HC Deb 08 November 1948 vol 457 cc1275-88

1. After Standing Order 156, page 195, line 3, at end, insert the following new Orders:

156A.—(Modification of practice as to charges on public revenue.)

In the case of a Private Bill, it shall not be necessary to comply with the Standing Orders and practice of this House relating to provisions authorising charges upon the Public Revenue, by reason only that the Bill contains provisions authorising expenditure by a local authority which would or might operate to increase the amount of any Exchequer Equalisation Grant under Part I or Part II of the Local Government Act, 1948.

156B.—(Special clause to be inserted in Bills authorising expenditure affecting grants under Local Government Act, 1948.)

Where a Bill contains any provision authorising such expenditure as is mentioned in Standing Order 156A (Modification of practice as to charges on public revenue) and the Standing Orders and practice of this House mentioned in that Standing Order have not been complied with in respect thereof, the Committee on the Bill shall insert therein a clause providing that the said expenditure shall not be taken into account in computing the expenditure of the local authority for the purposes of Section four or Section twenty (as the case may be) of the Local Government Act, 1948:

Provided that the Committee shall not be required to insert such a clause in respect of any such provision as aforesaid if a Report made on the Bill on behalf of the Minister of Health or the Secretary of State recommends that the expenditure authorised by that provision be taken into account as aforesaid.

2. Standing Order 168, page 201, line 16, at beginning, insert "Subject to the provisions of Standing Order 156A (Modification of practice as to charges on the public revenue)."

3. Standing Order 169, page 201, line 26, at end, add: Provided that, for the purposes of this Order, a provision of a Bill shall not be deemed to involve a grant from any Government Department by reason only that it authorises expenditure by a local authority which would or might operate to increase the amount of any Exchequer Equalisation Grant under Part I or Part II of the Local Government Act, 1948.

4. After Standing Order 190, page 210, line 5, at end, insert the following new Order:

191.—(Tolls and charges not in the nature of a tax. )

This House will not insist on its privileges with regard to any provision of a Private Bill sent down from the House of Lords, or returned by that House with amendments, on the ground that that provision authorises or affects—

  1. (a) any toll or charge for services performed (not being in the nature of a tax); Or
  2. (b) any local rate; or
  3. (c) any expenditure by a local authority which, under the Local Government Act, 1948, falls to be taken into account in calculating the amount of any Exchequer Equalisation Grant payable to that authority tinder Part 1 or Part II of that Act.

5. Standing Order 219, page 222, line 26, after "House)," insert "156A (Modification of practice as to charges on public revenue)."

6. Standing Order 228A, page 229, line 21, at end, insert the following paragraph: (3) Standing Order 156A (Modification of practice as to charges on public revenue) shall apply to Bills to confirm Provisional Orders issued under the Procedure Act subject to the modification that after the words 'local authority' there shall be inserted the words or altering the boundaries of the area of a local authority'.

7. After Standing Order 248, page 243, line 7, at end, insert the following new Order:

248A.—(Application of S.O. 156A and 191.)

Standing Orders 156A (Modification of practice as to charges on public revenue) and 191 (Tolls and charges not in the nature of a tax) shall apply to Bills introduced under the Special Procedure Act as they apply to Private Bills.—[King's Recommendation signified].—[Mr. Glenvil Hall.]

3.33 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

The reason for this series of changes to Standing Orders was the passage into law earlier this year of the Local Government Act. Under that Act the old system of block grants running normally for five years was superseded by a system of Exchequer equalisation grants. This means that new expenditure by a local authority may have immediate effect on the grants it receives. It follows, therefore, that any Bill authorising increased expenditure by a local authority must be regarded as imposing a charge on public revenue. This in turn means that under our procedure all such Bills, public and private, must be supported by a Financial Resolution.

This matter was discussed, as the House will recollect, on 23rd March last, shortly before the Local Government Act received the Royal Assent. On behalf of the Government I then moved a Motion, which was accepted by the House without a Division, and that Motion waived temporarily the requirement of a Financial Resolution for certain Bills. During the Debate I gave an undertaking on behalf of the Government that this matter would be examined and that in due course proposals would be made to the House. Those proposals are those I am moving and we are about to examine and discuss them.

Two types of Bills are involved—public and private. So far as public Bills are concerned no change in the usual procedure is proposed. In future, a Financial Resolution will be brought in to cover any provisions in a public Bill which for any reason may operate to increase the Exchequer equalisation grants. The purpose of Part I of the Schedule under the heading "New Standing Order relative to Public Business" is not to make any alteration in public Bill procedure but to give formal authority to the proposals which follow in Part II, which deals with procedure on private Bills.

