present cost for such compensation for loss of remunerative time is £2,680. That is based on 15s. a day, but when the provision is not 15s. a day but £1 a day, as is provided in this Bill, the costs for that particular county council will be raised to £3,576. Those costs are related to the decision in the Arbuckle case in Scotland, and to a very narrow section of the community. Here, under this Bill the Government are proposing to widen its applicability.

Mr. Willis (Edinburgh, North)

The hon. Member said earlier that the fact of having no payment had brought about conditions in England and Wales in particular where a very high standard of public service had been achieved. He then went on to say in reply to an interjection that he would deal with Scotland later. Is he suggesting that in Scotland there is not the same high sense of public service where these payments are made?

Mr. Turton

From the evidence to which I have listened, I am convinced that the standard of public service in England and Wales is higher than it is in Scotland. At the end of my speech I will refer to that.

Mr. Lipson (Cheltenham)

Would the hon. Gentleman tell the House what is the value of a penny rate. Then we can estimate how heavy the burden is likely to be.

Mr. Turton

I think that at present it comes to .55 of a penny rate for that particular county. I think that that is rather obscuring the issue and, if I am allowed, I will continue neglecting the last interruption but not the former one. Working from the figure of £3,500, I think that this Bill will run a county council into a sum of about £7,000 a year under the proposed system. That may be all right for the big councils, but it will be a very heavy burden on the small county councils, the district councils and indeed, for many borough councils, especially in Scotland. I ask the Secretary of State for Scotland what provision he is making to enable some of these poorer areas to find the money.

That brings me to the main issue between myself and the Government on this matter. It was the issue between the minority and the majority in the Report. I believe that when there is this grievous burden which will be imposed on some ratepayers, the ratepayers should have a right to say whether or not they want to bear the burden. I admit at once that if the Minister had come down as a sort of fairy godmother, and said, "I am going to get this from the Chancellor of the Exchequer out of the taxpayers' money and hand it to the local authorities so that the ratepayers will not feel the full burden," then there would be justice in his attitude. But he is not doing that. He is saying that all this money must come out of the pockets of local ratepayers. Speaking from my own knowledge of England, I can think of district councils where the men who are members are either shopkeepers or farmers. If they go on a market day to their market town, they will be entitled to claim £1 a day which will have to be paid by the poor agricultural worker and his wife.

Mr. Bevan

In what way? A farmer who attends a meeting on a market day would have to make a declaration appearing on the minutes of a local authority that, in fact, he has lost money that day by appearing. Would he make such a declaration in those circumstances?

Mr. Turton

Certainly. It the farmer was engaged for six hours at a rural district council meeting, he would be losing money just as much as, and probably far more than, any other person. I assure the Minister that farming is hard work and that by giving up that time the farmer is losing—

Mr. Bevan

Suppose the farmer had gone to the market and lost money. What declaration would he make then?

Mr. Turton

I am sorry. I do not want to instruct the Minister of Health in farming, but he must not think that the markets of this country resemble the stock exchange. They do not. The farmer takes his animals to the sale and gets back to his farm as quickly as he can to put in a day's work. By working on a local authority he is deprived of that time, and that is why he can claim. I think that this right should be confined to the man who, because of his income, is prevented from being a member of a local authority. In support of that belief I put forward the fact that the weight of opinion in the country areas was strongly opposed to this system of compensation for loss of remunerative time. Out of 444 rural district councils, 316 opposed it. In 40 out of 59 county councils, no hardship was incurred under the present system. Finally, and perhaps this is the best example of all, in 22 out of 26 catchment boards, it was said that such a system was not required. This is not a question for the councillors, and I suggest that the matter should be put to the vote so that the electors can say whether or not they think this system should be adopted as suitable for their area with its peculiar local conditions.

I now wish to touch on two things in our Report which have not been made clear in the statement by the Minister or, indeed, in the Bill. In reference to Clause 106, which deals with travelling allowances, I do not yet understand whether, where the Minister gives no travelling allowance for distances less than three miles, he intends to end what I believe to be the pernicious practice by some local authorities of giving their members a free pass to go wherever they wish by public or private transport. That is highly undesirable. I hope that I carry hon. Members on all sides of the House with me in that. I see that one hon. Member is displaying a permit now. I say that they are highly undesirable and I hope that that system will be ended.

Lastly, may I say a few words in regard to Scotland and this system of the Common Good? What will happen when we have compensation for loss of remunerative time, travelling and subsistence allowances, and when there are large numbers of authorities in Scotland paying out large perquisites to their members out of their Common Good, or their Burgh of Barony funds, or out of the profits of their transport undertakings? I can think of one authority which allows to every councillor a free pass to the value of £26 a year, and gives luncheons worth 3s. each and teas worth 1s., out of the Common Good at a cost of £9,000 a year. In the interests of the integrity of public life, that system should be ended. It ought to be made quite clear that if there are to be these systems of travelling and subsistence allowances, and financial loss allowances, then no longer need we have these hidden perquisites. I appreciate the adoption by the Minister of the recommendation, with which I entirely agreed, that the minutes should be published, though I think that it is an incomplete sanction. The rate-payers who read the minutes cannot vote—though I wish that they could—against financial loss allowances if the system is being abused. At least, however, it is a sanction of a kind.

In conclusion, I would say that I believe this Bill is in danger of swinging local government towards regionalism. We will begin to get men coming into local politics who have not that intimate knowledge of local affairs which people had in the old days. By this proposal for the centralisation of valuation, we are adding to the red tape with which the whole of local authority work is now being encumbered.

6.40 p.m.

Mr. Thomas Lewis (Southampton)

I would like to raise one or two points on this Bill because I am keenly interested in local government. I think that this Measure is like the curate's egg—it is bad in parts. I hope that it will be considerably improved when we come to the Committee stage. To those of us who have had long experience of public work—I have had over 40 years of such experience—the question of the rates in our towns has been an absolute bugbear. It has prevented work from being carried out, especially when the Measures passed by this House were optional. Even when the work was obligatory, it was very often put into operation in a very niggardly way.

I want the House to look at this Bill from the standpoint of the ratepayers.' The Minister made a great deal of unnecessary display about the difference between the local authorities and the ratepayers. After all, the local authorities represent the ratepayers. Even though they themselves are ratepayers, they are not, the only ratepayers in the area. It seems to me that if local authorities make objections to a particular Measure, or put up alternative proposals, they have the right to be considered, because they are acting for the people in their constituencies. This Measure is long overdue because the people of this country, especially the poorer section, have been overburdened with regard to rates for a long time past. The rating system is entirely bad, and I thought that the Minister would have recognised that fact.

I would ask my right hon. Friend to give some attention to what local authorities feel on this matter. For some years, I was a member of the Council of the Association of Municipal Corporations, and it is my opinion that they have not been consulted as they should have been. I do not like saying these things, but they must be said because the A.M.C., the rural district associations, and all the other organisations representing elected public bodies expect from our Ministers in this Government better treatment than that which has been meted out to them in the past. They do not want to be treated in a cavalier fashion. I suggest to my right hon. Friend that they probably know more about the subject than many of his officials at the Ministry. Of course, I would not suggest that they know more about it than he does himself. It is rather surprising how revolutionary Ministers can be led astray by the blandishments of the officials in charge. I hope the Minister will not think that I am making any personal attack because that is far from my thoughts, but it seems to me that the more revolutionary Ministers are, the less they seem inclined to put revolutionary measures into operation.

I honestly believe that the Minister knows perfectly well that this is only half a Measure. If he tells us that it is only a stop-gap Measure and that something better will be provided later on, well and good. All the same, as a loyal member of the party, I shall, of course, go into the Division Lobby in support of the Bill. I read the Opposition Amendment very carefully; I thought it was a very clever Amendment, and one which I could almost support. But I asked myself why, when they were in power, hon. Members opposite did not take advantage of the ample opportunities presented to them to alter the rating system. I remember in 1929 when we had the derating system which inflicted a very heavy burden on the local authorities. That is what the party opposite did instead of completely overhauling the rating system. I say that they are not interested. While their Amendment could possibly be acceptable to a good many people, it contains a good deal of "blarney," if, Mr. Speaker, "blarney," is a permissible Parliamentary expression.

I am concerned about the ratepayers. I am sure the Minister must know that there is a vast difference between the burden borne by a person renting a house at, say, from £25 to £30 a year, and earning, perhaps, £4 or £5 a week, and a person renting a house at, say, £50 a year, who has an income of £1,000 a year. The system is very unfair and calls for drastic changes. I have read the different reports which have been made, and I have great difficulty in understanding the formula arrived at. The Minister made a most interesting speech this afternoon, but, even with his explanations, it was difficult to understand the need for a formula of the kind he described. For every blessed thing they touch they must have some peculiar formula, some weighting process. Why they cannot have a simple plan is altogether beyond my comprehension.

There is one other matter to which I wish to refer; it is one in which I have been very interested since the end of the war, and even before that. It is the question of the blitzed areas. I want to ask the Minister why he has not put in a short Clause dealing with that matter, which is still a very pressing one. All the Ministries—not merely the Ministry of Health—have treated the blitzed areas in a disgraceful fashion. That may seem to be strong language, but I feel strongly about it, as do some of my hon. Friends who represent other blitzed areas. Neither the authorities who control the funds nor the Ministries who control the labour and materials have shown any desire to restore the blitzed towns to a proper condition. There are towns like Southampton in which practically every multiple store was destroyed and whose centres are a ghastly sight. Very little has been spent on those towns except for the purpose of erecting a few temporary shops in order to allow a certain measure of trading to be carried on.

I hope that I am not speaking unjustly about the people responsible, but in my town they gave us £200,000 for the first year and dropped the figure to £100,000 for the second year. We had to use all our reserves before they would grant us anything at all. It put us in a very awkward position, and we are still in that position today. I maintain that the relief which it is proposed to grant under this Bill is not sufficient to enable blitzed areas to put themselves on to a proper footing.

Dr. Barnett Stross (Hanley)

Before my hon. Friend leaves that point, will he tell us the amount of the reserves to which he has referred?

Mr. Lewis

I think our reserves amounted to something in the region of £100,000. The reason why we had such a large sum available was largely the fact that we were unable to carry out work which we should have liked to carry out. The fact that 50,000 of our population were evacuated made our rateable position very difficult, and even today it is much below what it was before the war. There are difficulties, of course, with which one cannot deal in a discussion of this kind, but they are known to the Ministry. It will be agreed in every town which has been blitzed that the Ministry have not given us the assistance to which the blitzed areas are entitled, in view of their having borne the brunt of the war damage. I do not know whether it is possible to insert a new Clause into the Bill, but if there is any chance of doing so, I hope it will be possible to include a provision by which these authorities are given the assistance to which they are entitled.

I have one or two criticisms to make. One is the lack of uniformity in valuation and rating assessments. Towns which have been kept at a low standard of rateable value obtain an unfair advantage in the amount of grant receivable. The rateable value does not reflect the ability to pay. The principle of the general grant in aid of rates expenditure of all local authorities has been abandoned. Under the block grant all authorities received a grant which increased in proportion as the rate of expenditure increased. I would like to call the attention of the Minister to the loss of rates due to derating no longer to be made good. Whereas areas below the average figure receive various grants according to the formula, all those above the average figure receive no grant, even though they are the smallest decimal point over the average. I appreciate the desire to preserve the formula, but it does lead to a situation in which one town is just over the average and another town is just under it and receives nothing at all.

I would like to call the attention of the Minister to the loss of contributions which we previously received from the trading organisations. I was never very keen on the trading departments paying rates, although when the rates were getting high we were bound to ask them to make a contribution. I was in favour of ploughing back the profits into the undertaking itself. During past years, because of the changed circumstances and the niggardly attitude of the Ministry to our blitzed areas, we have had to ask our trading organisations to make contributions, and we are now going to lose those. We are to receive 2s. 3d. under the scheme. That 2s. 3d. will be swallowed up easily by the extra expenses which we shall have in the coming year. The fire brigade services are going to cost us an 8d. rate. This amount is altogether out of proportion to what it was years ago. We are not being fairly treated. Another point I would like the Minister to bear in mind is the question of the assessment on the docks. We have, I suppose, in our town the most important docks in the country. I do not intend to give Southampton a free advertisement, but it is the greatest passenger port in the country. I do not know what the position is with regard to the rating of docks. Perhaps the Minister will deal with that point and make us easy in our minds.

