HC Deb 04 May 1949 vol 464 cc1135-75

Postponed proceeding on consideration of the Bill, as amended, resumed.

Amendment: In page 15, line 26, leave out sub-paragraph (b).—[Mr. Hare.]

8.45 p.m.

Mr. Hare

Perhaps I may now take the House back to the Amendment which I was moving. I feel that hon. Members may have learned a great deal about the procedure of the Bolton town council, and I feel that many of them may choose to leave the rather prosaic precincts of this House and attempt to qualify for future town councillorship vacancies on that august assembly.

I would like to recapitulate the few words with which I prefaced my speech by bringing the House back to the short explanation of why my hon. Friends and I have tabled this Amendment. The effect of this Amendment will be to delete sub-paragraph (b) of paragraph (29) of the Schedule, which will have the effect of making it impossible for the Mid-Northamptonshire Water Board to levy a rate on the constituent authorities who are within the area of that water board for the purpose of paying for any deficiency there may be in their operations. We consider that this is a matter of very considerable importance because, for the first time, a new principle in levying a water charge is brought into effect. I shall develop my theme later, but I would point out first of all that the Mid-Northamptonshire Water Board is being formed under the arrangements laid down by the Water Act of 1945, and we have already the example of the Shropshire Water Board and the North Devon and Mid- and South-East Cheshire Board formed under this Act in which no such principle is, in fact, laid down. The real objection which we have to the procedure adopted under this Order is that it is entirely contrary to any ideas laid down in the parent Act, which is the Water Act, 1945. People who are not recipients of a water supply from this new Water Board may possibly have to pay contributions towards the deficiencies of the operations of that Board. It seems to us monstrously unfair that such a procedure should be allowed.

I think hon. Members would agree that water is a commodity which everyone needs and for which everyone expects to pay. That has always been the principle under which all water undertakings have so far worked, whether they have been local authority undertakings or private enterprise undertakings. I think hon. Members would agree that if they go to a butcher to buy some meat they expect to pay for that meat—[Interruption]—that is, as one hon. Member says, if they are fortunate enough to get anything worth paying for. If they have to go to a baker, from whom they can get unlimited supplies of bread, they expect to pay for that bread. Surely it is only reasonable that if somebody benefits by being fortunate enough to be supplied by a water corporation, then that person should expect to pay his fair share in proportion to the output of that corporation, and he should expect the proportion which he takes to be his financial responsibility. It would seem unfair that any persons who receive no benefit whatsoever from the operations of a water company should be expected in any way to contribute towards the operations of that company.

I think we should examine how this Clause will affect people living in this area. Unfortunately it is very difficult to assess the numbers of the people affected. The only way in which I can illustrate to the House how serious is this matter is by giving the proportion of the rateable value of those properties which will be served, so far as I can see, by this Water Board by comparison with the rateable value of those properties which will receive no benefit whatsoever from the operations of the Mid-Northamptonshire Water Board. The total rateable value of those properties receiving water in this new area will be £1,794,830—a very substantial rateable value, as I think hon. Members would agree. But the rateable value of those properties not receiving water from this Board will amount to £192,841. That is a very considerable proportion of the total figure and I think it does not require complicated mathematics for hon. Members to realise that more than 10 per cent, of the properties in this area will not be receiving any water from the operations of this Board.

I think one should also point out that it is quite clear that the hardship is likely to fall on certain sections of the population particularly, because within this area are the wealthy towns of Northampton, Kettering and Wellington, and it is obvious that the rateable value represented by those towns comes to a considerable proportion of the total of those properties which are to receive water from the scheme. In other words, it would appear—and I should like confirmation of this from the hon. Gentleman —that the people who are to suffer most, who are to have to pay something for nothing, are to be chiefly the rural inhabitants of the area. No farmer or farm worker who is not to benefit by the operations of the scheme will get much satisfaction if all he is to get in return for this levy which will be placed upon him is the right, when he goes to the market town on market day, of washing his hands or taking a drink of water. That will be a very poor compensation for the financial hardship which will be imposed on him.

Why is this new principle being imposed in this Bill? Why it is that for the first time, as far as I am informed, in England or Wales this principle of paying for water which one does not receive, is being proposed by the Minister of Health?

Mr. Donovan (Leicester, East)

It is not a new principle at all. Right or wrong, it is a very common one.

Mr. Hare

It is all very well for the hon. and learned Gentleman to say that. I should like an example of that.

Mr. Donovan

I can give the hon. Gentleman one. If he will look at the Pontypridd and Rhondda Water Act, 1910, he will find that many inhabitants in the Rhondda area have had to pay for water for 40 years although they get none.

Mr. Hare

I am grateful to the hon. and learned Gentleman. He has produced one example. I have genuinely tried to find out if there are other examples.

Mr. Donovan

Does the hon. Gentleman want another?

Mr. Hare

Perhaps, the hon. and learned Gentleman will give all he can in one go.

Mr. Donovan

If the hon. Gentleman will study the Water Acts which cover the City of Glasgow, he will find a similar example.

Mr. Hare

I am trying not to involve Scotland in my discussions. I did make it quite clear that my remarks referred entirely to England and Wales. The hon. and learned Gentleman has given us one example of an injustice which has lasted for 40 years in Wales. I have no pleasure in that injustice. I hope that we do not want to increase injustice by imposing a similar injustice on the inhabitants of mid-Northamptonshire. That is the case to which I am asking the House to address itself.

Mr. Mitchison

Would the hon. Member regard it as an injustice if a bachelor —let me make it quite clear that I mean a childless bachelor—had to pay an education rate?

Mr. Hare

That may be a very clever interjection, but I fail to see that it bears any relation whatsoever to the argument I am trying to put forward. I maintain —and the hon. and learned Member for Kettering (Mr. Mitchison) apparently disagrees with me—that it is an injustice that any man in this country—I mean England and Wales, with great respect to my right hon. and gallant Friend the Member for the Scottish Universities (Lieut.-Colonel Elliot), who is sitting in front of me—that any Englishman or Welshman should have to pay for water which he does not receive. That is my case. It may not be agreed with, but that is the reason why I am speaking on this Amendment. I was asking the House whether it could think what possible justification there was for this admittedly Unjust procedure. The hon. and learned Member for East Leicester (Mr. Donovan) mentioned the case of a town in Wales, and admitted that it was an injustice that those people had been asked to pay for water which they had not received.

9.0 p.m.

The reason that the Minister has put the proposal forward in this Bill is very easy to see. He has in fact been quite frank about the reason, which he has published in a letter to all the authorities who are concerned with this Board. I will not detain the House for long, but I wish to read an excerpt from the letter written by the Minister, dated 6th August, 1948, announcing his decision after the inquiry, when he wrote to the affected authorities: The Minister has had some doubt whether he would be justified in agreeing that the Joint Board should not be empowered to charge a water rate for domestic supplies. He feels, however, that the proposals made to him in this respect will simplify administration and produce substantial economies in the costs of collection. That is the reason why this injustice is to be perpetuated upon great numbers of citizens in the mid-Northamptonshire Water Board area. The reason is administrative convenience.

We are having too many examples in this present Parliament of the way in which administrative convenience is allowed to override all other considerations. The way in which in recent legislation the convenience and the rights of the private individual are completely overridden by this desire on the part of legislators in this House to make things happy and simple for themselves and for those who work under them is, I think, quite monstrous. I feel that our primary duty in this House is to sacrifice our own convenience and the convenience of our administrators in order to give a better and more convenient service, and a fairer service, to the individual citizens of this country. That is the basis on which we move our Amendment.

When one looks into the past and considers that in this House, John Hampden stood up against the right of King Charles I to collect ship money, one realises that the Minister of Health has here a far less good cause than King Charles had for collecting ship money. After all, the English towns which objected to that levy to which they had not been accustomed did, at any rate, get the benefit of a defence force in the form of the Navy to defend our shores. They at least got some indirect benefit. In the same way, when we lost our American Colonies on the cry of "taxation without representation," even there the American Colonists had less cause to "grouse" than the inhabitants of Northamptonshire because they did get some benefit from this country for the taxes which they were asked to pay to King George III. I feel that this is an extreme example of taxation without benefit, and that the Minister of Health has no right to introduce such a principle into this House of Commons.

Brigadier Thorp (Berwick-upon-Tweed)

I beg to second the Amendment.

Mr. Blenkinsop

The hon. Member, in moving the Amendment, has raised the general question of whether the Water Board should have the right under this Bill of securing its revenue by a precept upon the general rate of these constituent authorities, and he has not dealt purely with the deficiency charge question which is, of course, the subject of the subsection which we are at the moment discussing. I appreciate the point that he was wishing to raise this general question. I understand that so far as deficiencies are concerned, this is not an unusual practice in relation to joint boards, but I would agree with him that this is a more novel practice in relation to the precept upon constituent authorities for their general expenses. In this case the majority of the constituent authorities decided that it was in the interests of the area that a water rate should not be charged after 31st March, 1954, but that the expenses of the Board, after taking account of revenue, should be met by precepts upon the constituent authorities.