I should perhaps at this point make it clear that the numbering of existing Standing Orders referred to in the Motion is that of the latest edition, which was published on 2nd November and which perhaps not all hon. Members may have seen. Nevertheless, we thought we should follow the latest edition which is now published and the numbers referred to follow the numbering and the paging in the new publication.

For private Bills it is obvious, I think, and it became quite clear when we discussed the matter earlier this year, that the existing procedure must be changed. To attempt to combine the passage of a private Bill through the House with a Financial Resolution would be so awkward as virtually to stop this kind of legislation altogether, which neither the local authorities nor the Government nor, I feel sure, the House in any quarter, desire to see.

The first of the proposed Standing Orders under Part II of the Schedule, namely 156A, therefore dispenses with the normal financial resolution for this kind of Bill. It is not sufficient to leave the matter there, however. It is essential, if the rights of the Crown and the House are to be safeguarded as effectively as hitherto, that we should establish some alternative procedure. The proposals made to this end are set forth in a new Standing Order numbered 156B. This provides that where a private Bill which authorises increased expenditure by a local authority reaches its Committee stage, the Committee has to insert in it a Clause providing that the expenditure shall not be taken into account in computing the authority's exchequer equalisation grant unless the Minister of Health or the Secretary of State for Scotland recommends that the Clause may be omitted. If, of course, the Committee think that the proposed expenditure should not rank for grant, they can still insert the Clause in spite of the recommendation of the Minister concerned.

It will be noted that though the formal procedure is different under the proposed Standing Order its effect will be the same as hitherto has been the case. Standing Order No. 78 does represent a self-denying ordinance on the part of hon. Members of this House in that it is not open to any hon. Member to propose a charge on the public revenue unless such a charge has previously been recommended by the Crown, and even when a charge is so recommended it is still open to the House to reject the proposal if it is so minded. The new procedure which I am now proposing for adoption, it will be seen, continues this practice by another method. It may be argued—and one objection to the form which I now propose is—that it might appear that it will be a general rule for this protective Clause to be inserted. This, however, will not be the case. I think that, perhaps, in order to allay any anxiety on the part of local authorities, I should, on behalf of the Government, at this stage make that quite clear. The Government have no intention of departing from the original arrangements which were made for the local authorities when this Bill was projected and passing through the House.

I now come to Standing Orders 168, 169 and 190 which are in paragraphs 2, 3 and 4 of the Motion. All these are consequential to the passing, if the House agrees, of Nos. 156A and 156B. The addition which we propose to Standing Order 168 lays down that Clauses of a Private Bill need not be printed in italics merely because they might operate to increase the Exchequer equalisation grant. The new procedure which we propose, and which will be embodied in the Standing Orders to which I have referred, will make this unnecessary. Secondly, the addition to Standing Order 169 provides that because of the new procedure there is no need to refer to the effect on a Government grant of Clauses in a private Bill. Again, the acceptance of 156A and 156B renders it unnecessary for Standing Order 169 to apply.

As to Standing Order 191, the House will notice that there is already a No. 191; but if hon. Members will refer back to the Motion preceding the Schedule they will find that Standing Order 191 should be deleted. We propose here that a new Standing Order 191 should take its place. The new Order includes most of what appears in the old one, with additions which appear in the Schedule. This change will enable Bills of the kind under review to be taken, if necessary, in another place, notwithstanding that they may operate to impose a charge on public revenue. This aspect of such Measures, of course, will be dealt with when they reach this House.

The remaining proposals waive the requirement of a Financial Resolution for three other classes of Bills which are analogous to private Bills. These arc provisional order confirmation Bills, which are covered by paragraph 5, and will necessitate some additional words to Standing Order 219; Bills for the confirmation of Scottish provisional orders under the Private Legislation Procedure (Scotland) Act, 1936, which are covered by some additional words which we propose to Standing Order 228A; and Bills for the confirmation of orders under the Statutory Orders (Special Procedure) Act, 1945, which are covered by the new Standing Order which we propose after 248A. None of these is, in a sense, important, in that Bills of this kind are not likely' in the future to be as numerous as they were in times gone by; although I understand they were not very numerous even then.