This seems to me to be a very complicated Measure, but I suppose these matters will be put right in the course of time. I hope that in Committee we shall be able to arrive at amicable arrangements with regard to some of the points which I have mentioned. No doubt the A.M.C. and other bodies will be proposing amendments, and it will be awkward for some of us to support amendments if they make things difficult for the Government. I hope, therefore, that in a matter of this kind, which is not essentially political, if the amendments are reasonable hon. Members will be as rational as possible and support them.

6.55 p.m.

Mr. W. J. Brown (Rugby)

I rise to put very briefly, within a few minutes, the feeling of the town council of Rugby in regard to this Bill. It is a borough of between 30,000 and 60,000 population, and what I say about Rugby will apply to other non-county borough and urban district authorities who are in the same position. My town council takes the view, first, that the amount of the new Exchequer grant is inadequate; second, that the proposals are not sufficiently flexible to meet the requirements of local authorities in the future; third, that the rateable value per head is not a suitable test of the financial needs of the local authorities; and fourth, that there are now, and are likely in the future to be, such variations in the standard of rating as to make the rateable value or the rate per head of the population quite unsuitable as a measure of financial need.

I hope the Minister will take into account those four substantial criticisms as affecting all authorities in the same position as Rugby. But with regard to Rugby, Crewe, and one or two other places, there is another factor, and that is the amount of railway hereditaments included in the property at the time. The effect of Part V of the Bill will be to abolish the present system of rating, as far as railway property is concerned, to substitute an artificial basis for the determination of the value of all such hereditaments, and to provide for the division of the rates paid among all local authorities in the country on the basis of rateable value without any regard to the location of the hereditaments. The Rugby Corporation has to provide for the needs of the railway company and of the railway workers, including housing, and this part of the Bill is going to hit us very hard. I therefore ask the Minister to be good enough, between now and the Committee stage, to take into account these few points which I have mentioned, and to see what he can do to meet us. As for the Bill generally, I give it my blessing.

6.58 p.m.

Mr. Bowen (Cardigan)

I welcome the introduction of this Bill, and, if I may, I would like to congratulate the Minister on implementing the undertaking he gave in November, 1945, when we discussed what is now the Local Government (Financial Provisions) Bill. I hope that my support and acclamation in this respect will not embarrass the Minister. All I would say is that my enthusiasm for the Bill is particularly applicable to Part I. In the time at my disposal I will have some critical observations to make with regard to the other provisions in the Bill.

With regard to Part I, which relates to the Exchequer equalisation grants, the provisions as they stand make a bold and honest attempt to meet the difficulties which exist, particularly in so far as they relate to sparsely populated rural agricultural areas. When the right hon. Gentleman introduced the Local Government (Financial Provisions) Bill and when he spoke today, he referred to the need for a definite bias in favour of poorer authorities. The criticism which a number of us levelled when we discussed the earlier Measure was that the bias was not nearly definite enough. At this stage of the Bill I am not going to discuss the details of the method by which the equalisation grant is arrived at, but I do think this is a very honest endeavour to meet the difficulties. The need for a Measure of this kind is perhaps best illustrated by the figures which have already been referred to by the Minister and which are contained in the statement which has accompanied the introduction of this Bill. The right hon. Gentleman has already referred to the effect it will have on my constituency. It is, I think, a striking illustration of the need for a Measure of this kind. It would have meant an estimated reduction in the rate last year of 13s. 6d. in the pound—a reduction which far exceeds the whole rate poundage in most areas throughout Great Britain. I was delighted that the right hon. Gentleman, when considering the effect which this Measure would have on the poorer authorities, stressed the benefit which would accrue to the individual. To my mind that is certainly the correct way in which to view the position.

As far as the areas in which I am particularly interested are concerned, they have been able to maintain only a very moderate standard of service by imposing a high rate poundage—in the case of my own particular constituency, 24s. 5d. in the pound. If those areas are going to maintain any sort of nationally acceptable minimum standard of service then a Measure of this kind will have to come into force. It has rather annoyed and irritated me to find people coming into my area from wealthy residential areas and complaining about the services provided, without realising the tremendous difficulty which the local authorities in rural areas are up against in this matter.

These provisions of Part I to my mind make a very substantial contribution towards the solution of one of our great social problems—the drift of population from the rural areas. One of the great factors in that drift—there are others—is the fact that, owing to their financial difficulties, those rural areas have not been able to supply and maintain a decent standard of social service. By giving them far greater opportunities than they have ever had before this Bill will contribute towards a solution of that problem. In contributing towards a solution of that problem we shall be contributing towards the solution of the labour problem in the agricultural industry, because one of the great difficulties in attracting people to agriculture is the fact that the local authorities in the agricultural areas have not been able to play their full part in social reforms.

In my view the effect of this Bill on a constitutional issue is going to be important. Two or three other hon. Members have referred to the importance of the independence of local authorities in relation to the central Government, and to how that measure of independence is bound to be jeopardised when we have large measures of financial aid given by the central authority to the local governments. Owing to the extension of the services which local authorities have to provide, the supplementation of their funds by funds from the Exchequer is inevitable, but I do think that by doing it in the way this Bill will do it, rather than in the way of block grants, there is a far greater opportunity of the poorer authorities maintaining a standard of liberty and independence in their relations to the central authority than there would be otherwise. The rich authority by reason of its wealth can maintain an air of independence and of liberty; but I do think that, in the delicate balance which always must exist in a position of this kind, the position of the poor authority in relation to the central Government will be strengthened rather than weakened by the provisions of this Bill.

Before leaving Part I of the Bill there is one aspect of it on which I should like to make a comment of a more detailed character, and that is with regard to the provisions of Clause 13. I am not quite clear in my own mind, and I hope the Minister will be able to enlighten the House later on, as to what is the position with regard to the poorer authorities' educational grant during the transitional period; because if that grant is not to continue during the transitional period that will mean for many areas a very substantial loss. In my own particular area for a period of three months the loss represents a sixpenny rate. I hope that the Minister will have something to say on that, and that what he has to say will be satisfactory.

With regard to Parts III and IV, I should like to say something first of all about the centralised system for making valuations and rating. I view those provisions with considerable suspicion. There is a need to attempt to obtain a common standard of valuation. Clearly, the present position is highly unsatisfactory. However, my natural inclination is to regard with disfavour the setting up of a further Government Department, with a large staff and with all the expenses and implications which that involves. I do think that, in this respect, we might well have something other than the complete giving up of the regional assessment of gross values, and the setting up of a central machine. I believe myself that far greater use could be made of the Central Valuation Committee, and that the localised machinery, provided with greater powers of supervision and guidance given to the Committee, would be a far better solution of the difficulties than the setting up of a new Government Department. I do not know what the House feels about it, but even if we do set up a central authority for rating, I think it might find a happier home than the Inland Revenue Department. At present there is great difficulty in obtaining competent rating officers—very great difficulty; and I think that the Minister is going to have considerable trouble in recruiting the right type of person to implement this Part of the Bill. Incidentally, I believe—I speak subject to correction on this—that the Minister referred to this as being a professional job. What the professional organisations of the people who at present carry out this work have suggested should be done is to extend the influence and guidance and powers of the Central Valuation Committee.

With regard to the procedure for the valuation of dwelling houses, that is to say, Part IV of the Bill, I think that the Minister has been unduly optimistic in thinking it is going to produce any common standard of valuation, and in thinking it is going to do away with the undoubted anomalies existing at present without creating new ones. I venture to anticipate that as far as the rural areas are concerned the cure is going to be worse than the disease. It seems to me that the three categories which have been set out in the Bill, and the whole basis of this valuation have been framed with reference to conditions in urban areas, and that as far as the rural areas are concerned we are going to have quite as many anomalies as at present exist.

I have made inquiries so far as I have been able in the time at our disposal since we have had access to this Bill and I have here some figures relating to one village, a selected village in my constituency. The effect of the application of Part IV to the circumstances in that village are very remarkable indeed. The gross value of houses which fall into the second group, that is to say, houses built since 1918, is going to be doubled in some cases and trebled in others. With regard to houses which come in group (3)—that is to say, pre-1918 houses—in many cases the gross value will be halved. So there are houses whose present gross value is the same, but whose gross value will be halved in one case and doubled in the other. I notice that a writer in the "Economist" took the view that these provisions will benefit the occupiers of houses built during the inter-war years. Certainly from my observation in rural areas, the effect will be precisely the opposite. I am not challenging the accuracy of that statement so far as it relates to urban areas, but so far as the rural areas are concerned, there are a large number of houses with extremely low rents fixed many years ago which will be in a very favourable position compared with houses—maybe small dwellings—built between the two wars.

There is one question I wish to ask with regard to Part V. Will the lump sum payments with regard to, for example, electricity undertakings, be on the basis of present assessments? If they are, I suggest that that might work very unfairly. Many local authorities have had to delay the making of fresh assessments for many years, through no fault of the authorities; and many are at present engaged in re-assessing undertakings, such as electricity undertakings, in their localities.

The hon. Member for Thirsk and Malton (Mr. Turton) spoke at some length on Part VI, which relates to providing the payment of sums of money in respect of financial loss, travelling allowances and subsistence to members of those bodies. Whilst, I must say, I share some of the anxieties and qualms which he expressed in relation to this part of the Bill, on the whole I think it is justified, having regard to the danger that otherwise some people may be deprived of the opportunity of playing their full part in local government service by reason of their financial position. Although there is undoubtedly a danger of abuse and—if I might be forgiven the phrase—a racket developing, on the whole I am in favour of the measures anticipated in this Bill. I think that at a later stage Clause 105 should be strengthened, in order to make it quite clear that the self-employed man is in the same position as the employed man with regard to payments in respect of financial loss. In my constituency some of the most active members in local government circles are self-employed local craftsmen—the local blacksmith and the local carpenter. This Clause should make it perfectly clear that the self-employed man is in no way in an unfavourable position compared with the wage earner, because very often the wage earner is in a very much better position in that he may well have a union behind him.

I am afraid that I have detained the House longer than I had intended. I say that this Bill, particularly so far as Part I is concerned, will result in a measure of emancipation for sparsely populated rural agricultural areas, for which they have longed for many years. Some of the relief provided by this Bill, when it comes into operation, may well be used to reduce rates, and it will be commendable if it is so used. For my part, I hope that the bulk of the financial assistance provided by this necessary readjustment of grants from the Exchequer will be used to provide services which have long been needed in these areas. If that is done, then, indeed, the provisions of this Bill will make a very valuable and permanent contribution towards the social life of those areas.

7.15 p.m.

Mr. Blyton (Houghton - le - Spring)

When I read in the Opposition Amendment that they were declining to give this Bill a Second Reading because it failed to adjust the burdens of ratepayers, I wondered why, in the last 25 years, they had not put into operation that which is embodied in their Amendment. Surely, they can remember that in recent years George Lansbury went to gaol on the rating problem, fighting the Government to make the richer boroughs in London pay a share of the burden of unemployment then being carried in Poplar? Men had to go to gaol to force the Government of that day—then comprised of right hon. Gentlemen opposite—to make an adjustment of the poor rate inside the City of London. For years in my area, with chronic unemployment and sickness, particularly tuberculosis, at a very high rate, involving great expense on our local authorities, we cried out, through the Association of Municipal Corporations, to Tory Governments to give us equalisation of rates throughout the country, but we got no reply; we got no help, save the derating Act, which helped private employers in industry and mulcted the local ratepayers in the different areas.

What happened in my area? In Tyne-side and Wearside, and in the vast County of Durham, which is a mining area, we had huge unemployment and terrible problems to face. There were old-age pensioners with their 10s. a week, which had to be supplemented through our Poor Law rate. Even today National Insurance is not sufficient to maintain a man, his wife and family when they are in sickness, with only a week's wages between themselves and the Public Assistance Committee. They had to apply to the Poor Law Assistance Committee for relief during periods of sickness. During those years what ought to have been a national burden had to be carried upon the backs of the ratepayers. When I read the Opposition Amendment my mind went back to the days of unemployment, of the six weeks' gap, when the present Opposition, who then formed the Government of that day, refused to give unemployment pay, and again the ratepayers had to pay it through the Public Assistance committees to maintain the unemployed men at that time. When I read that Amendment I wondered whether the Opposition had not forgotten that those days ever existed.

I have heard much talk from the Opposition benches about democracy, but I remember when the democratically elected representatives of Chester-le-Street were driven from their posts, for the simple reason that they refused to pay unemployed persons a scale of relief which they considered inadequate to maintain body and soul. I suggest to the Opposition that they had better look up the history of their own attitude to the rating problem during the inter-war years before they go into the Lobby on this Amendment.