As the hon. Member mentioned, one factor which made us feel that this was a reasonable experiment to make was the reason given in the letter from my right hon. Friend which the hon. Gentleman has just quoted. I am a little surprised to find that on this issue the considerable saving in administration, not only in expenditure but in actual terms of labour, is something the hon. Gentleman disregards rather rightly. We shall certainly remember that in other discussions we may have in this House. The machinery of rate collection is very much simplified in this way, and it is estimated that a saving of some £8,000 a year on staff can be effected. That is a factor we must keep in mind, although I should be the last to say that it should be the sole determining reason.

Above all, this is a matter in which we think the view of the constituent authorities, which has been taken, should be expressed in the Bill. What we have therefore done is to ensure that this Measure, which they desire themselves to operate, should be given a chance of operating. It is novel, and it is something of an experiment; but we think it is justified both in relation to the saving of expenses involved and because of the desire of the authorities concerned. If it should prove to be unworkable, or if it is proved unduly to penalise large bodies of ratepayers, we could review the matter in the light of the experience we gain in this case. In our view—and it is the view of the majority of the constituent authorities concerned—there will not be a severe penalisation of the ratepayers, as the hon. Gentleman suggests.

There are, of course, many other services where this is a fairly common practice. For example, in relation to sewage there are very many cases in which payments are made, although at a particular time no service is actually provided. In view of the undoubted benefits that this order will bring to the agricultural community as a whole, we do not think it is unreasonable. It is also of some interest to note that there was no petition to alter this provision to the joint committee by the authorities concerned. It is true that some of the authorities involved already make no charges for water supply, but meet their deficiencies from general rate funds. For those reasons, and with the assurance that we will examine the working of this procedure, we think this is something to which the House should give its support, remembering that it is the desire of the authorities concerned to operate this scheme, and that it is our desire to see that it shall operate, as far as possible, without any undue hardship to those concerned.

Lieut.-Colonel Elliot

The Parliamentary Secretary treats this matter a little lightly. For instance, he says it was carried by the water board. It was, of course, decided by the urban areas in the teeth of very strong protests by the rural areas.

Mr. Blenkinsop

I did not say by the board, but desired by a majority of the constituent authorities. I was careful not to give a wrong impression.

Lieut.-Colonel Elliot

That makes it clearer. It was desired by a majority of the constituent authorities. Naturally those who are going to pay and get water will welcome it, because in addition they are going to be helped by charges made by people who are going to pay but are not going to get water. Those who will pay and get water happen to be in a majority and voted for it, and it was considerations such as those which made the Minister doubtful whether the thing should be embarked on at all. The Minister cannot pray in aid that the majority of the constituent authorities supported him unless he is able to break it down and show exactly the relations between the authorities who are not going to get any water although they will pay for it and the authorities who will get water and will pay for it.

The next point is whether the rural areas were justified in objecting. A heavy charge is to be made upon them. The suggestion is that the Minister may say that it was a matter of no very great importance, but I do not think he will deny that the water rate in other areas, such as East Shropshire, will be something of the order of 2s. 6d. to 3s. in the £. A rate of 3s. in the £ is not a rate which any section of the community is going to regard with lightness, and particularly when they are told that it is being adopted as a kind of experiment. They are entitled to say that a gain of £8,000 in rate collection is going to be outweighed by a considerable figure for the charge.

The Minister did not give us the figure, but perhaps he could give us the amount of money which is to be raised from those who will receive no benefit. That is germane to the discussion which we are having. The levy is one of the order of 2s. 6d. or 3s. in the £, but what amount is this levy going to raise from those who are to receive no benefit from it? The hon. and learned Member for East Leicester (Mr. Donovan) said there were many precedents for it, and actually had the temerity to quote a Scottish example. He may not be keeping himself up-to-date on Scottish practices, because the Secretary of State for Scotland, whom we are glad to have with us, will remember that this matter was, in fact, the subject of a Government decision not so very long ago. The hon. and learned Member for Kettering (Mr. Mitchison), who is consulting literature and who is no doubt desirous of intervening in the Debate, has already used the hoary example which he brings up on all these occasions of a bachelor paying rates—

Mr. Rankin

A childless bachelor.

Lieut.-Colonel Elliot

I am taking a high moral tone. I mean a childless bachelor, but I wish to keep the tone of the Debate high. The difficulty of the hon. and learned Member for Kettering, who sat through many of the Debates on the Scottish Bill, will be to get rid of the very specific declarations which were made on that occasion. On 9th November the Joint Under-Secretary of State for Scotland said: We have taken the view that a domestic water rate should not be levied on any persons other than those who actually have a supply laid on by the water authority."—[OFFICIAL REPORT, 9th November, 1948; Vol. 457, c. 1469.] That is a very striking statement of Government policy, and it is paralleled by every statement made by the Secretary of State for Scotland in the course of the Debate.

9.15 p.m.

It is true that a proportion of the rate was levied as a public water rate and a proportion as a domestic rate. Of course, the proportion levied as a public water rate was trivially small compared with what is being discussed here. It was something from 2d. to 6d. in the pound, a proportion going up to 33⅓ per cent. and going down as low as 20 per cent. This limited fraction was charged as a public water rate. The domestic water rate was levied on the principle so admirably enunciated in the previous Debate, namely, that no rate should be levied for domestic water except on the people who were actually in receipt of such a water supply.

In the circumstances, it seems a very unjust experiment to try upon the rural inhabitants who are to come under the sway of this water board. The Minister will need to explain why, first of all, this striking departure has been made from the principles so clearly enunciated by the Government as affecting a whole country in the case of a Water Bill—The Water (Scotland) Bill—passed through this House as recently as November of last year and which, by a strange coincidence, is coming down for consideration from another place this very night. It is true that we have been a little delayed by the Bolton Wanderers. but that delay is now over. Home is the sailor, home from the sea. And the wanderer home from the hill. [Interruption.] I know that "hunter." is the correct word. We are all aware of what was written by our great Scottish poet Robert Louis Stevenson, but I was merely paraphrasing his lines because of their application to the Debate which we previously had tonight.

If we are going this very night to pass through its concluding stages a Bill under which nobody is to be charged, on the declaration of the Government, a domestic rate for water that he does not receive, it is strange that we should preface it by passing a Clause which says that the rural areas of Northampton in the purview of this board covering 10 per cent. or more of the board's rateable value, are to suffer a charge which I estimate to be something of the order of from 2s. or 3s. 6d. in the £, for water to which they are not connected and are not likely to be connected, so far as one can see, for a very long time. That is a striking injustice, and one to which the Parliamentary Secretary should give further attention before he commends the Clause to the House.

On this occasion the Minister of Health almost came down on the right side. In his own letter he said that he had had serious qualms and doubts. That is very unusual. We can judge the strength of our case by this very unusual impact which it has had upon the mind of the Minister of Health. He is not a man who is usually given to doubts and qualms and still less to writing official letters to official bodies stating that he is suffering from them. When the Minister of Health quavers and rocks, the rest of us can conclude that the arguments are supremely convincing. We ask the House an unusual thing: let it help the Minister of Health to make up his mind. Let it bring the Minister of Health down on the side of justice and reason and, for the sake of precedent, on the same side as that to which hon. and right hon. Gentlemen opposite are going to address their arguments in a very short time when the Bill covering Scotland is brought under consideration and passes its final stages, with Amendments incorporated from another place. The case for the proposals put forward from this side is really one which the Minister might well concede on this occasion.

Mr. Mitchison

At this hour of the night no one would wish to detain the House for more than a minute or two. The answer to the right hon. and gallant Gentleman is, briefly, that it is the duty of this joint water board to supply water throughout the whole area, that the rural places to which he refers have been without water for a long time notwithstanding any efforts by the local authorities, and they will only get water through the operations of this joint water board and the works which it is proposed to erect at Pitsford and elsewhere.

Lieut.-Colonel Elliot

We are not arguing about those who are to get water but those who are not to get it. Will the hon. and learned Member address his arguments to that point?

Mr. Mitchison

What I understood we were arguing about was whether those who are not now getting the water should pay for it.

Lieut.-Colonel Elliot

Those who are not getting water now and are not to get water for any length of time that can reasonably be foreseen.

Mr. Blenkinsop

We are discussing the position as from 1954.

Lieut.-Colonel Elliot


Mr. Mitchison

The whole point of the matter, as I understand it, seems to me to be that one of the main purposes of constituting this joint water board is that under the existing local authority machinery, it has, for good or ill, proved impossible to supply water to some parts of the county. Some works are now specifically contemplated, and others will no doubt be carried out later. The general duty of this joint water board is defined in the order. It is to supply water in the area.

I wish to make only one general observation. I do not see how bodies supplying water over even so comparatively small an area as a county will be able to function properly if the financial contributions are to be limited to those persons who are now getting water, or, if I may take the right hon. and gallant Gentleman's point, are immediately and foreseeably to get water. The point is surely whether the provision of water is to be regarded like the provision of school facilities, the disposal of sewage and many other public services. It must be regarded as one thing or another—it must be regarded either as a business of selling water or as a public service.

