Commons Sitting of 28 June 1955

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  NORTH WALES HYDRO-ELECTRIC POWER BILL [Lords]
  To be read a Second time Tomorrow.
  MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (MORTLAKE CREMATORIUM BOARD).
  Bill to confirm a Provisional Order relating to the Mortlake Crematorium Board, presented by Mr. Sandys; read the First time; and referred to the Examiners of Petitions for Private Bills and to be printed. [Bill 18.]
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF WORKS

    Atomic Energy (Civil Uses)
    Mr. Hector Hughesasked the Minister of Works what advances have been made in this country during the last two months towards the development of the uses of atomic energy for peaceful purposes.
    The Minister of Works (Mr. Nigel Birch): Research into the peaceful uses of atomic energy is a continuous process in which very rapid advances are not to be expected. Normal progress has been made during the last two months.
    Mr. Hughes: Is the Minister aware that the Question I asked was very generalised, and was similar to a Question which I asked last year, to which I received an equally generalised answer? Is the right hon. Gentleman aware that authoritative leaders in the British shipbuilding industry are awaiting facilities to install atomic energy in trawlers and other ships? Surely the Minister can be a little more specific about this very important matter?
    Mr. Birch: The Answer I have given accurately represents the position, as no doubt the previous Answer did. If the hon. and learned Gentleman will put down a Question about ships, I will do my best to answer it.

    Statues (Sites)
    Mr. Doddsasked the Minister of Works what decision has been reached in the consideration given to the proposal to move the statue of Mrs. Emmeline Pankhurst to another site; and what objections he has received to the moving of the statue.
    Dr. Strossasked the Minister of Works when it is proposed to move the sculptured group, Burghers of Calais, so that the public may view it more easily; and what consideration he has given to the desirability of also moving the statue of Mrs. Pankhurst to a better point of vantage.
    Mr. Grimondasked the Minister of Works if he has reached a decision on the new site of Mrs. Pankhurst's statue.
    Mr. Birch: There has been general agreement for a long time that the Burghers of Calais are badly sited. A new design has been prepared for Victoria Tower Gardens. This has been approved by the Royal Fine Art Commission. It is proposed to move the Burghers of Calais to a more central situation and put them on a lower plinth. The central shrubbery will be removed and the statue of Mrs. Pankhurst placed in a new setting further south in the gardens. I consider that this is a better setting for the statue. Some opposition has been expressed by women's organisations to the statue being moved. I have discussed the scheme with the Suffragette Fellowship and done my best to remove their apprehensions. A model and drawings illustrating the scheme are in the Library.
    I hope work can start in the autumn.
    Mr. Dodds: While wishing to avoid stirring up any unnecessary anger in the Press, may I ask the Minister if it is not a fact that the new site for the statue is much more prominent than the old one? Although it is further away from the building, should not the women who pay homage to Mrs. Pankhurst be pleased that it can now be seen more advantageously by the public?
    Mr. Birch: That is my opinion. I went round the site with the Suffragette Fellowship, and I do not think they really disagreed that the site proposed was a better one, though there was a sort of metaphysical objection in that it is 40 or 50 yards further away from the House of Commons. I think that women, having won their battle so decisively, can now afford to be generous.
    Dr. Stross: Would it be fair to say that, if the statue of Mrs. Pankhurst remains where it is today, after the removal of the Burghers of Calais to a more central position it would tend to overshadow it, and is it not desirable, for that reason alone, to provide a better place for it? Secondly, may we have an assurance that this work, so long promised, will be carried out this year?
    Mr. Birch: The hon. Gentleman is perfectly right. If we do anything about the Burghers of Calais, we must also do something about the statue of Mrs. Pankhurst, or the whole thing is thrown out of proportion. I have money in this year's Estimates for redesigning the Victoria Tower Gardens, and this work will go ahead.
    Mr. Grimond: As part of the uneasiness among women's organisations is lest the statue of Mrs. Pankhurst be moved yet again, may I ask for an assurance that this is the final resting place for her statue?
    Mr. Birch: I cannot bind succeeding Governments, but I have given the most categorical assurance to the Suffragette Fellowship that there is no intention of any kind of moving the statue again.
    Mrs. Mann: Is the Minister aware that only two days ago I had an objection from the women mentioned by the right hon. Gentleman, and that they are still dissatisfied? They do not like the idea of this noble lady being pushed around because of the Burghers of Calais, and they wish to have a definite assurance that there will be no more pushing around of Mrs. Pankhurst.
    Mr. Birch: I have given that assurance in as categorical terms as are open to me to give.

    Atomic Reactors (Output)
    Mr. G. R. Straussasked the Minister of Works the approximate megawatt output of the six additional atomic reactors.
    Mr. Birch: Between 150 and 200 megawatts.

    Atomic Energy Authority
    Mr. G. R. Straussasked the Minister of Works the reasons which led the Atomic Energy Authority to make a substantial change in its nuclear power programme, compared to that presented to the House in Command Paper No. 9389 in February; and why the six additional stations will come into operation before those contemplated in the original programme.
    Mr. Birch: The six nuclear reactors do not form part of the civil programme, described in the Command Paper, which is to be carried out by the electricity authorities. They are being built in order to provide additional fissile material for military purposes as well as electricity. They are, therefore, being erected by the Atomic Energy Authority. They will come into operation before any of the stations in the civil programme, because they are exact replicas, rather than improved versions, of the two reactors now under construction at Calder Hall.
    Mr. Strauss: Nevertheless, is it not rather surprising that shortly after the Atomic Energy Authority issued a large civil programme—which was announced to the House a few months ago—another programme is announced which will make a further substantial contribution to the supply of electricity in this country? It seems rather strange that in the original statement the Authority made no mention of this very big further development, which was announced so shortly afterwards.
    Mr. Birch: The statement made in the White Paper concerned power stations put up by the electricity authorities for civil use. These reactors are to produce both fissile material and electricity.
    Mr. G. R. Straussasked the Minister of Works what steps the Atomic Energy Authority proposes to take with the purpose of ensuring that Britain plays its rightful part in the development of nuclear power throughout the world, in view of

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    the financial and technical assistance promised by President Eisenhower to all countries who seek United States aid.
    Mr. Birch: I would refer the right hon. Gentleman to the reply given by my right hon. Friend the Prime Minister to the right hon. and learned Member for Rowley Regis and Tipton (Mr. A. Henderson) on 22nd June, to which I have at present nothing to add.
    Mr. Strauss: But that does not deal with the point that these promises made by President Eisenhower to provide half the cost of nuclear research stations to any country that desires them, with an enormous amount of technical aid, while no doubt exceedingly generous and to be welcomed, do, in fact, mean that a substantial subsidy will be given to industry in the United States in the export of all machinery and all matters connected with atomic development. Therefore, unless this country does something similar, or co-operates with other countries in the same way, it will be left very far behind. Can the Minister say whether the Authority is urgently considering, and are there any plans in mind to deal with, this very important matter?
    Mr. Birch: What President Eisenhower has done is to make certain proposals which are to be submitted to Congress in the United States. Nothing has positively happened yet. This matter is very much in our minds, and we have offered fissile material to other countries. We have also trained atomic scientists from other countries, and have offered aid in the erection of atomic reactors in other countries, but it will be appreciated that our resources are not so great as those of the United States.

    Site, Ludford
    Mr. Osborneasked the Minister of Works if he is aware that the huts on the derequisitioned Royal Air Force site No. 1, South-west Portion, Ludford, Lincolnshire, have been dismantled, but the foundations have been left in a bad condition and covered with concrete and rubble; and if he will give his Nottingham office instructions to clear the land completely in readiness for cultivation.
    Mr. Birch: The site to which I believe my hon. Friend refers has not yet been derequisitioned and the arrangements for
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    releasing it, including the payment of compensation, are still being discussed with the owner. The normal arrangements do not provide for the removal of foundations and but bases but for the payment of compensation under the Compensation (Defence) Act, 1939.
    Mr. Osborne: May I ask my right hon. Friend if he is aware that this derequisitioning is being dealt with by his Nottingham office under rather rigid rules? Is it possible for him to give his regional offices more power to deal with matters like this more expeditiously?
    Mr. Birch: If there has been any undue delay I shall be very grateful if my hon. Friend will consult me about it, and I will see what can be done.

    Ancient Barrows and Earthworks (Preservation)
    Captain Pilkingtonasked the Minister of Works what steps he is taking to preserve ancient barrows and earthworks.
    Mr. Birch: Ancient barrows and earthworks of national importance are listed under the Ancient Monuments Acts and owners and occupiers are notified. I have now arranged for owners and occupiers to be reminded periodically of their obligations. I am also strengthening the Ministry's system of county correspondents, and inviting local archaeological societies to assist by reporting any threat or damage to a listed monument.
    Captain Pilkington: Is my right hon. Friend aware that that is a very satisfactory answer, but in view of the numerous cases of destruction of which one reads, will he press on with the good work?
    Mr. Nicholson: Is my right hon. Friend aware that these barrows and earthworks are absolutely irreplaceable, and that the main result of all the precautions taken is that nothing is heard of an earthwork until it has been damaged? Will he take greater steps to see that damage is prevented rather than notified afterwards?
    Mr. Birch: The Ancient Monuments Board has again brought this problem to attention. I am adopting its recommendations, except that I am still considering whether it is right to label all monuments.

    Hostel, Ferryhill
    Mr. Slaterasked the Minister of Works how often inspections are made to properties under the control of his Department, such as the hostel at Dean Road, Ferryhill, County Durham; and what proportion of the premises at this hostel are in use.
    Mr. Birch: Properties under the control of my Department are frequently inspected. The hostel at Ferryhill, which is used for storage, has been inspected three times by my officers since 15th March. Stocks are being run down with a view to the early release of the property.
    Mr. Slater: Is the Minister aware that this hostel cost a great deal of money to build? Does he think that its present use is satisfactory, and when such premises become vacant are applications from factory owners and others to rent them taken into consideration, in order to bring other forms of industry to the area?
    Mr. Birch: That is rather a different Question, and is not one for me to answer.

    St. James's Park and Constitution Hill (Speed Limit)
    Sir C. Taylorasked the Minister of Works whether he will raise the speed limit in St. James's Park and on Constitution Hill from 20 to 30 miles per hour.
    Mr. Birch: Yes, Sir. I propose to lay an amending Regulation under the Parks Regulation Acts to raise the speed limit to 30 m.p.h. on Constitution Hill and in St. James's Park, which includes The Mall, Birdcage Walk and the Horse Guards Approach Road.
    Sir C. Taylor: I thank my right hon. Friend for that reply, but would he consider extending the Regulation also to Hyde Park where, at the present moment, motorists consistently break the law under the watching eyes of the policemen?
    Mr. Birch: There is a certain distinction between the two. The roads that I have mentioned are really ordinary traffic arteries whereas the roads in Hyde Park are in the park itself. I do not think that raising the speed limit in Hyde Park would do very much to speed up
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    traffic, because the limiting factor to the flow of traffic is the entrances and exits, and not the speed along the roads. If one has a 20 m.p.h. speed limit motorists will go at just under 30 m.p.h., but if the limit is 30 m.p.h. they are apt to go just under forty.

  PALACE OF WESTMINSTER

    Commons Chamber (Acoustics)
    Mr. John Hallasked the Minister of Works what action has been taken to improve the acoustics of the Chamber of the House of Commons.
    The Parliamentary Secretary to the Ministry of Works (Mr. J. R. Bevins): Certain of the loudspeakers were adjusted during the Whitsun Recess, and the operating company which maintains the amplification system is making a detailed examination of it. We hope to effect an improvement during the Summer Recess.
    Mr. Hall: Is my hon. Friend aware that I moved a little further from the Gangway and so heard every word of his reply, but is he aware that the acoustics are still not very good for those at this end of the Chamber? Would he bear in mind the old Chinese proverb, "Words of the greatest celestial wisdom do not take root in the mind unless they are heard"?
    Mr. Bevins: That is not always so, of course. We are hoping to get the report from the operating company before the long Recess.