We are entitled in our area to maintain our children and to give them the same educational facilities under the 1944 Act as the richer boroughs. We are also entitled to give our children the best health facilities, and the same facilities that children enjoy in the richer boroughs. It means that if we have to face the new burdens arising from the Fire Services Act and the increase in the education rate, with rates standing at 25s. in Gateshead, about 22s. in South Shields, 20s. in Sunderland and £10s. 10d. in Jarrow, of world-wide fame, it will be impossible for the ratepayers to meet the cost of many of the services to which the people are entitled. We live in an area where houses were built higgledy-piggledy last century, with the result that we have low assessments and high rates. I remember that not long ago the assessments were manipulated so that the rates were reduced by 1s. and the assessments increased by £2 over the 12 months. The result of that was that the tenant had to pay more than he did before.

There has been criticism today of the proposal for the railway and electricity valuations being fixed centrally. I have seen barristers and accountants get large sums of money in the fighting which has taken place between the local assessment committee and the rating committee on this question. The only people who waxed fat were the lawyers and accountants. Why should this go on? Surely, it is not beyond the ingenuity of this nation to settle nationally the whole of the assessments for railway hereditaments, and to arrive at some equitable scheme for the whole country. The 1929 block grants were unfair to local authorities such as mine. It meant that the rich boroughs were getting practically the same block grant, in spite of the fact that we were carrying such a heavy burden in the North. I am pleased that at last the richer boroughs are to carry some of the national burden we have been carrying for 25 years. This Bill means to my people in South Shields a 5s. 10d. reduction in the £. It means a reduction of 6s. in the case of Sunderland, and 8s. 8d. in the case of Gateshead. I welcome this Bill as delayed justice so far as our people are concerned.

I listened to what the hon. Member for Thirsk and Malton (Mr. Turton) had to say in regard to payments to councillors. There are many good men and good administrators who have not the money for council work. They cannot run for office, or, if they do, they find the work so heavy that they have to give it up. I refuse to believe that the integrity of the local administrator will be lost because he is to be paid for time lost. I see nothing wrong in free passes for travelling on transport within a municipality. If there is, where do we stand when we get our tickets to go to our constituencies? We are in the same boat. I do not suggest for one moment that any Member of Parliament has lost his integrity because he goes to see Mr. Buchanan in the Central Lobby to get a ticket to go back home. There is some sanction in the matter. I can assure the House that the borough treasurers I have met are very careful when it comes to expending the town's money. These expenses will be checked, and if anyone is suspected of "doing the dirty," I have no doubt that there will be a check back to the employer if necessary. I know of men in the Durham County Council, having to travel from all the different colliery villages, who depend upon their miners' lodges to provide the necessary expenses to enable them to carry on the public work of this country. I welcome this part of the Bill. I welcome the Bill as a happy release for the people of the North, and I welcome the fact that these people are to be recompensed for the burden they have been carrying for so long.

7.28 p.m.

Colonel Wheatley (Dorset, Eastern)

I would explain for the hon. Member for Houghton-le-Spring (Mr. Blyton) that we on this side are not opposed to the aims of this Bill—we are all agreed that something has to be done to change the present system of block grants—but are opposed to this particular Bill. The Minister explained in introducing the Measure that it was a very complicated Bill, and as I listened to him, I felt that he was as mystified over his explanations as we are over some of its proposals. The hon. Member for Cardigan (Mr. Bowen) congratulated the Minister on bringing in this Bill. I do not like to use the expression "political nepotism," because it raised so much heat in the House the other day, but it seems to me, talking in the widest sense, that the hon. Member for Cardigan was thanking the Minister for this Bill as it would benefit very much indeed a great part of Wales. I gather that the Minister mentioned in particular the hon. Member's Division.

Some of us feel that rateable value is not a real indication of the financial resources of an area. My right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot) drew attention to the difference between Bournemouth and Merthyr Tydfil. In Bournemouth, the rates were low but the assessments high, and in Merthyr Tydfil, the assessments were low and the rates were high. He pointed out that it worked out at about £6 per head in the case of Bournemouth, and at less than £5 per head in the case of Merthyr Tydfil. I would point out that in Bournemouth, which is often quoted as an example of a rich borough that ought to help other areas, one quarter of the rateable value there comes from properties valued at £40 and under per annum. This means there are many people living there who will have to bear the increased cost that will fall on the borough as the result of this Bill. Although I agree that Bournemouth—and similar towns—has sea front and other properties of a high rateable value there are many people living there who have retired, and who are getting no increase in income. In fact, their incomes are going down because of the machinations of this Government in taking over the railways and electricity undertakings, and giving only a small rate of interest on their capital investments.

I am also against the valuation and rating proposals as outlined by the Bill. The Minister confused me very much when he was trying to point out that there was some difference between local authorities and ratepayers. The ratepayers do not mind whether they are called a local authority or not; all they are concerned about is how much cash they have to pay twice a year in the form of rates. They do not worry about poundage or rateable value; the only thing that worries them is how much they have to pay each year for their houses. If this Bill is carried to its logical conclusion it will penalise the authorities which keep their services up to the mark in an economic fashion, against those which are wasteful of their money, or do not keep up their services in the right way.

Mr. Walker (Rossendale)

In what way?

Colonel Wheatley

A good many authorities do not keep up their roads in a proper fashion, or they go in for large expenditure on swimming baths, and so on, which are not necessary at the present time, and which they cannot afford. There is another point: a local authority, apparently, has no right to appeal against valuation by the Inland Revenue Department. That seems extremely wrong. Surely, the ratepayers of the borough should have the right, through their local authority, of appealing against a valuation. After all, they provide the money. I may be wrong on this and, if so, I hope the Minister will correct me. I am also worried about the appointment of the officials to do this valuation. The Minister said that he would make use of the present permanent officials. Are they to be permanent, or are they to move about the country? It makes a great deal of difference whether a valuation officer knows his district, the property in it, its value, and how values are going up and down. These officials will have tremendous responsibility placed upon them. They will only be under the control of the Chief Valuer, a remote official. They can, apparently, do as they like. They can appeal against an objection, and go to court or not, as they please, and reduce an assessment on objection if they so desire. The method of assessment in relation to dwelling houses works very unfairly against the owner-occupier, especially in contradistinction to the council house. The owner-occupier may be a small man—I have already referred to those people who cannot increase their incomes—and this method of assessment is not at all sound. For this reason alone, I personally would be against the Bill.

Coming to Part V of the Bill, it is easy for the Government to say, "We will assess all these industries throughout the country, and distribute the money." That will not work fairly towards all authorities. Many have spent much money on roads, sewers, and other things to assist the development of undertakings. In my own area, for instance, a large electricity generating station is being built, which will mean a good deal of extra cost to the authority for roads. Indeed, the cost to the authority for repairs to roads has been heavy already during the building of this station. Finally, I want to refer to Clause 112 (2, c), which states that a county council can make a precept on its district without declaring a rate. That seems entirely wrong, because it prevents the district from being able to appeal against such a precept. Heretofore, a district has been able to appeal to quarter sessions. A borough in my constituency did so, and obtained a reduction in rate in consequence. For these reasons, and those adduced by other Members on this side of the House, I shall most certainly support the Amendment.

7.39 p.m.

Mr. Burden (Sheffield, Park)

No one, I think, can overestimate the importance of this Debate today on local government. The Minister, in his admirable opening speech, asked us to keep to broad principles, and not to get down to detailed Committee points. That was very wise advice. We can truly say that local government has its roots very deep in our national life. Local government preceded central government, and it has made a great contribution to the building up of our communal life. But, to be effective, local government must be local government, and not be controlled from Whitehall. It is, therefore, I submit, right and proper that this technical and complicated Bill of fundamental importance to local government should be, at some stage or other, subjected to the closest possible examination.

Let us look at the time-table we have had for the examination of this Bill today. It was presented on 24th October while the borough council elections were in progress. I do not think that it is overstating the case when I say that not one major authority has had an opportunity of examining the important provisions of the Bill in detail. It is true that the Association of Municipal Corporations has had meetings with the Minister. I have with me a copy of the special report submitted to the general purposes committee of the A.M.C., but that report is dated 6th November. This report, confirmed by the general purposes committee of the A.M.C., advances five fundamental objections to the Bill. I will not attempt to argue those objections. They may be right or the A.M.C. may be mistaken, but I say very seriously to the Minister, "Do not try to ride rough-shod over the local authorities; they have a right to be heard and their objections given the fullest possible consideration."

May I say a word regarding the new rating and valuation procedure for. England and Wales? Most people will agree that there is a very good case for reassessment of all properties on a uniform basis, but I challenge the great power— the autocratic power—which this Bill gives to the valuation officer. I remember that Walt Whitman says somewhere: Beware the never-ended audacity of the elected person. But it does require some audacity, I suggest, to submit to this House the powers which this Bill proposes for a valuation officer. Let us see what they are? First, the valuation officer must prepare a valuation list. He must then publish the fact that he has completed a draft list. This official will then have the power to revise his own handiwork, the draft list, which he has himself compiled. To quote the actual words of Clause 36: The valuation officer shall revise the draft and may, on that revision, make such alterations in the list, whether for the purpose of meeting an objection or for any other reason, that he thinks proper. The valuation officer will have the powers and duties of the local rating authorities so far as rating and valuation is concerned. He will, apparently, have the duties of the county valuation committee. He will have the most important functions of the assessment committee. I challenge the wisdom of giving an official such wide powers.

I pass to another important question arising from the Bill. I make no apology for referring to the position of the staff now employed by local authorities, who will be deprived of a livelihood if the Bill passes in its present form. Local government officers have served this country to the best of their ability. Many years ago Sir Henry Taylor told us that wise men have always perceived that the execution of political measures is the essence of them. I would be the last to question the public spirit, the integrity of purpose, the desire to do the right thing on the part of many thousands of elected representatives of local authorities, but, with all respect, I say that these members have neither the time, nor the requisite technical knowledge to give shape to policy. There must be trained administrators, national and local, if our communal life is to develop.

The question I want to put to the Minister quite bluntly is this: Why are there no provisions for the transfer, if otherwise suitable, of local government officers to the new posts under the central government? Why should all the knowledge of assessment officers, rating and valuation officers be thrown away—these men redundant, thrown on the scrap heap after they have rendered such valuable service as they have done in the past. There are ample precedents for such transfer provisions. I would refer the Minister to Section 68 of the National Health Service Act, 1946, Section 14, (3) (f) of the Transport Act, 1947, Section 14 (5) (f) of the Electricity Act, 1947, and Section 101 of the Town and Country Planning Act, 1947. I assure the Minister that the staff concerned are deeply disturbed at the fact that apparently owing to the absence of transfer provisions they are to be sacrificed. I ask the Minister to allay this legitimate anxiety, and, if necessary, to meet the appropriate trade union, the National Association of Local Government Officers, in order to discuss the removal of this obvious injustice.

There is one other point which I would mention. I am informed that certain voluntary organisations, for example, the National Council of Social Service, are vitally interested in some of the provisions of the Bill. I am sure that the Minister does not wish to handicap the excellent work of these organisations. They have not had an opportunity, owing to the time factor, to consider the Bill in all its bearings. When that consideration is complete, I trust that the Minister will be prepared to receive representations from the bodies concerned.

Finally, the blemishes in the Bill which I have tried to indicate are capable of remedy. The broad proposals are quite sound. The tests which I suggest should be applied to the Bill are, does it increase the opportunities for service to the community; will it tend to increase the purpose and efficiency of local government? I believe these are the intentions of the Minister. As one schooled in local government, I believe that local government is a precious heritage in our national life. I beg the Minister to be conciliatory and to meet in a generous spirit any objections put forward in order to help local government. Above all, he should not leave local authorities and members of local government bodies with a real sense of frustration. I beg the Minister to seek the willing and effective co-operation of local authorities, for all the wisdom is not in Whitehall. If the Minister acts wisely he will get overwhelming support from the local authorities in the great work which he has undertaken.

7.51 p.m.

Mr. Piratin (Mile End)

This, I believe, is the first major change in local government finance since the Derating Act of 1929. Further, I believe that this is not intended to be a stop-gap Measure but is intended to last. For these reasons I think that it ought to be given deep consideration as the hon. Member for the Park Division of Sheffield (Mr. Burden) said, and it is to those points I aim to address myself. There are three aspects of the Bill which the Minister outlined earlier today on which I wish to speak, namely, the Government grants, the valuation and rating procedure, and the payments to members of local authorities. With regard to the last I am certain that this House is not going to support what the hon. Member for Thirsk and Malton (Mr. Turton) said earlier. He disagrees with the recommendations that local authority representatives should be paid reasonable expenditure in the course of their services.

