RURAL WATER SUPPLIES AND SEWERAGE BILL

HC Deb 22 February 1955 vol 537 cc1186-224

Order for Second Reading read.

9.55 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes)

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

The purpose of this small Bill is to change the form in which the Exchequer grants may be paid towards local authorities' expenditure on rural water supplies. Those grants are paid under the Rural Water Supplies and Sewerage Act, 1944. This is primarily an internal financial transaction, but I am aware that a great many hon. Members are extremely interested in these grants. They govern the speed at which we can bring piped water and sewerage to the rural areas still without them. I want, therefore, to try to relate the specific provisions of the Bill to the wider subject of these grants. I think that that may give the House a clearer picture.

Hon. Members will be aware that the Act of 1944, amended by the Act of 1951, authorised grants—of up to £45 million for England and Wales and of up to £20 million for Scotland—to rural localities to assist in water and sewerage schemes. I think that perhaps I should summarise progress since the passing of the 1944 Act.

Of this total we have paid out £16 million in England and Wales. We have promised for schemes in progress £10 million in England and Wales, and we have promised for schemes in an advanced state of preparation, that is to say schemes approved in principle, £9.5 million in England and Wales. That makes a total of £35.5 million, leaving a balance unpledged, as it were, of £9.5 million of the original £45 million. For Scotland, the equivalent figures in these three categories are £5.5 million, £6.3 million, and £3.4 million, a total of £15.2 million of the total of £20 million.

In all, these grants have enabled us to complete schemes worth £22 million in England and Wales and £4.8 million in Scotland. We have in progress at this moment £61 million worth of work in England and Wales and £14.8 million worth in Scotland. I apologise to the House for giving so many statistics, but these are an important piece of background to the Bill.

I have said that we have paid or pledged a total of £35.5 million in England and Wales and £15.2 million in Scotland. That brings me to the point of the Bill. Normally these grants are being paid out each year by lump sums, and substantial lumps. Sometimes a single payment is made when the work is finished. In other cases payment is made as the work proceeds. It varies, but, of course, in every case it is capital which is paid, either in a lump or a series of payments. The intention of the Bill is that for future schemes payment will normally be made by a series of equal instalments, and those instalments will be paid half-yearly, and usually spread over 30 years.

In other words, this capital expenditure will, generally speaking, be amortised, and only very small grants will be paid by lump sum. By "very small" I mean about £1,000 or less. Where the grants have already been promised but not paid or paid in full when the Bill is in force, the balance will be paid by instalments.

The effect and advantage of this is to bring water supplies and sewerage in line with most of the other grant-aided services. Local authorities who undertake capital work normally finance it by borrowing. They meet the cost by way of loan charges each year, and an Exchequer grant is usually paid annually or half-yearly as well. Housing and education are examples, and so are new towns, although those are not directly financed by the local authority.

In the case of water and sewerage we have made a practice of paying lump sums since the 1934 Act, which provided the first Exchequer grant for these services. Under that Act, not more than £1 million was provided for England, Wales and Scotland. In the financial year 1955–56, these grants, in a lump sum, would account for about £8 million, or £6 million for England and Wales and £2 million for Scotland. Now that they have reached this scale we feel that they should be dealt with on the same basis as most other grants.

The proposal comes forward now because the point was raised during a thorough review of Government expenditure which was carried out last year. If the Bill becomes law by the end of March, the change to instalments can take place at once. The amount to be included then in next year's Budget would be about £1.5 million. It means, of course, that in amortising the capital sum we entail a rate of interest. The ultimate cost, therefore, will be higher. It is difficult to give exact figures but, as the Financial and Explanatory Memorandum to the Bill points out, over 30 to 35 years the additional total may be about £19 million for England and Wales and £8½ million for Scotland.

Hon. Members may wish to know exactly how that works out. Perhaps a simple example may help. Out of the £45 million for England and Wales we have a balance outstanding at the end of the financial year of £27,600,000. On that—instead of capital payments—there will be half-yearly payments of principal and interest combined over 30 years. Half-yearly payments on £100 at 3¾ per cent. over 30 years amount to £2 15s. 9¾d., and the aggregate of such payments over 30 years is £167 8s. Therefore the increase is £67 8s. for every £100. It follows that on £27,600,000 it is £18,600,000.

Again, this arrangement will in no way alter the present basis for giving or determining the grant. I think that that should be stressed. No local authority will receive less or more as a result of the Bill. The principle will remain exactly the same.

Commander J. W. Maitland (Horncastle)

I am not clear whether the local authority is consulted. It may, and I am advised that it can conceivably be, the wish of the local authority to continue to have the grant in a lump sum. The Bill does not make it absolutely clear whether the local authority is consulted or not, or whether the Minister has absolute power and is the only person to determine what shall be done.

Mr. Deedes

I think that the Bill provides that sums may be paid by lump sum or by instalments. The point is that there are certain contracts for which it is convenient for a local authority to pay by instalments. Where those contracts exist, and where it is convenient, instalments may continue to be paid.

Commander Maitland

Therefore, the local authority will have a say in whether payment is by instalment or by lump sum.

Mr. Deedes

Payment will be made according to the contracts made.

Mr. George Brown (Belper)

Clause 1 (2) of the Bill states that … the said Minister or, as the case may be, the Secretary of State may, if he thinks fit, substitute for any payment or payments remaining to be paid … these revenue payments. Therefore, it is not a question of whether it is convenient to the undertaking but a question of whether the Minister thinks fit. I do not think that the hon. Gentleman has met the point put by his hon. and gallant Friend the Member for Horncastle (Commander Maitland).

Mr. Deedes

The object here is to provide that where it is customary for the scheme to be paid for by a series of instalments it will be possible under the Bill to continue to do so. I think that meets the point.

Commander Maitland

What about new grants? I understand about grants made previously, but what about new enterprises?

Mr. Deedes

The new grants are covered. The local authority receiving this money may, where it is paying by instalments, receive the money by instalments.

Mr. Brown

It is not so.

Mr. Deedes

Perhaps this will become a little clearer as we proceed.

Mr. Brown

Well.

Mr. Deedes

I think it may.

The Act of 1944 allowed great flexibility in determining what the grant to each local authority should be. It is the intention that this amount should continue to be paid out in relation to the needs of a particular area. That is how we have always tried to implement it, and that is how we are going to implement it. The Bill makes no difference at all to that.

The Act of 1944 also provides that where the Government make a grant the county council should likewise make a grant. That will continue as before. The common arrangement is for the county council and the local district authority to share evenly between them the balance to be paid. That remains unchanged. It is also important to stress that this change to instalments will not reduce the size of the programme which can be undertaken.

I have said that the grants were authorised to a ceiling of £45 million for England and Wales and £20 million for Scotland. I have also explained that the grants by instalment will cost more, because the aggregate of instalments will be greater than the corresponding capital sum. This is rather an important point. Only the capital sum will continue to count against the permitted total of £45 million. This is the effect of Clause 1 (3), which also provides how the capital sum is to be calculated.

Hon. Members, certainly those representing rural areas, who have been patiently listening will really be concerned with one question only, apart from the explanation of the Bill: What effect will the Bill have on our progress towards furnishing all our rural areas with piped water and sewerage? In general terms, I can give an encouraging answer there.

Mr. Brown

No difference at all.

Mr. Deedes

For many years the progress in this respect was kept down by difficulties over labour and materials. These difficulties are no longer the cause of delay but, because of the taxpayers' stake, we have had to set some limit on the number of schemes which can begin or claim grant in each financial year. That is the reason why we have to ask local authorities more often than we like, or more often than hon. Members on both sides of the House like, to be patient a little longer when they request us to authorise water and sewerage schemes which they urgently wish to begin.