Lieut.-Colonel Elliot

May I direct the attention of the hon. and learned Gentleman to the declaration by the Joint Under-Secretary of State for Scotland and the Secretary of State for Scotland?

Mr. Mitchison

Parliamentary courtesy would forbid me to make any observations on what the Secretary of State for Scotland or the Joint Under-Secretary may have said, and Parliamentary conventions would prevent me from doing what the right hon. and gallant Gentleman appears to be anxious to do, that is, to debate with regard to Mid-Northamptonshire, some Scottish Bill or other which is shortly to come before the House. I prefer for this purpose to confine myself to the county water supply with which we are immediately concerned.

I ask the right hon. and gallant Gentleman and hon. Members opposite whether there are not two ways of looking at this matter. One was put by the hon. Member for Woodbridge (Mr. Hare), who seems to me to suggest that the provision of water is ultimately a matter of selling. We on this side of the House cannot accept that view. It seems to us, and I think I speak for everyone on this side of the House, to be a public service, and at present it is to be a public service within the limits of this joint water board. Our view is that for public services of that character a general contribution must be made by everyone in the area, since it is otherwise impossible to provide them with full efficiency.

It seems to me that the point which we are here considering in relation to Northamptonshire is bound to arise sooner or later over a wider area. One of the difficulties of water supply in this country, just as it has been the difficulty in the area covered by this water board, has been its variety of charges for a similar public service. Sooner or later water rates and charges all over the country will have to be equalised. They can only be equalised on the basis of a national water service for which I regard this order, excellent though it is so far as it goes, as only a temporary substitute.

Captain Marsden

Obviously, the hon. and learned Member for Kettering (Mr. Mitchison) has his mind fixed on a nationalised water service. When that moment comes, if I am in this House, I am not certain what I shall do about it. But now I am talking about the present situation as it is put before us, and my sympathies are very much with those men and women living in certain parts in this area who can get no water from a public supply and have not the slightest chance of getting it. Evidence given by expert witnesses, of which I have a copy and to which I can refer, shows there is no chance of them getting it in the future. Even though they do not pay a water rate, if there is a deficiency in the water rate they have to pay that deficiency through the general rate. Every single one of them has to have a water supply of some sort. Many of them have wells and pumps which require a certain amount of attention, which has to be paid for. I think it is unfair that these people in rather remote places should pay a full water rate.

The Minister himself is not at all happy about it, and if he does not like a thing we can be perfectly certain that he is very dubious indeed about it. I hate to see these things brought up as party questions. They are not. It is a question of fair play for the individual. Many hon. Members refer to education and sewage and then say, "And lots of other things." Then they think for a moment, but cannot think of anything else. After all if we take the question of a childless bachelor, the man with the biggest family was once a childless bachelor himself, so one never knows what is before one. I can only repeat that this is in a general sense fair play to the individual, and I think it is most unfortunate that by legislation we should try to force people who do not get water, and have not the slightest chance of getting water, to pay a full rate.

Mr. Rankin

I wish to put one point to the House because the hon. and gallant Member for Chertsey (Captain Marsden), who was my colleague on the Committee, seemed to try to indicate to the House that all the experts who appeared before us subscribed more or less to the point of view put by the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot). I wish to quote

the reply of one expert in response to a question put by me and detailed on page 115 of the report presented by the Committee. The question I put was: But they are reaping the benefits that come from the existing water supply even though they may not be getting it directly? That referred to the people to whom the right hon. and gallant Gentleman referred. The answer of the expert witness was: That is a view to which I subscribe.

Question put, "That sub-paragraph (b) stand part of the Bill."

The House divided: Ayes. 165; Noes, 64.

Division No. 132.] AYES [9.32 p.m.
Albu, A. H. Hannan, W. (Maryhill) Pargiter, G. A.
Allen, A. C. (Bosworth) Hardy, E. A. Paton, J. (Norwich)
Allen, Scholefield (Crewe) Hastings, Dr Somerville
Attewell, H. C. Henderson, Joseph (Ardwick) Pearson, A.
Awbery, S. S. Holman, P. Peart, T. F.
Ayrton Gould, Mrs. B. Holmes, H. E (Hemsworth) Popplewell, E.
Bacon, Miss A Houghton, A L N D Porter, E. (Warrington)
Baird, J. Hoy, J. Porter, G. (Leeds)
Barton, C. Hubbard, T. Price, M. Philips
Battley, J. R. Hughes, Emrys (S. Ayr) Proctor, W. T.
Blenkinsop, A. Hughes, Hector (Aberdeen, N.) Randall, H. E.
Blyton, W. R. Hynd, J. B. (Attercliffe) Ranger, J.
Bowden, Flg. Offr. H. W. Irving, W. J. (Tottenham, N.) Rankin, J.
Brook, D. (Halifax) Isaacs, Rt. Hon. G. A. Reeves, J.
Brooks, T. J. (Rothwell) Jeger, Dr. S. W. (St. Pancras, S.E.) Reid, T. (Swindon)
Broughton, Dr. A. D. D. Jenkins, R H. Robens, A.
Brown, T. J. (Ince) John, W. Roberts, W. (Cumberland, N.)
Burden, T. W. Johnston, Douglas Robertson, J. J. (Berwick)
Burke, W. A. Jones, D. T. (Hartlepool) Ross, William (Kilmarnock)
Callaghan, James Kenyon., C. Royle, C.
Carmichael, James King, E. M. Scollan, T.
Castle, Mrs. B. A. Kinghorn, Sqn.-Ldr E Shackleton, E. A. A.
Cobb, F. A. kinley, J. Sharp, Granville
Collick, P. Lang, G. Shawcross, C. N. (Widnes)
Collindridge, F. Lavers, S. Silkin, Rt. Hon. L.
Collins, V. J. Lewis, J. (Bolton) Simmons, C. J.
Colman, Miss G. M. Logan, D. G. Skinnard, F. W.
Cooper, G. Lynn, A. W. Smith, C. (Colchester)
Corlett, Dr. J. McAdam, W. Smith, S. H. (Hull, S. W.)
Daggar, G. McEntee, V. La T Sorensen, R. W.
Davies, Edward (Burslem) McGhee, H. G Soskice, Rt. Hon. Sir Frank
Deer, G. McKay, J. (Wallsend) Steele, T.
Delargy, H. J. Mackay, R. W. C. (Hull, N.W.) Sylvester, G. O.
Diamond, J. McKinley, A. S. Taylor, H. B. (Mansfield)
Dobbie, W. Maclean, N. (Govan) Thomas, D. E. (Aberdare)
Dodds, N. N McLeavy, F. Thomas, George (Cardiff)
Donovan, T. MacPherson, Malcolm (Stirling) Thomas, I. O. (Wrekin)
Driberg, T. E. N. Mainwaring, W. H. Tolley, L.
Dumpleton, C. W. Mallalieu, E. L. (Brigg) Tomlinson, Rt. Hon. G
Ede, Rt. Hon. J. C. Mann, Mrs. J. Viant, S. P.
Edwards, Rt. Hon. N. (Caerphilly) Marquand, Rt. Hon. H. A Walker, G. H
Evans, S. N. (Wednesbury) Mashers, Rt. Hon. George Watkins, T. E.
Ewart, R. Messer, F. Wheatley, Rt. Hn. J. T. (Editib'gh, E.)
Fairhurst, F Middleton, Mrs. L. Whiteley, Rt. Hon. W
Farthing, W. J. Mitchison, G. R. Wilkes, L.
Fletcher, E. G. M. (Islington, E.) Morgan, Or. H. B. Wilkins, W. A.
Foot, M. M. Morley, R. Williams, J. L. (Kelvingrove)
Fraser, T. (Hamilton) Morris, P. (Swansea, W.) Williams, Ronald (Wigan)
Freeman, J. (Watford) Mort, D. L. Williams, Rt. Hon. T. (Do Valley)
Freeman, Peter (Newport) Moyle, A. Willis, E.
Gilzean, A. Neal, H. (Claycross) Woodburn, Rt. Hon. A
Grierson, E. Nicholls, H. R. (Stratford) Yates, V. F.
Griffiths, W. D. (Moss Side) Oldfied, W. H. Young, Sir R. (Newton)
Guest, Dr. L. Haden Paget, R. T.
Guy, W. H. Paling, Rt. Hon. Wilfred (Wentworth) TELLERS FOR THE AYES:
Hale, Leslie Paling, Will T. (Dewsbury) Mr. Snow and Mr. George Wallace.
Hall, Rt. Hon. Glenvil Palmer, A. M. F.
Agnew, Cmdr. P. G. Hogg, Hon. Q. Nicholson, G.
Amory, D. Heathcoat Hurd, A. Orr-Ewing, I. L
Baldwin, A. E. Hutchison, Lt.-Cm. Clark (E'b'rgh W.) Piekthorn, K.
Boyd-Carpenter, J. A. Hutchison, Col. J. R. (Glasgow, C.) Rayner, Brig. R.
Braithwaite, Lt.-Comdr. J. G. Jennings., R. Robinson, Roland (Blackpool, S.)
Bromley-Davenport, Lt,-Col. W Joynson-Hicks, Hon. L. W. Scott, Lord W.
Buchan-Hepburn, P. G. T. Keeling, E. H. Snadden, W. M.
Challen, C. Kerr, Sir J. Graham Spearman, A. C. M.
Crookshank, Capt. Rt. Hon. H. F C. Legge-Bourke, Maj. E. A. H. Spence, H. R.
Crowder, Capt. John E Linstead, H. N. Stoddart-Scott, Col. M.
Digby, Simon Wingfield Mackeson, Brig. H. R. Stuart, Rt. Hon. J (Moray)
Drewe, C. McKie, J. H. (Galloway) Sutcliffe, H.
Elliot, Lieut.-Col. Rt. Hon. Walter Manningham-Butler, R. E. Thorneycroft" G. E. P. (Monmouth)
Erroll, F. J. Marples, A. E. Thorp, Brigadier R. A. F.
Fraser, Sir I. (Lonsdale) Marsden, Capt. A. Touche, G. C.
Fyfe, Rt. Hon. Sir D. P. M. Marshall, D. (Bodmin) Wakefield, Sir W. W.
Gage, C. Marshall,, S. H. (Sutton) Walker-Smith, D.
Galbraith, T. G. D. (Hillhead) Maude, J. C. Wheatley, Colonel M. J. (Dorset, E.)
Gates, Maj. E. E. Mellor, Sir [...] Williams, C. (Torquay)
Grimston, R. V. Morrison, Rt. Hn. W. S. (Cirencester) York, C.
Hare, Hon. J. H. (Woodbridge) Mullan, Lt. C. H.
Headlam, Lieut.-Col. Rt. Hon. Sir C. Neven-Spence, Sir B. TELLERS FOR THE NOES:
Mr. Studholme and Major Conant.