I may, perhaps, make two observations on these last changes. The first is, that we are proposing to abolish the Financial Resolution requirements here without substituting any other procedure for it, because it is our view, and we hope the House will agree, that the procedure which provisional orders of this kind, which later may need a confirming Bill procedure, go through before reaching this stage, is such that it is quite obvious that no Financial Resolution will be required, because they cannot get very far unless a Minister of the Crown, and, therefore, the Crown itself, has given confirmation for the possible imposition of an extra charge. So far as Scottish provisional orders are concerned, and expenditure by a local authority arises, there may be a charge where a local government boundary in Scotland is changed. As the House will remember, in England and Wales any future changes of that kind will be made on the recommendation of the Local Government Boundary Commission. I think I have covered the ground—briefly, I hope, but, nevertheless, as fully as is necessary—and I commend these changes to the House.

3.47 p.m.

Major Sir David Maxwell Fyfe (Liverpool, West Derby)

I think everyone will agree that it is important that the House should get a complete understanding of, and pay very careful attention to, any matter that concerns its scrutiny and control of public expenditure. Therefore, we are all indebted to the right hon. Gentleman for the care which he has taken in the exposition of the matter. There are just one or two aspects of it to which I should like him to give further consideration, because it is a new procedure, and, therefore, we all want to know the method in which it will work. I fully appreciated—I am sure everyone in the House did—how the question of the public charge arose. If I may give my own understanding of it, to see if I have got it right, I would say that the provision in the local government Bill, the dealing with the relevant fraction, depends, of course, on the integer of the fraction, the bit above the line of the expenditure of the local authority that is divisible by the rateable value plus the proceeds of a £ in the £ rate; so that any increase in the integer of the fraction means an increase in the payment which a local authority will receive in the relevant case. One goes from that to the provision of the two safeguards which this House has always insisted upon when there is a question of a charge on public funds, first, that the recommendation of the Crown should be shown, and second, that there should be a Financial Resolution, which means consideration by a Committee of the whole House.

Of the second of these, the right hon. Gentleman has frankly said that it goes, and that it is not possible to find an alternative for it. But he is suggesting, as I understand the gist of his argument, that the procedure embodied in these alterations will provide a substitute for the Crown recommendations' being shown. It is on that point that I should like to hear just a little further. As I understand the procedure, when a private Bill—a Bill promoted by a local authority in the majority of cases—means that that local authority will go in for further expenditure, then the Bill will come to this House for a Second Reading in the ordinary way. If there is no report from either the Ministry of Health or the Scottish Office, then there is a direction, as I understand it, to the Select Committee that this Clause will be inserted, and the effect of the Clause will be that even if an increased expenditure takes place, none of it will come out of public funds.

The Minister of Health (Mr. Aneurin Bevan)

Exchequer funds.

Sir D. Maxwell Fyfe

I agree. None of the increased expenditure will come out of Exchequer funds—public funds in that sense. If, on the other hand, there is a recommendation from the right hon. Gentleman's Department or from the Scottish Office, then the local authority will recoup some of its expenditure from the Exchequer funds. That obviously raises a new situation. I want to know how the right hon. Gentleman is going to approach that problem. Hitherto, when there has been a question of the Crown's recommendation to be shown that, of course, has been on a matter of Government policy, and the Government are the Crown for this purpose, because the Crown really means the Executive, and, therefore, they are using the Crown's recommendation as a step to intensify their own policy in this House and put it before the House. We are not dealing with that situation. We are dealing with a local authority putting forward its policy.

There are, of course, at least two views which the right hon. Gentleman might have in approaching the matter—and when I say the right hon. Gentleman I mean any Minister of Health, as he will appreciate. One is to give the local authority a chance to put its views first before the House and then before the Select Committee; the other, that the proposal of the local authority should have his implementation and support. That is, that he is, if I may use a colloquial term, backing the local authority on the line of policy which the Bill shows. I should like to know whether the private Bill will then come forward with his backing, or merely that he will clear the way for it to have a run in this House.

The second point is: At what stage will the report come? I have been a Member of this House for a certain number of years, and, therefore, it is a long time since I have had to deal with the technical side of a private Bill in my professional capacity, but I seem to remember that it is a recognised procedure in a private Bill—it certainly was some years ago—for the Government Department concerned to make a report to the Select Committee that was considering the Bill. I do not see how that would be sufficient to deal with this procedure. It appears to me that, if the effect of this procedure is intended to be to replace the signifying of the Crown's recommendation, the report should be attached before the Bill comes before this House for Second Reading, so that the House should have an opportunity of knowing whether this was a Bill in respect of which the local authority would receive recoupment in its expenses from the Exchequer or would not. That would certainly be a material matter for Members of this House to consider when deciding whether or not to give a private Bill a Second Reading. Therefore, I should be grateful if the right hon. Gentleman would also let us know his views on that point.