One effect of the Bill will be to give us more flexibility in making financial arrangements with the local authorities. To that extent it should ease, not hinder, our progress. I am glad to say that our expenditure shows an upward curve. In 1953–54, the value of schemes attracting grant authorised for England and Wales was £12 million. In the current year the figure was £14 million for England and Wales, and in the next financial year, beginning 1st April this year, it will be £17 million. That is a higher total than in any previous year. We wish to maintain that progress, and in so far as this Bill assists us to do so, I commend it to the House.

10.10 p.m.

Mr. George Brown (Belper)

The Parliamentary Secretary to the Ministry of Housing and Local Government did a pretty good job. This Bill has nothing whatever to do with him or his Ministry. It has nothing to do with the business of providing rural water supplies or sewerage. This is a Bill designed by the Chancellor of the Exchequer, who, so far as he can, wishes to cut immediate payments in what may well be either an Election year or a pre-Election year.

The Bill should have been moved by the Financial Secretary to the Treasury, who I see modestly sitting farther along the Government Front Bench. It has nothing to do with the wretched Parliamentary Secretary to the Ministry of Housing and Local Government, who has done his best with a brief which he understood no more than we do. And why should he? Had he been capable of understanding his brief he would be the Financial Secretary to the Treasury, and the hon. Gentleman who is the Financial Secretary would be the Parliamentary Secretary to the Ministry of Housing and Local Government.

The facts of the matter are that this Bill will not advance rural water supplies or rural sewerage by a foot. All it will do will be to increase the amount the taxpayer will have to pay over the next 30 or 35 years for the same amount of rural water supplies. The increase in payments by the taxpayer amounts to £19½ million. But the Chancellor, who is anxious to get all the money he can in order to create an electoral climate, will have in hand what otherwise he would have had to pay out in lump sum payments. Those of us representing the taxpayer well know that the taxpayer will pay it all out in extra interest payments over the next 30 or 35 years.

The Parliamentary Secretary was plausible, attractive, and nice, but he could not hide the essential fact that the taxpayer and his children will now be forced to pay increased sums amounting to £19 million so that the Chancellor shall have a few mean, miserable pounds to hand out in tax reliefs this year. This is one of the nastiest, dirtiest, meanest little Bills—[Hon. Members: "Oh."]—yes, indeed, that the Treasury has ever forced upon another Department.

I have said before in this House that I have been not only a Minister, but a member of the Parliamentary Secretaries' union. Whenever a Parliamentary Secretary is put up by himself both to advocate a Bill and to answer the debate, we may be pretty sure that there is something rotten about the Measure, otherwise he would not be given the job. Were it something to boast about, the Minister would do it and not the Parliamentary Secretary. It is the same in all parties. This is something which has nothing to do with the Ministry of Housing and Local Government and nothing to do with the provision of water supplies and sewerage. It is a mean little Measure by which the moneylenders in the City of London—[Hon. Members: "Oh."]—yes. One of the reasons why the South Norfolk by-election cut the Tory majority from 3,500 to 800 was that the hon. Gentlemen opposite who should represent rural interests do not do so. The Bill will make the taxpayers pay for what the rural areas are not going to get.

There are still far too many undertakings providing water and sewerage to our local authority areas. In Wales, Derbyshire and Staffordshire that is the fundamental problem, and the Bill does nothing to remedy it. It does not take the matter a step further from where we left it in the early 1940's. We have now had the joys, advantages and benefits of a somewhat arrogant and somewhat cocky majority of Conservatives, who can be trusted to laugh whenever we discuss matters which are important in relation to the living conditions of ordinary people. They laugh scornfully; they are so much better than we are, and are quite prepared to say "Hear, near" to that proposition. They are so modest, in addition to their other qualities.

Having conferred upon us all these benefits and advantages, they do not take the fundamental question a single step further than we left it. The real problem to which the hon. Member should have directed his statement and did not—and I hope that he will deal with it in his second speech—is that when a local authority embarks upon a scheme it goes first to the Ministry and says, "Please, what grant will you give us?" As the hon. Member said, the major Act left a very great deal of flexibility with the Ministry. The local authority having gone to the Ministry, the Ministry argues about the matter for the devil of a long time.

There are two rural districts in my constituency—Repton and Belper—and they are pretty good, too. Neither is Socialist-controlled, so I am paying a sincere tribute to the party opposite. [Interruption.] I do beg hon. Members opposite to try to rise above this practising for the hustings. When they are in the House of Commons discussing the expenditure of £20 million of the tax papers' money, they might get out of the habit of trying out their speeches for the next hustings.

As I said, the two rural district councils in my constituency have a good record. I pay tribute to Conservatives when they are good, as well as to Socialists when they are good. I do not try to play party politics on every occassion. Perhaps that is why I was elected to represent a seat which for 22 years had returned a Conservative. Hon. Members opposite might think about that.

When a local authority asks the Ministry for a grant the Ministry argues about it for a long time and then makes a grant on the basis of the known costs when the local authority first thought about undertaking the scheme. The real problem is concerned not with this business of spreading the payment out over 30 or 35 years, but with the fact that the costs of the scheme tend to rise between the time when the local authority first asks the Ministry for a grant and when it is able to get on with the job as a result of getting a firm grant from the Ministry and permission to proceed to tender.

If the hon. Gentleman is really concerned with saving the local authorities' money, we do not need this Bill. We want an assurance from him either that the Ministry will get on a lot quicker about deciding the proportion of the grant, so that the local authorities do not have to spend so much time in arguing, or that the Ministry will make this grant, when it is decided to make it, on the percentage applicable to the costs when the scheme is carried out and not to the costs when it is being thought about.

If the intention of this Administration—goodness knows whether that is the right word or not to apply to this lot—is to encourage more water and sewerage supplies, then they ought to address themselves to trying to make these grants apply to the costs of doing the work when it is undertaken. If I am wrong, let the Parliamentary Secretary say so, but I do not think I am; that is the problem which this Bill does not tackle one bit. That is the situation in which many local authorities find themselves under this Ministry and this Administration.

There are still far too many of our rural houses without a piped water supply. Do not let us run away with a silly idea of what that means. To us who mostly have to live in the towns—otherwise, we could not attend here—a piped water supply means water that comes through a pipe to a tap in the sink. I am told that, as far as Ministry statistics are concerned, a piped water supply means water that comes to a communal tap at the end of the lane. That is a piped water supply, according to the Ministry; so that to say, as I am told is the case, that 20 per cent. of the population in the rural areas is without a piped water supply means that 20 per cent. of the rural population is without water coming to the end of the lane to the communal tap. But how high, I ask the Parliamentary Secretary, is the percentage of rural houses without water coming into the house? It is much higher, and this is a very serious problem indeed.

We all talk about the drift from the land. Sometimes we exaggerate it; sometimes we talk about it when we all know that there has been a big increase in mechanisation on the land, and that, therefore, we need fewer men. Even when we make allowances for all the qualifications, the fact remains that under this Government we are losing people from the land far faster than we can easily contemplate.

I happen to hold the view that it is not so much the question of wages that determines this question, not so much working conditions, but that living conditions in the countryside determine it far more than either wages or working conditions. If we want to get people working on the land, we have got to move towards giving them living and social conditions which approximate what they can get elsewhere. A woman will determine whether a man works on the land or not, far more than the man himself determines it.

This Government, if it desires to receive some cheers in the Election year or pre-Election year, really ought to set itself the task of finding out how to provide water and sewerage supplies in the rural areas quicker than we could do it. I repeat that the Bill does not attack the cause of the delay or address itself to the reason for the slow movement.

This is such a silly little Bill to bring to us. The Parliamentary Secretary knows as well as I do, because he represents a rural constituency as I do, that one of the problems is that, as the law now stands, we can only grant aid at a really high rate for a water supply to farm cottages provided that the supply is incidental to the farm supply. That means that the cottages for farm workers are incidental to the cowsheds for the cows. I find myself more busily occupied trying to work out ways and means of fitting water supply for cottages into water supply for the cows in order to get a Ministry of Agriculture grant than with anything else.