Amendment made: In page 15, line 29, leave out: "before the commencement of each," and insert: as soon as may be after the appointed day and before the commencement of the second and each subsequent."—[Mr. Blenkinsop]

Mr. Blenkinsop

I beg to move, in page 19, line 4, at the end, to insert: and shall be subject to audit by a district auditor. This is one of the Amendments which are consequential upon the action of the Joint Committee in amending the Minister's order on the question whether the accounts of the Board shall be subject to district audit or professional audit. The Minister's order, which is in accordance with his usual practice, provided that the accounts shall be subject to audit by the district auditor. The Government consider that the alteration which was made by the Joint Committee is undesirable and not in accordance with the general past policy in regard to the auditing of the accounts of joint boards of local authorities which are formed by order of the Minister.

In fact, we are operating here under the provisions of Section 293 of the Local Government Act, 1933, which enables the Minister, in the order forming the joint hoard, to apply to the board any provisions of the Act, including the provision requiring the accounts to be subject to audit by the district auditor.

It has been clearly understood that the general rule shall be that a district audit shall be applied, for the accounts of one or more of the councils concerned are already subject to district audit. In fact, the accounts in the great majority of the constituent authorities in this instance, are already subject to district audit. Therefore, in the Government's opinion, it would be wrong to institute a new system of audit for the Board's accounts. It is further of some interest that none of the constituent authorities, who are the bodies responsible for providing the Board's funds, objected to district audit either at the local inquiry or when the Order was before the Joint Committee. In this case, my right hon. Friend the Minister of Health is following the general practice and our interpretation of our duties of the Local Government Act, 1933.

Mr. Manningham-Buller

The Parliamentary Secretary has done his best to indicate the great importance of this Amendment, which is one of the two Amendments causing this discussion to take place in this House today. It is an Amendment tabled by the Minister of Health who has not as yet graced us with his presence, and which he obviously regards as of vital importance. It may be of even greater importance than the other Amendment which we discussed previously, which reserves the right to the Ministers of Agriculture and Health to express an opinion on the state of the River Nene.

What exactly is it that we are now being asked to do, this matter of great importance? Instead of providing, as the Bill now does, that the Water Board shall have the option of employing either district auditors or professional auditors, we are asked to take away that option and to force them to employ district auditors. I should have thought that not even the Parliamentary Secretary or the Minister of Health could have suggested that this Amendment went to the root of this Order. Therefore, I should not have thought it possible, even for them, to suggest that this Amendment did not constitute a serious breach of the pledge given to this House in 1945 by the Lord Privy Seal.

Mr. Blenkinsop

If I may be allowed to interrupt the hon. and learned Gentleman, I would point out that we regard it of very real importance to carry out the duties imposed upon us by the House under the provisions of the Act to which I referred.

Mr. Manningham-Buller

I did not say that the hon. Gentleman did not consider it of real importance; he may consider it of real importance, but he must have regard to the terms of the pledge which limited the action to be taken by the Government in a matter of this sort to things which went to the root of ministerial orders, and no one can suggest that this Amendment, which seeks to reverse a decision come to by Joint Committee of both Houses of Parliament, which went into the matter with great care and heard a mass of evidence, goes to the root of the creation of a water board. It is an absolutely clear breach of this pledge.

9.45 p.m.

The hon. Gentleman did not indicate that there is a precedent for joint water boards having this option. Surely, he must have made inquiry in this matter. I ask him to deny that the North Devon and the Mid and South-east Cheshire Water Boards, established quite recently have the right, if they so desire, of a professional auditor as opposed to district auditors. If this matter is of such great importance, why was not action taken by the Minister? There are precedents for the water boards having this option. Why is it that after spending two short days this week giving limited consideration to the Iron and Steel Bill, subject to the guillotine, we should thereby make room for the discussion of this "most important" matter of principle whether a water board should have the option of employing professional auditors? It really is wasting the time of the House that the right hon. Gentleman should make up his mind to reverse the decision of a joint committee and take up the time of this House in considering a point of this nature.

We were told, if I may refer to the OFFICIAL REPORT of 14th November, 1945, that these orders of joint committees would not be challenged unless national policy is involved, or is likely to be imperilled or embarrassed." —[OFFICIAL REPORT, 14th November, 1945; Vol. 415. c. 2183.] I fail to see how anyone supporting this Amendment can maintain that giving this choice to the water board in any way affects or imperils national policy.

The Parliamentary Secretary has been unable to say that the constituent authorities of the water board have the slightest objection to the order in its present form giving them the power of choice, and I think he would also find if he made inquiry that they do not care two hoots whether this Amendemment is made or not. He has got no support from them for this Amendment. It may be that there are various joint boards which have a district auditor, but that is no reason for saying that this option should be taken away from a joint board, which is in the nature of a public utility company, and that they should be limited to the employment of district auditors.

Mr. Diamond (Manchester, Blackley)

I rise to oppose this Amendment. I want to make it quite clear, as this Amendment is concerned with the option as between district and professional auditors, that I myself am a professional auditor and, therefore, am most directly interested in this matter. Indeed, although I have not the slightest possibility or hope or expectation of ever becoming the auditor of a joint water board, I nevertheless regard the interest of any accountant who speaks on this matter as being so direct that it would be preferable that he should not vote in any Division which might arise, and I myself will certainly impose that discipline upon myself. I hope, however, that it will not be necessary to have a Division on this matter, because I feel sure that the Parliamentary Secretary will reconsider it, in view of the facts which have been put before him and which I hope to underline and make a little more full.

There are two aspects of this matter: first, the merits of the case, and secondly, what one might call the question of constitutional procedure and the pledge to which the hon. and learned Member for Daventry (Mr. Manningham-Buller) has referred. Let us deal first with the substance of the case. It is quite clear to the House at this stage that what we are concerned with is whether the joint water board should have the right to decide whether its accounts should be audited by a district auditor—that is to say, a civil servant, a member of the Ministry of Health—or whether they should be audited by an independent professional auditor such as a chartered accountant or a member of one of the associated bodies who are petitioners in this matter.

Perhaps I may give the information with regard to the number of professional auditors who are engaged at the moment on audits of local authorities. I am told that a survey was made in 1946 by the Association of Municipal Corporations and it appeared, from that survey, that the figures for the county boroughs were as follows: 69 adopted the professional audit, as against nine who adopted the district audit. Apparently that figure has improved since then, because the evidence submitted to the Joint Committee showed that 73 out of a total of 83 county boroughs, including, for example, Manchester—in which is my constituency—and Liverpool, have adopted the system of the professional audit. So far as the boroughs are concerned, professional audit is adopted in 134 cases and district audit in 103 cases.

It is quite clear, therefore, that the argument is not so strong in the case of the boroughs as it is in the case of the county boroughs, where the figures were 69 to nine and are now 73 out of a total of 83. Perhaps I may make one further point.

Mr. T. J. Brooks (Rothwell)

What are the figures for the county councils?