Mr. Oliver Poole (Oswestry)

I would not like the hon. Member for Mile End (Mr. Piratin) to misrepresent my hon. Friend. What he said was merely that it should be left mandatory to the council whether they did or did not accept this. He was not opposing the principle of the question.

Mr. Piratin

Having read the minority Report of the hon. Member for Thirsk and Malton on this question, in the document which was circulated a little while ago, I believe his intention is to disagree with the essence of the Government's proposal, and I think hon. Members who have read the document will understand it in the same way. I hope this House will give full support to this particular proposal and the series of Clauses that go with it, because I believe that this is something which is long overdue. It does not affect so much the members of the local authority in which I myself function, because we are a working-class authority, we meet in the evenings, we are a London authority and, therefore, we are within a short distance of the town hall. It does, however, affect many members of local authorities up and down the country who have not the same facilities as the Metropolitan Boroughs. For these reasons it is to be welcomed.

I want to come back to the wider aspects of the Bill. First, there is the grant system. Obviously in relation to the immediate circumstances in which local authorities find themselves the equalisation grant is going to be of real and standing benefit to the local authorities in general to the extent of £39 million which is the sum which has been mentioned in the Explanatory and Financial Memorandum. This must be welcomed on all sides. It is true there are a small number of authorities who are not going to benefit though, of course, they will have the special fund over a period of five years. We welcome this from all sides There are a number of welcome features. I have extracted some of these which show an attitude on the part of our present Minister of Health very different from that of his predecessors. For example, the annual re-allocation is a very important feature. The present quinquennial valuation is too inflexible, and is a cause of annoyance and irritation to many property owners and occupiers. Further, there is the weighting of children under 15 in assessing the rateable value. The present position is that the weighting applies only to children under five years of age. This charge is an advantage; and there are a number of other features of this kind which should be supported on all sides. I would rather have heard the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) give some credit to the content of this Bill in view of the fact that he himself was a former Minister of Health, and somehow these particular points of great value in local government work were overlooked in the period of his dynasty.

While the proposals relating to the Equalisation Grant are of great advantage now, it seems to me that the method of making the grant will create new difficulties and problems within a few years. The present position is that grants are made from the national Exchequer in the form of bloc and supplementary grants, mainly based on the extent of activity and services which a local authority provides; whereas in this Bill the Equalisation Fund is not to be based on that particular feature. The value of the incentive which is inherent in the present method of grant is thus likely to be lost. Further, this is important because in the coming years it is quite likely that local authorities may be called on to provide further services and so may have to find greater revenue. That has been a feature of current years. In 1938–39 the rates collected by local authorities was £212 million; in 1942 it was £220 million; and in 1946–47 it was £267 million. It seems to be a feature of modern local government expenditure which undoubtedly will continue. The danger will be, therefore, that though the expenditure will continue to increase the grant will not be increased in relation to the expenditure as is the method now, but on an entirely different basis. I believe that the grant should be related to expenditure and I hope the Minister will give this point his attention.

While we should give credit to the Minister for attempting to achieve equity between local authorities there is a further matter which seems to me to call for some consideration. It has been one of the greatest crimes in recent years that in one local authority area the rate should have been as low as 7s. while in another it was as high as 27s. 6d. The Minister has gone a long way to redeem that injustice, but I hoped that when this Bill was introduced he would also attempt to eliminate a further injustice, not only the injustice as between one local authority and another, but the injustice as between one ratepayer and another. It is a well known fact that the burden of rates falls most heavily on the working classes and the poorer ratepayers. It falls particularly on the fathers of large families compared with others. In such cases, not only must the parent feed, cloth and tend his several children, but in addition he must also provide larger accommodation, and hence he has to pay more rent. If, say, he is an engineer and earning the same rate as the man next door who has only one child and who, therefore, requires only three rooms, this man's burden is relatively heavier, though it should be lighter.

This is a fact recognised by the Exchequer in that Income Tax exemptions are given for parents with children. Here we have the anomaly that while the Treasury acknowledges this fact local authorities themselves are not permitted to do so. In the case of Income Tax the bigger the family the less the tax; in the case of rating, the bigger the family the more the rates. There would be widespread support for the Minister if he gave some attention to this anomaly, since this is the first Local Government Bill we have had for many years and probably there will not be another for some years to come. He might try to eliminate this injustice by some form of local income tax which would create equity between one ratepayer and another.

I turn now to another aspect of the Bill, in regard to valuation. It seems to me from the reading of the Clauses, which I agree are rather technical, that an unnecessary burden is being put on owners or occupiers of smaller houses. I do not want to argue the point, because several hon. Members who have studied the question have previously made the point. I am prepared to offer my support to them in this matter. I would, however, ask the Minister to look carefully into what is involved here. I would suggest that it might be useful to increase the powers permitting deductions from the gross annual valuation to determine the rateable value, and to introduce scales and reductions weighted in favour of the smaller properties. That is a feature which might well be introduced by means of one Clause in this Bill, while maintaining the general aspect of the scheme.

I would express my concern with other hon. Members, that an unnecessary degree of centralisation is reflected in the Bill. It is a continuation of what we have had in previous Bills dealing with local government matters. In this Parliament from time to time I have tried to make observations on this matter both in the House and in Committee and I know other hon. Members agree with me. Though I am a member of a local authority I assure the House that my mind transcends the town hall point of view. I would like the House and this Government to do what is best for the nation as a whole, without regard to any parish pump policy. I am sure that other hon. Members who sit on local authorities, and who have expressed their views have done so on this occasion likewise as Members of Parliament.

I support the point which was raised by the hon. Member for the Park Division of Sheffield and I would draw the attention of the House to Clause 6. The side heading to this Clause is: Power to reduce Exchequer grants. I believe—and I hope the Minister will agree with me—that this could be a very dangerous Clause. Perhaps I may here read the Clause in order to show what it involves: (1) The Minister may reduce any Exchequer Equalisation Grant or Exchequer Transitional Grant payable to a council by such amount as he thinks just, if "— and it is the two qualifications with which I am concerned—

  1. "(a) he is satisfied, either upon representations made to him or without any such representations, that the council have failed to achieve or maintain a reasonable standard of efficiency and progress in the discharge of their functions, regard being had to the standards maintained in other areas; or
  2. (b) he is satisfied "—
and this I believe is most dangerous— that the expenditure of the council has been excessive and unreasonable, regard being had to the financial resources and other relevant circumstances of the area. This can lead to the most serious consequences.

Mr. J. Edwards

Would the hon. Gentleman be good enough to read on?

Mr. Piratin

Certainly, and it was my intention to cover the point the Minister has in mind. The Clause goes on: If by virtue of this section the Minister reduces any grant he shall make and cause to be laid before Parliament a report stating the amount of the reduction, and the reasons therefor. This Clause contains something entirely new in the powers of central government vis à vis local government. There is, already, the audit system, and that is a useful check on the expenditure and efficiency of local government, but now the Minister proposes that he and the officials of his Department shall decide what is good or bad and whether the expenditure has been excessive and unreasonable. If they so decide, the Minister can then withdraw or reduce the grant. He will place a report before Parliament. Does this mean that Parliament will discuss the matter? Parliament can discuss it, I assume, on a Motion. Does it mean that Parliament will discuss the matter automatically? We know how difficult it is to get Motions discussed in this House. Should a particular Minister—I doubt whether the present Minister would do this—want to be tough, Parliament could spend the whole 180 days of the Session discussing Motions in which the Minister is refusing to continue grants to local authorities. I can foresee great danger here and I would ask the Minister for a full explanation of what is involved in this Clause. However careful the explanation may be, it is an undoubted fact that a degree of centralisation is proposed which is unwarranted and which none of the Minister's predecessors has attempted to introduce.

Again, take Clause 32, dealing with valuations to be made by Inland Revenue officers. Reference was made to this point by the hon. Member for the Park Division. I cannot understand why the central Government must take over the whole of the work. What exactly is involved here? The Minister may say, and quite rightly, that there have been a lot of anomalies in the methods of valuation, but is it not a fact that these anomalies primarily are due to the very bad and faulty law dealing with valuation, to the fact that no guidance has been given, and to the fact also that as long ago as 1937, I believe—I speak from memory—a committee was set up to make recommendations which were never implemented by the Government of the day. I suggest, therefore, that what is wanted is a definite law which would make uniform for the whole country the method of valuation. If that were done, why could we not trust the local authorities to operate it? I heard the hon. Member for Gillingham (Mr. Binns) say that he thought it was unwise to have councillors responsible for finance committees and assessment committees, and to have the town clerk acting on both bodies. There may be some lack of wisdom in that. As hon. Members are aware, however, a member of a valuation committee may not be a member of the assessment committee. There is that provision to act as a check.

Although the present arrangement is far from perfect I believe that if we pass the proposals contained in the Bill we should be going from the frying-pan into the fire. It is now suggested that the whole of the responsibility shall be vested entirely in one body with a very minimum, if any, of check. There is the possibility of appeal to the valuation officer and to the county court, but those measures are limited and restricted. I think the Minister would be far better advised to seek to use the present machinery while providing these new laws and methods so that the present machinery could be improved and could give adequate service. Those are some of the observations I want to make.

I want to say for myself and my party that we welcome the Bill as a step forward in the right direction and as something which is sorely required. That has been recognised on all sides, for even the Amendment of the Opposition does not deny the need for a Measure of this kind. As it now is, it will not serve to develop the future of local government along expanding and democratic lines. Some alterations in the Bill would help a lot in this direction, and I hope that those changes will be made in subsequent stages.

8.11 p.m.

Mr. Oliver Poole (Oswestry)

I think the Parliamentary Secretary will now agree, having listened to the Debate, that it is conceded on all sides that a Measure of this sort was necessary for revising the current system of Exchequer grants and adjusting the burden on ratepayers. It is considered by many to be overdue. Also, having listened to the observations, not only of hon. Members on this side of the House, but hon. Members behind him, he must now agree that the Minister was perhaps rather premature and optimistic in sweeping aside the reservations in the Amendment. The fact is that on all sides it is agreed that a Measure of some sort is necessary, but everywhere there is grave concern over various details in the Bill. I would agree that there is a very urgent need for rating revaluation. The valuation lists are in some confusion, since some have not been revised since 1928 or 1929 and none, I understand, has been revised since 1934. Many of us hoped that revaluation would have been announced at the end of last year in time to come into effect in April, 1949.

I concede that it would be quite impossible for the right hon. Gentleman to bring in a Measure which would please everybody. It is quite obvious that a Measure of this sort is bound to cause considerable controversy among a very wide number of local authorities and professional bodies affected by it. Having said that, I am bound to say that I find a very great deal in the Bill which concerns me. I would say straight away that I have not had the opportunity of service on a local authority like many other hon. Members. At a time when I was hoping to embark on that career I found myself engaged in another occupation. In the short time I have had to examine this Bill I have found many matters to concern me. I hope that at a later stage we shall be able to go into many of the points in detail. I would from the very outset urge the point that has been made by many of my hon. Friends, and that is that when we get into Committee and consider these points we should discuss them in the same dispassionate atmosphere in which we have had this Debate. It will be a very great misfortune if this Bill is allowed to go forward without suitable amendment merely because passion and party feeling are raised during the Committee stage. It will very much depend on the right hon. Gentleman, with the Parliamentary Secretary, whether that atmosphere can be maintained.

I wish in my brief speech to refer only to three of the major points in the Bill with which I disagree and which I think offend definite principles. The first of these is the valuation office of the Board of Inland Revenue. As is well known, we on this side view with very great concern any kind of transfer of the powers of local authorities to Whitehall, but I am bound to say that, having given this matter as much consideration as I have been able to in the time, I am impressed by the argument that carrying out actual valuation is not a "power"; it is really a technical matter and cannot be classed in quite that category. Therefore I think this change should be examined entirely from the point of view of efficiency in getting the desired result. I do not believe this new scheme can stand that test.

The Government are setting up a large number of central boards and other centralised organisations, and personnel, or indeed the accommodation to house the personnel, of the necessary quality, simply cannot be found. I believe there are not sufficiently qualified, sufficiently competent and well-trained people to fill the large number of posts which the Government are creating. I do not think it is right to claim that the demand in this particular instance can be filled merely by transferring men with experience from the local authorities. I agree that many valuation officers will become available for transfer to the new organisations, but many valuation officers carry out other duties within their local authority and some, because of approaching retirement and for other personal reasons, will be unwilling to transfer. In addition to the valuation officers, there is the necessary clerical and administrative staff to be found. This is a matter of major principle because it affects not only this Bill, but every other case where this has happened, and I do not believe, however theoretically efficient it may be, that these staffs can be got together in time to function with the maximum efficiency.