This is really fantastic. The Parliamentary Secretary might very well have ensured that his advisers directed their Bill to that point instead of being content to bring forward a Bill on behalf of the Treasury. We ought to recognise that direct connections to cottages matter as much as incidental connections as byproducts to connections to cowsheds.

On 23rd March, 1954, a member of the Inland Water Survey Committee, Mr. Ionides, wrote a letter to "The Times" in which he said that the Ministry's response to the Report of the Inland Water Survey Committee was to suppress the Committee's report, close down the Inland Water Survey, disband its staff and inform the members of the Advisory Committee that it would be called together only if there should be any urgent business for their consideration! That does not bespeak a Government really concerned with rural water supplies.

Mr. Garner Evans (Denbigh)

Oh.

Mr. Brown

Let the hon. Gentleman defend it if he can.

Mr. Evans

How long did that committee take to report on those grandiose schemes? Was it not possible that if the committee were shut down we might get on with local water supplies that are really worth while?

Mr. Brown

Is that not typical of a Tory Government to say, "If we shut down the local people so that all the strings are in the hands of the people in Whitehall, we shall be able to do it better"?

Mr. Evans

The right hon. Gentleman is either incapable of understanding what I said or is unwilling to understand. I said that these were grandiose schemes put up from a central board and that I was anxious to get on with the job with local people who know something about the matter.

Mr. Brown

The members of the Inland Water Survey were local people. The hon. Gentleman has taken the point himself that he has now become a gentleman in Whitehall responsible for showing that the local people know nothing about it and for saying, "Shut them down. Disband them. Don't let us consult the Advisory Committee but let's get rid of it. We know what is best for the country." The hon. Gentleman might have quite a time in his Welsh constituency defending that point of view.

The point is that the Government decided that the Report of the Inland Water Survey Committee was inconvenient to them and they decided not to publish it but to suppress it, and in case the Advisory Committee should try any more inconvenient reports the Government disbanded it.

Mr. Evans rose——

Mr. Brown

I think the hon. Member will make an attractive speech in a moment attacking this Report. Although it is not for me to say who should catch your eye, Mr. Speaker, I hope that the hon. Member does so because I hope to hear a speech from him attacking the independent advisory committees. I like to see Tories and National Liberals giving vent to their real feeling.

Mr. Evans rose——

Mr. Brown

I will not give way again to the hon. Gentleman. If I do so too often he will feel that he need not make a speech, and I want him to be on record as having made a speech.

Why did the Government disband the Committee and suppress its Report? Why did not they let the Advisory Committee tell us what it thought? Since the Government said that they would call it back if there were any urgent business, I want to know whether they have yet called it back, because the provision of a piped water supply for rural England is very urgent indeed.

One of the areas of England which is very badly served with a piped water supply is the Eastern Counties. Another very bad area is that for which my hon. Friend the Member for Brecon and Radnor (Mr. Watkins) speaks out and for which the hon. Member for Denbigh never speaks out—Wales. I can understand the problem in Wales, which is mountainous and difficult for engineering, but East Anglia is not a difficult area, so why is it—perhaps the Parliamentary Secretary will tell us—that East Anglia features among the areas with a very bad record in this respect under a Conservative Government?

I am bound to say that there are many problems—and I am glad to see that the hon. Member for Barry (Mr. Gower) is advising his colleague, the hon. Member for Denbigh. The hon. Member for Barry knows no more about rural water supplies and sewerage than his colleagues, but he understands a little more about politics, and I have no doubt that he will be able to give his colleague good advice on the politics of the matter which may result in his colleague not making a speech—to the disappointment of us all.

This Bill is a great disappointment to the House. There is room for a better Bill, for a Bill which would improve the situation. This Bill is a gift, and nearly a wholly-free gift, to the money-lenders. This arranges our affairs so that the Minister will be able to leave with the authorities the whole problem of borrowing money.

Under the old arrangement, with all its disadvantages, the Ministry said, "This is our grant. You borrow the rest." Under the new arrangement, the local authority is left to borrow the whole amount, and so the interest charges are increased because it is borrowing so much more. Under the old arrangement, the authority borrowed 40 or 50 or 60 per cent. Under the new arrangement the authority will borrow the lot, and because it borrows the lot it will pay much more in interest charges; and because it pays much more in interest charges over a long period, the Ministry will pay much more to the authority. That is the reason for the £19 million mentioned in the Bill. This is a free gift to the money-lenders of £19 million in order to prevent the Treasury from having to make its full grants this year.

Belper Rural District Council and Repton Rural District Council will now borrow more money and will get then-revenue charges met year by year by the Treasury. At the end of it all we shall get no more piped water supplies than otherwise we should have got and no more rural sewerage schemes than otherwise we should have got and, according to the Memorandum, we shall have paid £19 million more for that in England and Wales.

The Financial Secretary to the Treasury smiles. If there is any other explanation it is a different one from the one given by his hon. Friend the Parliamentary Secretary. Since all of us who are experienced know that he was reading the brief provided by the Financial Secretary, there was either something wrong with the brief or there was something wrong with the hon. Gentleman's reading of it. We shall be prepared to hear the Financial Secretary in addition to the Parliamentary Secretary. Let the Financial Secretary explain it to us if the explanation is different from that of his hon. Friend and the one given by me. Let him follow me; we shall make room for him. We shall make no difficulties. My guess is that the Financial Secretary will not get up because what I have said and what his hon. Friend has said is true.

This is a device to provide the same amount of pipes, the same amount of water supplies, the same amount of rural sewerage at a very heavily increased cost. This Government prefer hire-purchase to paying as they go. This is a scheme to unload on the taxpayer and his descendants charges that ought to occur in this year. I can find no reason at all to applaud this Bill. We are quite prepared to leave hon. Members who want to take the responsibility to enjoy the responsibility of carrying it. Most of us on this side of the House spend the week-ends addressing meetings in the rural areas. It is not part of our business to stop hon. Members opposite who want to give us things to speak about. We do not propose to interfere; we propose to allow the Government to have the Bill.

The hon. Member for Denbigh may well enjoy the pleasure of carrying the Bill. I shall very soon enjoy the pleasure of going to Denbigh to explain why he supports the Bill. It would be very silly of me to stop him the Bill. The hon. Member for Grantham (Mr. Godber) ought to have the pleasure of being responsible and the hon. Member for Norfolk, South-West (Mr. Bullard), with his tiny majority, ought to have the pleasure of being responsible for this Bill. We shall not stop them.

Mr. J. B. Godber (Grantham)

As the right hon. Member mentioned me, perhaps when he comes to my division he will have the pleasure of explaining why under the previous Government so little was done in water supplies and sewerage and so much is being done in my division now.

Mr. Brown

Is it not really extraordinary that the hon. Member really believes that when I come to his division to explain the shortcomings of this Bill his electorate will be satisfied with his explanation of what was wrong five years ago? If he believes that, let him have a go.

Mr. Denys Bullard (Norfolk, South-West)

The right hon. Gentleman referred to my majority and accused us on this side of the House of being concerned with electoral matters. I think he far better concern himself with rural water supplies. I can tell him that the position in South-West Norfolk is far better than it was.

Mr. Brown

If I remember, the Gadarene swine took a similar view, but they went over the brink just the same. The hon. Member may be right and I may be wrong. [Hon. Members: "Oh."] I am prepared to concede that. When hon. Members opposite are prepared to concede that point to us, it will be time for us to worry. The point is that with all the assurance of hon. Members opposite that they are right and we are wrong, we are still prepared to allow them to carry this Bill. I am still willing to go to South-West Norfolk and Grantham and Denbigh and Barnstaple to say, "Ladies and Gentlemen, your Member helped to carry a Bill which, for the same amount of piped water and sewerage, cost you as taxpayers £19 million more."

Mr. Raymond Gower (Barry)

If the right hon. Gentleman criticises the Bill so strongly, why are he and his colleagues so willing to allow it to go through?