Mr. Diamond

I have not the figures for the county councils, but if my hon. Friend has them no doubt he will tell the House. There is no reason at all why all information should not be placed before the House and the House be given an opportunity of reaching an appropriate conclusion. In addition to the profes- sional audit and the district audit, there is a system known as the elective audit, which goes deep into the roots of the history of this country and which, I believe, received constitutional blessing more than 100 years ago. The elective audit is a system whereby the local authority elects its auditors and it is, indeed, very germane to what we are now discussing, because the effect of this Amendment is to deny to a body composed of local authorities—a joint water board—the freedom to elect its auditors. Indeed, in those elective audits, many auditors are professional auditors chosen where that system is followed.

It will be quite clear that many authorities take the view that a professional audit is a satisfactory method of carrying out the audit of its accounts. I do not want to do more than suggest that a professional audit is quite as suitable a method of auditing the accounts of a local authority or a water board as any other system of audit. If it were suggested to me that a district audit was a more appropriate method, I should, of course, feel compelled to produce arguments to show why, in my opinion, the professional audit was the more suitable.

The hon. and learned Member for Daventry referred to a case with which, unfortunately, the Parliamentary Secretary had not time to deal. I want to say here that I sympathise with the desire of the Parliamentary Secretary to make his speeches as short as possible, because by now he must be feeling very tired and presumably very hungry, having spent so much time on that bench. [HON. MEMBERS: "Where is the Minister?"1 The hon. and learned Member referred to the case of the Cheshire Water Board, but I do not think that point was made sufficiently strongly because the Cheshire Water Board was a case where the Minister, acting on the same advice as that which he has adopted on this occasion, preferred the district audit and suggested it to this House, but this House disagreed with that suggestion and came to the conclusion that the professional audit was preferable in that case. The point I would underline is that in that case there was not even an option; it was a question of pinning the water board down to a district audit; but the House decided that if it were to be pinned down to any audit it would be better for it to be pinned down to a professional audit.

Having, I hope, satisfied the House that the professional audit is a proper and the reasonable method of carrying out this job, I now come to the question of the new constituent local authorities which have been combined in the joint water board which is under consideration, and we find in the evidence that 50 per cent. of the income which will come into the joint water board is subject at the moment to professional audit.

Mr. David Jones (The Hartlepools)

Will my hon. Friend indicate how many of the authorities contribute that 50 per cent.? This may give a false impression. He will find that the bulk of the authorities are subject to district audit.

Mr. Diamond

I will give any information any hon. Member wants that I have in my possession. The last thing I want to do is to convey an unfair impression. I thought it was a fair consideration to have regard to the income of the authority. There are 17 local authorities involved, of all sizes. It is very difficult to compare a small rural district council with a large county borough, and I thought a fair method of comparison was that of income, because £1 to one local authority is the same as £1 to another. Of the income coming in to the joint water board, 53 per cent. is at present subject to professional audit, arising in two out of the 17 authorities, if my hon. Friend wants to know. They are, of course, as the figures indicate, a substantial two, and between them contribute more than 50 per cent. of the income.

Mr. Donovan

Which are they?

Mr. Diamond

Perhaps I can give that information a little later on. I am making the point that it would be unreasonable to deny to this joint board, whose income as to more than a half has previously been subject to professional audit, the right to decide for itself in a matter such as this. I have no doubt that all of us in this House feel that those responsible for conducting an organisation of this size, which represents a very considerable accumulation of capital, and which will have a very large income, are really capable of deciding whether an auditor does his job satisfactorily or not.

Of course, it will not be lost sight of that what we are considering is something which is more in the nature of a public utility company, a trading organisation, than a local authority. Therefore, the argument is reinforced, that although professional auditors may not have the full experience of the district auditors of purely municipal matters, of trading matters, and matters of public utility companies—as the House has shown by the way it has acted with regard to nationalised industries—the professional auditors would by no means be prepared to say they were lacking experience in any degree at all.

A further point which, I think, is not entirely without relevance, as Scotland has been mentioned many times today, and as we are about to sail into Scottish waters, is that in Scotland all local authority accounts are audited by professional auditors. I should like, as an accountant, to pay my tribute to the Scottish accountants, each one of whom is worth at least one and a half English accountants. I hope I have given reasons why I think that this is a very reasonable and moderate case we are bringing forward, a very reasonable thing for which we are asking—that at least, the right to choose be left with the Joint Board.

10.0 p.m.

Let me refer now to the reasons which the Parliamentary Secretary has given for feeling himself bound to go on some system that he calls the normal system, and which is contained, he alleges, in Section 293 of the Local Government Act, 1933. I have read the Section very carefully, as I am sure my hon. Friend has, but I cannot accept his conclusions, and I hope that when he replies he will put me right. The first point to be made is the point which my hon. Friend made, in all fairness, that this Section which provides for the appointment of a district auditor or a professional auditor, is purely a permissive one, so that the Minister can do exactly what he wants and can adopt one course or the other.

The second point is the quite simple one that this Section has no relevance whatsoever to what we are considering. The second of the provisions under subsection (1) states that the provisional order may apply to the joint board, provided that the audit of accounts by district auditors shall not be applied to a joint board…if the whole of the constituent local authorities are councils of boroughs… That is not the case we are dealing with. The whole of the constituent local authorities of the joint water board with which we are concerned are not councils of boroughs. They are boroughs of every type, and this Section, therefore, has no relevance whatsoever. I put this forcefully, but I hope courteously, to the Parliamentary Secretary in connection with the case which we are considering. The third point which I would make is that there is nothing in the Section whatever to prevent the application of Section 239, which provides for the alternative, so far as this particular water board is concerned.

I apologise for delaying the House some time on this matter, and I am very grateful to hon. Members for listening to me with as much courtesy as I hope I listen to them on other occasions. Having put to the House the reasons why the right to choose should remain with the local authority—and I do not think the right to choose is a right we should easily forego—may I now deal with the point which the hon. and learned Gentleman dealt with when speaking first for the Opposition with regard to the pledge which he said was given by my right hon. Friend the Member for Wakefield (Mr. Arthur Greenwood). I would not accept for one second that there is any question here of a pledge being broken. I have already referred to the subject of the speech which the right hon. Gentleman made on that occasion. If those who are interested will refer to the OFFICIAL REPORT of 14th November, 1945, they will see that my right hon. Friend said with great clarity: …It must rest with the Government of the day, whatever its complexion, to advise Parliament whether a particular issue raised on a Ministerial order is or is not one of policy on which the Government may feel bound to use their Parliamentary resources in support of their point of view."—[OFFICIAL REPORT, 14th November, 1945; Vol. 415, c. 2181.] I am sure that we would all accept that there is this doctrine of Ministerial responsibility. Any Minister and, I am sure, any Government would be put in a very severe difficulty if they did not have the right to dictate, or attempt to put forward, the point of view which they thought ought to be adopted, if they were to be charged with the responsibilities that might result. The right hon. Gentleman went on to say that The Minister of Health may feel himself obliged, in the interest of public health, to make orders which are considered by some water undertakers to be detrimental to their interests, whether those undertakers be private companies or local authorities."—[OFFICIAL REPORT. 14th November, 1945; Vol. 415. c. 2183.] There was, in fact, a general reference and a specific reference. I do not think, therefore, that anyone can feel that he has any complaint at this matter being raised. Having said that, it must be pointed out that the Minister, in putting forward this Amendment, is going against a decision of a Joint Committee of both Houses. Surely he would not adopt a course like that unless he had the gravest doubts and could produce substantial evidence to this House to show that that Committee had not got all the evidence before them when they came to their conclusion, or that they were quite wrong or misguided in coming to that decision. I think the House will 'agree that we have not been given any new evidence, and that we have not been given any facts to justify the Minister's view that the decision of this Joint Committee was ill-founded.

I am sure the Minister and the Parliamentary Secretary will bear in mind that we shall be led into a very difficult position if, every time this procedure is adopted, all the Minister has to do is to come forward and put minor Amendments before the House. While I say he is entitled to do that, I think that it will lead to very great difficulty. For example, what attitude will private interests and local authorities take up? They may say, "Why on earth should we spend our money"—and indeed the money of Parliament—"in long sittings"—and this case has involved long sittings—"of a Joint Committee of both Houses to consider the matter when even minor points have to be reconsidered in the whole House?" We might as well forgo all that and let the matter be discussed by the whole House in the first place, which would of course upset one of the reasons for which I understand this new procedure was introduced in 1945.

I therefore say it is reasonable to suggest to the Parliamentary Secretary that there are not very adequate and weighty reasons present in this case which should lead him to put forward an Amendment which is against the decision of a Joint Committee. I am tempted to wonder— and these are my final remarks on the subject—what are the real reasons which have prevailed upon my hon. Friends to come to this new conclusion. I have disclosed my interest in this matter; I have made it quite clear that this is a question of a professional auditor versus a district auditor. I ask the Minister: Has he disclosed his interest in this matter? Has he made it perfectly clear that there must be many members of the district audit staff who now find themselves, shall we say, with less to do than they did before this Government took office? As a result of the many nationalisation Acts, which all of us on this side accept, involving gas, transport and electricity, there are undoubtedly many cases where professional auditors and district auditors alike have found themselves without the job they previously did. That is one of the economies, which has resulted.