I have refrained from making any further comment, because a good deal depends on the view which the right hon. Gentleman takes, and the view which it is intended should operate with regard to my first question. If the Ministries concerned are backing the Bill, obviously this House would not have to consider, as is its duty, the expenditure of public money but would have to consider the policy involved. It may be, as I am sure the right hon. Gentleman will realise—I do not want to raise hypothetical controversies—that differences of policy would come into being whichever party was in power and whichever party was in Opposition. Therefore, I should like at the moment to say that that is a point which wants watching, and I think that the Minister of Health will agree that it is a point upon which, at this stage when the new procedure is introduced, all quarters of the House would like enlightenment. I should be grateful if he would let us know his views, and the views of the Government on the points that I have raised.

3.57 p.m.

Mr. David Jones (The Hartlepools)

There is a good deal of apprehension still in the minds of local authorities about this new procedure. They feel that a change is necessary as a result of the passing of the Local Government Act, but they are certainly not welcoming this change with much enthusiasm. I have had representations made to me by some local authorities who feel that this procedure will to some extent cramp the initiative of local authorities. They feel, too, that because the position will now rest with the Ministers concerned and not primarily with the House of Commons, it will give Ministers greater powers than the local authorities feel they ought to have. They have given the matter very careful consideration, and while they feel that they must accept this revised procedure, they are not at all happy about it, and are in fact very apprehensive. I make that point in order that it may be on record as expressing the view of some of the local authorities of this country.

3.58 p.m.

Mr. Warbey (Luton)

I should like some clarification on the question of how this new procedure will affect a certain type of private Bill, namely, a private Bill which changes the status of a local authority. If, for example, a non-county borough, such as Luton, were to promote a private Bill to become a county borough—and I think that I may say in passing that Members of both the present and past Governments have admitted that Luton has as good a claim to become a county borough as any non-county borough in the country—how far would the Standing Orders operate and how would they be operated? Such a Bill, would, of course, involve a very considerable increase in expenditure by a local authority becoming a county borough.

I would like to know whether the Order would apply in such a case, or whether it would be held that in fact a new authority was being created, and, therefore, the expenditure of the new county borough was not in the same category as the expenditure of the old non-county borough, which would cease to exist as a result of the success of the Bill. If such a Bill came under this procedure, we should like to know what attitude the Minister of Health would be likely to take. In view of the fact that increased expenditure would necessarily be involved, I take it that the Minister of Health would not withhold the recommendation that the Clause should not be inserted in the Bill, merely because of the fact that for other reasons perhaps he took the view that there was no case for such a Bill. I quite agree that he might have other reasons for opposing the Bill, but I take it that while opposing the Bill he would not withhold the recommendation in a case of this kind.

4.0 p.m.

The Minister of Health (Mr. Aneurin Bevan)

With the permission of the House I should like to dispose of the last question first. It is rather an original one, so that if I am wrong I hope I shall be for given. As I understand the situation, no alteration of the status of a local authority nor any alteration of its boundary can now take place without the initiative of the Minister himself. Consequently, if there were any changes in the revenues, if there were any charges imposed by the change upon the national revenues, the fact that the Minister would himself be moving the order would make it possible for it to be done. The whole question that is now raised by the alteration in the Standing Orders is: where should an additional charge upon the public revenues initiate? Should it initiate with the House itself, or should it initiate with a private body outside the House?

All we are seeking to do is to preserve the old convention that it is the Executive itself, that it is the Crown, which initiates charges upon the general revenues. It is because the 1948 Act, which makes the Treasury a ratepayer, might give the local authority, in promoting private Bills, power to attract money from the public revenues that this change is necessary. Therefore, it is only that part of their activity upon which the 1948 Act impinges which is being affected by the changes in the Standing Orders; all other things are, necessarily, unaffected.

Next, I should like to remove the apprehensions of some of my hon. Friends who appear to think that local authorities are put in a worse position by what we are now doing. That is not the case at all. Local authorities can gain but they cannot conceivably lose. As things were in the past, local authorities could not themselves initiate expenditure; but now, if the Minister of Health says he does not mind, then whatever additional powers they want would attract money from the general revenues, so that local authorities need not worry at all. As the procedure will go, there will be a Second Reading, at which it will be intimated that the safeguarding Clause will go in; then it will be considered in Committee, and it is at that stage that the Minister or the Secretary of State intimates whether he wishes the Clause to be waived.