Mr. Brown

We are willing to allow the Bill to go through because—does the hon. Member want to know the answer, or does he suspect already what it is? [Interruption.] The hon. and gallant Gentleman the Member for South Angus (Captain Duncan) really ought not to let himself go. He is too old a hand. He is no minnow. He ought not to fall into the trap. The answer to the hon. Member for Barry is that we are willing to allow the Bill to go through as we rather relish the idea of going to Barry to explain how it was that it went through.

Colonel Alan Gomme-Duncan (Perth and East Perthshire)

The right hon. Gentleman said just now that we were doing this from an electoral point of view. It seems to me that this party political game he is prepared to play with his hon. Friends is purely for electoral purposes.

Mr. Brown

To go from Barry to Denbigh and Perth and back—or forwards—to Angus is quite a business, but let me deal with Perth before I deal with Barnstaple.

Commander Maitland

The right hon. Gentleman means Horncastle not Barnstaple. Let him get it right, for goodness' sake.

Mr. Brown

Horncastle. I must remember, if I am to go on so many tours about the country. The answer to the hon. and gallant Member for Perth and East Perthshire (Colonel Gomme-Duncan) is that the Government calculated this would be electorally advantageous to them, because the Bill will give the Financial Secretary a bit more money to distribute under the Income Tax. I calculate that it will be electorally advantageous to us. That is why we are going to allow the Bill to go through. I am quite happy to play party politics with hon. Gentlemen opposite. I am an old hand, like the hon. and gallant Gentleman the Member for South Angus. I calculate that is electorally advantageous to us because I can go to the rural areas and explain that in order that the Chancellor of the Exchequer may give a bit more money away to the payers of Income Tax——

Mr. Victor Collins (Shoreditch and Finsbury)

And Surtax.

Mr. Brown

—people in the rural areas have got to pay a rate inflated by the amount necessary to service the additional loan charges of £19 million. Hon. Gentlemen opposite are entitled to take their choice. I gather the hon. and gallant Gentleman the Member for Horn-castle (Commander Maitland) does not want to pursue the point?

Commander Maitland

I wanted to be the first Member to congratulate the party opposite on having found, or on thinking they had found, one point on which to fight the next General Election. [Hon. Members: "Tea."]

Mr. Brown

Those whom the gods wish to destroy, they first drive mad. Do not let the hon. and gallant Gentleman worry himself about us. The reason we cut the Tory majority at Norfolk, South from 3,500 to 800—[Hon. Members: "What about Sunderland, South?"] We are talking about rural areas.

Mr. Deputy-Speaker

This is a Second Reading debate. We are not in Committee.

Mr. Brown

I think it is quite right that we should remind hon. Gentlemen opposite of the facts. I am quite reasonable about these things. What I was going to say was that the Bill is entitled a Rural Water Supplies Bill, and Sunderland is hardly a rural area. Let the party opposite note that the reason why we are progressing in the rural areas, the reason why we managed to cut the Tory majority in Norfolk, South is that we had many issues on which to fight the by-election. It is very clear from the response of hon. Members opposite that they are extremely uncomfortable about the Bill. [Laughter.] Hon. Members opposite laugh.

Sir Arthur Colegate (Burton)

The right hon. Gentleman would vote against it if he had any guts.

Mr. Brown

The hon. Gentleman is rather lucky. He is giving up the constituency of Burton next time. He is my political neighbour. He has the distinction that alone among his friends, in an election which favoured the Tory Party, he managed to cut his own majority by 50 per cent. No wonder he is giving up Burton next time. He ought not to erupt too much.

Mr. Collins

My right hon. Friend is being a little unjust to the hon. Member for Burton (Sir A. Colegate). The hon. Member can hardly be expected to take a great interest in water.

Mr. Brown

What we send out from Burton has more to do with what flows from the Trent than anything else.

The laughter on the benches opposite is the best evidence that hon. Members opposite are most uncomfortable about the Bill. They know as well as I do that no more rural water will flow as a result of the Bill and that no more rural sewage will be carted away properly as a result of it. They also know that it will cost us, in England and Wales alone, £19 million more to provide the same amount of water and to cart away the same amount of sewage.

The hon. and gallant Member for Perth and East Perthshire may like to know that it will cost Scotland £8½ million more to carry the same amount of water to rural areas in Scotland and to carry the same amount of sewage from those areas. If the Tory majority in the House thinks it effective and useful to carry through a Bill to spend £27½ million more to do the same amount of work, let it do so, but I am very clear that in choosing after 10 p.m. for the purpose, it was very well served by its Patronage Secretary.

10.47 p.m.

Mr. Horace E. Holmes (Hemsworth)

It may be that in what I am about to say I shall soon be ruled out of order, having in mind that the Bill is narrow and limited, but after the wide range covered by my right hon. Friend the Member for Belper (Mr. G. Brown), I hope that the Chair will look kindly upon me.

I had great hopes when I first knew that the Bill was to be introduced. A short time ago I was in communication with the Minister of Housing and Local Government and the Minister of Agriculture and Fisheries with regard to the water supply in the rural area of Hemsworth, which is rich agricultural land. One dairy farmer in my constituency, who has been in business for 20 years or more, has had to close down because the water supply is not up to the standard required to maintain his farm. I may be wrong, but I had the impression from the Parliamentary Secretary's speech and his reference to spending £12 million in one year, £14 million in another and £17 million in the next that there is to be an easing of restrictions on capital investment and a rapid development of water supplies in rural areas. I could not follow my right hon. Friend on all the ground that he covered, but he kept within order fairly well.

What I should like to know is this. What can the rural districts expect from this Bill?

Mr. G. Brown

To pay more rates.

Mr. Holmes

Can the rural district of Hemsworth expect some easing of the capital investment question? In my area, the rural district council proposed a scheme. It had the blessing of the West Riding County Council, the agricultural executive committee and the National Farmers' Union, but in spite of that, because of the capital investment question, it was turned down. In the Hemsworth rural district there are farms which still have to have water carted in on barrows, and one dairy farmer has had to close down.

If the Bill is all that my right hon. Friend has said it is, it will be a disappointment for the rural district councils, and I hope that before long we will have another Bill——

Mr. Brown

And another Government.

Mr. Holmes

—that will widen the opportunities for getting water in the rural districts.

10.52 p.m.

Mr. Douglas Houghton (Sowerby)

My powers of invective do not match those of my right hon. Friend the Member for Belper (Mr. G. Brown), but I have an additional reason for being kinder to the Parliamentary Secretary than was my right hon. Friend. I want to get something out of him before I finish.

The hon. Gentleman gave very little explanation of the reasons for this Bill. He was at some pains to explain what the Bill would do but said very little as to why it is before us at all. I wondered while he was speaking whether this is a reversion to orthodox Treasury finance. In more than one respect, Governments of the past appear to have shirked capital expenditure. If they can, Governments desire to spread their commitments over a number of years. We have notorious examples of that in connection with the provision of accommodation for Government staffs.

The Ministry of Works is very reluctant to embark on capital expenditure on a Government building. Rather will it go in search of someone who will acquire the site, put up the building and then lease it to the Government for 21 years.

Mr. Speaker

The hon. Member is getting a little far from the Bill when he talks about housing Government staffs. The Bill deals with water supplies.

Mr. Houghton

With great respect, Mr. Speaker, I am giving examples of what I believe to be the orthodox approach by the Treasury to capital expenditure underlying the Bill.

As I understand it, this is a change from lump sum payments on capital account to an instalment plan. That has the same effect of refusing to embark on the capital expenditure of a new Government building and choosing the alternative of a long lease for a lessor's building. I am trying to get at the reason why the Government have introduced the Bill.

My right hon. Friend, with bold prediction, suggested that this was one of the ways in which the Chancellor of the Exchequer would reduce his commitments in the next financial year to an extent to enable him to distribute tax reliefs in the forthcoming Budget. I make no prediction about what the Chancellor of the Exchequer distributes in the forthcoming Budget. I am not so sure that he will have very much to distribute at all, but I doubt whether the contribution which he gets from this Bill will make any difference anyway.