    Westminster Hall
    Mr. K. Thompsonasked the Minister of Works if he will make the necessary structural alterations to exclude from Westminster Hall the smell of cooking.
    Mr. Bevins: My right hon. Friend is having certain alterations made in the staff canteen adjoining the Hall, and I hope that these will do away with the trouble.
    Mr. Thompson: Is my hon. Friend aware that his answer will give great satisfaction to those who love the Hall and object to it being abused by the smell of cooking?
    Mr. Paget: Has there been any occasion in the history of Westminster Hall on which cooking has not taken place?
    Mr. Crouchasked the Minister of Works when he will place a plate in Westminster Hall to mark the spot of the lying in state of Her late Majesty Queen Mary.
    Mr. Birch: A plaque is being designed and I hope it will be in position by the end of the year.

  RESEARCH

    Detergent Washing Powders (Fish Poisoning)
    Mr. Doddsasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the Council, what progress has been made in the experiments at the Stevenage research station into the reaction of fish to various types of detergent washing powders.
    Mr. Bevins: There is no doubt that detergent washing powders can poison fish. Experiments are continuing to find out whether they are toxic at very low concentrations and under the conditions likely to be present in British rivers.
    Mr. Dodds: Can the Parliamentary Secretary say whether any of the detergents are favourable to the fish?
    Mr. Bevins: So far as I know, none of the detergents is favourable to the fish. I think this is a case where we cannot please everyone; the housewives like the detergents when they are strong but the fish dislike them.

    Air Pollution
    Mr. Ellis Smithasked the Parliamentary Secretary to the Ministry of Works, as representing the Lord President of the Council, if he will give a full report on the research up to the latest date on air pollution.
    Mr. Bevins: A great deal of research is being done on the problems of air pollution. It includes measuring the amount and content of pollution; methods of preventing it; and studies of its effect on health, especially in relation to respiratory diseases. Among the Departments principally concerned are the Fuel Research Station and other establishments of the D.S.I.R., the Medical Research Council, the Ministry of Fuel and Power and the nationalised fuel and power industries.
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    The results are described in reports of the Fuel, Chemistry and Building Research Boards of the D.S.I.R. and in many scientific and technical journals.
    Mr. Smith: I have other Questions dealing with this subject but they have been transferred to other Ministers. While I am not complaining of that, may I ask if there are regular Departmental meetings with a view to pooling ideas and experience in regard to air pollution in order to get co-ordinated action?
    Mr. Bevins: As the hon. Member knows, the Gracious Speech foreshadowed legislation on this subject. That necessarily implies that consultation is going on.

  BRITISH ARMY

    Barn Fire, Austria (Report)
    Mr. R. Harrisasked the Secretary of State for War if he will make a statement to the House, or publish a report, on the fire in an Austrian barn on 11th March, 1955, in which British National Service men lost their lives.
    The Secretary of State for War (Mr. Antony Head): I would refer my hon. Friend to the statement I made on 14th June in reply to a similar Question by the hon. Member for Edmonton (Mr. Albu).
    Mr. Harris: Will my right hon. Friend bear in mind that the statements which he has made so far deal chiefly with the causes of the fire, and that these are not of such great interest to the relatives of the people concerned? What is required is a public statement which corrects to some extent some of the earlier rather unfortunate Press reports and pays tribute publicly to the bravery of some of the people who took part in the rescues and also of those who died.
    Mr. Head: I should like to take this opportunity of paying tribute to the behaviour of those who helped and particularly of all who died while attempting rescue work. I have had very detailed correspondence with various of the parents, but if my hon. Friend has in mind a statement which would be a source of satisfaction to the parents, I will certainly consider it, if he gets in touch with me.

    Personal Case
    Mr. Coldrickasked the Secretary of State for War (1) why the inquiry into the death of 23126898 Royston Love, of the Royal Army Ordnance Corps, was held in secret; and why the father was not informed that the inquiry was taking place;
    (2) why the father of 23126898 Royston Love, of the Royal Army Ordnance Corps, was not invited to attend the inquiry into the death of his son;
    (3) why the father of 23126898 Royston Love, of the Royal Army Ordnance Corps, was not informed of the result of the inquiry into the death of his son.
    Mr. Head: As my hon. Friend explained in his letter of 14th June to the hon. Member, no court of inquiry was held following the death of Private Love. This was because it is not the practice to hold a court of inquiry when death is shown to be due to known natural causes and is confirmed by post-mortem examination, as was the case on this occasion. A special investigation was made at my request in the light of the hon. Member's reports to me. The results of the investigation made were notified to the hon. Member in the usual way and not direct to Mr. Love.
    Mr. Coldrick: If no inquiry was held, why should Colonel Hughes have made a statement to a prominent newspaper that one had been held, and thereby cause a great deal of anxiety? Secondly, having regard to the evidence which has been supplied by the father of Private Love concerning either the criminal negligence or gross incompetence of the medical officer, does the Minister not now think that in these circumstances he ought to hold a real inquiry into the death of this young man?
    Mr. Head: I have seen the hon. Member's letters and I have seen what Mr. Love said, from which I have not been able to find any particular new piece of evidence. If, however, the hon. Member or Mr. Love likes to inform me of any particular thing, I will certainly have it gone into.
    Mr. Coldrick: Is the Minister not aware that, according to the statement of Mr. Love, who saw the boy on the 20th of
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    the month, the now deceased son reported that he had himself seen the medical officer on 20th April, but that according to the replies I have received from the right hon. Gentleman he says that he had not seen him until the 21st, that even on the 21st he accused the boy of malingering, and that it was the sergeant major who gave the boy authorisation to go to bed, which led to his ultimate decease? In the circumstances, I am positive that, having regard to the anxiety that is felt in Bristol, it would be advisable to have a complete inquiry into this matter.
    Mr. Head: We have had a very close investigation into this case. I am satisfied that the question of malingering was not gone into. The unfortunate thing was that the boy had a hernia in exactly the same area as his suspected appendicitis, and the subsequent diagnosis was quickly made. If the hon. Member has any particular aspect that he would like me to go into further, however, I do not want to cover anything up and am quite prepared to reopen the case and go into it further, if he wishes.

    Camps (Cancellations)
    Mr. Goughasked the Secretary of State for War why he has cancelled sixty-nine Territorial camps and ninety-eight Army Emergency Reserve camps; and what plans he has to give alternative training to the men involved.
    Mr. Head: We decided that the practical difficulties of rearranging dates at short notice made it undesirable both from the point of view of industry and the men concerned.
    Mr. Gough: While I appreciate the difficulties, does it not show a complete lack of initiative that the Territorial Army should be treated in this manner? Is it not also rather parodoxical that the Army Emergency Reserve, when going to camp, should be defeated on the first occasion that there is an emergency?
    Mr. Head: No; I do not think that that is a fair deduction. The strike was in progress and it was up to the Army to reduce traffic and travelling to a minimum. Therefore—rightly, I think—we cancelled the camps during the rail strike. To rearrange them would have meant a completely new set of dates. All private arrangements would have been upset and

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    industry also would have had to face new and sudden arrangements. I do not think that in the circumstances we would have been right to rearrange camp dates at short notice, when we would have had the added complications of duplication in other camp areas.

    Fatal Accident, Cwm Silyn
    Mr. G. Robertsasked the Secretary of State for War (1) if he will make a statement about the recent occurrence at Cwm Silyn, Caernarvonshire, in which two boys were killed and two others gravely injured by the explosion of War Office material which had not been cleared when the ground was evacuated as a training ground;
    (2) if he is aware that, as a result of the fatal accident at Cwm Silyn, there is widespread anxiety in Caernarvonshire as to whether this area, and others, formerly used for battle training, have been fully cleared of explosive material; and if he will give an assurance that steps are now being taken to effect complete clearance.
    Mr. Head: During the last war about 6 million acres of land were used for training with live ammunition, and before this land was released steps were taken to clear it of mortar bombs, grenades and other explosives. The area to which the hon. Member refers was searched before it was released in 1946. I deeply regret that despite these steps this tragic accident occurred, and I should like to take this opportunity of expressing my sympathy with the parents. I have arranged for the high ground in the vicinity of the accident and the agricultural land within the old training area to be searched again.
    Mr. Roberts: Is the Secretary of State aware that there is considerable feeling in Caernarvon, and, I believe, elsewhere, that his Department has not been as efficient as it should have been in properly clearing these areas of unexploded missiles before permitting public access? What we all in Caernarvonshire now hope is that this dreadful accident will at least be the means of preventing anything of this sort happening to any other child in any other part of the country.
    Mr. Head: I appreciate that feeling, but I am sure the hon. Member will realise that to be completely certain of 6 million acres, when there may be an
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    odd mortar bomb under a gorse bush, is a very difficult problem. We have done our best, and it is a very major manpower commitment. Our only alternative would be to close these areas to the public, and up to date we have found that we should not have been justified in doing that. I assure the hon. Member, however, that wherever anything like this happens, we shall carry out a much more intensive search. That will be done.
    Mr. Roberts: While appreciating what the right hon. Gentleman says, may I ask him to look into this point? It is sugested that it was not one bomb that was responsible for this accident, but rather a pile of bombs, in which case the search cannot have been a very efficient or close one.

    Territorial Army Administration (Committee)
    Mr. Ian Harveyasked the Secretary of State for War whether he will examine the constitution and functions of the Territorial Army and Air Force Associations, in the light of present developments with a view to their reform or abolition.
    Mr. Head: This is one of the matters which has recently been reviewed by a Committee which I set up under the Chairmanship of the Under-Secretary of State to examine the administration of the Territorial Army. Its Report will be published shortly.

    Personnel, Suez Canal Zone (Withdrawal)
    Mr. Bellengerasked the Secretary of State for War how many officers and other ranks have now been withdrawn from the Canal Zone to this country.
    Mr. Head: About 17,000 since the Heads of Agreement were signed in July last year.

    Anti-Aircraft Command
    Mr. Bellengerasked the Secretary of State for War how many senior officers will be available for other duties as a result of the reorganisation of Anti-Aircraft Command; and how many will become redundant.
    Mr. Head: Forty-three officers of the rank of colonel or above become available for other duties. Thirty have been found

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    employment elsewhere, and thirteen are being retired on grounds of age. None are redundant.
    Mr. Bellenger: Can the right hon. Gentleman say a little more about the thirty officers whom he has placed in other appointments? One would have imagined that the senior ranks were full in all the other establishments of the Army?
    Mr. Head: A great many of the thirty have been found jobs in what is called E.R.E.—Extra-Regimental Employment—on such things as courses and the like. I am glad to say that, owing to the officer situation, we have not "axed" people—and it always would be our policy not to do so—before their careers are ended.
    Mr. Bellengerasked the Secretary of State for War whether he is now in a position to state how many volunteers, mostly of the Territorial Army, have been enabled, through arrangements which he has made, to continue their services in other branches or arms arising out of the reorganisation of Anti-Aircraft Command; and how many have expressed a desire to resign.
    Mr. Head: We shall not have any worth-while figures until August.

    Wide and Slow-moving Vehicles
    Viscount Hinchingbrookeasked the Secretary of State for War whether he will issue instructions to Army drivers that wide and slow-moving vehicles and those drawing trailers should make a temporary halt at lay-byes to enable following vehicles to clear.
    Mr. Head: I am going into this suggestion, which I think might be helpful.
    Captain Pilkington: Could not more of these very large loads be sent by rail and not by road?