It has been admitted on all sides that it is a serious defect in the Bill that the revaluation will take four years. I would not be at all surprised if, with the teething troubles of this new organisation, it takes considerably longer than that to get the results for which the right hon. Gentleman hopes. I believe the quickest and most economical method would have been to use the existing machinery available to the local authorities, at the same time strengthening the supervision of the county valuation committees—which could have been done quite easily and economically—and also to give wider powers to the Central Valuation Committee. That would have been much easier and the object which the right hon. Gentleman is striving for could have been achieved. I hope it will be possible at a later stage of the Bill for my right hon. and hon. Friends and myself to put forward alternative schemes in greater detail because I think we can substantiate the broad suggestions I have made. Bearing that in mind, it is worth noting also that the scheme put forward for the new valuation office is viewed with grave concern by most local authorities and has, I understand, been turned down as inadvisable by all the professional bodies concerned.

It seems to me—and I say this with not quite the same certainty as the other suggestions I have made—that there is one other grave objection which has not been considered. This new organisation will give the Chancellor of the Exchequer much greater power over rating than he has ever had before. In the past, assuming that the Chancellor had wanted for any reason of raising revenue, or for any social or other economic reasons, to raise the rates all over the country, he had not the machinery at his hand to do so, but under the new organisation he has that opportunity.

Mr. Sparks (Acton)

Would the hon. Gentleman say how the Chancellor could raise rates all over the country?

Mr. Poole

He could not do it at all before; but it seems to me that if there is to be one central valuation office under the hands of the Treasury, it is perfectly simple for him to give that office a direction.

Mr. Sparks

Would not the hon. Gentleman agree that the rate is actually made by the local authority and that the Chancellor would have no power?

Mr. Poole

I agree. It is, in fact, the assessment and not the rate. That is a point. I would like to consider further at some later stage. The whole question of valuation of dwellinghouses has been complicated in the past by the Rent Restriction Acts. I was not satisfied with the reply given by the Minister to the hon. Member for Rugby (Mr. W. J. Brown). The effect of Part IV will be discrimination in favour of those in council houses, as against those who fall into the third group.

Mr. J. Edwards

indicated dissent.

Mr. Poole

The Parliamentary Secretary shakes his head. No doubt he will refer to that matter in detail when he replies to the Debate. People who live in flats and maisonnettes have a greater ability to pay than those in council houses, but the basis in regard to flats in the past has been the actual rent, and I cannot see any reason why that should be changed now. Many people today, not only in towns, but in the country, are going into houses which have been converted into flats owing to the shortage of accommodation. I think it is quite wrong that any two people who live in dwellings of the same value should have different abilities to pay.

I wish briefly to refer to the point raised by my hon. Friend the Member for Thirsk and Malton (Mr. Turton) about the payment to local councillors. He did not disapprove of it in principle, and I think it would be accepted by hon. Members on all sides of the House. I agree with him, and would prefer to see, where the payment is made, that it should be given to local authorities themselves. I am not satisfied with the replies given on this matter. What I object to is that compensation should be payable only to wage earners for direct loss of wages, or if a man is self-employed and has to pay someone else to do the work for him. I do not see why there should be this discrimination against a self-employed man. I thought the Minister had met this point to some extent, until the quesion of the farmer was raised, and it was asked if the farmer would have lost money by going to the council meeting. It may be that the farmer would not lose anything by giving up time to attend the meeting, in which case he could not prove his claim. Presumably he would have to substantiate it if he put in a claim for time lost, and if in fact he had not lost anything, he would either have to lie about it, or he would not get away with it.

There are many people in rural districts who are self-employed—carpenters, thatchers, and so on—some of whom are the most sturdy and independent people in the district, whose services it would be to the advantage of a local authority to have, but they would not lose actual wages by spending their time at. the council meeting. I fought this battle with the Minister of National Insurance over the question of waiting days, during the passage of the National Insurance Act. The Government gave way over that and, in my opinion, most satisfactorily righted what was a very grave injustice. I hope it will not be too much to ask in this case that the Bill should be redrafted to make quite clear that anyone, regardless of circumstances, if he can show that he loses by attending meetings, can get his claim substantiated and paid. I was rather surprised to see in this part of the Bill no suggestion of payment to the chairmen of urban district councils. That had been put forward in the report of the Interdepartmental Committee, and I was hoping that the Government would incorporate the suggestion in this Bill.

The Government have brought in a Measure which I think everyone thinks necessary. I very much regret that they should have brought in a Measure on which there are so many points of disagreement on all sides, and I hope that, after listening to the Debate, the Parliamentary Secretary will realise the very grave concern among local authorities. I urge that when we get to the later stages, the Government should receive with sympathy and consideration, any constructive suggestions, regardless of the part of the House from which they come. That will do something to allay the fears of the local authorities, and if the fears of the local authorities are not allayed, this Bill will not come to anything.

8.26 p.m.

Mr. Shurmer (Birmingham, Sparkbrook)

I do not intend to take up much of the time of the House, because I have experienced in the last three days during the Budget Debate, the half-hour speeches of some hon. Members which robbed some of us who sat here for three days of the opportunity of speaking. But, coming from the great City of Birmingham, where we shall benefit by 4s. in our rates of 21s., I would like to say briefly that we welcome this Bill. We all know that the problem of the rating system has been the concern of councils up and down this country for many years, and this Bill is long overdue. The hon. Gentleman the Member for Houghton-le-Spring (Mr. Blyton) ably explained to us what happened between the two wars. That anomaly will not arise under this Government. If we have another Government, we shall probably see that anomaly arise again.

I desire to speak on the question of payment to councillors. The hon. Member for Oswestry (Mr. Poole) seemed to imply that he had no objection to the payment of councillors for lost time, but the hon. Member for Thirsk and Malton (Mr. Turton) was very much concerned about lost time. Let us be quite frank about this situation. I have been a member of a city council for 27 years. In the early days, fortunately, I was a member of the Civil Service where my pay was only stopped in the difference between the maximum and the minimum of my grade. Unfortunately, having been sent to prison by my friends on the opposite side, in an attempt to break me in Birmingham, I had to resort to other employment, and for 18 years—[Interruption]—the hon. Member for Moseley (Sir P. Hannon) does not believe that—I had to resort to employment which gave me a salary and commission.

Sir Patrick Hannon (Birmingham, Moseley)

I hope the hon. Member will forgive my intervention, but I would like to say that the hon. Member has been treated with the greatest possible respect in Birmingham since he came out of gaol.

Mr. Deputy-Speaker (Mr. Hubert Beaumont)

Might I also say that I find nothing in the Bill about the hon. Gentleman being in gaol?

Mr. Shurmer

I was going on to explain that for 18 years in my employment I had to lose something like £800 by way of commission. I was fortunate because, not having a large family to keep, I was able to attend the meetings of the city council and the committee meetings. We know full well, however, that up and down this country, the local authorities lose many valuable men who, unfortunately, are unable to spare time from their employment. Whilst it is true to say that employers today are a little easier, we know that the time is not long past when employers refused to allow men to sit on the local authorities, and told them they would be dismissed from their employment, or they would have to lose pay if they were away from employment. When we realise that some councils have between 100 and 300 meetings per year, we can readily understand the difficulty in which a man finds himself if he wishes to give his services to a local authority. I am a great believer in voluntary work. I think there is no other country in the world where people do so much voluntary work as is done in this country. But it is utterly impossible for some men or women to do the work. We have some good women up and down the country who, unfortunately, are unable to do work on local authorities because they cannot pay for someone else to do the services necessary in the running of a home during the time when they are away.

On the question of privileges, earlier in the Debate I held up a card which gives me the privilege of riding free on the trams and buses in the City of Birmingham. Birmingham is a great city where a member may live six, seven, or eight miles away from the place where the city council meets, and he may attend between 100 and 200 meetings a year. Can hon. Members imagine a member having to pay out of his own pocket a sum of £10 or £12 a year—

Mr. Turton

Is that pass only to be used on council business or can it be used for other purposes?

Mr. Shurmer

It is left to the honesty of the member whether he uses it only for council business. One would imagine that members of a city or town council would not be prepared to show their passes when travelling with their wives and families. Surely, the majority of members of local authorities are honest men, prepared to respect the privilege granted to them? In regard to expenses, we know that local auditors will be prepared at all times to scrutinise the expenses being charged to local authorities for time lost. I can understand why hon. Members opposite are opposed to the granting of expenses. It is because they know that the absence of such a provision will prevent valuable working men, or women, from standing in the interests of the Labour movement for election to a local authority. I hope that hon. Members opposite will give fair play to these people, whatever party they support, and recognise the voluntary service they are prepared to give to their local authorities. I feel confident that in the later stages of this Bill we shall hear very little of these attacks on the privileges conferred by this Measure.

8.33 p.m.

Mr. Heathcoat Amory (Tiverton)

Many of us who serve on local councils of one kind or another had high hopes of this Bill, but now that it has come along I am bound to say that we are grievously disappointed. This is a Measure I realise of limited scope dealing with the one aspect of finance and not with the major problem of local government reform. There is general agreement, however, that a Measure of local government reform must be tackled before very long. That being so, it seems to me that the provisions of this Bill should fit the pattern of the future. I do not think that this Measure does that very happily.

Whatever the future structure of local government, there are two principles which I hope will be observed. First, I hope that there will be a development of the two-tier system with the county at the top, and then county districts reduced in number by merging where necessary, non-county boroughs, urban and district councils. The second principle is the delegation of really worth while functions to all local councils with a wider degree of freedom for the execution of those functions. I mention the two-tier system, but I trust that there will also be a continued place for the parish council, which really means, I suppose, a three-tier system. Every hon. Member in this House will agree that the tradition of local government in this country is one of which we can feel very proud.

The heart and soul of that tradition is a wide measure of local responsibility. Hitherto, because of this, men and women of integrity and ability have come forward to serve the community in this field of service. The hon. Member for the Park Division of Sheffield (Mr. Burden) was right in giving the right hon. Gentleman the advice—"do not ride roughshod over the local authorities. There is an ever-present menace in the temptation to seek an easy solution by excessive over-centralisation, a temptation to which, I think, this Government is particularly prone. If that goes on, I believe it will kill the spirit of local voluntary service stone dead. In future, that danger is going to be great. "What can we do when Whitehall runs the show?" "What are we here for if all these things are decided over our heads?" That kind of protest from members of local authorities is familiar to all our ears, and I hope that it is also familiar to the ears of the right hon. Gentleman.

It is in the light of these considerations that I want to consider, for a moment or two, three points in this Bill. First of all, with regard to the equalisation of the rateable value. As has already been said, there are two problems—the equalisation of the rateable value, and the equalisation of rates. The principle of getting an equalisation of incidence and, as far as may be, an equalisation of rates, is one with which we on this side of the House are in entire agreement. Our complaint is that the proposals in this Bill seem to be ill-designed for that job. Even if they eventually result in the equalisation of the rateable value, it does not seem to me that the weighting proposals are sufficient to ensure an equalisation of costs in view of the widely differing costs of services today. At first sight it does not seem that the sparsity weighting is big enough to do the job desired, and, on that, we should be glad of further explanation.

The second objection is to the provisions for dealing with the increasing burden of local expenditure which is bound to rise as the social services expand. I am very far from objecting to the extension of social services; in fact, I am wholeheartedly in favour of them. But we must face the fact that, as time goes on, they will entail a very heavy charge on local rates unless something is done to relieve them. I believe that, as the years go by, expenditure on the present basis would cripple local finances. Much has been said about the relief of local finances due to the transfer of the Poor Law and the hospital services. But very little has been said of the enormous increases which are bound to follow during the next 10 or 15 years as the result of the development of the Education Act, 1944, the new Planning Act, the National Health Act, and the Fire Services Act. I believe that the additional expenditure arising from the development of these services will outweigh many times over the relief which we have been promised through the transfer of the two services I have mentioned.

After all, rates constitute a levy mainly on house accommodation—an indirect tax which directly impinges on the standard of living, and which is a very necessary element in the family budget. Normally, that particular source of taxation should be expected to bear only a relatively light proportion of the total national expenditure, particularly nowadays when so much of that expenditure is dictated by national policy and by the regulations of the central Government. For these reasons I predict that the proposals in the Bill will not result in an adjustment for the future between the burdens falling on local government and central funds which will be in accordance with justice and expediency.

