HC Deb 12 June 1953 vol 516 cc605-23

Section ten of the Local Government Act, 1948 (which deals with payments by the London County Council to the councils of metropolitan boroughs), is hereby repealed.—[Mr. H. Brooke.]

Brought up, and read the First time.

Mr. Brooke

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

I do so primarily in order to voice the strong criticism that prevails in the constituency and borough which I represent against the working of the London rate equalisation scheme, which springs from Section 10 of the Local Government Act, 1948. In order that we may discuss this matter with the placidity which is usual on a Friday morning, I should like to assure the hon. Member for Clapham (Mr. Gibson), whom I see opposite, that I have no intention of pressing this matter to a Division or of forcibly putting up the rates in his constituency. Indeed, I am the first to recognise that the equalisation scheme could not be abolished without something else being put in its place. Naturally I cannot write a whole new scheme into a Private Member's Bill; therefore, the only proper way in which I can initiate a debate, I hope a short debate, on the matter, is by moving to repeal the operative Section in the 1948 Act.

This equalisation scheme has now been working in London for the past five years. To the best of my knowledge it has not been debated in the House at all in that period, so I think the Committee will agree that it is not too early to take it out to have a look at it. The Committee will recollect that the 1948 Act set up two rate equalisation schemes, entirely separate from one another. The main one applies to the whole country except London. The basis of that scheme, and indeed of the other, is that equalisation grants are made to assist local authorities whose rateable value per head of population is below the average. Outside London these equalisation grants are made from the Exchequer. London receives no Exchequer equalisation grant.

The separate London scheme provides that those boroughs whose rateable value per head of weighted population is below the average of all the boroughs shall receive assistance not from the Exchequer but from the other boroughs, known as the paying boroughs. Frankly I regard it as one of the major defects in the scheme that it is taxation without representation. Outside London it is possible for Government Departments, which are the paying bodies, to exert some control over the more extravagant ideas of local authorities, but there is no power whatever for the paying boroughs in London to exert any control or influence over the expenditure of the receiving boroughs.

I have no doubt that a freedom to spend the ratepayers' money should be in the hands of the elected representatives of the ratepayers. If, as happened recently, a certain Metropolitan borough council thinks that it is in the interests of its ratepayers that a municipal aviary should be established, well and good, if those ratepayers are to pay for it; but the ratepayers of Hampstead are not at all enamoured of the idea that, under the equalisation scheme, they should be called upon to make a contribution to the aviary of some other borough. That is one of the flaws in the scheme, that there is no really adequate safeguard against extravagant policies in the receiving boroughs qualifying for subsidy from the paying boroughs.

Let me seek to put into perspective the financial implications of the matter. When the scheme first operated in 1948, the paying boroughs, that is, those with rateable values above the average, were called upon to pay an additional rate of 1s. 8d. in the £. That has now risen to just over 2s. in the £. The receiving boroughs are this year receiving various sums ranging from 7d. in the £ up to the enormous figure of 9s. 9d. in the £. From that it will be appreciated that the operation of this scheme, while it is a technical matter with which to weary the Committee, is of extreme importance to ratepayers throughout London.

A second flaw in the scheme—I am not blaming the originators of the scheme for all this; it was a pioneering effort, and it is extremely difficult to get everything right first time—is that though the receiving boroughs, those with low rateable values per head, received according to their need, there is no provision whereby the paying boroughs are made to pay according to their means. In fact at present the average rateable value per head of population in London under the formula is, I understand, £15 14s. The borough of Hampstead, which I represent, is unlucky; it has a rateable value per head of population amounting to £16 16s. Therefore, it is only just on the wrong side, but it is charged an additional rate of 2s. in the £, exactly the same additional rate as falls upon other boroughs and other parts of London which according to the formula are three, four or seven times as rich as is Hampstead.

A third flaw is that the scheme is based on resident population, and everybody knows that resident population in various parts of London is no criterion of the services that have to be provided. This happens to operate in favour of my constituency rather than against it, but I cannot help thinking that the representatives of some of the central boroughs must feel strongly about the fact that no attention is paid to the cost of the services which they have to provide for the swarms of people who come into their boroughs to work each day.