    Women's Royal Army Corps
    Mr. G. Thomasasked the Secretary of State for War the number of girls under 20 years of age who were recruited to the Women's Royal Army Corps in 1953 and 1954, respectively; the number who were discharged in each of those years before completing their service; and the number who were reported absent without leave for a month or more in each of those years.
    Mr. Head: Figures for the first eight months of 1953 are not available. Four hundred and seventy-two girls under twenty years of age were recruited in the last four months of 1953 and the number recruited during the whole of 1954 was 1,564. Sixty-two of the girls enlisted during the last four months of 1953 were discharged before completing their service and 395 of those enlisted in 1954. Of the 2,036 girls enlisted in these two periods, thirteen have been absent for one month or more during their service.
    Mr. G. Thomasasked the Secretary of State for War what steps are taken by his Department to look after the moral well-being of young girls recruited to the Women's Royal Army Corps; and what steps are taken to notify parents when anxiety is aroused concerning their moral conduct.
    Mr. Head: Recreational activities and amenities, such as organised games, libraries, television, unit concerts and choirs, etc., are available in all units. Padres' hours and education classes are regularly held. Weekly request hours are held by unit commanders and regimental officers are available for interviews as and when required.
    Contact with parents is encouraged by means of Parent Days and correspondence.
    Mr. Thomas: Can the Minister assure the House that if there are signs of trouble developing the parents are kept informed?
    Mr. Head: Yes, Sir. The hon. Member will understand that we have a problem here; perhaps I can discuss it with the hon. Member.
    Mr. G. Thomasasked the Secretary of State for War why he refuses to tell parents the whereabouts of their daughters who are serving in the Women's Royal Army Corps even when these people are under 21 years of age.
    Mr. Head: When a parent writes to the War Office for information we invariably notify the girl's commanding officer, who will do everything she can to persuade her to get in touch with her parents. The commanding officer herself would do everything possible to bring parents and daughter together.
    Mr. Thomas: Does the Minister not think that he is taking a lot upon himself by denying a mother the right to know where her daughter is when she is under the age of 21? Does he not think that even the War Office has no right to offend against these family obligations and relationships, and that he is asking for trouble by refusing to give details of this sort?
    Mr. Head: It is not quite as simple as that. The hon. Member must appreciate that there are girls who join up to get away from a bad home. If we make a statutory undertaking that in all cases we must put the parents in touch with the girl we may be acting against the interests of the individual concerned. What we do is to use our common sense. Where we find that there are good parents and their influence is good, we do not stand in the way of the girls getting in touch with them.
    Mr. Thomas: How does the Minister decide what is a good home and what is a bad home? Is he saying that the Secretary of State for War knows better than parents what is good for girls under 21?
    Mr. Head: I am saying nothing of the sort. What I am saying is that the commanding officer of the girl's unit will get in touch with the girl and find out her background and problems. If she says she has a bad home and joined the W.R.A.C. because she does not want to see her parents, we do not step in and put her in touch with her parents.
    Mr. Simmons: In view of the apparent embarrassment of the right hon. Gentleman, would it help him if the Prime Minister appointed a lady as one of his Under-Secretaries?
    Dame Irene Ward: Speak up for us.

    Flood Damage (Compensation)
    Mr. Braiseasked the Secretary of State for War why compensation for internal repairs carried out by the War Department tenants of Landwick Cottages, Great Wakering, following the flood disaster of 1953, has not yet been paid by the War Department, notwithstanding that funds for this purpose were advanced by the Lord Mayor's National Flood and Tempest Distress Fund on 6th October, 1954.
    Mr. Head: We are arranging for this compensation to be paid. I regret that there has been delay.
    Mr. Braine: Whilst thanking my right hon. Friend for that answer, and noting that payment has been effected only since the Question appeared on the Order Paper, may I ask if he is aware that, not only have my constituents not been paid the compensation to which they are entitled for work carried out over a year ago, but that the distribution committee of the Lord Mayor's Fund has been unable to get a satisfactory answer from the War Department for months past? In view of this dilatoriness, will my right hon. Friend look into the matter?
    Mr. Head: I did look into that matter. Although I apologise for the delay, I should add that there were claims which should have been made which did not come in. Perhaps we should have written and asked for the claims, but we did not.

    Children (Educational Facilities)
    Mr. John Hallasked the Secretary of State for War if he is aware that the problem of educating the children of those serving in the Army both at home and abroad is becoming a matter of increasing concern and often of heavy expense to the parents; and what proposals he has to deal with this problem.
    Mr. Head: My Service colleagues and I, the Minister of Defence and the Minister of Education, are very well aware of the difficulties and importance of this problem. I cannot say more at present.
    Mr. Hall: Is my right hon. Friend aware that this problem is causing great anxiety to many serving officers and men in the Regular Forces, and is playing a great part in their deciding whether or not to continue in the Army as a career? Will he also bear in mind the effect on the future recruitment of men who wish to make the Army a career? Cannot he persuade his colleagues to look at the matter sympathetically and provide special facilities for educational services?
    Mr. Head: I am in very strong sympathy with what my hon. Friend has said.
    Mr. Bellenger: Will the right hon. Gentleman deal with this matter in a little less abrupt manner than he appeared

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    to deal with it in his Answer when he said that he had nothing more to say about it although he is investigating it? Can he give any idea of what he is going to do, because this affects the whole of recruiting for the Army?
    Mr. Head: The right hon. Member has been Secretary of State for War and, if he uses his imagination, he will realise why I cannot say anything more at the moment.

  TRADE AND COMMERCE

    Furniture Industry (Hire-Purchase Restrictions)
    Mr. Albuasked the President of the Board of Trade whether he will now withdraw the restriction on the consolidated hire-purchase agreement in the furniture industry.
    Mr. Gibsonasked the President of the Board of Trade what steps he is taking to reduce the unemployment and short-time working in the furniture-making industry; and whether he has yet come to any conclusions on the recommendations made to him by both sides of the industry.
    The Parliamentary Secretary to the Board of Trade (Mr. Donald Kaberry): I have nothing to add to the reply given last Thursday by my right hon. Friend to similar Questions on this subject.
    Mr. Albu: Does the hon. Gentleman realise that this restriction is having a great effect on the industry? Can he say whether or not representations made by the industry in regard to this matter are being considered?
    Mr. Kaberry: I can give the hon. Member that assurance. My right hon. Friend met a deputation from both sides of the industry within the last three weeks and is giving the matter careful consideration.
    Mr. Nabarro: Will my hon. Friend bear in mind the association between carpets and furniture?
    Mr. Lewis: Is the hon. Gentleman aware that hon. Members who represent constituencies which have furniture factories in them find that many of their constituents are either unemployed or under-employed and on short time and
    188
    that unions and manufacturers claim that that is because of the restriction? Will he do something quickly about this problem?
    Mr. Kaberry: My right hon. Friend is bearing that in mind, but I am sure the House will remember that the latest figures, to the end of April, show that, compared with last year, there are more people employed in the furniture industry.
    Mr. Gaitskell: Nevertheless, in view of the serious situation in the industry, the amount of short time and some degree of unemployment which exists, can the hon. Gentleman tell us when the President of the Board of Trade is likely to make an announcement on this subject?
    Mr. Kaberry: Perhaps the right hon. Member will put that Question on the Order Paper.
    Mr. Hall: Is my hon. Friend aware that the experience of unemployment and short time is not common to all furniture manufacturing areas, and that in some areas there is no unemployment or short time? Nevertheless, will he look at the problem with sympathy, because it affects a large part of the furniture trade?
    Mr. Gaitskell: Will the hon. Gentleman try to give a slightly more helpful answer because of the great concern of many people in the country and many hon. Members whose constituents are in difficulty? Can he give some idea when the President of the Board of Trade is likely to make up his mind on this subject?
    Mr. Kaberry: My right hon. Friend is considering all the representations made to him. I draw the attention of the House to the fact that, compared with last year, there are more people now employed in the furniture industry.
    Mr. Attlee: Could the hon. Gentleman come to my constituency in Walthamstow and have a talk with employees and employers there to find what is the condition of the furniture trade?

    Textile Industry
    Air Commodore Harveyasked the President of the Board of Trade if he will make a statement on the position of the textile industry, including the silk and rayon sections.
    The Minister of State, Board of Trade (Mr. A. R. W. Low): On the general question I would refer my hon. and gallant Friend to the comprehensive statement made by the Prime Minister in the House on 3rd May and to the Answers given by my right hon. Friend the President of the Board of Trade on 13th and 23rd June.
    I will, with permission, circulate the latest available figures of rayon and silk production and deliveries, imports and exports in the OFFICIAL REPORT.
    Air Commodore Harvey: Is my hon. Friend aware that a number of people in Macclesfield are working on short time and that this is mainly due to the dumping of Italian and Japanese silk and rayon? Will he say what steps are being taken to put that right?
    Mr. Low: I understood that some of these matters were being considered by the Silk and Rayon Users Association, which has not made any positive application to us. Imports from Japan, of

    UNITED KINGDOM PRODUCTION, EXPORTS AND IMPORTS OF WOVEN RAYON AND MIXTURE CLOTH

    Million sq. yds.

    ——

    1950

    1951

    1952

    1953

    1954

    1955

    Production

    …

    …

    707

    759

    601

    769

    781

    January-April 243

    Exports

    …

    …

    197

    218

    152

    177

    175

    January-May 61·9

    Imports

    …

    …

    55

    99

    29

    44

    67

    25·1

    UNITED KINGDOM DELIVERIES, EXPORTS AND IMPORTS OF SILK AND SILK MIXTURE CLOTH

    Million sq. yds.

    ——

    1950

    1951

    1952

    1953

    1954

    1955

    Deliveries

    …

    …

    5·72

    5·26

    3·17

    3·77

    3·86

    January-March 0·81

    Exports

    …

    …

    ·9

    ·77

    ·42

    ·56

    ·75

    January-May 0·3

    Imports

    …

    …

    1·35

    1·56

    1·73

    2·82

    3·04

    1·23

    Monopolies Commission
    Mr. Albuasked the President of the Board of Trade whether, in view of the monopolistic tendencies in the retail furniture trade, he will refer it to the Monopolies Commission.
    course, are strictly controlled under quota arrangements of the Anglo-Japanese Agreement.
    Mr. S. Silverman: Will the hon. Gentleman bear in mind that what he calls "the comprehensive statement made by the Prime Minister" has so far proved completely incomprehensible to the industry, and the Answers by the President of the Board of Trade last week have done nothing but increase the gloom and despondency in Lancashire? Does he not think the time has come when the Government ought to bring their mind to bear—if they have a mind—on the position of the textile industry and to decide what long-term policy they are to recommend?
    Mr. Low: As the House knows, the statement of the Prime Minister was a comprehensive statement—[HON. MEMBERS: "No."]—interpreted as such by the industry. I do not think I need add anything to my Answer.
    Following are the figures:
    Mr. Kaberry: It is not clear that the statutory conditions which must be satisfied before a reference can be made to the Monopolies Commission prevail in the retail furniture trade. But in any event, my right hon. Friend has already announced a full programme of work for

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    the Commission and he does not intend to make any further references at present.
    Mr. Albu: Is the hon. Gentleman aware that there is a strong feeling in the industry that over one-third of the retail trade is in the hands of a single firm, and can he say in what way the statutory conditions for reference to the Commission can be fulfilled? Does the hon. Gentleman realise that it is also felt that the ownership by one firm of such a large part of the retail trade has a very considerable effect, on the manufacturing side of the industry, in preventing a continuance of regular employment during the year?
    Mr. Kaberry: A reference to the Commission can be made only if it appears that at least one-third of the goods are supplied by one firm or a group of interconnected firms. I shall be pleased to receive any information which the hon. Member may provide to show that these conditions obtain in the retail sale of furniture.
    Mr. H. Morrison: The hon. Gentleman has said that the President of the Board of Trade does not propose to make any more references to the Monopolies Commission at present, whatever happens. Are we to understand that whatever the circumstances and whatever dramatic facts or conditions may arise, the Monopolies Commission is now to be inhibited from making any further inquiries or receiving any further references?
    Mr. Kaberry: No, Sir. If the hon. Gentleman can give us any information to show that these conditions prevail, it will be most carefully considered.
    Mr. H. Wilson——
    Dame Irene Ward: Four Privy Councillors!
    Mr. Wilson: Is it not an extraordinary fact for a Minister to state that it is not clear to him whether the statutory conditions are satisfied or not, and that he has to ask my hon. Friend to provide information? Should not the President of the Board of Trade get the necessary information from the industry and establish whether my hon. Friend's statement is a statement of fact?
    Mr. Kaberry: The answer is that it does not appear at present to the Board that the conditions do, in fact, prevail.
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    If the right hon. Gentleman can supply evidence, it will be considered.
    Dame Irene Ward——
    Mr. Nabarro: On a point of order, Mr. Speaker. It will not have escaped your attention in the last two days that as several Privy Councillors on the Opposition side of the House now sit on the back benches and a large number of non-Privy Councillors have been elected to the Front Bench, the result is that approximately four times the number of supplementary questions come from the other side as are allowed on this side of the House. What can be done to protect the rights of the minority of private Members on this side of the House?
    Mr. Speaker: That is not a point of order.
    Dame Irene Ward: Does my hon. Friend think that the internal pains from which right hon. and hon. Members opposite seem to be suffering with regard to monopolies are due to sour—oh, very sour—grapes?
    Mr. Viantasked the President of the Board of Trade whether, in view of the prevalence of common price and level tendering, he will set up a Departmental committee to inquire into the changes in the law needed to bring these widespread practices to an end.
    Mr. Kaberry: No, Sir. As already announced by my right hon. Friend, we are asking the Monopolies Commission to inquire into the general effect of these practices on the public interest.
    Mr. Viant: Am I to understand from that reply that the President of the Board of Trade is perfectly satisfied that he has powers to deal with these things?
    Mr. Kaberry: Yes, we feel that the Monopolies Commission has great experience in these matters, and we can see no reason to think that a Departmental committee could do the job any better.
    Mr. Wade: If we are to rely on the Report of the Monopolies Commission and await it before any action is taken, can the hon. Gentleman give an approximate estimate of the period of time that will elapse before that Report may be expected?
    Mr. Kaberry: I could not give that estimate at the moment.