The right hon. and learned Gentleman the Member for West Derby (Sir D. Maxwell Fyfe) asked whether it would not be desirable to do so before the Second Reading. Well, as a general rule these Second Readings are formal matters: the real work is done in the Select Committee where, as he himself recollected, the relevant Department makes its report on a suggested Bill; and it is at that stage that it seems to us, and to those experts who have been drafting these Amendments to Standing Orders, that it would be appropriate for the Minister to indicate his views to the Committee.

What does the Minister do when he indicates his views? All he really says is: "In our opinion these powers are of a kind which should enable them to rank for payment under the 1948 Act." In other words, his initiative would take away a disability that the local authority might suffer from if he did not exercise his initiative. It does not follow, of course, that the Committee would agree with him. The Committee could still say: "No, in our opinion these new powers are such that this particular local authority ought not to enjoy the additional grant under the 1948 Act."

What happened in the past was that the local authority asked the House for powers, got the powers, and paid for them out of local revenues. All that can happen in the future if the Committee accept the recommendation of the Minister of Health is, not only will they say that these additional powers shall be provided for out of local revenues, but to the extent that the Treasury is a ratepayer in that area, the Treasury itself will also contribute towards the expenses of the new powers. I hope I have not been over-elaborate, but I have desired to make it quite clear that local authorities need not worry.

The right hon. and learned Gentleman asked me a question—and a very important question it was—as to what kind of principles would guide the Minister in making his recommendation to the Committee. Now, it is very difficult, as I think the House will appreciate, to lay down general principles here, because we are in a new field; but normally, where the local authority would be coming for powers which are not entirely novel, and where they are powers which the House will already have conferred upon other local authorities, the Minister would recommend a waiver. Of course, if a local authority is going in for very novel powers involving quite considerable building and capital expenditure on a large scale, then, obviously, the general revenues could not be asked reasonably to make a contribution to the local authority.

Where the activities lie normally within the field of local government activity, and where they have been enjoyed before, or where they are not of an entirely exceptional character, the Minister of Health and the Secretary of State for Scotland will, I should imagine, say: "In our opinion this ought to rank for grant in exactly the same way as every other part of the local authorities activities," because we would not desire to have so complicated an accountancy that a certain part of a local authorities expenditure could rank for this grant and other forms of expenditure could not. We should only wish to make a distinction in the accountancy where the distinction is established by the nature of the new powers.

I think the House will appreciate that this is very necessary, because the State is now a ratepayer to a very large extent—in some cases up to as much as 50 per cent. Therefore, it would be a grotesque situation if a local authority in that position could obtain from Parliament powers which would automatically attract from the Treasury as much as 50 per cent. of its own expenditure. I am sure the House will appreciate that we have examined this matter very carefully, and I hope I have managed to clear up any apprehensions that may have existed.

Captain Crookshank (Gainsborough)

As I understand it, this communication from the Minister to the Select Committee will enable the expenditure proposed to attract the grant from the State, and it follows from that that it is open to the Select Committee to decide whether or not that should be done. Suppose the Select Committee—this is rather hypothetical, and possibly there is no answer—in its wisdom says: "No, we do not think that this should attract a grant, although the Minister has expressed his view that he does not object." Under this new procedure will it be possible at any subsequent stage of the Bill before this House to reverse on that point, the decision of the Select Committee? I am not sure that it would be competent, in view of the fact that we have moved out of an ordinary Money Resolution procedure. I wonder if thought has been given to that. Perhaps it is an elementary question to which I ought to know the answer but do not.

Mr. Bevan

I doubt very much whether it would be possible so to do. After all, the right of the Committee to refuse to accept the recommendation of the Minister is exactly the same as the right of any Committee of the House to refuse to accept a Financial Resolution. It is in no different position. It is the Crown that indicates the King's Recommendation, and it is the House which agrees or disagrees with the King's Recommendation. All that would happen is that the Crown, having intimated to the Committee that the Government were prepared to carry this expenditure, the Committee could still say: "No, we do not agree with the Government in this case." The situation has not been altered. I should have thought that that finished the matter, but I will look at it again. I doubt whether it could be reviewed at another stage. However, I will have a look at it, and if something further is required, we shall certainly do it.

Captain Crookshank

That is what I thought. I thought it would end it. I wondered what would be the position where the local authority, according to the Minister, should have a grant and the Select Committee did not agree. In that case the Minister would want to over-ride the Select Committee, which I do not think is possible as the matter stands.

Mr. Bevan

I will certainly have a look at it. I do not think this alters the power at any stage. I suppose that the Government could alter its financial recommendation at some subsequent stage but that the Committee could not. However, as I have said, I will certainly inquire into the matter.

Question put, and agreed to.

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