A fourth flaw is that a rather complicated system of industrial weighting of the population was introduced into the original scheme. I hope that my hon. and learned Friend the Member for Ilford, North (Sir G. Hutchinson) will deal with that point, because I remember him as a pioneer critic of that element in the scheme five years ago when it was introduced, and his words have been proved to be absolutely true.

Mr. E. Shinwell (Easington)

Does the hon. Member think it fair to introduce this important and vital issue, which is very complicated, into a minor Bill of this character? Would it not have been better to await another and more favourable opportunity of raising it?

11.30 a.m.

Mr. Brooke

To reply to the right hon. Gentleman, I think that if this matter had concerned his constituency as it concerns mine, he would have taken the first opportunity of raising it. I assure the right hon. Gentleman and the Committee that I have no desire to take an unreasonable time on the subject. The fifth and last weakness that I want to mention is one which is not confined to London, but which is marked in London, and it is the inequalities of valuation in the different boroughs. My own borough suffers through this particularly, because it always endeavoured to operate the law of valuation properly and not to underassess the properties in its area.

I can sum up the shortcomings of the present system by one or two illustrative figures. If there were no equalisation scheme, the rates in the borough of Lambeth, which I see represented here, would be 1s. 8d. higher than the rates in Hampstead. Thanks to the equalisation scheme, the rates in Hampstead are made 1s. 6d. higher than the rates in Lambeth. It is a peculiar kind of equalisation which, instead of equalising, virtually changes the positions round. I could quote figures illustrating just the same point by comparing the borough of Hampstead with the borough of Wandsworth.

All I ask is that in his reply the Parliamentary Secretary will give an assurance to the Committee that the revision of this scheme will receive the attention of the Government. I know that at officer level much thought has been given to this complicated matter. I trust that a new scheme can soon be worked out and brought into operation to remedy these flaws which I have described, flaws which are largely agreed among all parties.

Perhaps I may specify two criteria which the new scheme ought to satisfy. I hope it will not allow all expenditure automatically to qualify for equalisation grant; I see no reason why a local authority which decides to charge particularly low rents for its council flats, and thereby incur a high rate deficiency on its housing revenue account, should, because of that policy decision, expect other metropolitan boroughs to help to finance its rent policy. I hope, too, that attention will be paid to safeguarding against the use of payments to repairs and renewals funds as a means of gaining unfair advantage from the scheme. I also trust that when the new plan is worked out it will offer direct incentives to economy and the saving of money.

The paying boroughs recognise that some kind of equalisation scheme must exist. I greatly hope that, with the help of the Government, a new scheme will be worked out which will eliminate these present defects and will secure as much good will as possible from all quarters—good will which at present certainly does not exist.

Mr. C. W. Gibson (Clapham)

I wish to oppose this Motion, although I understand that the hon. Member for Hampstead (Mr. H. Brooke) does not propose to press it. I must confess that I had a good deal of sympathy with the interjection of my right hon. Friend the Member for Easington (Mr. Shinwell), who said that this was hardly the appropriate time to introduce a subject of this size and importance. It is a pity that it has been raised in this way. There were plenty of other ways in which consideration of the London rates equalisation scheme could have been discussed without, on the face of it, jeopardising a Bill which, as far as I can judge, most people are anxious to see reach the Statute Book.

I do not want to enter into a long argument about the reason and justification for the London rates equalisation scheme. It is inevitable in any equalisation scheme that the richer boroughs will pay a little more than the poorer boroughs; that is what is intended and what has been done in London. All the hon. Member for Hampstead has done is to emphasise once more what many of us have heard many times since the days of poor law education, when members of the Poplar Borough Council went to prison over a question of rates—the objection of the richer parts of London to helping to bear the burdens of the poorer parts.

The equalisation of rates scheme was introduced in order to ease some of those burdens. It has not by any means removed all of them. I regret that the hon. Member referred to some boroughs deliberately adding to the rate charge for rents. It is quite true that there are some boroughs which, because of the economic circumstances of the people who have to live in their houses, must keep rents down to a figure lower than that which perhaps some of the people who live around Hampstead Heath could afford to pay. The alternative is for them not to have any houses, because the people would not be able to pay the higher rents.

It has always seemed to me to be quite justifiable socially for a housing authority to keep its rents down to a figure which the people for whom the houses were built can afford to pay. If that involves an additional charge on the rates, I think it is justified. I do not suggest that there is no limit to it, but I have never heard it suggested that any of the London boroughs, including the East End Boroughs which have a higher housing rate, have unfairly operated the provisions of the Housing Act.