    Restrictive Business Practices (U.N. Discussion)
    Mr. G. Darlingasked the President of the Board of Trade what were the instructions given to the United Kingdom delegate at the meeting held in May of this year of the United Nations Economic and Social Council, in relation to the Report on Restrictive Business Practices.
    Mr. Kaberry: To abstain from the discussion.
    Mr. Darling: Do I take it that the President of the Board of Trade has no views on international monopolies and cartels, and that the only action that he is prepared to take to deal with these menaces in international business is action that he is forced to take by the pressure that we put upon him?
    Mr. Kaberry: No, Sir. The hon. Member does not do himself or the Question justice. The conference was on 16th May, and, in deference to the doubt felt at that time in certain quarters as to which party would be elected to form Her Majesty's Government, we thought it right to abstain from the discussion.

    Rayon Staple Fibre Imports (Tariff)
    Mr. Holtasked the President of the Board of Trade if he will remove or reduce the United Kingdom tariff on the importation of rayon staple fibre.
    Mr. Low: My right hon. Friend is not prepared to recommend arbitrary removal of or reduction in any rates of protective duty, but, as he informed the hon. Member last week, there are procedures whereby interests concerned can apply for the lowering of protective tariffs.
    Mr. Holt: Is the right hon. Gentleman aware that this is not a question of improper removal? Is he further aware that Messrs. Courtaulds have a monopoly in the manufacture of rayon staple fibre in this country and that this year they had an increased profit of £3½ million? Does the right hon. Gentleman think that there is any possible defence for this company having a high protection of 37½ per cent. duty when he gives no protection to the cotton trade against its chief competitors?
    Mr. Low: The point is that there are procedures whereby the interests concerned can apply for the lowering of pro-
    194
    tective tariffs. In fact, no application for the reduction or removal of this duty has been received.
    Mr. Holt: Will the right hon. Gentleman stop stonewalling?

    New Industrial Buildings and Extensions
    Mr. Gowerasked the President of the Board of Trade (1) how many new factories were completed in Wales in 1954; and how many are likely to be completed during 1955;
    (2) how many new factories were completed in the United Kingdom in 1954; and how many are likely to be completed during 1955.
    Mr. Kaberry: According to the latest information, seventy-seven new industrial buildings and extensions of more than 5,000 sq. ft. were completed in Wales in 1954, and 1,652 in Great Britain. I cannot forecast what numbers will be completed during 1955.
    Mr. Gower: If my hon. Friend cannot answer the second part of the Question, can he at least say how the figures for the first quarter of this year compare with those of the similar period of last year?
    Mr. Kaberry: The number of industrial buildings approved in Wales for the first quarter of this year was substantially greater than that for the same quarter of 1954.
    Mr. Watkins: Will the hon. Gentleman tell us the figures of factories built in Wales outside the Development Areas in 1954?
    Mr. Kaberry: Perhaps the hon. Gentleman would put down a Question about that.
    Mr. Ness Edwards: Do not the figures which the hon. Gentleman has just given indicate that the Government have abandoned the Development Area policy? Are they not the worst figures for Wales in the last 10 years?
    Mr. Kaberry: No, that is not so.
    Mr. Slaterasked the President of the Board of Trade how many new factories were completed, in Durham, for

    195
    1954; how many are in course of construction, and in which areas of the county; and the prospects for new factories in 1956.
    Mr. Kaberry: According to the latest information available to the Board of Trade, forty-five new industrial buildings and extensions of more than 5,000 sq. ft. were completed, and forty-eight are under construction. Sixteen of these were in South Tyneside, six in Wearside, fourteen in the rest of the coalfield area, ten in Teesside and the Hartlepools, and two in the Darlington-Barnard Castle area. I cannot say what the numbers will be in 1956.
    Mr. Ainsley: Is the hon. Gentleman aware that in 1945 some 68 per cent. of new industry came into that Development Area, which was then a depressed area, and that in 1954 only 16 per cent. came into that area, and that that is causing concern to local authorities which are setting up their development boards? At the same time there is a drift of population away from there into and around Greater London.
    Mr. Kaberry: I think the hon. Gentleman raises a wider question than the Question on the Paper.
    Mr. Slater: Can the hon. Gentleman say how these figures compare with those of Development Areas in the rest of the country?
    Mr. Kaberry: I think it would be better for the hon. Member to put down a separate Question about that.

    Cotton Operatives, Accrington and Church (Short-time Working)
    Mr. H. Hyndasked the President of the Board of Trade whether he is aware that 800 cotton workers in Accrington and Church are now working short time; and what progress is being made with plans to help the cotton industry to overcome its present difficulties.
    Mr. Low: I am aware that there is some short-time working in this area. My right hon. Friend has invited the Cotton Board to discuss with him some of the problems in the various export markets.
    196
    He has taken every opportunity to urge on the United States Government the importance of ending the present uncertainty as to their future raw cotton policy.
    Mr. Hynd: Is the Minister aware that it is not a question of the Government of the United States but a question of India more than anything else, and what is he doing about that?
    Mr. Low: I am told that the short-time working in the hon. Gentleman's constituency is mainly in fine cottons and other cloths which are not affected by imports. I think if he will inquire into that he will find that the main trouble is, possibly, exports and doubt about the future of the price of raw cotton, which is very important.
    Mr. Fletcher-Cooke: Could my right hon. Friend name any date by which the answer to this very important question of fixing by the Americans of the price of raw cotton is likely to be known?
    Mr. Low: No. I wish I could, but I am afraid I am not able to do that.
    Mr. S. Silverman: Does the right hon. Gentleman not realise that the supplementary answer which he gave to my hon. Friend just now, pointing out that the trouble in the Lancashire cotton industry is not exclusively due to the Indian question, reinforces the demand that is being repeatedly made by all sides of the industry and from all quarters of the House that the Government should as soon as possible consider what their long-term policy is to be?

    Aycliffe Trading Estate
    Mr. Slaterasked the President of the Board of Trade how many of the factories are in commission, as such, on the Aycliffe Trading Estate; and how many building sites for new factories are available on the estate.
    Mr. Kaberry: There are fifty-six tenant firms on the Aycliffe Trading Estate occupying 1,280,000 sq. ft. of factory space for manufacturing purposes. There is ample land available on the estate for any expansion likely to be required.

  FOUR-POWER TALKS
  Mr. Hector Hughesasked the Prime Minister what steps he has taken during the last two months for securing talks at top level between the Governments of Britain, the Union of Soviet Socialist Republics and China, with a view to limiting the arms race and promoting agreements for international peace.
  The Prime Minister (Sir Anthony Eden): The hon. and learned Member will be aware of the steps which have been taken to secure talks at the highest level between the Governments of the United Kingdom, the United States of America, France and the Union of Soviet Socialist Republics, which are due to take place at Geneva on 18th July. There is no question, at the present time, of seeking a further conference different in composition and overlapping in scope with the conference due to take place at Geneva.
  Mr. Hughes: Is it not a fact that everything so far done about the summit talks since the Government took over Labour policy in this matter has been of an inchoate and nebulous character? Does the right hon. Gentleman realise that I am asking him about two specific matters—the arms race and international peace? Has he nothing to say about them?
  The Prime Minister: If the hon. and learned Gentleman, in the course of his studies, had been good enough to read the proposal of the Allied Powers for this meeting, he would have read that the agenda at Geneva does not exclude any topic from discussion. It is hardly for the Prime Minister of this country to lay down for all the other countries exactly what should be discussed.
  Mr. A. Hendersonasked the Prime Minister whether he will make a statement on the agreement of the four Foreign Ministers that any subject which is contributory to the cause of world tension may be raised at the forthcoming Geneva Conference.
  The Prime Minister: No formal agreement on this matter has been reached by the four Foreign Ministers, but it is clear from the terms of the invitation which the Governments of the United Kingdom, the United States of America and France addressed to the Soviet Government on 10th May that, so far as they are concerned, any subject may be raised.
  Mr. Henderson: Does that refer to the meeting of the heads of Government, as opposed to the separate meetings we are told are to be held by the Foreign Ministers?
  The Prime Minister: That is in our Note dealing with the meeting of the heads of Government. That is our position.

  NUCLEAR RADIATION
  Dr. Strossasked the Prime Minister when the White Paper on the possible harmful effects of nuclear explosions will be issued; and whether he will instruct our delegate to propose in the United Nations that a commission should be established to study and assess the potential dangers in atomic and thermonuclear bomb tests.
  The Prime Minister: I am informed that the Medical Research Council is giving the highest priority to the preparation of a report on the medical aspects of nuclear radiation, but it cannot yet say when it is likely to be ready.
  With regard to the second half of the Question, the United States representative to the United Nations made a proposal on 21st June that the United Nations should assemble and collate scientific information from all over the world on the effects of radiation on human health and safety. Her Majesty's Government have learned with interest of this proposal. It will be given careful study and Her Majesty's Government will be ready to take their full part in discussing it at the first convenient opportunity.
  Dr. Stross: Whilst thanking the Prime Minister very heartily for the information given in his answer, may I ask him whether the report is correct that the Soviet Union has stated that it is prepared to stop further tests at the moment?
  The Prime Minister: I have not heard that.

  SCOTTISH GRAND COMMITTEE
  Mr. Emrys Hughesasked the Prime Minister the Government's proposals for adding to the powers of the Scottish Grand Committee.
  The Prime Minister: The powers of the Scottish Grand Committee already extend beyond the functions of the other

  199
  Standing Committees. The Government do not, therefore, consider that there is any need to increase them. We are, however, considering the suggestion made in the recent debate on the Report of the Royal Commission that at the Committee stage of Bills it may not always be necessary to use the full Committee.
  Mr. Hughes: Is the Prime Minister aware that the Scottish Grand Committee is now regarded as the penitentiary for refractory Members from England and Northern Ireland, and that they only come into the Committee when the Division bell rings to decide Scottish business? Is the right hon. Gentleman also aware that the Government have robbed the Scottish Grand Committee of six days for discussing Scottish Estimates and Scottish business, and is this not a good time, at the beginning of a new Parliamentary Session, to look thoroughly into the question of how we can give more powers to and improve the efficiency of the Scottish Grand Committee?
  The Prime Minister: I should be most reluctant, as an English Member, to intervene in respect of the earlier part of the supplementary question. I have a feeling that it might get me into considerable trouble.
  As regards the second part of the supplementary question, relating to the arrangements about Supply days and the General Election, it is true that certain steps had to be taken in order to enable us to hold the General Election. Perhaps if there is a matter on that subject that the hon. Gentleman wants to raise, it could be raised with the Leader of the House through the usual channels.
  Captain Duncan: Does my right hon. Friend realise, if he is discussing through the usual channels this question of dividing the work of the Scottish Grand Committee to deal with certain Bills, that the Labour Party this morning voted against its own Whip?
  Mr. Rankin: Not at all.
  Mr. Woodburn: To come to a more serious point—the incidental and accidental loss of the six days that are normally allocated to the discussion of Estimates in the Scottish Grand Committee—I suggest that the Government, in the extraordinary circumstances which have arisen, I have no doubt quite un-
  200
  intentionally, should not deprive Scotland of this special opportunity, and that provision should be made for the allocation of some days for the Scottish Grand Committee to discuss the Votes of the Departments for Scotland. It would not interfere with the normal work of the House.
  The Prime Minister: I think there is some complexity about the matter in respect of our Standing Orders. Perhaps the matter could be discussed through the usual channels.
  Mr. Rankin: On a point of order. Is it in order for the Prime Minister to compare the Scottish Grand Committee with any other Standing Committee?
  The Prime Minister: I thought I was trying to avoid any of Mrs. Malaprop's odoriferous comparisons.
  Mr. Speaker: Anyhow, it is not a point of order.