I hope that when the Parliamentary Secretary replies he will explain more fully why this proposal is brought to the House, because it is going to cost more in the long run. That has been made plain. It is going to cost more because there will be interest payments over extended periods instead of immediate discharge of liability in the form of lump sums. In our domestic affairs we have always been told that prudence would justify paying spot cash for things if we could, and that we ought to resort to hire-purchase or instalment plans only if we have not the money to spend initially.

I do not think the Government are in any difficulty about providing the finances necessary for the lump sum payments under the 1944 Act. Let me turn now to something else which the Parliamentary Secretary said. He stated that there would be no change in the Bill of the grounds and conditions on which grants would be made. I hope it is in order for me to say that I regret that. In Clause 1 the Bill refers again to "a rural locality." I have been looking up the Second Reading debate on the 1944 Act, and the debate during the Committee stage, which took place on the 8th June, 1944. I saw incidentally that the hon. Member for Elland, a Mr. Thomas Levy, said in rather strong terms that the Bill was a pretence and a sham, and that it would not do anything, anyway. Elland now occupies an honoured and influential place in the Sowerby Division, and is as interested today, as then, in water and sewerage facilities in rural areas.

The figures which the Parliamentary Secretary gave were impressive. To be fair, I thought that the totals he mentioned would not justify the forecast which the then hon. Member for Elland made about the efficacy of the 1944 Act; but I saw nothing there in either of the debates which helped me with this troublesome question of the interpretation of the term, "rural locality." I realise the difficulty of drawing in any Bill definitions which will put beyond any doubt the intentions of the House. It may be that the difficulty of the interpretation of the term "rural locality," which we see in Clause 1, goes back as far as the 1934 Act. Anyhow, as the Parliamentary Secretary knows, I have been having an exchange of views with him on the proper interpretation of the words, "a rural locality," which are important not only in the original 1944 Act, but are still important as they are written into this Bill.

The 1944 Act and this Bill will continue to give the Minister wide powers of interpretation of the term "a rural locality." One is inclined to ask, "What is a rural locality; when is a rural locality not a rural locality?" I have in my constituency a rural locality which the Minister says is, interpretating the terms as used in the 1944 Act—and which is used again in Clause 1 of this Bill—not a rural locality because it happens to be part of an urban district.

These are very troublesome matters. I sympathise with the Minister in having to deal with them, but what is a local authority to say if it is an urban district council which, on a redistribution of boundaries, finds itself now embracing a purely rural area previously part of a rural district council area for which a sewerage scheme is now proposed, and in respect of which the Minister says, "This rural area is no longer a rural locality because it is part of an urban district area"?

To be fair to the Minister, he says that Urban districts are not ruled out as such and grant has, in fact, been paid to urban district councils in a very small number of cases where, because of the general character of the locality, and the size and distribution of the population, the Minister has felt justified in regarding them as comparable to rural districts. That is a quotation from a letter which the Parliamentary Secretary was kind enough to send me on 30th November last. But when the Minister gives a reply to a local authority on a question of interpretation of this kind and says that the place, which I mention only for illustration, Norland Town—although its title belies it—is not a rural locality when everybody locally knows that it is, of course there are cries of derision from all who know the facts and who cannot understand why what is so obviously to them, and to anybody who knows it, a rural locality is judged by the Minister not to be such.

I hope that, in continuing the provisions of the 1944 Act under the Bill, the Minister will look more liberally at the problems of urban districts which have the exceptional cost of providing water supplies and sewerage facilities to rural localities which are part of their urban areas. The Parliamentary Secretary was good enough to say that, when seeing cases of this kind, he naturally asked himself whether the Ministry's policy or precedents were right and whether there was a case for looking again at the hallowed practices of the Ministry over perhaps the last 20 years and considering whether greater flexibility should be given.

I hope that he will find it possible to do that, because otherwise it makes it very difficult for hon. Members of this House to explain to their constituents the apparent contradiction in terms between a rural locality for the purposes of the Act and the Bill and a rural area which is ruled out because it is said to be part of an urban area. I think, too, that it is a justifiable criticism of the Bill that it is really still only tinkering with the much bigger problem of water supplies throughout the country. We are a very long way yet from having achieved any degree of satisfactory provision of these essential services in many of the scattered areas. I hope that the Minister will be able to give me some assurance on the latter point as well as more explanation than he has given already of the reasons for introducing the Bill.

11.5 p.m.

Mr. G. R. Mitchison (Kettering)

I share my hon. Friend's anxieties as to the reason for the introduction of this Bill. There seems to be something a little humorous about it. I understand that the Treasury is now engaged in viewing with a certain amount of alarm a semi-inflationary situation, and particularly the growth of hire purchase. It hardly seems to be the moment for the Government themselves to bring forward a Measure the effect of which appears to be—like other forms of hire purchase—to mortgage the future in order to secure the appearance of greater prosperity in the present. To quote a famous phrase, I feel that "It's That Man Again." Mr. Gibson Jarvie must have been trotting round the Government Departments—having perhaps been thrown out of the Ministry of Transport at long last—spreading some of these dangerous doctrines, even in so orthodox, so austere and, one would have thought, so critical a place as I have always understood the Treasury to be in matters of this sort.

It looks as if somebody has got to borrow, but if anybody has to borrow it should not be local authorities—or, at any rate, if local authorities are to be forced to borrow, they should have some say about it. This is a really remarkable proposal, because although Clause 1 (1) certainly refers to future arrangements, subsection (2) refers to arrangements which have already been made. One does not expect to see even the Law Officers or the representatives of the Foreign Office here when we are discussing such matters as this at this hour of the night, but what they would say to a unilateral breach of contract sanctioned by Statute I do not quite know.

Local authorities are not even to be allowed to say a word about the matter; without their consent, without consultation with them, the Minister, having promised one thing, is entitled at his own sweet will to substitute something else, and if they protest and say that they would rather have the other arrangement, they have no means of giving effect to it. The Minister has power to substitute not merely what is equivalent, but what he thinks is equivalent, for that which is forcibly taken away from them.

This is a really serious form of legislation. I thought that the party opposite had some sort of respect for the sanctity of contract and the pledges given to local authorities in these matters, but here we are, without a protest from any hon. Member opposite, allowing promises to be broken at the mere ipse dixit of the Government, upon such terms as the Government think suitable. It is pretty stiff, and I hope that it may be remedied during the Committee stage.

I now turn to an entirely different matter. The essential thing about water supplies and sewerage schemes, at any rate in rural areas, is that in the long run the amount of water one puts into a village has to come out somewhere, but for some reason or other there is always a lamentable delay in sewerage schemes as compared with water supply. In my part of the world the Labour Government provided the Mid-Northamptonshire Water Board, and that was a very good thing, because no single local authority could have done the work which that water board is doing. It is doing it well, and rather faster, but there is no corresponding acceleration in the sewerage schemes.

The position is even worse than that. What happens is that the Mid-Northamptonshire Water Board dig up a road—and that may be quite expensive if a long section is involved—while the sewerage schemes are still in the stage of having been approved in principle without any authority to proceed having been given. Consequently, while they are still hanging between the heaven of approval and the further heaven of execution—swung, as it were, in the celestial sphere—the road is filled in again, and a lot of money will have to be wasted later on in digging up the same road again to put in the sewerage system.

If the Parliamentary Secretary wants an instance I can give him one. Perhaps he will consider the matter of Cransley. There he will find that the water supply scheme was submitted in, I think, 1952, but that sanction to proceed has not yet been received, and, if he makes further inquiries, he will find that the road in that part of the world is being dug up at the moment in order to put in the water pipes. He should get his people to face realities and give authority to proceed in this matter.

I have said all I wanted to say, except to urge that there should be a substantial increase of funds for sewerage. It is not a very interesting subject and does not attract much attention. The Parliamentary Secretary will find that rural sewerage has been lagging behind water supply not only recently but for long years past, and that he will be able to justify himself by the time-honoured expedient of blaming the previous Government. I ask him to face facts and get on with the supply of rural sewerage.