I do not want to get into controversial waters I merely want to make clear that, unless some very good and powerful reasons are put before us why this right to choose is denied to a combination of local authorities, we must look to some of the less powerful and less good reasons. I therefore hope that my hon. Friend will be able to disabuse my mind, and will on further consideration decide that the best thing to do would be to allow local authorities the right to choose—a right which every municipal corporation and every free man in this country enjoys.

Mr. Jennings (Sheffield, Hallam)

I rise to oppose this Amendment. Like the hon. Member for the Blackley Division of Manchester (Mr. Diamond), I have to disclose my interest, which is that of a professional chartered accountant. Also like the hon. Member, I have very little likelihood of being appointed as professional auditor to a water undertaking, so that my interest is very remote. He said that he would not oppose the Government in the Lobby on this matter. I, unlike him in this respect, feel that, even though my interest is so remote I shall be obliged to go into the Lobby against this Amendment.

The Parliamentary Secretary called in aid Section 293 of the 1933 Act. It is a great pity that the Minister of Health is not here to defend this Amendment. He has sent his Parliamentary Secretary to quote in aid of the Amendment this par- ticular Section. On page 178 of the Minutes of Evidence of this Joint Committee this very point was raised. Counsel for the Minister was being questioned on this particular Section that has been quoted. It states: We know here that, out of sixteen authorities, district audit would apply to thirteen, and has been applied to a fourteenth by the choice of the Borough of Kettering. Of course, the proviso does not strictly apply here because not all the authorities are boroughs. Counsel for the Minister replied: "That is so." If counsel for the Minister before that Joint Committee admitted that that Section did not strictly apply surely it is treating the House with some discourtesy for the Minister to ask the Parliamentary Secretary to support this Amendment by quoting a Section of an Act which his counsel in Committee said did not strictly apply. There must be some motive for not giving a choice to this authority.

I feel there must be some other motive why the choice has not been given to the local authority for the appointment of a professional audit. Recently gas, electricity, transport and so on have all been given the power to have professional audits, and it seems to me that there is no reason at all why the local authority should not have the choice of deciding for itself which kind of audit it will have. It is not for me as a chartered accountant to quote the standing of any of the professional bodies like the Institute or the Society or the many other authorities in this country.

Mr. Mathers (Linlithgow)

It would be helpful to the House if the hon. Member would say something about the qualifications of those between whom we are asked to decide. Have they all equal qualifications or is it not the case that the district auditor requires to be even more fully qualified than the ordinary professional auditor? Is it not another consideration that the district auditor is more likely to be completely impartial in doing his work?

Mr. Jennings

I could not let that pass. I had purposely refrained from criticising the district auditor, because I had thought that would be the wrong thing to do, but the right hon. Gentleman has made a suggestion to the effect that district auditors are better qualified to audit these accounts and without any hesitation I must refute that suggestion. It is not for me to criticise the district auditor. The best way of deciding the question asked by the right hon. Gentleman is to realise how little the district auditor has been brought into the picture in recent Acts. It seems to me that their duties are getting less and less, and it is not that the Minister wants to give them some more work or keep them in existence, because they are being deprived of these audits in the various nationalised undertakings and under local authorities. Many local authorities have taken the choice that was given to them and have appointed professional auditors in preference to district auditors.

10.15 p.m.

Mr. Mathers

The hon. Member appears to have misunderstood my question, which was an inquiry, a request for information. I was asking about the relative qualifications.

Mr. Jennings

It would be most improper of me to reply to that question. As an interested party and a member of a professional body it would be wrong for me to compare qualifications one against the other. If the hon. Member is right that the district auditor is better qualified, then keep him in the Bill as he is, but put the professional auditor in as well. The wisdom of the authority making the choice will be shown in the way it chooses. If, in their opinion, the district auditor is better qualified I take it that the district auditor will be appointed to audit the accounts. If he is not, then the professional accountant will be appointed.

I must ask the hon. Member not to press me to comparisons with regard to professional qualifications because on a matter like this comparisons might be a little odious from one professional man to another. I prefer not to make the comparison. The comparison will have to made by the local authority which is making the appointment. If the choice is between one and the other, the local authority can decide the right thing to do. It must be wrong for the Minister to force upon an authority one type of auditor if the authority feel it would like a different system of audit which might be a better way of doing the job. Questions of comparison do not enter into it.

The plain issue is that we have had an advancement through recent Acts of Parliament, such as the 1933 Act, giving local authorities the power to appoint professional auditors. With nationalised industries we are getting the power given for professional auditors to be appointed. At this late stage, does the Minister propose to take away from local authorities the choice, in spite of the fact that the Joint Committee after hearing all the evidence that the Minister could put forward in support of this matter refused to accept it and decided that the choice of auditor should be the method employed? Here is an Amendment brought forward by the Minister at the last stage. He has not the courtesy to come forward and defend the matter. It was suggested a little earlier by the Home Secretary, when the Minister's absence was questioned, that perhaps it was a good thing that the Minister was not present, because we might get off more lightly. Those are not the Home Secretary's exact words but that was the inference from them. I say that it is a pity that he is not here because we could give him what he is entitled to. Unfortunately we cannot do him justice in that respect. We cannot do the right hon. Gentleman justice if he is not here. He should have been here.

This is a matter of importance and concern to every Member of every party. The right should be given here to the authority to make their choice, as we have been providing in Acts of Parliament for some years. This Amendment is depriving this authority of that choice, and a far better case should be made out for taking away this right than that put forward by the Parliamentary Secretary, which was no case at all. The Ministry's own counsel said before the Committee that the particular Section did not really apply. I think it was misleading the House, not purposely but innocently, to ask the House to accept this Amendment. If the Parliamentary Secretary reads those minutes again he will appreciate that his own Department's counsel pleading the case admited that that particular Section did not apply. I am certain that the hon. Gentleman will have to offer a much better case than the one which he has brought forward in support of this Amendment. I believe that Members on all sides of the House who believe in justice should come into the Division Lobby against the Amendment.

10.22 p.m.

Mr. Rankin

The case for the option between the professional auditor and the district auditor has had two strong advocates on the professional side, both of whom have, of course, declared their interest. The hon. Member for Hallam (Mr. Jennings) has somewhat over-laboured the position of the Joint Committee on this matter. I want to make it perfectly clear to him that in the Joint Committee—I hope I am revealing no secrets that should not be revealed—there was a long discussion on this matter, and the point of view put forward by some of us was not that which the hon. Gentleman has put forward.

Mr. Jennings

Did the Committee decide in favour of the two types being included? That is my point.

Lieut.-Colonel Elliot

On a point of Order. It is surely undesirable that the private discussions of the Committee should be even broached in open Debate because it will inevitably lead to the whole question of the discussions of the Committee behind closed doors being brought out on the Floor of the House, and as there is no report of those discussions they may be inaccurately quoted.

Mr. Speaker

The report and proceedings of the Committee are not before the House, and have not been reported, and they may not be discussed in the House. All that the hon. Member for Tradeston (Mr. Rankin) said, however, was that the opinion was not unanimous. He should not go beyond that.

Mr. Rankin

I had that carefully in mind, and I did not propose in any way to venture into the opinions which were expressed, but I felt that the point I made was one which ought to be made because the position of the Joint Committee was being emphasised in the Debate. I think I made quite a fair point.

A good deal has been made of the right of option, and it has been urged that that right should remain. The point should be kept in mind that in the Local Government Act, 1933, the right of option as between the professional auditor and the district auditor was only retained, so far as the boroughs were concerned, in order to get rid of a method called the elective audit, which was condemned by every judicial authority in this country. That is the reason the option was allowed, but that is not a defence of a further retention of this principle. The hon. and learned Gentleman who initiated the discussion from the Opposition side of the House pointed out that there was a precedent for the option and also for the professional auditor so far as water boards were concerned. He named two, but he omitted to go further and point out that out of 47 water boards in England there are 37 which have opted for the district auditor—[HON. MEMBERS: "Opted?".] —yes, and now have a district auditor. I will drop the word "opted."

Mr. Manningham-Buller

The hon. Member said that 37 water boards out of 47 had "opted." Does he mean that those 37 had the choice?

Mr. Rankin

No, I will drop the word "opted," and use the phrase that they are now carrying on using the district auditor. My hon. Friend the Member for Blackley (Mr. Diamond) pointed out that there were 69 boroughs which had a professional auditor as against nine which had the district auditor. I suggest that he will find, if he looks into this matter further, that in most of these cases the professional auditor is concerned with the commercial and trading aspects of those boroughs, and not with the aspect that is before the House at the moment. If we look into the position of those boroughs we find matters in relation to education, rating and valuation, public assistance, motor taxes and functions under the National Health Act and the National Assistance Act are all subject to district audit, so that within the boroughs, while we may have the professional audit in being for the commercial and trading side, so far as these other aspects of the activities of the borough are concerned it is the district audit which is used.