I find myself surprisingly in agreement with the hon. Member for Mile End (Mr. Piratin) who, I am glad to find, is a good decentraliser, in thinking that the ratio of grants to expenditure is not simple or direct enough. As the Minister explained to us today, it is true that if the expenditure of local authorities, whose rateable values are below the mean, increases, they will get some contribution from the central Government. But, as he pointed out, the proportion of credited value will, to start with, be only 16 per cent. of the total rateable value. The shortcomings against which we have to provide are extravagance or inertia on the part of local authorities. There are drawbacks to any device, of course, but experience shows that a direct proportion of local expenditure as a contribution from central funds is the best and the most practical way of doing the job. I hoped that this principle would find more expression in the Bill, instead of one which I do not feel will promote either energy or efficiency on the part of local authorities.

That brings me to the subject of valuation, about which I want to say only a few words. It seems that the Government are intending to commit what I regard as their besetting sin—over-centralisation. I do not wish to be unfair to the Government, although it may be that I need not worry about that. The Minister told us that it is impossible to treat badly a local authority, and perhaps, therefore, it may be that it is impossible to treat a government badly. In theory, it is possible to make out an excellent and logical case for the proposals. In practice I think they may well fail even to attain uniformity in rateable values. At best they are bound to delay for a considerable time any fruits which may come from the present Bill. We know our Minister of Health, and in this Bill he is showing signs of playing true to form. To some of us it seems that he is giving yet another indication of a weakness that we think we can discern in him sometimes—a certain impatience with local institutions, a suspicion of local responsibility and a desire to get everything into his own hands. If he suspects that the powers of valuation cannot with safety be en-trusted to local hands, members of local authorities may also have some grounds for suspecting that they may not be safe in the Minister's hands.

If this were the only means of getting this work done there would, no doubt, be something to be said for it. But is this the only means? As my right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot) said, all the responsible Associations both of local authorities and of the professional people concerned, have recommended an alternative scheme which they are convinced will work. This, I understand, consists of strengthening the Central Valuation Committee and the county valuation committees. If such a scheme were adopted I believe it would avoid throwing an enormous additional burden on the Inland Revenue Department, already groaning and gasping under their present load of responsibilities. It would ensure a measure of practical uniformity much quicker, and, what is more important, it would retain a reasonable amount of decentralisation and local knowledge.

I am not an expert in valuation, and I am not going to express an opinion about the proposals for the valuation of houses beyond saying that the suggestions seem to me to smell slightly of discrimination; and I, personally, did not find the right hon. Gentleman's explanation, as to why it was a good thing to have a cost basis, convincing. It seems to me that the cost of something after a lapse of time becomes a purely arbitrary consideration, and that rental value in some form is the only reasonable starting point. Many dwellers in small flats are going to find, I understand, that these proposals involve big increases which will hit them hard. I think that that is a personal contribution from the right hon. Gentleman the Minister of Health, because he seems to suffer from the strange delusion that all flats are inhabited by millionaires; whereas quite the contrary is the case, and we all know of many young couples who have a very great difficulty in making both ends meet in highly rented flats.

Finally, on this question of the expenses of local councils, my own view is that if our local institutions are to be fully representative, and if we are to make sure of getting a contribution from all the best people available, there is a very firm case, indeed, for paying some compensation both for travelling and for loss of remunerative time. Whether it should be mandatory or permissive is a point for careful consideration. What I feel is important is, that if we accept this principle we should also accept the principle that the compensation should be low rather than high. I think that there are no members of local authorities who would desire that there should be any possibility of a feeling that extreme assiduity in attending to their public duties or any prolongation of their speeches would be construed as a desire on their part to turn an industrious penny. A distinguished man was once quoted as saying: If I can do a good action and, at the same time, make money, I feel my powers are moving in harmonious co-operation. I feel that we cannot afford that particular incentive in local government. Surely, it is proper that local government service should involve some sacrifice. We must, however, see to it that the sacrifice is not so heavy as to be not within the means of an individual who has been selected by his neighbours to serve the community.

I would, therefore, conclude by expressing once again my personal disappointment that the inadequacy of this Bill and its failure to find solutions in accord either without local government tradition as it has evolved over the last 100 years, or the just needs of the future; makes it necessary for me, as it does for other hon. Members, to vote against a Bill from which we had been hoping great things. Much more important is that that disappointment, I feel, will be shared, when they come to read this Bill, by the majority of members of local authorities. Whatever failings the right hon. Gentleman may have in our eyes we do not accuse him of lack of courage, and I hope that he will show his courage by recasting this Bill so that it will become what we all want it to be—a really bold step along the road leading to still more vigorous and still more responsible local government.

8.50 p.m.

Mr. Berry (Woolwich, West)

While many of us may have some criticisms to make of this Bill, I think we all welcome it, and I ask my right hon. Friend the Minister of Health not to be deterred by the criticism of the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) that it is like a patchwork quilt. I have memories of some very nice looking patchwork quilts under which I lay when I was a lad; they did their work very well indeed, and I wish there were more of those old-fashioned patchwork quilts about in these days. I ask my right hon. Friend not to be deterred by that criticism, for, after all, the proof of the Measure will be in the way it works.

I should like to deal first with the final point made by the hon. Member for Tiverton (Mr. Amory). One of the leading persons in the Central Conservative entourage fold me that he thought the payment of members of local authorities would help the Conservative Party more than it would help the Labour Party. Speaking out of the depth of his experience, he told me that most Labour members of local authorities were trade union officials. It is wonderful what misconceptions there are in that direction. But he did point out—and I readily accept it—that many folk who belong to the Conservative Party are debarred in just the same way as Labour Party members are debarred, simply because they cannot afford it. Inasmuch as this Bill succeeds in ensuring all-round justice, I hope there will be fewer objections from the benches opposite.

One of the glories of English local government has been its purity. I have been a member of a body which is termed by unthinking people as "the meanest local authority on earth": I refer to the London County Council. I would much rather have the tightness which was instituted in 1889 when the Progressive Party came in with a majority—that was when council was formed, and it has been maintained as a party ever since—rather than have any looseness. My feeling is that English local government, in its purity, has been an example to the rest of the world which I hope will be long maintained. I see no difficulty at all, provided there is proper administration of Clause 6 of the Bill—and much will depend on the administrative regulations the Minister draws up in connection with that Clause—why the same purity should not be maintained, while at the same time, people who otherwise would be prevented from taking part in local government are enabled to put their talents at the disposal of the community.

I desire to make one or two remarks with regard to the Exchequer grant. I am bound to say, there is every likelihood of a deficiency of £10 million on what local authorities will get compared with what they would have got and I hope the Minister and the Parliamentary Secretary will give this matter very careful consideration. While there may be an immediate benefit with regard to rates, we must take a long view and consider certain expanding duties which are cast upon local authorities. Obviously, with expanding duties they are making expanding grants, whereas under this Bill, unless there is a recasting it will mean that, while there may be a temporary drop in rates, the increase in rates in some directions will be very marked. I call the attention of the House to educational grants. I find that educational authorities are divided into two groups—gaining authorities and losing authorities. Of the losing authorities, which are 33 in number, three—the London County Council, the Middlesex County Council and the Surrey County Council—will bear 85 per cent. of the losses; the London County Council to the tune of 70 per cent., the Middlesex County Council to the tune of 7 per cent., and the Surrey County Council to the tune of 8 per cent. That is a matter to which attention should be given, and possibly the Minister might have further thoughts on that.

All of us rejoice over the drop which will occur in some of the more heavily rated authorities. The rates there have been well over 20s. in the pound, which has made it very difficult for a large number of authorities throughout the country. But it ought not to be made difficult in future for the larger towns, even though the small authorities will benefit. I suggest that the Government themselves should contribute to this. I speak as one who has had a fair amount of experience in regard to rating and valuation. The subject of rating and valuation is not everyone's pigeon. It requires study, and is not picked up in a day. It is not every member of a local authority who cares to take the trouble to study the subject, or indeed many of the other subjects important to local authority work. I hope that the day will come when the folk who are elected to local authorities will realise that they have a heavy course of study ahead of them. I know, because I have trodden the path myself. From my own experience, both with my former immediate local authority and with other local authorities, I know that very careful attention is given to rating. I have known of more than one great battle between a rating committee and a housing committee. The rating committee have been animated by rating principles, wishing to fix the rates on a proper basis, while the housing committee have wished to cut them down as low as possible. That is not peculiar to housing committees, because I have found that every landlord has wanted to get his assessments as low as possible. I am surprised, and here I am under the vigilant eye of the Chairman of the London County Council, that that principle has invaded some housing committees.

In transferring these powers to a central authority, I think that some of the local interest that there has been in the past will be lost. We need safeguards against super-centralisation. There ought to be an opportunity for objections to be lodged, both by individuals and by local authorities, as well as by other interested authorities. A central authority is no more free from error than a local rating authority; indeed, they may be more prone to errors, because there are not the same checks on them. I hope that the Parliamentary Secretary will look into this matter, because I think that there should be some special tribunal where objections can be lodged. Such a tribunal should include a lawyer—although I do not think there is any special virtue in lawyers for these jobs, although they generally seem to get them, and two or four assessors well versed in rating and valuation. I suggest that that would be a better tribunal than the authority proposed under the Bill.

I was hoping that this Bill would deal with the question of rating of site values. The present Leader of the House once had the temerity to introduce a Bill on the subject, but it was ruled out of Order by Mr. Speaker. He had no luck in introducing it as a Private Member's Bill, which has probably coloured his views in regard to private Bills ever since, although I do not know that for sure. It is a question which should receive attention. It will give an additional source of income, which is badly wanted by local authorities.

There is another matter, almost as old as the hills, which I can remember raising at a conference some 25 years ago, and that is the question of the proper rating of Crown property. When I say, "Crown property," I mean property in the possession of the Government. With industries being nationalised and Crown property increasing, it means that local authorities have to take what the Treasury valuer likes to give them if we stick to the existing system. There is no reason why the principles of rating which apply to all other properties should not apply to Crown property. During last Session the Crown was made sueable for its agents' actions. It is, therefore, only right that Crown property should be properly rated and levied. The old theory that the present system applies to such property only as an act of grace ought to have gone by the board long ago. It has not, but I am hoping that the Minister, even though he may not be the Moses, will be the Joshua of the movement which will lead local authorities into the promised land of the rating of Crown property.

There are flaws in this Bill, as is only to be expected, but I believe that when it is properly amended it will be a great step forward. Criticism has been made that local authorities have not had a proper opportunity to study the Bill. I can say that the Association of Municipal Corporations, with its usual liveliness, has given the matter careful study, as has the London County Council. Some of the criticisms I have made tonight have been in accord with both their views. I hope they will be taken to heart, because I believe that if they are, the Minister will make this Bill infinitely better. I wish the Bill the best of luck, and I hope we all may be happy when it has been amended and comes into operation.

9.3 p.m.

Mr. Howard (Westminster, St. George's)

I count myself singularly fortunate, Mr. Speaker, in being able to catch your eye at this moment, because I know that the hon. Member for West Woolwich (Mr. Berry) is just as proud of belonging to his party as I am of belonging to mine. We have both worked in local government for a great many years, and I can say with absolute honesty that with 90 per cent. of what he has said I find myself in almost complete agreement. I hope very much that when we get to the next stages of this Bill those of us who are proud to have the privilege of giving some service to local authorities will be able to approach in a practical spirit the problems which this Bill presents. I am sure that if we can do that the Minister will certainly listen to us.

I approach this Bill from this point of view: Will it give us better local government? I am sure the Minister himself will think that that is a reasonable approach, although he may not agree with my conclusions. I must say at once that I appreciate that there must be a short-term as well as a long-term view. I do not grudge the Minister, in the least, the credit which he has taken unto himself for improving the immediate financial position of many local authorities, by distributing with great generosity—and with, shall I say, the Chancellor's connivance—a good deal of the taxpayers' money. We all know that there are local authorities who are not in control of sufficient revenue to enable them to carry out their duties in a proper way. We all know that equalisation is necessary, and so far as the first part of this Bill contributes to that equalisation, it is necessary at the moment and we approve of it, although we may differ as to whether it could not have been achieved in a different and possibly better way.

This Bill as was said by the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot), is a transitional Measure. It is neither a purely short-term Bill nor a satisfactory long-term Bill. The Minister based his case largely on the short-term aspect of the Bill. When I say that it is neither a short-term nor a long-term Bill, I refer to the changes proposed in the whole system of valuation. The Minister cannot, and will not, claim that these changes can have any effect whatsoever in the short-term. I would claim, although he would not agree, that they will not, in fact, contribute in the least to a solution of what I regard as the basic long-term problems of better local government. Can we have a measure of agreement in this House as to what are the basic needs for better local government? I am going' to make my own suggestions, and I hope that they will meet with a measure of approval from all quarters of the House.