  HYDROGEN BOMB
  Mr. K. Robinsonasked the Prime Minister if, in view of the improved prospects for nuclear and general disarmament, he will halt production of the British hydrogen bomb at least for a limited period, as a positive contribution towards securing international agreement in this field.
  The Prime Minister: No, Sir. The prospects for nuclear and general disarmament have improved because the Western Powers have persisted in building up their strength. There is no reason to think that a reversal of this policy would now be either timely or effective.
  Mr. Robinson: Does the right hon. Gentleman not appreciate that a gesture such as this would be widely regarded, not as a sign of weakness, but as a sign of strength and of confidence in the future? What is the good of our trying to prove to the world that we can manufacture these hideous weapons when the whole world knows perfectly well already that we can if we wish to?
  The Prime Minister: We are not the only people manufacturing these hideous weapons, and I should have thought that the future of this problem was one which might be well discussed, in whatever form

  201
  thought appropriate, at the Geneva meeting. I do not myself believe that in advance of negotiations of this kind we improve our position by gestures of that kind.

  NATIONAL FINANCE

    Public Works (Cost-Plus Contracts)
    Mr. Rentonasked the Chancellor of the Exchequer to what extent the cost-plus method of paying for Government contracts for public works is still used; and whether he will introduce a more satisfactory method of payment, which is less wasteful of public money.
    The Financial Secretary to the Treasury (Mr. Henry Brooke): It is the general policy that Government Departments should not enter into cost-plus contracts for public works, but in some cases, for example, where the work to be done is of an exceptional nature, or unusually difficult to cost in advance, it is not always practicable to adhere to this rule.
    Mr. Renton: Is my right hon. Friend aware that, in spite of what he has said, the cost-plus method is used far too widely and that it is an invitation to contractors to charge as much as possible? Will he aim, with the Chancellor, to have the practice eliminated as soon as possible?
    Mr. Brooke: The Treasury's desire is that that method should be used as little as possible. If my hon. and learned Friend would like to draw my attention to any case in which he thinks the cost-plus contract has been entered into unnecessarily, I should be very glad to examine it.

BUSINESS OF THE HOUSE
Mr. Attlee: May I ask the Lord Privy Seal for what purpose he has on the Order Paper a Motion to suspend the Standing Order, and how far he proposes to go with the Rating and Valuation (Miscellaneous Provisions) Bill today?
The Lord Privy Seal (Mr. Harry Crookshank): The purpose is to get along as well as we can with the Bill. I am very ready to meet the right hon. Gentleman, who has suggested that we should have another clear day to debate the Bill. If that is agreeable to the House, I suggest that we proceed tonight on the Committee stage up to the new
202
Clauses and that on Thursday, instead of the Road Traffic Bill, we should take the new Clauses and Schedules. I do not think that, in consequence of that arrangement, we need sit very late tonight.
Mr. Attlee: I think that that would be satisfactory. There is a great deal of detailed work on the Bill of which many hon. Members have particular knowledge. Provided that we do not start on the new Clauses tonight, we may finish at a reasonable hour.
Mr. Crookshank: I take it that that is acceptable and that we finish dealing with the Amendments today and take the new Clauses and Schedules on Thursday. As the right hon. Gentleman knows, the Bill is urgent. I hope that part of the arrangement will be that we have the Report stage and Third Reading early one day next week.
Mr. Attlee: We will try for that, but it depends how forthcoming Ministers are. There have been occasions when, obviously, the opinion of the whole House, on both sides, demanded changes and Ministers seemed to be rather obdurate. I hope that they will have second thoughts.
Mr. Crookshank: That, of course, is a very general statement which possibly applies to Ministers at all times—in whatever part of the House they sit now—in the future or in the past. Provided that good progress is made, I do not think that it is asking the House too much to pass the Report stage and Third Reading early next week so that we can get on with the Bill.
Mr. Hirst: Is my right hon. Friend aware that this kind of change of business in the same week, without any notice to us on this side of the House, is very far from satisfactory?
Mr. Crookshank: I agree that in these difficult matters of important business it is never easy to satisfy everybody, but I am trying to see that there is adequate time to discuss an important Bill. My hon. Friend need not worry—the Road Traffic Bill will come along later.
Proceedings on the Rating and Valuation (Miscellaneous Provisions) Bill exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Crookshank.]

ORDERS OF THE DAY

  RATING AND VALUATION (MISCELLANEOUS PROVISIONS) BILL
  Considered in Committee. [Progress, 27th June.]
  [Sir CHARLES MACANDREW in the Chair]

  Clause 4.—(ASCERTAINMENT OF RATEABLE VALUE.)
  Amendment proposed [27th June], in page 8, line 14, to leave out subsection (8).—[Mr. Mitchison.]
  Question again proposed, That the words proposed to be left out, to the end of line 23, stand part of the Clause.
  3.34 p.m.
  Mr. G. Lindgren: When the Parliamentary Secretary to the Ministry of Housing and Local Government had finished his speech last night and I rose, both he and his right hon. Friend were no doubt disappointed that they did not secure a decision on this Amendment, but I am sure that, on reflection, both will agree that it was wise to have further time to discuss all the important points which were raised yesterday.
  I think that the case was exceptionally well put by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and my hon. Friend the Member for All Saints (Mr. D. Howell), whose advent as a colleague we welcome and whose knowledge of local government will be of great advantage to the Committee. On the other side of the Committee, the hon. and learned Member for Hertfordshire, East (Mr. Walker-Smith) and the hon. Member for Oldham, East (Sir I. Horobin) put an equally effective case against the Government's proposals.
  Earlier yesterday, the Minister said that he was impressed when, during discussions in Committee, both sides were agreed and there was not a voice in support of the proposals which he had before us. That was the case last night, and I seriously suggest that where there is full knowledge among hon. Members, if not of every detail then of the general principles, it is always desirable that when there is agreement among such knowledgeable persons—which happens more often on the subject which we are
  204
  discussing today than on almost any other—the Minister should be ready to make a concession.
  I should like to start by discussing the bass upon which we can reach agreement before we discuss those points on which there is disagreement. First, in common with all other classes of properties, water undertakings have not been revalued since 1934. It may be, as the Parliamentary Secretary suggested, that in some cases those values which are now on the rate books of local authorities are not altogether in agreement with the facts of valuation, but that does not apply only to water undertakings. We are agreed at once that there ought to be a revaluaton of water undertakings in exactly the same way as of other properties to bring them into line with other property in relation to their value and the amounts which they contribute to the general provision of social services in the local authority area.
  Equally, the result of revaluation of other people's property, which is now going on in the case of domestic businesses and shop premises, ought not to mean that the reduction in rate poundage is a benefit to water undertakings, that is to say, that those undertakings maintain their existing rateable value and pay less, with the local authorities losing revenue from that source. We agree on that point on both sides of the Committee.
  I should like to be equally emphatic about the Government's proposals as an alternative to those now provided in Clause 4 (8). They are unsatisfactory and they ought to be withdrawn, because water and electricity undertakings are social services as well as industries. They fulfil similar functions in their respective areas and, therefore, ought to be similarly treated.
  That is not the proposal in the Bill. In the Second Schedule there is virtually an instruction to the Inland Revenue Department to value water undertakings on the average of the cost of repairs and renewals over the past three years. I suggest to the Committee that this is an unreal basis on which to start. We are still in a period of considerable shortage of materials and of an even greater shortage of the type of labour used by water

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  undertakings on their civil engineering and building construction work.
  So, although restrictions are fewer than they were, water undertakings, even with the best will in the world, have not been able to carry out the work they would have liked to do during the past three years. It is equally true that what work they have been doing has been the renewal of works constructed with the use of capital forty, fifty and sixty years ago. Those replacements are of an age which bears no relation to the present capital structure of the undertaking concerned, its provision for future capital, and the rest.
  I do not claim to be an expert, but it seems to me that where an asset of an undertaking lasts forty, fifty or sixty years it is not unreasonable that one-fortieth, one-fiftieth, or one-sixtieth of its capital value should be written down each year so that, when replacement of the asset is needed within that period, the money will be available or the undertaking will have credit for the depreciation which has occurred.
  It is true that capital development in water undertakings over the past twenty-five years has been considerable. This is commendable, because it has given the benefit of a public health service to hundreds of thousands, if not millions, of people who were previously deprived of it. Hon. and right hon. Gentlemen can take some credit, if they like, for the fact that there was considerable expansion of the industry in the 'thirties, with Government encouragement. In view of the encouragement given by pre-war Governments of all types, and by the Labour Government after the last war, is it unreasonable to say that some credit should be given for the capital then expended in arriving now at the question of valuation?
  Many undertakings developed considerably after the last war with the encouragement of the Labour Government. There were amalgamations of water companies. There was the institution of area boards; indeed, some of my hon. Friends would have liked this to be extended to a national water supply. This proposal, however, makes no allowance for that change in the structure of the industry, or for the fact that its development has been for the service of the public. The Minister appreciates that, because in addition to
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  having given what is virtually an instruction to the Inland Revenue to take the last three years as a basis, he then gives two alternatives. The first is to take the average cost for the years from 1944 to 1954.
  3.45 p.m.
  I could have made greater play than I did with the impracticability of taking the average of the last three years, but to take the ten years from 1944 to 1954, which were the last years of the war and the immediate post-war years—well, words almost fail me. We on this side of the Committee might perhaps be blamed for it, but there were then severe restrictions on water companies. I had the honour of serving in the Government with my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) and I remember representations being made to us by a large water undertaking which was not getting all the help which it thought it should have for making renewals because of the restrictions on capital development.
  That large water undertaking said, "We appreciate your position as a Government, but we are an important undertaking and we have responsibilities. We think it is our duty to call attention to the fact that all our technical officers think that these renewals are necessary and that if they do not take place something serious may happen and the supply may be interrupted." At that time, my right hon. Friend had to take into account whether the decision not to allow the undertaking to carry out the renewals was a wise one in view of those representations. Those renewals were not carried out.
  Would it be fair that this large and responsible undertaking should be penalised because it did not undertake renewals which it urged on the Government should be undertaken? Right hon. Gentlemen opposite must take over some of our sins as well as all the blessings we conferred on them when they took office. Is it fair that this undertaking should be penalised because the Government of the day would not allow it to undertake those renewals?
  Realising that this is an impossibility, the Government offer what I think is an even more impracticable solution. They say, "If you do not like the last three years and if you do not like the ten years

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  from 1944 to 1954, go back to the ten years from 1929 to 1939. We realise that costs have risen since those years so we will let you multiply the cost by three." The factor of three in the cost seems to recur. Where it came from originally, I do not know. We had it in the Girdwood Committee Report in regard to housing repairs. Hon. and right hon. Gentlemen opposite who have a knowledge of civil engineering will be the first to agree with me that a basis of three times the cost as between 1929 and now is certainly not realistic when applied to civil engineering costs.
  What relation can the average cost of replacement works undertaken in 1929 have to the cost which these undertakings have to bear today? It is fantastic. At the same time as the general structure of the industry has changed over many years, certainly in the last twenty-five, the capital structure of the industry today—to which those ten years is supposed to have some relation—has nothing to do with the size of the undertaking, the extent of the development of its capital, the changes in pumping arrangements, and so on, which have taken place in the industry.
  There is, perhaps, an even worse feature. In this respect, I do not think that the Parliamentary Secretary was at all forthcoming last night when replying to his hon. and learned Friend the Member for Hertfordshire, East. I agree, and all to whom I have spoken who are associated with water undertakings agree—I do not want to be too definite or use language which is too strong—that the trend will certainly be to imperil the development of rural water supplies. It will certainly make the cost to the consumer fantastic when one takes into account that this is a public service.
  Ever since that monumental Measure the Public Health Act, 1875, the provision of a public water supply has been considered as the basis of public health administration, with which I agree. In 1945, the Labour Government gave a great deal of encouragement to water companies, even at the expense of their repairs and renewals, to make new provision in rural areas. The Water Act, 1945, added to the burdens of water companies and water boards the duty to provide water supplies for persons in
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  dispersed areas where the sinking of capital by the water undertaking was risky because it could not, as it used to be able to do, lay down the condition that there must be a likelihood of other hereditaments being joined to the supply line.
  In a rating and valuation Bill we ought not to agree to impose a basis of valuation which cuts right across the policy of the present Government and the policy of the Labour Government, of making a greater and more varied supply of water available to people in rural areas, even in very scattered communities. I suggest to the Minister, and I do it without trying to score points, that we want as far as possible to do the right thing by everybody. The present basis of valuation has been in existence for a long time, and if there is a reason for changing it, it should be a good reason.
  There are valuers who have been concerned with the valuing of water undertakings for thirty or forty years. They are men of repute in their profession who understand water undertakings. They know a great deal about the industry and its capital structure and about rating and valuation. Also, there are public-spirited men, who are not concerned about sectional interests, in such organisations as the Metropolitan Water Board, the Birmingham Corporation water undertaking or the Manchester Corporation water undertaking, men who have given their lifetime to the industry and know it from A to Z. Surely it is possible for the Minister to discuss the matter with those valuers and the other knowledgeable people in the industry and arrive at some agreement which is equitable to all sections of the community. If that could be done, surely the Minister could agree, as it has been agreed that there is to be a revision or rearrangement of the gas and electricity pool payments, and there is to be legislation——
  Mr. Gerald Nabarro: This point has been raised four times from the other side of the Committee. As I understand, no undertaking whatever has been given about legislation. All that has been said is that there will be a review. That is the critical point about the whole argument.
  Mr. Lindgren: The hon. Gentleman has less faith in his colleagues than I have. I have at least taken what they