Mr. John R. Thomas (Dover)

Will my hon. Friend allow me—

Mr. Rankin

I am sorry I cannot give way at this stage. My hon. Friend the Member for Blackley stated that the district auditor was a civil servant, a member of the staff of the Ministry of Health. It did seem that there was an inference in that sentence, and I think it is my duty to make it clear that the district auditor is an independent statutory officer who is not in any way controlled by the Ministry of Health.

The question of qualifications has been raised. It has been asked whether the district auditor is better qualified than the professional auditor, or the other way round. I shall not make any comparisons, but it is perfectly clear from the evidence which we had in the Joint Committee—which is available to hon. Members—because I put the questions myself, that the district auditor is a person who is not less well qualified than a professional auditor both academically and on the professional side. In addition there is this further point to be borne in mind, that the district auditor has powers which the professional auditor has not. He has powers to call for papers and documents, powers of disallowance and powers of surcharge, and these are powers which the professional auditor has not.

Mr. Jennings rose

10.30 p.m.

Mr. Rankin

I am not giving way. The professional auditor may report back to the council that appoints him, but the district auditor, by virtue of the powers vested in him as such, has power to take action. It has been shown in the Committee that that power has been exercised and exercised to a fairly large extent. I am supporting the Amendment proposed by the Minister because of these facts and I support it with the greater conviction because I opposed an earlier Amendment which he moved on the Nene Catchment Board.

Mr. P. Thorneycroft

I rise to make two short points only. The first arises out of the intervention of the right hon. Member for Linlithgow (Mr. Mathers), who asked whether it was not possible that the district auditor would be more likely to be impartial than the professional auditor? I think that is a wrong interpretation of the attitude of auditors of any kind, whether district or professional. I think the reputation of that profession for impartiality in whatever capacity they serve is so high that it should not be called in question in the House in that manner. I do not think we can weigh it one way or the other. The main purpose for which I rose was to ask the right hon. Gentleman the Home Secretary, if I could have his attention.

Mr. Ede

I have been listening to every word the hon. Gentleman has said.

Mr. Thorneycroft

I am grateful for the right hon. Gentleman's courtesy. I wished to put a question to the right hon. Gentleman, whose advice on matters of this kind we welcome on all sides of the House. Earlier we heard the right hon. Gentleman dealing in a moderate and courteous manner with the pledge given by the then Lord Privy Seal, the right hon. Member for Wakefield (Mr. Arthur Greenwood), and he made it plain that he wanted that pledge to be honoured and honoured to the full. We all accept it from the Home Secretary because we respect his view on these matters. He said we should look at these Amendments as they came along and judge whether they raised matters of principle or matters of detail.

I think the House is now entitled to hear from the Home Secretary whether he will really say that this Amendment raises a matter which goes, in the words of the pledge, "to the root of the audit." I think the right hon. Gentleman should stand up and say whether it does go to the root of the audit. Every local authority has its audit done by professional auditors. I will not reiterate the arguments already adduced, but authority after authority has been cited and power after power given where professional auditors are concerned. I have already made the point in answer to the right hon. Member for Linlithgow that there is no distinction in impartiality and professional capacity between district and professional auditors. [Interruption.] I have given a much fairer argument than the right hon. Member. Authorities can be cited on both sides. Some authorities prefer a professional auditor. Others prefer the district auditor. No doubt there are advantages on one side or the other, but the quesiton which I want to put to the Home Secretary is whether he is prepared to stand at that Despatch Box and say that it is not a decision which is clear-cut between a professional auditor and the district auditor, but whether discretion should be given or not in a matter which goes to the whole root of the order. I am prepared to give way while he does so.

Captain Marsden

I certainly oppose this Amendment. It strikes at the roots of all fairness in the life of this form of corporation of which we are talking. Hon. Members talk about councils and who should audit their accounts. This is not a council, it is a corporation. But even if they do give these figures I do not think it proves anything. Supposing everyone chose to have a professional auditor, why should the Minister have to make a regulation? Supposing they chose the district auditor, why again should the Minister have to make a regulation? Would he make a regulation if 99 per cent. made one choice, and there was only one exception? There is one private enterprise company in this country for one part of England which runs a private telephone service at a profit where a call locally costs one penny. That is an indication. Let Ministers keep that in mind as a star by which they may be guided.

In the Committee we had a lot of evidence about the qualifications of auditors, and I do not think it matters very much if we all come round to the same point and if we only remember that the importance of the point is the right of a corporation to choose whom they wish. Certain facts stuck in my mind. One was that the reports on the accounts of water boards made by professional auditors were received within two and a half months of the end of the year, while 11 months elapsed before reports were received from district auditors. These reports after 11 months gave facts which were interesting as historical documents, but those received within two and a half months gave information early enough to provide a useful guide to the previous year's experience.

But that is not the matter of primary importance, which is that the corporations should have the right to choose. The district auditors get the whole of their training, examination and experience within the Civil Service. I am not criticising them for the work they do today for the councils. They have a certain knowledge of local law, and of council law, which probably the professional auditor has not got. The district auditors really are there to protect the council. The professional auditors in a limited liability company are there to protect the shareholders. That is the angle from which they view their operations. Even if these are public utility services, one does not want them run at a considerable loss. The district auditors are in a very different position from that of the professional auditors of other companies, whose whole business is to see that their accounts are audited in accordance with the practice of companies which have to run at a profit or close. But there is much other evidence with which I will not bore the House, because I think Members are getting a bit tired. Do let us get to the main principles of this matter. We are not asking that one form of auditor should be appointed or another form of auditor, but it is that a corporation should have a choice.

It has been mentioned once or twice that there is something behind all this. I am perfectly certain there is, because on 19th February this year the decision was made to accept the petitions which allowed the choice of auditor to the corporations. A letter was sent out by the Minister's political agent to the various accountant and auditor corporations to inform them of this as if it were settled and fixed without dispute, and that it would be incorporated in the statutory order or the Bill as the case might be. Nothing was said for two months or more, when suddenly it crops up that the Minister is going against the finding of the Joint Committee, disregarding all the evidence, and all the vast expenditure on the various counsel who presented their case, and so on and so forth, and make the order.

Why? Everybody knows why. "Jobs for the boys" once more. Owing to the large amount of nationalisation and cutting down of this and that, the various district auditors are finding themselves without these higher-paid posts for which they yearn. Here is an opportunity to bring in a rule and regulation and this act of law means this particular Corporation has to have a district auditor. That will satisfy somebody and give somebody else a job, and in the absence of any evidence given to the contrary that is the reason this House must accept as the reason for bringing in the Amendment to this Bill now.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 129; Noes, 63.