First, we must get greater decentralisation and devolution of governmental functions and activities. Obviously, local authorities have two duties to perform, and we must get a clearer line between what I call their agency duties—the duties which they perform as local agents of the central Government—and the purely local functions which they discharge on their own responsibility, and for which, I think, it is highly desirable that they should be charged with the responsibility of raising the necessary revenue. To be charged with the responsibility of carrying out certain tasks, and not, at the same time, to have to face the unpleasant duty of raising the revenue to enable those matters to be properly dealt with, does not lead to the most responsible type of government.

Therefore, I say that the second vital necessity if we are to get better local government is the provision of a broader and more elastic source of revenue for local government. Only then do I believe that they will be able to achieve the necessary degree of independence to carry out their local functions really well. Unless they have a high degree of independence and experience, I think that the Minister will agree that they are not likely to be the most fitting agents for carrying out the local duties which devolve upon them. These I regard as the two basic problems.

The Minister has made no practical contribution to them at all in this Bill. So far as he has made a verbal contribution, it is that he claims that he has made a ratepayer of the Exchequer. It may be old-fashioned in these days to talk about "no taxation without representation." But he claims it as a virtue that he is making the Exchequer a ratepayer. But will the Chancellor of the Exchequer not say, "If I am a ratepayer, should I not have a very considerable say in the election of the local councils? "He would be perfectly justified in doing so, and I am not certain that it is not his duty to do so. I always feel that there is a grave danger, which has been stressed by speakers on both sides, in the tendency which affects every Government of vitiating by too-tight central control the free exercise of proper local government powers, a freedom to which we all pay lip service, although only those of us actually engaged in local government feel about it as strongly as we all should.

The other point I want to make is in regard to a new sort of revenue. The Minister dismisses that merely by saying that no one has suggested a method by which that can be done. That is possibly so, although I doubt it. What I do say is that no Government and no Chancellor of the Exchequer has ever yet faced the difficulty of allocating a really elastic and useful source of revenue to the purpose of providing local authorities with new income. What is apparent is that the present rating of property is rigid and inelastic in relation especially to the actual earned income of the population of a local authority. What we want if we can get it is a source of revenue which bears a closer relation to the actual wealth produced in the local area, which surely depends on, and can be measured by, the income in that area or possibly the income spent in that area.

Speaking from memory, the sum raised in local rates in the last financial year was approximately £200 million. What was the sum raised from the duties on alcohol throughout the country? It was approximately £360 million. What were the sums raised on tobacco? They were approximately £450 million, more than double the whole source of revenue from local authorities for the financing of their heavy services. Of course, no Chancellor of the Exchequer is willingly going to allow an allocation of the revenues from beer and spirits to be given to local authority funds. He is not going to allow an allocation of the tobacco duties to go to the same source. If I were Chancellor of the Exchequer I certainly would not and I do not believe anyone else would. But I do not think it right to say that there are no alternative sources of revenue available for local -authorities, because that is simply not true. The fact is no one has had the courage to face up to the absolute need of allocating some new source of revenue if we are to preserve the integrity of local government, and anyone who attempts to do that has obviously to face a hostile Chancellor regardless of what party he represents.

That to my mind is the most grievous omission of this Bill. It does not touch the basic problem of long-term better local government. The Minister's proposals for valuation are quite frankly in my opinion not entitled to the use of the word "valuation" at all. It seems to me that they are a system of costing which is to be arbitrarily imposed by the Minister, and these proposals are bound to be entirely out of date when eventually they are brought into operation. They bear no resemblance whatever to what rightly or wrongly we have got into the habit of regarding as valuation. Will the Minister really maintain that present day value can be accurately assessed by any sort of mathematical manipulation of the cost of producing an article 10 years ago, because that is what he is putting before this House as his new system of valuation?

How is the new system to be operated? We know that it is to be operated by the Minister. He is to give his own idea of the right specification, and is to decide what is the cost for that specification, or series of specifications, in a given area. The Minister in his own speech this afternoon said that valuation is a professional job. What sort of professional is going to do this job of valuation? I agree that the only possible sort of professional who could do it is the politician, the Minister himself, because actually it is not a valuation job at all. Yet he says in his speech that valuation is a professional job. Those were the actual words that he used.

On the general matter of central valuation in order to get greater uniformity, I do not think there will be much difference of opinion. Obviously, there are great inequalities in different areas today, and we should all welcome a more uniform system of valuation, if we could get it. Whether doing it through officers of the Inland Revenue is the best way I "hae mae doots." I do not feel very strongly about it, but I do feel there is a great deal of muddled thinking and confusion between the questions of deciding what are the values of properties, and determining what the occupiers of those properties should pay by way of rates. It seems to me that in valuation we must have an absolutely uniform basis for every type of property, even if we then decide, as I think we must, as a matter of policy, that, having got an even and agreed valuation, the contribution that we require from different types of ratepayer is different. We may compare it with Income Tax. Where would we be if we decided that the different types of people earning money had got to have their incomes assessed in a different way? Here again this applies to the differentiation between one type of property and another, as to whether it was built 10 years ago by a local authority, or by someone else.

May I say one thing in parenthesis about—to use a common phrase—houses built by local authorities? Will the Minister agree that, with one or two exceptions, local authorities have not in the past built directly for themselves? They have employed contractors. Therefore, when we talk of local authority built houses we merely mean, in 99 per cent. of the cases, houses which have been built by firms of building contractors, to the order of a local authority. But the same firm of building contractors may have built other houses, practically on the next site, to the order either of itself or some other private enterprise. Therefore, when we talk about local authority houses do let us realise that what we mean is, except in very few cases, that the houses have been built for but not by the local authorities. It follows that the differentiation which the Minister seeks to make is very hard to justify.

I will examine this differentiation in comparison with Income Tax. It seems to me that the Minister is suggesting that we should assess these properties, and then draw rates for them on this sort of basis: We should say that civil servants and local government servants are not to be assessed for Income Tax on their earnings of the past 12 months but on the earnings they would have received if they were still paid at the rates of 10 years ago. We should then take another class, say members of trade unions, though it does not matter what they are, and should say that they are not to pay Income Tax on their actual income for the year but on the income they would have had if they had still been receiving the rates of payment they were receiving five years ago. Then we should ask the whole of the rest of the community to pay tax on the actual income they are receiving. I claim that is not an unfair comparison with the method the Minister suggests we should adopt for raising local rates in the future; and I claim that it is absolutely unjust.

Mr. Scollan (Renfrew, Western)

Will the hon. Gentleman explain how the system in Scotland has been a success for very many years? There the assessor in each rating area is responsible for fixing the value and the rates. If the owner is dissatisfied, he can appeal to the Appeal Court.

Mr. Howard

I cannot follow the hon. Gentleman into the difficulties of Scottish law. I know, and he knows, that Scottish rating practice is in some respects rather different from the English, and my knowledge and experience only cover English practice.

Sir W. Darling

It requires a separate Bill.

Mr. Howard

The hon. Member for West Renfrew would not. suggest that it has been the practice in Scotland to value properties on a costing figure which was 10 years old.

Mr. Scollan

The assessor comes along and values the property at what he says is the current value. It may appreciate or depreciate.

Mr. Howard

I fully accept that. Is that not very akin to the present system in England and Wales, and is it not an improvement of that system rather than a complete change for which I am pleading? I have already occupied the House too long, but there is just one further point to mention, although there are a number of points of detail which those of us who are keen on local authority matters could continue raising at length—

Mr. J. Edwards

As I shall have to reply to some of the points which the hon. Gentleman has made, it would help me if he would tell me what he would like to see as the principle to be adopted.

Mr. Howard

In regard to—?

Mr. Edwards

As the basis of valuation of dwelling houses. He was criticising the proposals in the Bill, and I should like to know what he would like to see.

Mr. Howard

It is not my task to do that. I have my own views. I am well prepared to give my own opinion. I want to maintain the present system under which the same basis of valuation is applied to all properties, but with machinery which through central direction will secure a larger measure of uniformity; having got a uniform measure of valuation, I then say, face difficulties by adjusting the amount of rates we charge on a particular type of property if we think that is desirable. I will take the obvious case of derating. I think derating was a partial failure, but it was an honest way of facing the problem. The problem then was that there were several types of property which we wanted particularly to assist. They were agricultural and industrial properties. That was faced quite openly by treating them differently when it came to collecting the money from them, but there was no differentiation at all in valuing the assessment on which they would have to pay.

Mr. Bevan

This has been happening the whole evening. May I ask the hon. Member one simple question: does he want the existing valuation laws to apply to the valuation of cottage property? If not, what are the principles he would like to apply?

Mr. Howard

If by "the existing valuation laws" the Minister means the hypothetical tenant he laughed at so much, I would say yes, I wish that to continue to apply. If I may I would add to that answer that in defence of his new system, which is the 5½ per cent. on a costing basis, the strongest argument a Minister was able to bring forward was the fact that he and some of his colleagues had illegally brought it into operation a good many years ago.

Mr. Bevan

Why then did the Government in 1938 not assess cottage property on the basis of the hypothetical tenant?

Mr. Howard

The Minister knows the answer, and he gave it.

Mr. Bevan

Because cottage property would be raised in valuation.

Mr. Howard

I am sorry if I am detaining the House, but it is not I who am causing interruptions and apparently I have still failed to make myself clear. If valuation of cottage properties is on the same basis as all other valuations, there is no injustice to anybody. If the Minister or anyone else thinks injustice would be caused if rates were collected to the same extent from all types of property—as if Income Tax and Surtax were collected from every taxpayer quite regardless of what his total income was—if he thinks that, then let him say boldly, "We will not collect the full amount from you." But do not confuse the two issues. I must resume my seat, and I apologise for having continued much longer than I had meant to do. I have tried to approach the problem in an objective way because I feel strongly that local government can play as great a part in the future of our country as it has played in the past, and I regret that this Bill does not offer us any hope of getting better local government in the future.

9.27 p.m.

Mr. Medland (Plymouth, Drake)

I have a conviction that when tomorrow I read the speech of the hon. Member for Westminster, St. George's (Mr. Howard), except for the last two or three phrases, I shall wonder why he is going into the Lobby against the Second Reading of this Bill. I am sure we have all enjoyed his illuminating speech for which he has, for what it is worth, my thanks and appreciation. I have sat through this Debate, which we have continued for some hours, and the objections which have been raised have in the main been on the centralisation of the valuation method. I am an alderman of my county borough and I have seen the hospitals, which I was proud to initiate under the 1929 Act, pass out of our care into that of some other organisation. I did not object, I thought my ratepayers would get a better service with the co-ordination of the hospitals. I have seen the transport organisation of which I had the honour to be chairman pass out of the control of the local authorities. I did not object, because I was convinced that we were going to have a better service by co-ordination between town and country. Having seen all that with the natural reluctance with which one sees one's children pass away out of one's care and keeping, it is with natural reluctance that I look at the problem of centralisation of valuation, but this is a matter about which I have no regret whatever. This is the one thing in local government upon which there can be no doubt that centralisation is absolutely imperative.

I was interested to hear a fellow county man of mine, the hon. Member for Tiverton (Mr. Amory) speaking of the attack on local government. I thought about Devon County Council, I thought about Cornwall County Council, Dorset County Council, and Wiltshire County Council—all composed of baronets, viscounts and rich farmers, with about seven representatives of my class of the community among them, none representing the ratepayers in their areas, and, for the information of hon. Members opposite, they meet four times a year.

Mr. Lipson

Is that the reason why this progressive Government are taking powers away from non-county boroughs and giving them to county councils?

Mr. Medland

That is the reason why we have provision in this Bill for the payment of expenses to working class people, in order that they may infiltrate and put some life into those councils. I have some criticisms of the Bill. No county borough representative would be able to sit through a Debate on a Measure such as this without making some criticism. High rateable value does not necessarily mean a rich community, yet high rateable value is the weighting factor which is keeping my county borough and many others from getting a fair crack of the whip in respect of the £33 million which is to be distributed. High rents are the cause of high rateable value. In my city the average number of families in each house is 1.84, and that means that there are two, three, and, in some cases, four families in one house. The same thing happens in Glasgow. It means high rents and high valuation, so that the arbitrary method of fixing how the equalisation fund is to be distributed by taking the rateable value and dividing it by the population plus children does not give a fair or equal distribution all over the country. That is admitted by the Minister. There are bound to be inequalities. I believe I can prove that case, because there are inequalities. Every time a county borough takes in part of a county one finds that the rateable value of cottage and house property in the county is about 20 per cent. below the rateable value of that of the county borough. I mean that some districts are underassessed, and deliberately under-assessed, and under this equalisation the underassessed areas are going to get the biggest amount of equalising grant. Because of the deliberate under-assessment, there are all these variations.