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  have said at its face value. It is rare that Ministers intend deliberately to mislead the House of Commons, and I certainly would not suggest that the Minister and the Parliamentary Secretary, particularly the present occupants of those offices, would do that in this case. Therefore, I take it that there will be a review. The Minister gave me that undertaking in reply to the Second Reading debate on 6th April, and it has been repeated since by the Minister and the Parliamentary Secretary. They would not have done if they had not been serious about it.
  Either the Minister or the Parliamentary Secretary yesterday—I do not want to attribute statements to one or other of them wrongly—said that there had been discussions with the local authorities, who were pressing for a revision, and it had been agreed with the local authority associations to bring forward the review. I am prepared to accept the Minister's word for it, and we will give the Government the assistance they require in passing the necessary Measure through the House, although we may be critical of it.
  Mr. Victor Collins: The Parliamentary Secretary, replying yesterday to the point made from these benches about the costs of the Birmingham Corporation, which were quoted at 13·7 per cent. as against 1·8 per cent. for gas undertakings, specifically referred to the fact that gas undertaking rating would be reviewed, which would have the effect of reducing the gap.
  Mr. Lindgren: I am grateful for that helpful interjection. It is further confirmation of the point which I made.
  Meanwhile, cannot we treat the water undertakings in exactly the same way as we treat the ordinary ratepayer or groups of ratepayers, whether shopkeepers or business people, who are in dispute about their valuations? The Bill says, and I think this is fair, that when an objection is made to a valuation, the ratepayer or group of ratepayers shall, until it is settled, pay the same amount in rates as they paid the previous year. This would be likely to meet with the approval of local authorities, and I am sure that water undertakings would readily agree that while discussions were going with the Minister they should pay the same amount in rates as in the previous year, irrespective of the rate poundage.
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  If the Minister is not prepared to withdraw this provision and let us deal with gas, water and electricity together, perhaps he would agree to withdraw this provision now and bring it forward again on Report. Judging by what was said earlier today by the Lord Privy Seal, it may be that there will not be sufficient time before Report stage for the Minister to undertake discussions, and, therefore, perhaps my first suggestion is the better one.
  I want also to deal with the question of the Birmingham undertaking. The Inland Revenue has sought to implement over a period the basis set out in Clause 4 (8). It was plain to the British Waterworks Association that that was so, and it was contesting it. As I said on 6th April, the Association said that the Inland Revenue was trying to apply a system of valuation which had no legal authority. In spite of what the Parliamentary Secretary said, the Inland Revenue then invited the Birmingham Corporation to undertake a test case through the British Waterworks Association.
  This is common practice in Government circles. If a point is in dispute, a national organisation or a large undertaking may be invited to take a test case in order to get a decision. In those circumstances, it is not unusual for the Government to offer that each side should bear its own costs. I do not know whether that was done in this case, but the Birmingham Corporation was certainly invited to contest the case. The case took a very long time to be heard before an eminent person. It has now finished and the decision is to be announced on Friday.
  4.0 p.m.
  Surely it is not unreasonable to say that the Government may have to change their view in the light of the decision on Friday, or that they may have reason to change their view. It may be that hon. Members who speak with knowledge of the subject will have to change their minds. We can lose nothing by delaying a decision on this matter and leaving it open until after the court decision is announced.
  This is a very unsatisfactory proposal; it is quite as unsatisfactory as the original Clause 4 (8). We will give the Minister time to undertake the negotiations. We do not wish to evade our responsibility for making decisions, but nothing but good can come from consultation with the most

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  knowledgeable people and coming to the best possible decision. In that spirit I ask the Minister to withdraw the Clause for further consideration.
  Mr. Graham Page: On a point of order. A number of hon. Members wish to discuss the affect of this Amendment on industries other than public undertakings. If you are calling the next Amendment, Sir Charles, it might be more convenient to deal with them then. If not, some of us would like to address the Committee on that subject.
  The Chairman: The next Amendment, in the name of the hon. Member for Norfolk, Central (Sir F. Medlicott) will not be moved, but a later one in the name of the hon. Member for Harrow, Central (Mr. Bishop), Clause 24, page 8, line 27, will be called and that might be most suitable for that purpose.
  Mr. Page: I am much obliged.
  Sir Robert Grimston: I do not want to detain the Committee for very long, because a great deal has been said on this subject, particularly in reference to water undertakings, and I do not want to add very much. I think that it is generally agreed that the water undertakings are very apprehensive about the affects of this Clause and that those apprehensions are not allayed by the Amendments to the Bill and the Schedule which the Minister now has on the Notice Paper.
  I do not think that it will be disputed on any side of the Committee that some change in assessment is desirable, particularly when, as was pointed out yesterday by the Parliamentary Secretary, if things are left as they are, there will be considerable reductions in assessments. I do not think that anybody would be prepared to support that. I am concerned about the timing of what is being done, quite apart from the substance. First, we have the Birmingham case, to which reference has been made and in which we shall get a judgment on Friday.
  I shall not suggest that the House of Commons should have to wait for a decision of that sort in order to legislate, nor, indeed, that the House should necessarily be influenced by such judgments. But when one is considering matters of this sort, and judgment in an important case
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  is imminent, it is just as well to see what that judgment does contain before making a final decision. I do not look upon it as more than a help to the House, and certainly not as a direction to the House.
  The next matter is that an undertaking has been given that pool arrangements are to be reviewed in a year's time for gas and electricity and it has been suggested that that would be an appropriate time also to review assessments for water undertakings. Beyond that there is the general pledge, which was repeated by the Parliamentary Secretary last night, that when the results of revaluation are known the Government will review any case where injustice exists, or where it is thought that adjustments should be made, and the Parliamentary Secretary specifically brought water undertakings under the umbrella of that general pledge.
  The position we will have is that for the sake of a year or more we will have this upset for water undertakings which may all be reassessed again in a year. I am concerned with the point made last night by my hon. and learned Friend the Member for Hertfordshire, East (Mr. Walker-Smith) about the deterrent effect, particularly on rural water supplies. We are all most anxious that there should be progress with those supplies and an upset of this sort for a short period may well have a deterrent effect, although the Parliamentary Secretary said he did not think that it would. Of course, that can only be a matter of opinion.
  However, I suggest to my right hon. Friend that it would be worth considering—I put it no higher than that—letting things run on as they are until this other revaluation takes place and these other decisions are known. It would not make very much difference and it would be a prudent course to adopt. At any rate, we are today at only the Committee stage and between now and the Report stage the Minister might consider whether it would not be prudent to do that. He is a Parliamentarian of considerable experience and he will know that by deference to the wish which I believe is held on all sides of the Committee, he will, in the end, be losing nothing.
  I ask my right hon. Friend to give consideration to this between now and the Report stage to see whether he cannot arrive at a more satisfactory solution. I suggest that it may be wise to let things

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  run on for another year, having regard to the things to be done in other directions and the pledges that have been given by the Government.
  Mr. Ede: I should like to join my plea to that of the hon. Member for Westbury (Sir R. Grimston), who speaks with some knowledge of the problems of water supply that confront rural district councils. I hope that the Minister will feel that the plea he has put forward is one to which he ought to listen. So far as urban cases are concerned, I am informed by the water company that supplies my constituency and the important County Borough of Sunderland that this will mean such an increase in the charges on them that they will have to make an increase equal to 8 per cent. on the charge to people who pay water rates.
  Mr. J. Enoch Powell: When the right hon. Gentleman says "This will mean," does he mean the proposal in the Bill, or the proposal in a Schedule on the Notice Paper?
  Mr. Ede: As I understand, it means the latest proposal of the Government. I can go only by what is said by a company technically fully qualified to speak on the matter. I understand that that refers to the latest proposal.
  Whether the sum is great or small, I want to point out that as a rule water companies have contracts for a supply of water to premises other than domestic premises. Big industrial concerns which want water enter into long-term contracts with water companies. If these proposals result in substantial increases in the cost of supplying water, that will, in the main, be borne by the domestic consumers.
  In my opinion, one of the difficulties which arises from the Government's proposals is that they may lead to a substantial variation of the rates in two successive years. As I understand, the proposal made last night by the Parliamentary Secretary was that we should proceed in this matter by trial and error; that if the Government find they have perpetrated an error, the matter can be put right after one year's infliction of the error upon the consumer. I imagine that most rating authorities, and people with the power to levy rates, such as water undertakings, prefer to apply where possible the doctrine of what is called the
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  "even keel," and that substantial variations up and down are things which people who have to levy rates, or to precept for rates, wish to avoid when they can.
  Of course, where the rents of controlled properties become involved, there is the difficulty of giving notice when rates go up; and the fear experienced sometimes by tenants that when rates go down the appropriate notice may be forgotten. There have not been many instances in recent years where it has been possible to issue a notice of a rate reduction, but it may be that people who have the duty of issuing these notices sometimes feel that they ought only to be issued when rates go up.
  I urge the Government to bear in mind the plea advanced by the hon. Member for Westbury and also what appeared to me to be the quite devastating case made yesterday by the hon. and learned Member for Hertfordshire, East (Mr. Walker-Smith). We understand that the whole question of this kind of service is to be reviewed next year, so this matter might very well stand over until then. Perhaps then we could get on to a basis which would be fair not only to the water undertakings, but also as between the different forms of public utilities. I hope that the plea voiced by my hon. Friend the Member for Wellingborough (Mr. Lindgren) and other hon. Members will not fall on deaf ears when the Government have to make a decision.
  4.15 p.m.
  Mr. Nabarro: I wish shortly to refer to the numerous speeches from hon. Members on both sides of the Committee about the proposal that rearrangements of rating for water undertakings should be deferred until a date when they could be made to coincide with the gas and electricity undertakings. It seems to be very uncertain when the rearrangements will be made for gas and electricity. The point was first raised yesterday by the hon. and learned Member for Kettering (Mr. Mitchison) who said:
  "We know that a Bill is to be introduced in the comparatively near future to deal with gas and electricity—we have been told so. That being so, I have a suggestion to make to the right hon. Gentlemen and to his hon. Friends opposite. I suggest that the legislation dealing with the valuation and rating of the