Mr. H. Brooke

The district auditor has criticised two Metropolitan boroughs on that ground.

Mr. Gibson

That may be, but the district auditor has not the last word in these matters. It is strange to have a point of that kind made by somebody who wants to extend the bounds of freedom for local authorities—as I do, too— but the point I was trying to make was that it would be unfair to use that as an excuse or one of the excuses for abolishing or seriously altering the equalisation of rates scheme which, on the whole, has worked fairly well and has been of advantage to the poorer parts of London.

The hon. Member referred to the fact that residence is no criterion—that the number of people who live in an area is no criterion—of the amount of services which the local authority may have to provide. That is quite true. Nor is it an indication of where they produce the wealth which the boroughs enjoy. In my own borough, Lambeth, most people go out of the borough to work and to produce the wealth which is enjoyed in other boroughs and which adds to the value of land and property in those boroughs.

Lieut.-Colonel Marcos Lipton (Brixton)

Some even work in Hampstead.

Mr. Gibson

It seems to me that there is nothing wrong in principle in a scheme which provides that part of the cost of maintaining the social services—and I do not want to go into them in detail today—should be borne by the richer boroughs in which the greater part of the wealth of London exists and is produced. I therefore hope that the Committee, having heard the points raised, will pass to the next business and allow us to complete the Local Government (Miscellaneous Provisions) Bill today.

Sir P. Spens

I want to be very brief, but I think it is highly desirable that this House should have an opportunity of discussing this subject at the present time, because the 1948 scheme has been working for five years and has been referred to a Committee for consideration. I represent a borough which I suppose is looked upon by many people as a rich borough, although in fact it consists of two parts. A great deal of the borough of Kensington is extremely poor and requires as much help as the richer part of the borough can possibly give it. We happen to be above the line and therefore have to subscribe a very substantial amount each year to the poorer boroughs.

I want to make it clear that we in Kensington believe that there must be an equalisation of rates scheme for London. There is no question about that. Our complaint is that we want the legislation under which the obligation to pay is imposed on the paying boroughs revised so that the boroughs pay a much more fair and equitable proportion than some of them pay today.

The Kensington Borough Council, which has an energetic and active Labour minority, unanimously took the view after discussion on Tuesday of this week that it is desirable that the scheme should be revised as soon as possible. Their complaint is not against the richer boroughs having to make a payment for the poorer boroughs. I, like the hon. Member for Clapham (Mr. Gibson), agree that we cannot cut up social services into parts: that is impossible in London. I think that a much bigger question will arise in future between London and the suburbs, but let us leave that for the time being.

What we want is that the amount which is to be paid shall be found in what we think would be a much fairer manner than that in which it is found today. The burden on Kensington rate-payers is far greater for this purpose than the corresponding burden on the ratepayers in some of the neighbouring and richer boroughs. We want that aspect of the scheme revised as soon as possible.

On the other point, we have doubts whether the provisions to prevent boroughs from incurring expenses largely at the cost of the richer boroughs are sufficient. It is not unfair to say that generally the provisions have been very fairly worked, but there have been exceptions. That is the other point on which we think the scheme should be revised.

There is one question I wish to ask. Assuming that the investigating Committee suggests alterations in the 1948 scheme, will the House of Commons have any opportunity to discuss a proposed new scheme before it is put into operation? An assurance on that would also meet the point made by the right hon. Gentleman the Member for Easington (Mr. Shinwell), and that would be a more appropriate occasion to discuss the matter at greater length.

Mr. Somerville Hastings (Barking)

I wish to deal with two points. But first I should like to apologise to the hon. Member for Hampstead (Mr. H. Brooke) for not being present to hear the whole of his speech. A point was made by the hon. Member for Hampstead and his hon. and learned Friend the Member for Kensington, South (Sir P. Spens) with which I am sure every hon. Member must agree. There must be some scheme of equalisation of rates in the metropolis. If this is so, surely we ought to have the new scheme before the House of Commons before the present arrangement is abolished. That is only reasonable. Therefore, to introduce this new Clause to abolish all systems of equalisation of rates and to leave the whole matter in vacuo seems absolutely absurd.