Division No. 133.] AYES [10.45 p.m.
Allen, A. C. (Bosworth) Hardy, E. A. Pearson, A.
Allen, Scholefield (Crewe) Hastings, Dr. Somerville Porter, E. (Warrington)
Attewell, H. C. Henderson, Joseph (Ardwick) Porter, G. (Leeds)
Awbery, S. S. Hobson, C. R. Price, M. Philips
Bacon, Miss A. Holman, P. Proctor, W. T.
Baird, J. Holmes, H. E. (Hemsworth) Reeves, J.
Barton, C. Houghton, A. L. N. D. Reid, T. (Swindon.)
Blenkinsop, A. Hoy, J. Roberts, A.
Blyton, W. R. Hubbard, T. Robertson, J. J. (Berwick)
Braddock, Mrs. E. M. (L'pl. Exch'ge) Hudson, J. H. (Ealing, W.) Robinson, K. (St. Pancras)
Brook, D. (Halifax) Hynd, J. B. (Attercliffe) Ross, William (Kilmarnock)
Brooks, T. J. (Rothwell) Irving, W. J. (Tottenham, N.) Royle, C.
Broughton, Dr. A. D. D. Jager, Dr. S. W. (St. Pancras, S.E.) Scollan, T.
Brown, T. J. (Ince) Jenkins, R. H. Sharp, Granville
Burden, T. W. Johnston, Douglas Shawcross, C. N. (Widnes)
Callaghan, James Jones, D. T. (Hartlepool) Silkin, Rt. Hon. L.
Carmichael, James Kenyon, C. Simmons, C. J.
Collindridge, F. Kinley, J. Smith, C. (Colchester)
Collins, V J. Lang, G. Smith, S. H. (Hull, S.W.)
Colman, Miss G. M. Logan, D. G. Snow, J. W.
Cooper, G. Lyne, A. W. Sorensen, R. W.
Corlett, Dr. J McAdam, W. Soskice, Rt. Hon. Sir Frank
Daggar, G. McEntee, V. La T. Steele, T.
Davies, Edward (Burslem) McGhee, H. G. Sylvester, G. O.
Deer, G. McKay, J. (Wallsend) Taylor, H. B. (Mansfield)
Delargy, H. J. McKinley, A. S. Taylor, R. J. (Morpeth)
Dodds, N. N. Maclean, N. (Govan) Thomas, D. E. (Aberdare)
Driberg, T. E. N. McLeavy, F. Thomas, I. O. (Wrekin)
Ede, Rt. Hon, J. C. MacPherson, Malcolm (Stirling) Tomlinson, Rt. Hon. G.
Evans, S. N. (Wednesbury) Mallalieu, E. L. (Brigg) Wallace, G. D. (Chislehurst)
Ewart, R. Mann, Mrs. J. Watkins, T. E.
Fairhurst, F. Mathes's, Rt. Hon. George Wells, P. L. (Faversham)
Fletcher, E. G. M. (Islington, E.) Middleton, Mrs. L. Wheatley, Rt. Hn. J. T. (Edinb'gh, E.)
Fraser, T. (Hamilton) Mitchison, G. R. Whiteley, Rt. Hon. W.
Freeman, J. (Watford) Morley, R. Wilkes, L.
Freeman, Peter (Newport) Morris, P. (Swansea, W.) Wilkins, W. A.
Ganley, Mrs. C. S. Moyle, A. Williams, J. L. (Kelvingrove)
Gilzean, A. Neal, H. (Claycross) Williams, Ronald (Wigan)
Glanville, J. E. (Consett) Nicholls, H. R. (Stratford) Willis, E.
Grierson, E. Noel-Baker, Rt. Hon. P. J. (Derby) Woodburn, Rt. Hon. A.
Griffiths, W. D. (Moss Side) Oldfield, W. H. Yates, V. F.
Guy. W. H. Paling, Rt. Hon. Wilfred (Wentworth)
Hall, Rt. Hon. Glenvil Palmer, A. M. F. TELLERS FOR THE AYES:
Hannan, W. (Maryhill) Pargiter, G. A. Mr. Popplewell and Mr. Bowden.
Agnew, Cmdr. P. G. Hurd, A. Orr-Ewing, I. L.
Amory, D. Heathcoat Hutchison, Lt.-Cm. Clark (E'b'rgh W.) Pickthorn, K.
Baldwin, A. E Hutchison., Col. J. R. (Glasgow, C.) Raikes, H. V.
Barlow, Sir J. Jennings, R. Rayner, Brig. R.
Bossom, A. C. Joyhnson-Hicks, Hon. L. W. Renton, D.
Boyd-Carpenter, J. A. Keeling, E. H. Robinson, Roland (Blackpool, S.)
Braithwaite, Lt.-Comdr. J. G. Legge-Bourke, Maj. E. A. H. Scott, Lord W.
Bromley-Davenport, Lt.-Col. W Low, A. R. W. Spearman, A. C. M.
Buchan-Hepburn, P. G. T. Mackeson, Brig. H. R. Spence, H. R.
Butcher, H. W. McKie, J. H. (Galloway) Stoddart-Scott, Col. M.
Challen, C. Maclay, Hon. J. S. Stuart, Rt. Hon. J. (Moray)
Crookshank, Capt. Rt. Hon. H. F C. MacLeod, J. Studholme, H. G.
Digby, Simon Wingfield Macpherson, N. (Dumfries) Sutcliffe, H.
Drewe, C. Manningham-Buller, R. E. Thorneycroft, G. E. P. (Monmouth)
Elliot, Lieut.-Col. Rt. Hon. Walter Marsden, Capt. A. Thorp, Brigadier R. A. F.
Fraser, Sir I. (Lonsdale) Maude, J. C. Touche, G. C.
Gage, C. Medlicott, Brigadier F. Wakefield, Sir W. W.
Galbraith, T. G. D. (Hillhead) Mellor, Sir J. Williams, C. (Torquay)
Gates, Maj. E. E. Morrison, Rt. Hn. W. S. (Cirencester) York, C.
Grimston, R V. Mullan, Lt. C. H.
Hare, Hon J. H. (Woodbridge) Neven-Spence, Sir B TELLERS FOR THE NOES:
Hogg Hon. Q. Nicholson, G. Major Conant and Colonel Wheatley.

Further Amendments made: In page 19, leave out lines 5 to 33.

In page 22, line 5, leave out "May," and insert "July."

In page 22, leave out lines 10 and 11, and insert: The first meeting of the Board shall be the annual meeting for the first year, and the first meeting of the Board after the first day of July in any subsequent year shall be the annual meeting for that year.

In page 28, line 15, after "to," insert "66, 68 to."—[Mr. Blenkinsop.]

Motion made, and Question proposed, "That the Bill be now read the Third time."—[Mr. Blenkinsop.]

10.51 p.m.

Mr. Manningham-Buller

We have had a long discussion on this Bill, and I suppose we should be grateful to the Government for that, for after all they have given us far less time for far more important points this week. After this discussion what has been achieved? I have no doubt that the compliment paid to the chairman of the Nene Catchment Board, Mr. Dallas, may have brought a blush to his cheeks. But what has been achieved? Two things. The Minister of Health has exercised his power, and a great victory has been gained in his absence, thanks to the efforts of his Parliamentary Secretary. The victory is that the Nene Catchment Board will not be able to decide that the take from the River Nene should be reduced from 20 million to not less than 16 million gallons, but this will have to be decided by the Minister of Agriculture and the Minister of Health. That is the first great achievement. The Parliamentary Secretary has said "The interests of the catchment board may conflict with the interests of the Water Board, and we must have the two Ministers as arbitrators to take into account the interests of the catchment board and the water board." If this is done as the Bill now stands the Ministers will be acting outside the Bill.

It is clearly laid down that in deciding whether the flow shall be reduced to 16 million gallons a day they must have regard to the state of the river. All we have achieved is that instead of the Nene Catchment Board having regard to the state of the river the Minister of Agriculture and the Minister of Health are to do that. On what information are they to do that? Presumably on the information supplied by the Nene Catchment Board. That is a wonderful achievement. It is for that reason, and for one other—to prevent the water board taking powers to select auditors—that the House has been occupied for the greater part of today. As I said, the Minister of Health has won a great victory, and I think we should be grateful to him for revealing so clearly by his attitude today how easy it would have been to have provided proper time for consideration of the Iron and Steel Bill.

I should like to conclude if I might, for I have been connected with this matter almost from its inception, by wishing this water board well, by hoping that it will get into operation speedily, that it will work economically, and, in particular, that it will pay attention, and great attention to perhaps the less remunerative because they are the less populated areas within its limits to ensure that water is brought to these areas at the earliest possible moment. I hope the water board will work well and work speedily, and that its operation will not be materially delayed by the action of the Minister, which has resulted in the postponement of the order contained in this Bill.

I should perhaps say one word with regard to this being the first instance of a Bill coming before this House on the Report stage under the Statutory Instruments (Special Procedure) Act of 1945. This is the first experience we have had of it, and I must say that I do not think the grounds put forward by the Government for rejecting the recommendations of the Joint Committee in any way justify the Government's action. The arguments are entirely insufficient, and indeed I think the absence of the Minister of Health throughout the day's proceedings indicates that he has not much faith in the contentions put forward by the Parliamentary Secretary.

10.56 p.m.

Captain Marsden

I do ask hon. Members to remind themselves that we are creating a precedent today. I ask them seriously to consider their position if they are asked to serve on joint or similar committees on which possibly they will spend much time and care to present a case, where there will be much expense, and to do so sometimes for no purpose whatsoever, for if the Minister considers otherwise he will wipe out the results of their deliberations at a stroke. At the same time the House, as has happened today, will occupy much time which is badly wanted to discuss much more important Measures, like the Iron and Steel Bill. However, I do not suppose we shall divide against this Bill. Let Mid-Northamptonshire have the best supply of water as soon as possible, and let the people in that area realise that any delay will not be as the result of the action of those on this side of the House but due entirely to the Minister of Health.

10.57 p.m.

Lieut.-Colonel Elliot

We certainly do not intend to divide against the Third Reading but it would be churlish if we did not pay a tribute to the Parliamentary Secretary for his work today. It is our view that an altogether undue strain has been put upon him on this occasion, and that the continued absence from the House of both of the Ministers responsible for the Bill is a piece of grave discourtesy. We wish to thank the Home Secretary for his presence throughout the latter stages of our Debate, and for his courteous replies when a subject on which he felt himself competent to speak came up, but neither the Parliamentary Secretary nor any spokesman of the Government here could convey to the House the considered opinions of the two Ministers or make, if necessary, any concessions as a result of the arguments which were brought forward. The argument which was brought forward on the last Amendment, which was supported from both sides with a considerable amount of skill and a notable absence of bias, had simply to be ignored by the Parliamentary Secretary, who had no authority to make any concessions. In those circumstances, it is impossible to believe that the principles of Parliamentary debate are being properly carried out and if on future occasions the practice continues, it will be necessary to renew and intensify our efforts.

Question put, and agreed to.

Bill read the Third time, and passed.