11.11 p.m.

Mr. F. H. Hayman (Falmouth and Camborne)

I emphasise the point made by my hon. Friend the Member for Sowerby (Mr. Houghton) in getting a definition of "rural locality." I live in the urban district of Camborne-Redruth, which is within my own constituency. It has an acreage of 22,500, which is nearly twice the acreage of Plymouth, but although Plymouth has a population of well over 200,000, my urban district has only 35,000-odd.

This urban district was created in order to throw upon the ratepayers of the two former urban districts the cost of providing sewerage and water supplies for villages in a former rural district. We have the odd spectacle that 25 years ago the former rural council did sewer one village, which has not got water up to this day. Our urban district was once very depressed, and the cost of this heavy capital burden hits us very hard. Now we have a very high rate, although we still have immense burdens to carry to provide sewerage and water for many of the villages, which are really rural localities within our urban district.

I turn to the Financial and Explanatory Memorandum, which says in its last paragraph: In so far as lump sum payments are replaced by periodical payments towards revenue expenditure, additional expenditure out of moneys provided by Parliament will be entailed. The amount cannot be estimated accurately, but may be of the order of £19m. for England and Wales and £8½m. for Scotland, spread over 30–35 years. As I understand that, it means that we shall spend £27½ million more than was contemplated and we get nothing more for it. It will mean for the County of Cornwall in which I live an additional burden of over £250,000. True, it is going to come from the taxpayer instead of the ratepayer, but nevertheless for a population of 330,000 the additional expenditure, for which we get nothing more, amounts to over £250,000. That figure, taken over the whole of the rural areas of England, Wales and Scotland, will be found to represent far more than £1 per head of the population. It seems to me that this Bill ought to have a new title—the Rural Water Supplies and Sewerage (Hire Purchase) Bill.

11.16 p.m.

Mr. Tudor Watkins (Brecon and Radnor)

I am disappointed that the two Welsh Members who continually interrupted my right hon. Friend the Member for Belper (Mr. G. Brown) have now left the Chamber. I would have liked them to support my plea that the Parliamentary Secretary should dissect the figures which he gave for England and Wales so that we could have known the Welsh figures, for I am very interested—even if those two hon. Members are not—to ascertain exactly what the figures for Wales are. The Parliamentary Secretary may not have those figures with him tonight, and, to save me putting down a Question, perhaps he will let me have them at a later date.

The Parliamentary Secretary said that he would examine the possibility of enabling a change to be made from lump sum payments to instalment payments in schemes costing £1,000 or less. Why select schemes of £1,000? Why not £2,000? I am sure that would be a great advantage to small rural authorities in Wales. If the hon. Gentleman cannot agree to £2,000, let us split the difference and agree on £1,500.

An hon. Member asked the Parliamentary Secretary a question about Clause 1 (2). The Under-Secretary of State for Scotland has the power, in cases where grants have been indicated beforehand, to decide when the instalments shall come into operation. I should like to know on what basis he will decide whether to switch over to the instalment plan from the lump sum payment system. I put this point because in my constituency there are 21 local authorities, many of which have water and sewerage schemes and they have been informed of the amount of a provisional grant. I suggest that in cases where a provisional grant has been indicated, we should retain the lump sum payment principle, because it would encourage those local authorities which now have water supply schemes to undertake sewerage schemes immediately afterwards.

The Minister said that after the Government have indicated the amount of the grant to these local authorities, the county councils and the rural district councils would usually pay the remaining proportion of the amount required. But it does not work out in that way. When the Government have given increased Exchequer grants, the county councils in Wales have not paid so much as the rural district councils. If the Minister were to ask for a return from Welsh local authorities he would be surprised to find that the amount which the Exchequer is now giving by way of increased grants is not really passed on to the rural districts.

When the Minister deals with the payments which are to be made by county councils and rural districts, he should make sure that there is a uniform way of making those payments. I have seen a return of these payments which are made by the county councils in Wales. They vary in practically all counties. There ought to be some uniform method; the Minister ought to suggest to the counties the most appropriate way, the way which will suit the local authority in the rural district, and not let the matter be steam-rollered through by the county councils—although I am a member of a county council, fortunately as an alderman.

I am sure it would meet the unanimous wish of the House and expedite all rural water supply and sewerage schemes—and I speak particularly of Wales—if the Ministry set up a panel of consulting engineers, because some of the rural authorities who try to get excellent consulting engineers find great difficulty. The good consulting engineers are taken up by a great number of authorities so that they cannot give their minds to water supply and sewerage schemes. As a consequence, there is much delay. I am certain that if my suggestion were adopted the Government would be able to get more of these local authorities to undertake schemes, knowing quite well that they would have the Government's backing.

I am glad that we have had this debate on the Bill but, coming from a rural constituency, I must say that I should have preferred it to take place earlier in the evening so that urban Members on all sides of the House might learn more about the difficulties which we have in rural areas and so that we might thus get more support from the Government and from the Opposition.

11.22 p.m.

Mr. Thomas Fraser (Hamilton)

All of us on this side of the House were a little sorry for the junior Ministers who had the job of commending the Bill to the House. We are even more sorry for them now, because, since the Parliamentary Secretary introduced the Bill, briefly yet lucidly, the Government have been assailed from this side of the House but, unfortunately for the Parliamentary Secretary, not one cheep has come from his side of the House in support of the Government.

Major H. Legge-Bourke (Isle of Ely)

We want the Bill.

Mr. Fraser

But when the Parliamentary Secretary was speaking he was interrupted, in the middle of his speech, by his hon. and gallant Friend the Member for Horncastle (Commander Maitland) who criticised the Bill. When my right hon. Friend the Member for Belper (Mr. G. Brown) had concluded his speech, the hon. and gallant Member had disappeared from the scene.

Mr. G. Brown

Sunk without trace.

Mr. Fraser

The truth is that the Government supporters are utterly ashamed of the Bill. When the Bill was presented to the House for First Reading, those of us who are interested in the provision of rural water supplies and sewerage thought the Government had some plans for the provision of these services and we waited with baited breath to read the contents of the Bill. We then discovered, as my right hon. Friend the Member for Belper said, that the Bill had nothing whatever to do with the provision of water supplies and sewerage in rural areas. It is purely a financial Bill.

I have given a fair amount of attention to providing these services all the time I have been in the House, and I well remember the presentation of the 1944 Bill. I think the sums then made available from the Government were £6⅜ million for Scotland and £15 million for England and Wales. I have better reason to recall the introduction, Second Reading, Committee and later stages of the 1949 Water (Scotland) Act, because by that time the Labour Government had increased the amount of Government money being made available to assist local authorities in providing water supplies and sewerage from £6⅜ million to £20 million.

One of the Joint Under-Secretaries of State for Scotland, the hon. Member for Fife, East (Mr. Henderson Stewart), then described our Bill, on 9th November, 1948, as "a fraud." He said that the amount of money was hopelessly inadequate and the length of time we anticipated that it would take to spend the £20 million was a fraud. I thought he had such influence with the Government that when we got this new Bill the amount of money to be spent would be increased so that the Government contribution towards the provision of rural water supplies and sewerage would be increased, but not at all. The cost to the taxpayer is to be increased by 40 per cent.

The £50 million provided for England and Wales in the 1951 Act is now to be increased by some £19 million. The £20 million provided for Scotland in the 1949 Act is to be increased by £8½ million. But not one extra length of pipe is to be provided. As some of my hon. Friends have said, it seems remarkable that this Government, who have been playing down hire purchase—trying to stop my constituent Mrs. Brown from buying a wireless set, a washing machine, or a television set by hire purchase and discouraging her to the utmost—insist that Mrs. Brown shall get her rural water supply or sewerage by hire purchase.