Sir P. Spens

It was made clear by my hon. Friend the Member for Hampstead (Mr. H. Brooke) that we merely put down the new Clause in this form so that we could have a debate on the matter at this stage. We have no intention of pressing it.

11.45 a.m.

Mr. Hastings

We can only judge by what is on the Order Paper. When a new Clause is proposed one imagines that those who propose it wish it to be accepted, although they may think it judicious to withdraw it later.

My second point is that we cannot divide London into parts. The hon. and learned Member for Kensington, South said that in his borough there were rich and poor parts. For the benefit of Kensington all those parts must have the same administration. Not only can we not separate the different parts of Kensington but we cannot separate Kensington from Bethnal Green. People who live in Bethnal Green may come to work in Kensington. If the health services are not as good in Bethnal Green as they are in Kensington the people may carry disease contracted in Bethnal Green to Kensington. What applies to health applies to many other services as well, perhaps in a lesser degree. Therefore, I say that we cannot divide London into watertight compartments. On that basis, some form of equalisation of rates is essential.

Lieut.-Colonel Walter Elliot (Glasgow, Kelvingrove)

As one who has had responsibility as Minister of Health and also as one who took some part in the debates on the Measure under which the equalisation scheme was set up, it might be appropriate for me to make some observations on this occasion. I do not think that I should have done so but for the obvious impatience of the right hon. Gentleman the Member for Easington (Mr. Shinwell) that the matter should be raised at all. His interjection seemed entirely inappropriate.

My hon. Friend the Member for Hampstead (Mr. H. Brooke) with perfect propriety has taken the Parliamentary opportunity of raising a matter of great interest to his constituents, to the whole of the capital city and to the whole of the country. It is common knowledge that the exchange equalisation scheme throughout the country is working out in the most anomalous way, that it is ripe for investigation and that it is not in any way fulfilling the hopes held out by those who introduced it. This is not merely a matter between rich and poor but between city and city which in many cases requires urgent and immediate investigation.

Naturally, I do not intend to go into that aspect at length on this occasion, except to say that the city which I represent has sent forward from every quarter, both Conservative and Labour, the most urgent representations requiring the early examination of the equalisation scheme which is working out with startling inefficiency and startling injustice.

Mr. G. R. Mitchison (Kettering)

On a point of order. Is Glasgow in London?

Lieut.-Colonel Elliot

The hon. and learned Gentleman is a little anxious to limit debate. I have no intention of doing more than bring in the point that it is not merely in this respect but in other respects that examination is needed. It comes a little ill from one who is a prominent and prospective landowner to suggest that Scotland should not be brought in even as an illustration.

This scheme is London is a very big matter. The hon. Member for Clapham (Mr. Gibson) spoke of the old days when the equalisation of Poor Law charges led to certain of the Poplar representatives going to gaol. I remember well how some of the mayors of the London boroughs pursued Mr. Lloyd George, as he then was, to Inverness in buses, demanding that some equalisation take place. That equalisation has taken place.

The hon. Member for Barking (Mr. Hastings) seemed to me not to stress fully the fact that a great number of the services of London are already common services. They are L.C.C. services, The hon. Gentleman spoke of the domiciliary health service, which I think represents only a small sector of the people in which a great deal of equalisation has already taken place. There are, however, startling differences, and they are differences which require examination. I do not think anyone would deny that, and there could be no more appropriate occasion and time for discussing it, because the House is making good progress with the business before it. [Interruption.] The right hon. Gentleman the Member for Easington cannot have been here, or he cannot be aware that we have already dealt with and disposed of the previous Measures, and we are now engaged on this one.

The fact that hon. Members should take a Parliamentary opportunity provided by a Bill dealing with the powers of local authorities, and designed to amend the law relating to local authorities, in order to submit a proposal which raises a matter of great interest and importance is surely justifiable from every point of view. It is not in any way holding up the business, because, as my hon. Friend has said, we have no intention of dividing. The fact that a Parliamentary opportunity of importance should have been seized by those who are interested in the workings of Parliament as it affects their constituencies is surely not a principle about which any hon. Member, and particularly any right hon. Member, should possibly complain.

The differences in questions of local government in London, split up as it is, inevitably, into the great autonomous units of the boroughs, and, overriding them, the central authority of the County of London, has always been an adminisrative problem of very great interest and importance. It has puzzled this House for many years, but a reasonable solution has been brought about by combining the autonomy of the boroughs not only with the overriding authority of the L.C.C. but with these inter-changes of finance of which this is an example.