It is to me a most astonishing thing that the rateable value in one town is entirely different from what it is in another for the same type of house. A B.I.S.F. house is the same in any city—in Glasgow, Edinburgh, London, Birmingham, Liverpool, or any other place. At the present time in Walsall, the rent of a B.I.S.F. house is 9s. 6d. and the rateable value £12. In Wolverhampton—an adjoining town, the rent is 12s. 6d. and the rateable value £17. In my own city the rent is 16s. and the rateable value £24. That is why we are not getting any assistance under the equalisation grant. Let me instance temporary bungalows, which are occupied by the same class of people, nearly all getting the same rates of wages. The rates of pay for transport workers or engineering workers, etc., are very much the same all over the country, and these bungalows are occupied by the same class of people. There are cities and towns in which they are rated at £10—Nottingham. Barnsley, Sheffield and Rotherham; in Leeds, Bradford and Coventry and Norwich they are rated at £11; in Bridlington, Portsmouth, Birmingham, Hull at £12; in Bristol at £14; in Southampton and Manchester at £15; in Plymouth £17; in the Surrey county area and in Croydon £19, and in Middlesex £23. I believe that when in 1952–53 the rateable value is spread out, and we get centralised valuation, so that the amount that a man in one area is paying is roughly the same amount as a man in any other area is paying, the rateable value can be taken as a true assessment, but not at the present moment.

I would ask the Minister very carefully to consider whether, in that interim period—and it is the interim period with which I am concerned—he cannot give some regard to a point, which has been suggested to me by city treasurers and borough accountants, and I put it to the House for some consideration. The Government are already providing £33 million. The total weighted population of England and Wales is approximately 50 million people, which represents approximately 13s. per head of the weighted population per annum. Why not fix the Exchequer assistance to local authorities on this basis, scaled up or down according to whether the rateable value per head of the area was less or greater than the average rateable value for the country as a whole. I ask my right hon. Friend to consider that point. Does he want me to say it again?

Mr. Bevan

Yes, certainly, I do not know what it means.

Mr. Medland

Then perhaps my right hon. Friend will read it tomorrow. I have only a short time left. The whole point is that it works out at 13s. per head of the population. Why not, in the weighting proposals, weigh the variations according to the local circumstances, but based on the basis of 12s: 1d. per head of the population. We should then get a very much better rating. Let me show how this works out. According to a return of the Ministry of Health, we lost rateable value in our city because it was a blitzed city. The five towns in this country which were most heavily blitzed were London, Plymouth, Hull, Portsmouth and Southampton. That may sound strange to some hon. Members, but they were the five towns most heavily blitzed. The loss of rateable value in London was 14.52 per cent.; in Plymouth it was 17 per cent.; Hull, 8.3 per cent.; Portsmouth, 13.11 per cent., and in Southampton it was 12.5 per cent. Yet, under the equalising formula, although we lost this rateable value, none of us gets anything except Hull, and Hull gets £396,000.

Despite what I have said, I still think that this is a good Measure, which is a great advance on past legislation. I hope that we shall make it a much better Bill during the Committee stage. Before I conclude, there are two points I wish to make. I wish to ask for an assurance that where towns have lost rateable value by war damage and yet the rateable value per head is above the average for the country, they should continue to receive special assistance from the Minister. I beg the Minister to consider that point carefully. We must rebuild our cities. We are the civic wounded of the war. We are very grateful to the Minister for what he has done. I will not say that he has not helped us; indeed, I would be the last to say that. In the case of my own city, he has helped us extremely well. But I say to him, "Don't, for heaven's sake, cut the assistance short at this moment." I would point out to him that our service costs have not decreased. I hope that he will bear that in mind.

Nothing is said in this Bill about Crown property. Some towns have a great deal of Crown property in addition to the employment exchange, the post office and all the rest. A sum of money in lieu of rates is paid by the Crown to the local authority in regard to this property. I hope that we shall have an assurance from the Minister that that payment will be continued. Finally, I wish him good luck with this Bill, which I hope may have an easy passage through Committee stage. I hope that I shall be with him so that I can add to the points I have made tonight.

9.44 p.m.

Mr. J. H. Hare (Woodbridge)

I think the House welcomes a spirited excursion into a Debate such as that which the hon. Member for the Drake Division of Plymouth (Mr. Medland) always makes. I am glad to see that he has joined the very formidable band of critics who have sat behind the Minister throughout this Debate and who have told him in very clear language some of the bad things which they see in this Bill. The Minister seemed in doubt about how we arrived at our Amendment. He suggested that we must have stayed up late at night thinking out causes why we should oppose the Second Reading of this Measure. In fact, we need hardly have put down our Amendment at all because all the arguments contained in it have, at one time or another, been backed by speakers in other parties.

As my time is limited, I cannot summarise all the very cogent arguments which have taken place in this Debate, but I can say that I think it has been a Debate of very great quality. Those who have spoken in it have all had a great love for local government, and hon. Members have all been extremely anxious to see that, whatever comes out of this Bill, local government shall be allowed to continue to flourish in this country. The utterances of my hon. Friend the Member for the St. George's Division of Westminster (Mr. Howard), of the hon. Member for West Woolwich (Mr. Berry) and of the hon. Gentleman the junior Member for Southampton (Mr. T. Lewis) were those of people who have all had a very distinguished share in the actual control of local government in this country. I hope—and this has been said before in this Debate—that we shall be allowed to continue this friendly, co-operative atmosphere in our deliberations in Committee upstairs.

As for the Minister himself, I really felt that he was a transfigured creature. I have never before heard him cooing like a dove, but he certainly cooed like one in the very dispassionate, calm way in which he introduced this Bill. He also adopted the very unusual procedure of tearing the Tory Party to bits for only 10 minutes in a speech which went on for practically an hour and a half. I think that the right hon. Gentleman has almost been a good salesman, but that, in fact, he has begun to realise that his art of salesmanship has not quite come off in the way he thought it would. He has hurried us in the consideration of this Bill, and the result has been that many local authorities are only just beginning to realise that everything is not quite as he has painted it. The Minister is a very clever man, and his art in selling this Bill has achieved an all-high record. I even see that he has convinced a section of the Tory Press of the merits of his Bill. When I took up my "Daily Mail" this morning I saw a long leading article entitled, "Good; rates are going down."

I am afraid that many people, both ratepayers and local authorities, are going to be sadly disappointed., I do not believe that the impression which the Minister is trying to put across, that this is a good Bill for local authorities, so far as their rate estimates are concerned, is true. There may be a temporary reduction in rates in certain areas during the next year, but, after that, I can see nothing to stop the continuation of the very drastic rise in rates which we have been witnessing for the last two years. The first reason why I believe that the future rise in rates is inevitable is because the proposals which the Minister has put forward are not sufficiently flexible to meet future requirements. The grant is no longer related to expenditure but is based on rateable value per head of the population, and the basis of the new financial assistance which is to be given is lower than the assistance which local authorities were getting under the old block grant system.

I think it is very important that the point which was brought forward by, I think, the hon. Member for West Woolwich should be borne in mind—that if the health services, and so on, had been taken away and we had received a grant this year, it would have been at the rate of £43 million and not the £33 million which the right hon. Gentleman is trying to tell us is such a generous contribution from the Exchequer. Thus, in my opinion, the new grant is not adequate. This fact was most clearly illustrated in the very striking and lucid speech of my right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot). The sum of £33 million has got to cover a great deal of the unknown increase in expenditure as well as the known increase in expenditure, which local authorities will have to bear as a result of the postwar expansion in their services. The question of the education grants has already been raised. This increase is estimated to be at least £30 million a year, which will be an additional cost to the ratepayers. That extra expenditure will soon be coming into force if the Government press forward with the implementation of the Education Act, 1944. In addition to that, we have got the fire service which, when implemented, will cost another £12 million a year. That is £42 million a year against £33 million which we are told is generous. In addition, there is the general overall rise in local authority costs—an aspect which has hardly been mentioned in the Debate. There is the new Burnham award, quite irrespective of the 1944 Act. There are increases in salaries and outgoings of all sorts. I am certain that this grant as envisaged on the present basis outlined by the Minister will not prove anywhere near adequate for local authorities.

The Minister paid a friendly tribute to the former Chancellor of the Exchequer and referred to his generosity. I do not believe the former Chancellor was at all generous to the Ministry. I would say that the Treasury have driven a very hard bargain with the Ministry of Health—a bargain the burden of which the ratepayers will have to carry. I cannot believe that the Minister is so innocent that the former Chancellor could pull the wool over his eyes. Therefore, I am left with the unpleasant conclusion that the Minister is a willing accessory to this plot on the part of the Government to make the ratepayers shoulder a greater burden than they have in the past.

I shall not develop too many points because I have not got the time, but I think doubt has been expressed on both sides of the House as to the likelihood of getting the proposed new system of central valuation to work. There has been considerable criticism, not only from these benches but from the benches opposite, to the effect that this centralised department set up under the Inland Revenue cannot be expected to work. I do not think it is wise to centralise such functions. I believe it would be better to decentralise and strengthen the existing system. Irrespective of whether or not it is wise, I believe that one of the chief difficulties which the Minister will have to face will be the task of finding the necessary personnel. Where does he think he will find the technical and clerical personnel to carry out this highly technical and difficult job? That type of person will be in great demand. The Minister of Town and Country Planning is already in the field. He is grabbing all the expert valuers he can find, and the Minister of Health will have to look very quickly because the field is very limited. That fact was admitted in our town and country planning discussions.

I do, not think he is going to be able to rely on the existing personnel to anything like the degree he thinks. So many of them have dual functions. They carry out the job of treasurer and collector, many of them. That also applies to the clerical staffs. In addition, many full-time valuers will now be approaching the retiring age, and will not be prepared to enter a new service, although they may be prepared to go on in the old service for a period of two, three or four years. Many of them will probably not be prepared to join a new service because they will not want to move to a new area. All these factors are going to militate against the possibility—the physical possibility—of the Minister's getting his new system of valuation working by 1952. I believe it is very bad administration to bring forward a Bill which relies on certain things being done which, perhaps, cannot be done; and which relies, too, on a basis of valuation which even the Minister who introduced the Bill knows to be inaccurate when there is no guarantee that the new valuation system can, in fact, be brought in before 1952. It is much more likely that it will not be effective until 1954 or even later.

We have had the argument also that the experts are against the Minister in this matter. I think it was, the hon. Member for Southampton who made the point so graphically. He said that those of us who worked for municipal authorities, who have our own officials, and who have been watching the treatment which they receive when they go to the Minister at Whitehall, sometimes wonder whether the right hon. Gentleman and his people in Whitehall seriously consider that they know as much about local government as we. I agree with the hon. Member for Southampton that they do not. There are other points on which we feel strongly. We have dwelt on our extreme disquietude about the discrimination which we feel is being given in favour of the council house dweller against the owner-occupier. We are also extremely concerned about the effect on those who live in flats. It is quite clear that, on the basis of valuation now proposed, flats will probably be valued twice as high as they are now, and that will mean that an intolerable burden will be placed on the people who live in flats, and who are not all the privileged millionaires the right hon. Gentleman likes to think flat dwellers are.

We are all united in this House in agreeing that the preservation of local government is something really worth while fighting for, even physically. In this Bill the Minister has given us a transitory, rather uncertain Measure which he, in his heart of hearts, must realise is not going to last over a period of more than 10 years. It will have to be revised. It will have to be modified very drastically even before that period of 10 years has passed. Having listened to the Debate so far today we feel strongly—and we shall be reinforced when the Debate is resumed tomorrow—that we were quite justified in putting the Amendment on the Order Paper. We have been refreshed in our course by the contributions from Members of the right hon. Gentleman's party opposite and from Members of the Liberal Party, and from the hon. Gentleman the Member for Rugby (Mr. W. J. Brown), that very solid and worthy and doughty independent. We are certain that time will show that we are right in having taken the action that we have today. I want to use the words of the hon. Member for Southampton, who described this Bill as being like the curate's egg—bad in parts. We are convinced that we have in this Amendment laid our finger on those parts which are bad, and accordingly we shall have no hesitation whatsoever in pressing our Amendment and going forward to a Division tomorrow.

Debate adjourned.—[Mr. Snow.]

Debate to be resumed Tomorrow.