The Joint Under-Secretary of State for Scotland (Commander T. D. Galbraith)

The hon. Member has been speaking about extra lengths of pipe being laid. Surely if he has been watching things at all he has noticed that, whereas the value of work done in the last year in which he had any responsibility was £2 million, in this last year the value of work done on water supplies and sewerage was £3.3 million.

Mr. Fraser

The right hon. and gallant Gentleman has spoken too quickly. The Act under which the £3½ million has been spent was the Act passed in 1949 after which, as the right hon. and gallant Gentleman knows, local authorities got together to discuss regional schemes. If he likes to make inquiry he will discover that between the passage of the 1949 Act and the change of Government in 1951 I spent a considerable amount of time urging local authorities to initiate schemes. I did not spend my time stopping local authorities going ahead, but in urging them to go ahead with schemes. I am delighted to know that they took my advice and that schemes are now going ahead.

Will the right hon. and gallant Gentleman deny the allegation we on this side of the House make that this Bill will not in fact provide one extra foot of piping, one additional gallon of water, or one little additional sewerage scheme? It will not; it has not that purpose at all. The purpose is merely to spread the expenditure of Government money over a longer period—a period of 30 to 35 years. I have lived all my life in a rural area. I would prefer that I should now pay for rural water supplies and sewerage provisions than merely order the fulfilment of those schemes and leave the paying for them to my children. Hon. Members opposite would not want to leave the payments on nice country houses to their families when they would find those payments difficult to make; they would rather leave their families free of those burdens.

Mr. Gower

Surely the whole system of local government housing is spread over a period.

Mr. Fraser

Of course the financing of housing is spread over a period. The financing of new schools and hospitals was spread over a period. That was deliberate policy because the cost of providing them in one year or in a short period was a heavy one for the Government of the day to meet, but is the hon. Member for Barry (Mr. Gower), who interrupted my right hon. Friend the Member for Belper so assiduously and then departed from the Chamber, suggesting for a minute that this Government cannot find, out of their income, a contribution towards the provision of this service? The sum of £17 million was discussed by the Parliamentary Secretary. Is the hon. Gentleman the Member for Barry of the opinion that out of a Budget of £4,500 million the Chancellor cannot find £17 million for rural water supplies? I refuse to believe it.

In any case, there must be a number of local authorities that do not have to borrow the balance to be met for small schemes. They meet that out of current revenue at the present time. Why should the Parliamentary Secretary say that in future they will be able to deal only with schemes costing less than £1,000? Why should those local authorities be required to borrow money over a period of 30 to 35 years? It seems to me scandalous that the local authorities' right of decision should be taken from them in this way.

I would ask a few questions about the position in Scotland. First, like my hon. and learned Friend the Member for Kettering (Mr. Mitchison), I should like to know how sewerage schemes are proceeding. He told us that they were not proceeding very well in his part of the country. We all know that members of local authorities, like Members of Parliament, get a little more excited over the provision of clean piped water supplies than they do about the sewerage to take away the waste. We should like to know, if we can be told, whether satisfactory progress is being made with the provision of the necessary sewerage.

There has been some discussion—my right hon. Friend the Member for Belper raised the matter—about the amount of grant, first of all the percentage grant, and whether the grant is paid on the estimated cost of the scheme or on what the scheme ultimately costs. My recollection is that in Scotland—I remember negotiating some of these schemes with local authorities, sometimes with groups of local authorities—the Government normally negotiate the percentage grant and then pay the percentage on the approved final cost. I wonder whether we can be told if that is so in Scotland, and whether it is also so in England and Wales? It is rather important. There can be a difference between the estimated cost and the approved final cost of a scheme.

Can we be told what is the percentage grant on average, taking schemes as a whole? I mean the percentage grant from Government funds. From 1948 to 1949, when the Scottish Measure was before Parliament, we estimated that the cost of the schemes necessary in Scotland to provide piped water supplies and adequate sewerage in the whole country was about £40 million. That was why at the time we offered a provision of £20 million in the Bill, as it then was. We estimated that the Government would contribute about 50 per cent. of the cost. I wonder if we can be told what has now proved to be the percentage grant? Is it more than 50 per cent. or less? I believe that in Scotland at least the percentage grant is down more than 50 per cent. It was my experience that we had to grant more than 50 per cent. for water supplies to get the schemes going, having regard to the ability of the local authorities to pay for them.

It is important that we should know what is the average percentage. We should know whether it is more than was estimated in 1949 in Scotland and more than was estimated in 1951 in England and Wales. Having regard to the fact that costs have increased somewhat between 1951 and 1955——

Mr. G. Brown

More than somewhat.

Mr. Fraser

The cost of some of the materials has gone up, and wages have gone up a little in chasing the increased cost of living since 1951.

If our estimate was a fair one in 1951, it seems to us on this side of the House that the amounts then determined must now seem inadequate. If £20 million was right in 1949 in Scotland, on the assumption that the grant was 50 per cent.—and I think that it will have been more than 50 per cent.—and costs have gone up, the volume of work we expected would be done with the assistance of £20 million of Government money cannot now be fulfilled in terms of the then statute. The Bill provides no extra money to meet increased costs. The only sum that is provided in the Bill is the sum which is required because the Government are going over from lump payments to hire purchase terms.

These questions are important. It seems to some of us that if the House is to be asked to devote some time to discussing the Bill then, having regard to the facts in our possession, it is a great pity that we are not discussing the granting of more money to assist in extending the provision of rural water supplies and making sure that they are adequate, rather than wasting the time of Parliament in discussing cheap arrangements by which the Government will be able to save money in a short time by incurring greater costs in the long run.

11.38 p.m.

Mr. Deedes

A good many points have been raised in the course of the debate.

Mr. G. Brown

All from this side of the House.

Mr. Deedes

The connection of one or two of them with the Bill was rather tenuous, but I will try to deal with all of them.

Before I deal with some of the other points which the right hon. Gentleman the Member for Belper (Mr. G. Brown) raised, I should like to answer first two questions asked by the hon. Member for Hamilton (Mr. T. Fraser). The average grant in respect of schemes in Scotland works out at about 60 per cent., that is subject to a grant on retention money of 10 per cent. The hon. Member also asked the amount of money which was uncommitted in respect of grants to be given. I mentioned the figure in the course of my earlier remarks. A sum of about £4,800,000 of the £20 million is uncommitted. We note with satisfaction the hon. Member's remarks about what will be his attitude if and when we have to ask for a refreshment of that sum.

Mr. Mitchison

Can the hon. Gentleman give us the corresponding percentage, which we hope is greater, for England and Wales?

Mr. Deedes

Again, it is variable, but it is probably about one-third. I should refer the hon. and learned Member to the instructions which were issued on this subject at the time of the Act in 1944, in which it was made quite clear that there would be no fixed rate of grant. I want to be careful in mentioning any figure, because there is no fixed rate of grant. When I answer the questions already raised on the subject concerning the rate of grant to local authorities, my need for caution will be more clearly recognised.

Mr. Mitchison

It would cause great trouble if there were to be any misunderstanding about this. Am I right in supposing that the Scots get twice as large a percentage on the average as we do? If so, why?

Mr. Deedes

So I am advised. I cannot answer for the Scots in this.

The speech of the right hon. Gentleman the Member for Belper gave him great pleasure; he enjoyed himself very much. Some of his pleasure was innocent, and some less innocent. I am not crossing swords with the right hon. Gentleman on what he said. The short answer to the bulk of what he said about the Bill and myself in connection with it is Honi soit qui mal y pense. I prefer to leave it at that.

The right hon. Member said, however, that the Bill did not take us one stage further. But would he say that it would not make the smallest difference to housing or education if we departed from the system of helping water supplies by annual Exchequer payments towards the loan charges incurred by local authorities and if Exchequer grants for all projects in housing and education had to be paid for in lump sums? I am sure he would not. Everybody would say that that was a retrograde step. So that what we are doing in the Bill is a forward step which will very much increase the flexibility of our financial arrangements with the local authorities.