The whole thing is complicated just now by the fact that it has not been possible to carry through the re-assessments, and re-assessment is now held up for a considerable time. All this is making it all the more desirable that the working of the equalisation scheme between the various portions of London and, indeed, between the various portions of the country, should be examined by the Government at an early date and should be reported on, because this matter will certainly have to be reviewed, and the earliest possible opportunity of instituting that review should certainly be taken.

Mr. Shinwell

The right hon. and gallant Member for Kelvingrove (Lieut.-Colonel Elliot) gave as the reason for his intervention my apparent impatience at the slow progress being made.

Lieut.-Colonel Elliot

Not with the slow progress being made, but with interventions by anybody on this side of the Committee at all.

Mr. Shinwell

I repeat that that was the reason the right hon. and gallant Gentleman intervened; that is what he said. If it had not been, presumably, for my apparent impatience, he would not have intervened. I hardly think that his contribution really mattered, but I take him up on the point he made.

The right hon. and gallant Gentleman said that this is a most important issue. I agree, but if it is so important, surely it would have been possible for the hon. Gentleman opposite, or any other hon. Member on the other side, and even the right hon. and gallant Gentleman himself, in the course of the Ballot for Notices of Motion, to have produced a Motion, or even a Bill, in order to deal with this matter, or even to have used their undoubted influence behind the scenes with the Government in order to bring this important matter forward. There was no reason why it should be interposed in the debate on this very minor local government Bill.

It is quite obvious that, even on the merits of the case, from what has been said by hon. Members opposite, that one of the major defects in the existing equalisation scheme—and, first of all, let it be noted that there were a great many other defects and much more serious defects before the scheme was put into operation, as we know——

Sir Geoffrey Hutchinson (Ilford, North)

The right hon. Gentleman is surely overlooking the fact that, under the Local Government Act of 1948, London lost the block grant altogether, and that the loss of that grant will alone make this necessary.

Mr. Shinwell

That seems to me to be irrelevant to the point before the Committee. The right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) tried to camouflage the issue by pointing to the difficulties that presented themselves to the richer boroughs which would be placed at a disadvantage because of the way in which the scheme operated, but, in fact, all that the right hon. and learned Gentleman desires, all that the hon. Member who moved the new Clause desires—apparently supported by the right hon. and gallant Gentleman who represents a Glasgow constituency and who is not concerned primarily with London—is to relieve some of the alleged burdens which they say fall on the richer boroughs. On whose shoulders are they to fall? They are to fall on the poorer boroughs, and what is the use of camouflaging it?

Sir P. Spens

I tried to make it quite clear that my complaint was of the burdens between the richer boroughs. There was no suggestion that less money should be given to the poorer boroughs, but the allocation of the burden between the richer boroughs under the existing scheme is, in the opinion of people in Kensington, unfair and improper.

Mr. Shinwell

That may be, but all that the right hon. and learned Gentleman is seeking to do is to pass the buck to somebody else, and, in the end, he would prefer that the so-called poorer boroughs should have placed on their shoulders a larger burden than now exists. That is the issue. This is a very important matter, and it is a vital issue for London. I should have thought that hon. Members opposite would have taken some more appropriate opportunity of raising the matter rather than by holding up business which concerns a very large number of people in the provinces, which does not concern the London area at all, but which concerns my constituency, the miners and their wives and children, and I do not want to see that matter being held up.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Ernest Marples)

Perhaps it would be for the convenience of the Committee if I were to intervene now and try to act as a sedative in order that the hon. and learned Member for Kettering (Mr. Mitchison) may have more chance of getting his Bill through. I will not follow the right hon. Gentleman the Member for Easington (Mr. Shinwell), but, if I say to him that I prefer the language of reason to the arguments of passion, I am sure that he will not take it amiss.

I think it should be explained that, under Section 10 of the Local Government Act, 1948, provision is made for making payments by the London County Council to Metropolitan borough councils whose rateable values are less than a certain standard rateable value, and the effect of the scheme, therefore, is that the richer boroughs contribute to the cost of local services in the poorer boroughs, and that is right and proper in principle. This scheme is broadly parallel to the system of equalisation grants to county councils and county borough councils.