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  water industry should be postponed until it can be dealt with in conjunction with, and perhaps, in the same Bill …"—[OFFICIAL REPORT, 27th June, 1955; Vol. 543, c. 141.]
  as gas and electricity.
  At that point I expressed a doubt about whether any promise had been given to introduce legislation for gas and electricity, and I was told by my hon. Friend the Parliamentary Secretary that he dealt with the matter in reply to my Second Reading speech on 17th June. I can find there no reference at all to legislation. All that my hon. Friend said on that occasion was:
  "I would say to my hon. Friend the Member for Kidderminster (Mr. Nabarro), who made a long and very characteristic speech on the subject of the Central Electricity Authority in relation to this matter, that the point that he and the hon. Member for Wellingborough made is met by the assurance that I gave on the last occasion, that this will be the subject of a review in the year in which the revaluation takes place."—[OFFICIAL REPORT, 17th June, 1955; Vol. 542, c. 994.]
  I suggest to my hon. Friend the Parliamentary Secretary that that is not quite on all fours with his intervention yesterday when, referring to the same matter, he said:
  "I specifically stated that in the year 1956—it was not an indeterminate date. …"—[OFFICIAL REPORT, 27th June, 1955; Vol. 543, c. 142.]
  I had used the expression "indeterminate date." What I am trying to get at is the date when this review and revaluation—which evidently will not then be the subject of legislation immediately—is, in fact, to take place, as my understanding of the position is that the arrangement with the central pool runs for ten years from the passing of the 1948 Act.
  If the review on revaluation takes place in 1956, I think it follows, in the normal process of dealing with all these complicated matters with the Inland Revenue, and with a review of rating arrangements, that it will probably be two or three years before any change is made in the central pool arrangements after the date when the review is initiated. That brings me to the conclusion that were the suggestions made by so many hon. Members opposite during the last twenty-four hours followed out, and the revision of rating arrangements for water undertakings deferred until a date to coincide with the gas and electricity undertakings, it would
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  probably be 1958 or 1959 before it became effective.
  I am in a good deal of sympathy with the suggestion—though I do not wish to be dogmatic about it—that water, gas and electricity should be treated on the same basis. In my view, they should be dealt with on the same date. But I am concerned also about the fact that there is at present gross inequity as between electricity hereditaments and ordinary industrial hereditaments. I made that point with, I think, reasonably good effect on the Second Reading of this Bill, and I was supported by a number of hon. Members opposite. I do not wish to see those inequities perpetrated for a further period of three years. If we put off the revision of these water undertaking arrangements for rating purposes until a date to coincide with gas and electricity, we shall perpetrate these inequities at least until 1958 which, I think, would be a wrong thing to do.
  Mr. James MacColl: The hon. Member for Kidderminster (Mr. Nabarro) has been most helpful to us in our attempts to understand the Parliamentary Secretary. Some of us find that difficult. Would the hon. Gentleman add to his exposition an explanation of what the Parliamentary Secretary meant when he said yesterday:
  "The most important is that we accept the fact that there is a need for revision. The local authorities are pressing for it, and one will take place immediately on revaluation in about a year from now."?—[OFFICIAL REPORT. 27th June, 1955; Vol. 543, c. 156.]
  Were we wrong in thinking that the Parliamentary Secretary meant a year when he said, "in about a year," or should we have understood, by a natural process, that he meant three years?
  Mr. Nabarro: I have only cursorily read through the paragraph to which the hon. Gentleman has just referred——
  Sir Frederick Messer: Is the emphasis on "curse"?
  Mr. Nabarro: The emphasis is on "cursorily."
  I observe that on that occasion my hon. Friend the Parliamentary Secretary was referring only to the British Transport Commission. If the hon. Gentleman will read it, I think he will find that is the case. However, I am not arguing that,

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  because I think it is irrelevant and that my hon. Friend the Parliamentary Secretary must look after himself in this matter, as no doubt he is well able to do.
  The point I wish to make is that though a good deal of sympathy has been expressed with the suggestion that there ought to be standard treatment for water, gas and electricity—as is manifestly clear from the speeches made on the subject from this side of the Committee, notably that of my hon. and learned Friend the Member for Hertfordshire, East (Mr. Walker-Smith)—I am not in agreement with the suggestion that, to create that standard treatment, the revisions should be put off for a period of about three years before they become effective.
  Although my hon. Friend the Parliamentary Secretary may be right in saying that the review and the revaluation will take place in the same year, namely, 1956, what limited experience and knowledge I have of these rating and Inland Revenue matters suggests to me that even if the review and revaluation took place next year, the implementation of what is required would not actually come into effect until about 1958. That would mean perpetuating this very real grievance in regard to the enormously valuable electricity—I am speaking of power generation—hereditaments for a further period of three years.
  Mr. MacColl: I welcome the fact that we have had this overnight break in our discussions. It has enabled us to try to epitomise the issues of this very complicated question, of which I do not pretend to have any detailed knowledge. However, I think that anybody who has taken the trouble—quite clearly, the hon. Member for Kidderminster (Mr. Nabarro) has not—to read through the previous proceedings, and particularly the speech of the Parliamentary Secretary, will be struck by the extraordinary lightness of that speech in contrast with the weight of opinion expressed on both sides of the Committee on this very important question.
  I am sure that the Parliamentary Secretary did his best, but he failed to meet any of the constructive proposals put forward on both sides of the Committee for finding a way out of this difficulty, or the criticisms made about the suggestions which the Government put forward. In an earlier debate, we on this side were
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  challenged—I think a little unfairly—for having spent a lot of time criticising the Government's proposals and for not having suggested any alternative way of getting round the difficulty.
  The main difficulty is, apparently, the fact that the sum is coming out wrong, and that under the present system of valuation the water undertakings are not paying as much as, in the Government view, they ought to be paying. That, of course, is typical of the obsession of the Government. Both in this and in the previous Bill they have not really tried to strike a valuation which is fair or objective. They have merely tried to decide who best can afford to pay the money. They think that the water undertakings ought to pay more, or at least as much as they are paying at present, regardless of how the sum works out.
  That view is one with which I quarrel. It does not impress me, because water is a vital health service. It is also a vital industrial service. Why should water be put in this unique position, unique both vis-à-vis industrial hereditaments, which have the advantage of derating which does not apply to water undertakings, and unique in regard to the other utilities, gas and electricity undertakings, which do not pay the same share?
  The Parliamentary Secretary has not really attempted to answer that dilemma. All he has said is, "I agree that water undertakings are in an unfair position, but at some time in the future, whether next year or in two or three years' time, or whatever the period, we shall make the other industries pay more," just as, I suppose, one may hope that some time in the future the Government will agree to the rerating of industrial hereditaments, when the water undertakings will not be in such an invidious position.
  Why cannot the Government accept the suggestion put forward by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) that the way out of the difficulty would be to have a standstill arrangement for existing valuations until such time as the hereditaments of the other utilities and the industrials can be brought into the picture in the same perspective? Why cannot we wait until that moment and have a standstill on valuations so that assessments do not go down? That meets the only major point made by the Parliamentary Secretary against the existing position.

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  The other question to which we have not had a fair answer is that put with great authority by the hon. and learned Member for Hertfordshire, East (Mr. Walker-Smith), whose name I hesitate to mention once again. The hon. and learned Gentleman asked a question which was the one that I wanted to ask. I hope that we shall get an answer to it. He asked the Government to state what would be the effect of this new procedure on the development policy of water undertakings and how far it would act as a deterrent to their sinking money in the future development of their undertakings.
  That is a very important point not only in the case of rural water undertakings, which were mentioned by my right hon. Friend the Member for South Shields (Mr. Ede), but also an important matter in industrial areas. In my own constituency a very large development of the chemical industry is taking place. That industry is the one towards which the Conservative Party has recently been particularly solicitous. The chemical industry requires a tremendous amount of water, and, as a result of its development, we have been in danger of having almost a water famine in the constituency. Indeed, the industrial demand for water threatened to outstrip the supply.
  A vigorous local authority has been desirous of developing its water undertaking. Is that to be affected by these proposals? That is a question which the hon. and learned Gentleman asked and upon which the Parliamentary Secretary did not touch at all. It is a matter which goes to the root of the difficulty, and, therefore. I ask the Government to think about the matter again. The Government have succeeded in an astonishing measure in uniting hon. Members on both sides of the Committee against the Bill. Never, in my short experience, have I ever seen the Committee so united against the Government. There has been a growing volume of speeches urging the Government in the same direction. Surely, in the face of that, even the Government might realise that there is a chance that they are wrong and that the matter ought to be looked at again.
  The fact that the hon. Member for Kidderminster, the hon. Member for Westbury (Sir R. Grimston) and my hon. and learned Friend the Member for
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  Kettering and everybody else are united on the matter must surely prove that there is something in it. Will not the Government consider the withdrawal of these proposals?
  4.30 p.m.
  Squadron Leader A. E. Cooper: I must say that the arguments adduced both last night and today are overwhelming. I am rather surprised that the Parliamentary Secretary did not seek, even earlier this afternoon, an opportunity of indicating the intention of the Government on the matter.
  I wish to make a point very similar to that made by the right hon. Member for South Shields (Mr. Ede). The South Essex Water Company, which supplies the water for a large part of my constituency, has informed me that, as a result of these proposals, it will have to raise very considerably its costs and charges for water in order to meet the new rate demands made upon it. Knowing that that sort of thing is likely to happen all over the country, we cannot accept these proposals without a fight.
  It seems to me that there are two main points. One is the fact that the other utilities are to be reviewed within a short period of time. Knowing that, I think it is wrong that we should sort out the water undertakings for decision at this precise time. Secondly, I think that to rate any undertaking on the basis of, what is in fact, its capital structure is to make nonsense of rating and valuation altogether. I hope that the Parliamentary Secretary and his right hon. Friend will not be unmindful of the almost united body of opinion in the Committee on this subject.
  Mr. Donald Wade: My intervention will be very brief. The case against the Government's proposals has been put very forcibly, and, I think, very convincingly. I do not think that it is necessary to go over all the ground again. I was very impressed by the speech, among others, of the hon. Member for Oldham, East (Sir I. Horobin) last night. As many hon. and learned Members in the Committee will be aware, it is not unusual in a court of appeal, with more than one judge giving judgment, for one of the judges to content himself by saying, "I concur." After hearing the speech of the hon. Member for Oldham, East, I felt that it would

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  suffice if I said, "I concur," except for the last paragraph of his remarks, in which he referred to the action he would take in the Division Lobby.
  I have always endeavoured to live up to the good resolution that the vote one records in the Division Lobby should bear some relation to the views expressed in the Committee. I shall continue to do so. But it may be that there will be no Division on this issue. I am hoping that the Minister is still considering the very weighty arguments which have been put forward. I am aware that this is a highly technical and complicated point, but I think that the arguments against the Government's proposals are overwhelming, and I hope that the arguments will be accepted.
  Mr. Anthony Fell: I, in common with most other hon. Members who have spoken in this debate on the Amendment to delete subsection (8), have had notification from interested parties in my constituency, telling me that the burden which will be put on the waterworks will be almost insupportable, but, unlike many other hon. Members who have spoken, I do not profess to have a deep knowledge of this subject. I have, however, listened to the whole of the debate on this subsection with a very open mind.
  As most hon. Members will know, I always sedulously support the Government where possible, and I came to this debate feeling that I would obviously be able to support the Government on this Amendment. However, having listened to my hon. and learned Friend the Member for Hertfordshire, East (Mr. Walker-Smith) and also to my hon. Friend the Member for Oldham, East (Sir I. Horobin) and to many other hon. Members, and then having listened to my hon. Friend the Parliamentary Secretary, I find myself in a very great difficulty. I think that this should be said.
  The Parliamentary Secretary, if my calculation is correct, got up in the debate last night at 9.48. He had 12 minutes in which to speak. During those 12 minutes he had to face seven interruptions. Accordingly, I think that he was a little pressed for time in his answers. Certainly, I was not at all convinced by the answer which I got. As he was pressed for time last night, I hope that this afternoon he will be able to take more time. I hope that he will take as much time as he wants
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  to in telling us that he will, in fact, agree to what has been said by almost everyone who has taken part in the debate, because we really are worried.
  There is the question which was raised by my hon. and learned Friend the Member for Hertfordshire, East. In the OFFICIAL REPORT, column 156, the Parliamentary Secretary, referring to the hon. and learned Member for Hertfordshire, East, who asked what assessment, if any, had been made of the deterrent effect on capital extension, said:
  "On that, I can only say that such assessment as we have made does not lead us to adopt the apprehension felt by my hon. and learned Friend."
  This was in relation to rural water supplies. Obviously, that reply was not very convincing after the very powerful arguments adduced by other of my hon. Friends. I hope, therefore, that my hon. Friend will be able to give a more convincing argument, particularly on two points—one, on rural water supplies and, the other, why this cannot be left until the review, which, it has been said, will take place in about a year's time.
  Mr. Collins: My remarks will be very brief, and I have intervened only because, in my constituency, in the Borough of Finsbury, there is the largest water undertaking in the country—the Metropolitan Water Board—and also the largest gin distilleries. The conjunction of the two may help to move the Minister in a way that water alone has not been able to do.
  Sir F. Messer: Put new spirit into him.
  Mr. Collins: The gin distilleries, as industrial undertakings, are fully derated, but the Metropolitan Water Board, with a gross income of nearly £10 million, has, under the present system, to pay rates of more than £1¼ million—about 13 per cent. If the proposals in the Bill should become law, the Board will have to pay an additional £351,000 in rates, which will be a total of 16 per cent. of its income.
  Yesterday, mention was made of the position of the Birmingham water undertaking. The Metropolitan Water Board, in respect of rates compared with income, will be in an even worse position. I submit that is intolerable, because it will lead to a never ending increase in