Mr. Hayman

Would the Parliamentary Secretary, then, deprecate local authorities which try to provide for small projects out of revenue instead of by borrowing?

Mr. Deedes

We have already dealt with small projects. Projects of up to £1,000 will continue to be paid for in lump sums.

Mr. Brown

The Parliamentary Secretary asked whether I would agree that the Government ought to go to annual financing in the case of housing and education. Does he, therefore, say that because the taxpayer cannot pay his larger commitments out of his annual income, he should not pay his smaller commitments out of his annual income? Because he cannot finance his housing and education out of annual income—tremendous costs are incurred by doing it on hire purchase—why should he then incur enormous costs on financing rural water and sewerage, which he can quite easily pay for out of his annual income?

Mr. Deedes

As I pointed out earlier, this commitment has very much increased in recent years, from £1 million in 1934 to £8 million now. We consider that to be a figure of significance.

The right hon. Member also mentioned the time factor in relation to these schemes. I accept that a number of them take a long time. I do not accept that the delay is attributable always either to finance or to the Department's machinery. The planning of these schemes, the computing of demand, designing all new works and all the other preliminary preparations that go into these schemes take time, and the schemes have to be approved by the Ministry before grant. The direct answer to both the right hon. Member and also to the hon. Member for Hamilton is that grants are always reviewed when the final cost is known. If there is an increase in cost, the provisional grant may be increased.

Mr. Brown

Often?

Mr. Deedes

It rather depends on how long the scheme has been delayed; that is the principal factor. The real answer is to cut as far as possible the time lag between submission and approval, and the increased amounts which I mentioned earlier tonight will, I hope, contribute towards this. The fact that the taxpayer has a stake limits the amount that can be approved in any one financial year.

The third point which the right hon. Gentleman made was in connection with the Inland Water Survey Committee. I would point out that it was mentioned by me in another debate on rural water, when I said that the Central Advisory Water Committee, appointed in 1946 and suspended in 1951, is to be revived. That has been set up and will have a subcommittee to advise the Minister on questions concerning the collection of water and will give other useful information. It will have a substantial scientific representation, and I think it will fulfil the functions which the right hon. Gentleman was concerned about in relation to inland water.

Mr. Brown

What was the matter with the other committee? Why disband it so that a new committee can be set up?

Mr. Deedes

There was no trouble. This Central Advisory Water Committee was suspended in 1951 and has now been resuscitated; it is now going into action. It will perform the necessary functions.

The hon. Member for Hemsworth (Mr. Holmes), who is no longer in his place, asked whether a local authority which he represents could expect an easing of capital expenditure. The answer to that is yes, clearly, because the figures I gave indicated that whereas last year the total authorised for grant was £12 million, this year it will be £14 million, and in the next financial year it will be £17 million. Obviously I am not prepared to take these figures beyond March, 1956.

The hon. Member for Sowerby (Mr. Houghton) and the hon. and learned Member for Kettering (Mr. Mitchison) asked why the Bill had been introduced. I thought I had been at pains in my earlier remarks to say why that was so. It puts water into the same category as housing and education. We are now dealing with a far more substantial amount than in 1934, when rural water grants were first considered. It is now £8 million a year from the Exchequer. This now goes on to the same basis, and should go on to the same basis, as other public services.

The hon. Member for Falmouth and Camborne (Mr. Hayman) wanted to know more about the definition of a rural locality. The short answer is that there is no definition of that term in the Act. There is no statutory definition, and there is no definition that I shall attempt to give the House tonight. We try to interpret this reasonably, as I think the hon. Member has reason to know. It has to be decided in every case. He quoted me as having said that urban districts and boroughs are not ruled out. They might be if the wording were rather tighter than it is. In a small number of cases, they have been treated as comparable with rural districts and eligible, therefore, for the grant.

The two factors which we take particularly into account are the general character of the locality, and then the size and the distribution and density of the population. I think the hon. Member will agree that that is a reasonable way of judging the matter. He asked me to look at the matter more liberally in future. I cannot undertake to do that, but, as always, it will be looked at as sympathetically as possible.

Mr. Hayman

Will the hon. Gentleman be prepared to receive a deputation from Camborne should it wish to send one?

Mr. Deedes

I cannot refuse that. I would be pleased to hear from the hon. Member on the subject.

Mr. Brown

Is the hon. Gentleman in fact announcing some new policy? For example, a large part of the arms estimates, about which there is a good deal of argument, is carried in the annual cost. Is the hon. Gentleman now saying that all these things are to be carried over 30 or 40 years?

Mr. Deedes

The hon. Gentleman must not tempt me on to wider grounds.

Mr. Brown

Why water?

Mr. Deedes

I have explained that, and the category of water and education. [Interruption.] The hon. and learned Member for Kettering asked me a question about sewerage. I have reassuring news for him, and to some extent for the hon. Member for Hamilton. It is true that until recently water schemes had tended to outstrip sewerage schemes. It is obvious why. The water schemes had to be given first priority, but in the last two years progress on sewerage schemes has picked up rapidly. The position is that in the year 1953–4 water schemes authorised totalled £2 million more than those in respect of sewerage; in the financial year 1954–5 £7 million was spent on each, and in the next year, 1955–6, between £7½ million and £8 million will be spent on water and between £9 million and £9½ million on sewerage. That will give the hon. and learned Gentleman some idea of the trend which the policy in respect of sewerage is now taking.

Mr. Mitchison

May I assure the hon. Gentleman that the sums will more than cover what is required in Cransley?

Mr. Deedes

The hon. Member for Brecon and Radnor (Mr. Watkins) asked for equivalent figures for Wales. I cannot give them now, but we will see what we can find and I will give him the details. He asked about the £1,000. The answer is "approximately." I do not want to stick at £1,000 exactly, but it is not an elastic figure. The third point about which he asked was the proportion of the county council payment towards the grant. That is a matter I should like to look into. It is one which is rather specially related to his own part of the country. I should like to have another look into the question. Perhaps I may let him know about that.

My hon. and gallant Friend the Member for Horncastle (Commander Maitland) asked about the position of local authorities. I am anxious not to have misled him.

Mr. Brown

The hon. Gentleman cannot put him right now. He has gone home.

Mr. Deedes

As I hope I made clear, we intend to pay by instalments all grants except the small ones. It will not rest with the local authorities. That is decided by the Bill. I want to get it clear and beyond doubt that it is the intention of the Minister to pay all grants by periodical payments and not by lump sum, except where the amount is small. It will make no difference whatever financially to the local authorities.

The local authorities, instead of receiving a lump sum from the Exchequer, will raise a loan equal to that lump sum and will receive half-yearly grants from the Exchequer which will cover the whole of the loan charges on that loan, so the financial result for the local authorities will be exactly the same.

Mr. Brown

So it is the taxpayer who gets soaked and not the ratepayer.

Mr. Deedes

I do not accept that premise, but I am anxious that there should be no suggestion that the local authorities pay any more. The Bill will put nothing at all on the local rates.

I think that I have answered most of the questions which were asked. I do not think that the place which rural water supplies should be given is in dispute. It is accepted to be a service to be provided as fast as the money can be found. It has been a limiting factor. Progress is steady and it is now on an ascending scale.

Mr. T. Fraser

The hon. Gentleman said earlier that that was not the limiting factor. He said that the limiting factors were labour and materials. If he looks at the Official Report he will find that that is what he said.

Mr. Deedes

Perhaps I might correct the hon. Gentleman. I said that in the past labour and materials were limiting factors, but now it was the taxpayers' stake which must always be regarded as the limiting factor.

Progress is steady and on an ascending scale. The figures I have given are a part answer to the charge of the right hon. Gentleman. In respect of water at any rate, and I hope sooner or later in respect of sewerage as well, we shall be able to measure the distance between us and the completion of these vital rural services. I assure the House that we shall not shorten our strides towards that objective.

Question put and agreed to.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Wills.]

Committee Tomorrow.