I understand that my hon. Friend the Member for Hampstead (Mr. Brooke) had no intention of proposing, either in principle or in detail, the abolition of the system of the richer boroughs helping the poorer boroughs, but that he was solely concerned with criticising the effects of its present working and with remedying its existing defects. My hon. Friends who support the new Clause will forgive me if I do not deal in detail with the criticisms they made, because that would only prolong the debate and, as the new Clause is not to be divided upon, it would not help the proceedings on this Bill a great deal.

12 noon.

The Ministry are aware that criticisms have been made of this scheme, criticisms which are claimed to be valid and justifiable, and the working of the scheme is at present under investigation as part of the review of the Exchequer equalisation grants which is now taking place. This review has been undertaken by a Committee appointed by the Minister with representatives nominated by the London County Council and by the Metropolitan Boroughs Standing Joint Committee. It is not possible at the present moment to give any indication of the results of the investigation, but, if any changes are found to be necessary in the London scheme, they will be made at the same time as any changes that may be decided upon in the scheme for Exchequer equalisation grants in the country as a whole.

Mr. Gibson

Can the hon. Gentleman say whether the House will have an opportunity of discussing this scheme before it comes into operation?

Mr. Marples

That, surely, will depend on what the new legislation may provide. I would remind the hon. Gentleman that the existing London scheme, under Section 10 of the 1948 Act, is not subject to any Parliamentary control. But, if I interpret, and sense, as it were, the feeling of the House, I think it would be the wish of hon. Members on both sides that, if possible, some sort of Parliamentary discussion on the matter should take place if and when any action is proposed by the Government. I think I am right in saying that, but, if I am not, perhaps some hon. Gentleman will correct me.

Sir P. Spens

Surely a matter of this enormous importance, which is going to be coupled with the alteration of the country scheme, is one which this House ought to discuss before it becomes operative. I do press that point.

Mr. Marples

I think the best thing for me to do is, first, to refer what has been said in this debate to my right hon. Friend so that he may take into account the views expressed by hon. Members on both sides of the House, and, secondly, to convey to my right hon. Friend the desire of hon. Members on all sides to have an opportunity of discussing the matter in Parliament at the appropriate time.

Perhaps it would shorten the debate if I were to suggest that any hon. Members who wish to put forward points for consideration should write in instead of making lengthy contributions now, because it would help the hon. and learned Gentleman with his Bill. On the other hand, it would be quite improper for me to suggest that any hon. Member who wished to do so should not speak on this Clause. But there is a lot on the Order Paper, and the right hon. Gentleman looked a little agitated from time to time, so it occurred to me that in order to assist him it would be better to keep the debate as short as possible. If anybody has any points they would like to put forward I shall be delighted to hear from them and will see that they are considered.

Sir G. Hutchinson

I shall not detain the Committee for many moments because I have no wish to add to the anxieties of the hon. and learned Gentleman responsible for this Bill. I do not regard this Bill as a very minor matter; I regard it as a Measure of great importance, and I think the House is very grateful to the hon. and learned Gentleman for having taken this opportunity of raising so many matters of such considerable importance. I hope I shall not be out of order, or unduly taking up the time of the Committee, if I say how glad we all were to see that the services of the hon. and learned Gentleman to this House and elsewhere were so suitably recognised the other day.

The reason for my intervention is that it so happens, as my hon. Friend the Member for Hampstead (Mr. H. Brooke) recalled, that at the time when this scheme was adopted I was a member of the Finance Committee of the London County Council. At that time I ventured to make certain criticisms of the scheme in the form in which the Council adopted it. There is very little satisfaction in the situation of a prophet, but I hope it justifies me in making one or two observations this morning, particularly as this scheme is now to be reviewed. I hope that something I may say will perhaps be of value to those who are entrusted with this task.

It always seemed to me that the outstanding weakness of this scheme was the fact that those who prepared it attached much too much importance to differences in rate poundages. The scheme was primarily concerned to equalise the rate poundage in the different Metropolitan boroughs. One of the consequences of that was that to a very large extent it disregarded what is the true measure of the burden of the rates, which is the sum in rates raised per head of the population.

The result of that defect, or so it has always seemed to me, was that the scheme proved unduly favourable to those boroughs which had a high rate poundage and whose rateable value was composed largely of commercial and industrial properties, and unfavourable to those boroughs whose rateable value was composed to a greater extent of residential hereditaments. The result was that this scheme placed a burden, which proved to be quite unfair, on those boroughs which had a residential rather than an industrial character.

When I speak of boroughs with a residential character, I am not thinking only of Hampstead, or, indeed, of Kensington. Wandsworth is a borough with a very large residential population, Islington is a borough with a very large number of residential hereditaments, and I think that Lambeth has a very large proportion of residential properties. It always seemed to me, and I remember saying it at the time, that this scheme would work very unfairly in those boroughs which had a large amount of residential property.

This result arose primarily because those who prepared the scheme attached far too much importance to the equalisation of the rate poundage and disregarded the real burden of the rates. Of course, differences in rate poundage have become of much greater significance today than they were in 1948, because, as my right hon. and learned Friend reminded the House, when this scheme was prepared it was expected that within two or three years' time a substantial measure of uniformity in valuation would have been established, not only in the country as a whole, but in London as well.

Mr. James MacColl (Widnes)

Has the hon. and learned Gentleman any evidence at all to prove that valuations in London at the present moment are not pretty uniform?

Sir G. Hutchinson

I thought that the hon. Gentleman was very familiar with conditions in London. I think it is common ground among all who know London conditions that there are great differences in valuations as between one part of London and another. I did not think that any hon. Member, particularly one with such knowledge of London as the hon. Gentleman opposite, would challenge that proposition.

Mr. MacColl

It is because I have a fair knowledge of London that I challenge it. I am advised that nowadays there is no very alarming difference between valuations in one part of the county and another. The hon. and learned Gentleman, characteristically, if I may say so, is 20 years behind the times.

Sir G. Hutchinson

The hon. Gentleman overlooks the fact that it was only in 1948 that the Government which he supported introduced legislation for the express purpose of establishing a greater measure of uniformity, not only in the country as a whole, but in London as well. At that time it was not considered necessary to omit London from these proposals. That being so, if the hon. Member says that I am a little out of date in my ideas, I think he ought to apply the same criticism to some of his right hon. Friends who were responsible for that Measure.

Uniformity in rateable value was much nearer realisation in 1948, when this scheme was made, than it is today. Rateable value per head is the major criterion in distribution of the grant under this scheme. Now revaluation has been postponed. The earliest date when the new valuation lists can come into effect will, I suppose, be 1956. Boroughs which have benefited by the fact that their rateable value was lower than that of their neighbours are today receiving a greater sum in grants than they could have anticipated at the time when the scheme was made. I should have thought the prospect that these grants will now continue until 1956, was in itself a good reason for reviewing the scheme at the present time.

I would not regard this matter as a contest between the richer and the poorer boroughs. Indeed, much of the force of the argument used by the hon. Member for Clapham (Mr. Gibson) has exhausted itself by the changes made in recent years in London government. In London the major social services today are not borough services but London County Council services. Education has always been a county council service; to that have been added welfare services and, in more recent years, the domiciliary health services.

The contest between what are called the poorer and the richer boroughs is now to a very large extent based upon what I may call the local expenditure of the borough and not upon expenditure on the social services. This is one of the factors which abundantly justifies my hon. Friend in raising this matter today, and I am sure that the House will be grateful to him for the opportunity of this short debate on this very useful matter.

Mr. H. Brooke

I am grateful to my hon. and right hon. Friends for the support they have given to me, and I am grateful particularly to the Parliamentary Secretary for his assurance that revision of this scheme will receive the attention of the Government. I think that on all sides of the Committee we welcome his promise that any new scheme will be made subject to Parliamentary control, which the present scheme should be and is not. Having said that——

Mr. Marples

I did not make that promise. I was careful to say that I would convey to my right hon. Friend the feeling on all sides of the Committee that hon. Members would like to have this matter discussed in Parliament and that the question whether it was discussed would depend upon the legislation which was introduced. The feeling of the Committee will be borne in mind, but I am not in a position to commit my right hon. Friend in such a way.

Mr. Brooke

The Parliamentary Secretary has detected my jumping the gun a bit, but that reflects the confidence we have in his right hon. Friend. Having said that, I will fulfil my promise, and beg to ask leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

Bill reported without amendment; as amended (in the Standing Committee), considered.