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  charges, since they will feed on themselves. If we support that kind of thing now there will be a constantly increasing spiral.
  Another point is that these increases will bring the Metropolitan Water Board above the statutory 10 per cent. which it is permitted to charge without obtaining permission from the Minister. In other words, if the Bill goes through un-amended, it will mean that there will have to be application to the Minister for permission to charge over 10 per cent. Considering the relationship between the rate liability in respect of water and that in respect of gas and electricity, and the fact that this proposal will mean a quite phenomenal increase in that liability, has the Minister thought what the effect would be in the case of a small borough with a very big water undertaking in its midst if this increase were to take place in one year and, upon a reconsideration of the matter, it were found that there had been an overcharge? The whole rate structure of that undertaking would be utterly disrupted.
  The actual figures for the biggest water undertaking in the country were supplied to me only this morning. They amount to the latest and most accurate computation of the effect of the Minister's proposals upon that undertaking. I hope that he will give way to the almost unanimous view of the Committee that the Government Amendment should be withdrawn and that he should make a better proposal in a week's time.
  The Minister of Housing and Local Government (Mr. Duncan Sandys)The Minister of Housing and Local Government (Mr. Duncan Sandys) rose——
  Hon. Members: Hear, hear.
  Mr. Sandys: I am always glad to receive a welcome from the Committee. I hope it is a sign that the arguments advanced by my hon. Friend last night have at last sunk in. To quote an expression used about me by the right hon. Gentleman the Leader of the Opposition at Question Time, I certainly do not intend to be "obdurate." I have listened very attentively to the speeches which have been made and have re-read the remarks made during last night's debate. There is no doubt that hon. Members on both sides of the Committee are anxious about the possible effects of the proposal
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  contained in the Government Amendment.
  As some of those very able and impressive speeches have got the picture a little out of perspective, however, I would remind hon. Members that this is not a case where the Committee is trying to get a concession from the Government. It is not a case of the Government trying to defend the Exchequer and prevent more money being extorted than the nation's finances can afford. Nothing of that sort is involved; the same amount of money is going to be raised from the ratepayers whatever is decided. The only question is how the rate burden is to be distributed among various ratepayers, and it is my task to do what I can to see that that burden is distributed as fairly as possible.
  As my hon. Friend has explained very clearly already, the only reason for introducing this change in the law is that it is quite clear that the practice is growing up of using the notional sinking fund arrangement to an extent which was not envisaged when the legislation permitting it was introduced, and which really makes the position ridiculous. I have no doubt that if the decision on Friday is a favourable one to the City of Birmingham it will encourage a great extension of the practice. We are approaching the point where everybody else's assessments will be going up but those of water undertakings will be going down, or will even become zero, as a result of an excessive use of the notional sinking fund.
  That would be nothing short of a scandal. It is my business, as the Minister responsible for introducing this legislation, to try to present to the Committee a formula which will provide a reasonably fair distribution of the burden between the various interests concerned.
  Mr. Percy Daines: If that is so, how does the Minister justify the present derating of industrial premises?
  4.45 p.m.
  Mr. Sandys: I should be entirely out of order if I attempted to answer that question. The Committee has shown a great interest in the problem we are discussing, and I should like to stick to that.
  The only responsibility which I have is to try to see that this legislation strikes

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  a reasonably fair balance between all concerned. It would be unsatisfactory to leave matters as they are, even for only a year or two, before further legislation can be introduced. I have taken very serious note of the views expressed by Members on both sides of the Committee. It is clear that we cannot arrive at a better solution during the course of this afternoon's debate. Formulæ of this kind are not arrived at in discussions across the Floor of the House; they must be worked out, and many other people who are more directly concerned than we are have to be consulted.
  I therefore want to make a proposal which might meet the general convenience of hon. Members and which would allow us more time to arrive at a better and more generally acceptable arrangement. I suggest that the Amendment in the name of hon. Members opposite should be withdrawn and that the Government Amendment should not be moved, leaving the Bill as it now stands. I would then give an undertaking that I would welcome and invite suggestions from the various interests concerned—water undertakings and others—which might help us to arrive at a formula which is more acceptable to them and which, at the same time, does justice to the general body of ratepayers whose interests I have to protect just as much as those of the water undertakings.
  If this proposal were accepted, I could not hold out any serious hope that I should be able to present a revised formula on the Report stage, which is next week—although I should gladly do so if it were possible. I suggest that the matter should be left over until discussions have taken place and I have received any suggestions which hon. Members might care to send to me. The Government could then see that an Amendment embodying any new formula that might be arrived at would be introduced in another place, thereby ensuring that the House of Commons would have a further opportunity of considering it. We should not propose to leave the Bill in its present form; the House would, in any case, have a further opportunity of considering the matter.
  I must give this reservation and warning: I can give no guarantee that we shall be able to find a better formula than
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  the one embodied in the Amendment standing in my name. I shall, however, try to find a formula more generally acceptable and one which will provide a solution to our difficulties. I hope that hon. Members will be willing to accede to my suggestion.
  Mr. Lindgren: On behalf of my colleagues, and I am sure of all hon. Members, I thank the Minister for the manner in which he has met our representations. I agree with him that it is almost impossible to arrive at an agreement with the interested parties before the Report stage, which will take place next week. Obviously it would be preferable to have this agreement on the Report stage, but we appreciate that it is impossible to carry through in the time the negotiations which the Minister has so graciously offered to undertake.
  We shall welcome the introduction of a new Amendment in the House of Lords, and we reserve our right of discussion on the Lords Amendment when the Bill comes back to this House. In the light of the discussion that we have had, and of the first reaction of the Minister to yesterday's discussion, I am glad that I jumped in and reserved the right of the Committee to discuss this matter today. I thank the Minister that he has found it possible to bow to the wishes of the Committee and agree to have a further look at this matter in consultation with the persons concerned, and in fairness to everybody.
  Mr. Derek Walker-Smith: May I add a word of appreciation to my right hon. Friend for the course he has proposed and express the hope that when we next consider this matter on Amendments from another place some improvement will have been achieved to reconcile the objects that my right hon. Friend has in mind—fairness to the ratepayers with a better deal for water undertakings.
  Mr. Mitchison: May I express the hope that when the right hon. Gentleman next contemplates putting some iniquitous sinking fund down the sink he takes care not to put the baby down the sink with the bath water? Having said that, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. F. P. Bishop: I beg to move, in page 8, line 27, at the end, to add:
  Provided that this subsection shall not have effect in relation to any hereditament or part of a hereditament having an expected normal working life of less than twenty years from the date of construction or installation thereof.
  I am in some difficulty in moving the Amendment because I do not know how far the statement just made by my right hon. Friend covers the cases which my Amendment is desired to cover. The purpose of the Amendment is different from that of the last Amendment, in that it is designed to take the subsection out of the Bill——
  Mr. Sandys: Perhaps I might help my hon. Friend by explaining that my undertaking was that I would look into the whole of subsection (8), which covers anybody who comes within the ambit of the Clause. It does not cover the point in the Amendment which my hon. Friend is moving, which is on another issue about the twenty years.
  Mr. Bishop: I take the effect of that to be that I can move the Amendment, which is what I desire to do.
  The debate on this Clause has been confined to the water companies, although it has been made clear that many other concerns are affected by this subsection whose case differs materially from that of the water companies. Racecourses were mentioned by my hon. and learned Friend the Member for Hertfordshire, East (Mr. Walker-Smith). I understand that football grounds, zoological societies, probably installations for trolleybus services, and other undertakings assessed on what is called a "profit" basis, are included.
  Also included are radio-relay services, which are assessed on the same basis. In this connection I should declare an interest, because I happen to be on the board of one of these companies. I am not now, and have not been for a long time, actively concerned in this industry, but in years gone by I was, and I have some knowledge of the kind of problem it has to face.
  The object of the Amendment is to exclude from the subsection hereditaments or parts of hereditaments which normally have an expected life of less than twenty
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  years. That would cover a number of the interests which I have mentioned, including relay services, for a large part of their assets. The effect of the subsection must obviously be very much more severe in the case of hereditaments with a short expected life than where there is a building or some other form of fixed asset which has a long life in prospect. The sinking fund in the case of a hereditament with a long life is comparatively small. I understand that it drops to as little as 2¼ per cent. for thirty years and propressively reduces until it becomes no more than about 1 per cent. or an expected life of fifty years.
  On the other hand, with a short expectation of life the effect is very much greater. In the case of relay services, where the assets consist largely of an overhead wire network with a life that has been estimated at no more than ten years, the notional sinking fund amounts to as much as 9 per cent. I am informed that its withdrawal would result in the rates levied being almost doubled. That would be a very heavy addition indeed to the liabilities of these companies, and I hope that my right hon. Friend will consider it with very great care when he revises this matter.
  We have heard that water companies are paying rates up to 13·7 per cent. on their receipts. I am told that in the case of some relay services the rates payable amount to as much as 18 per cent. on their trading profits before deducting tax and provision for depreciation. This compares with an average over industry as a whole of no more than 4 per cent., as set out in the latest statement on the national income and expenditure.
  I am told also that the abolition of the sinking fund allowance would increase the rates of these companies to as much as 33 per cent. of their trading profit. That is an impossible figure, sufficient to drive many of the companies out of business. We have been told that water companies and other public utilities can and must pass on to the consumer any additional burden, but it is not possible for companies of the other kind to do so, because they are engaged in keen competition with the makers of radio sets and cannot pass on additional charges. Many of the small ones therefore face extinction if this enormous additional charge is levied on them.

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  5.0 p.m.
  The Minister's Amendment, which has been withdrawn, would not have helped these companies which have to provide for a capital asset with a very short life. In the case of such installations as I have mentioned, a life of ten years is expected and there is no question of any such thing as an average annual replacement. Replacement begins, I understand, in a small way, when more than half of the life of the assets has already gone.
  It is not only that the life comes almost entirely to an end with the very heavy expense of replacement to be incurred; it is also a fact that, normally, in a rapidly developing and expanding business like this, "replacement" is not the right word. It is more likely that the old installation will be torn out and replaced by something quite new and more up to date, so rapid is the development in this industry.
  A wire network, put in to receive sound programmes, may be replaced in ten years' time by a completely different network to receive television programmes, and I do not know whether it could be regarded as a replacement entitling the company to any allowance under the proposed average system. As my right hon. Friend has withdrawn his Amendment and intends to look at the matter again, there is no need to pursue that point. I only ask that he will give it careful consideration.
  An essential principle, whether in taxation or in rating, is, of course, that proper allowance should be made for the effective replacement of all those capital assets which are being used up in earning the income which is the subject of taxation or of rating. I admit that there is no other way in which the cost of these hereditaments with an expected very short life can effectively be dealt with except in the form of a sinking fund provision.
  I hope my right hon. Friend will examine the matter again with care and will consider whether he cannot take out of the subsection these companies, which I am sure were never intended to be in it and which probably were never thought of when the subsection was drafted. The subsection is designed to deal with a different sort of public utility. I ask that the matter should be considered again and I hope that my right hon. Friend will give an assurance that he will sympathetically reconsider it.
  Dr. Horace King: The Amendment seeks to preserve the sinking fund principle at any rate for short life hereditaments. Although I was in favour of the earlier and wider Amendment, which I was happy to find received at last such sympathetic consideration from the Minister, I still want to press the point made in this narrower Amendment of the hon. Member for Harrow, Central (Mr. Bishop).
  Yesterday the hon. and learned Member for Hertfordshire, East (Mr. Walker-Smith) said, rightly, that sectional or private interests could not expect Parliament to legislate in the most favourable way for them, but it seems to me that any sectional interest has a right, when a new principle is being introduced in legislation, to point out the discomfort and hardship to itself and the bad effects which it feels might happen to the community if the new principle is carried out. And it has a right to expect the Government, when they depart from some good sound principles which have lasted for a long time, to justify the new principles up to the hilt.
  The Government propose that for short-life hereditaments, as well as long-life hereditaments, it will no longer be possible to offset against profits a sinking fund to replace the hereditaments in due course. Instead, companies can claim the average annual expenditure actually incurred in replacement or renewal. The whole Government case for this radical change in policy is, according to the Minister, that the use of a notional sinking fund has been carried to excess, has been used to cheat the rating revenue, and that therefore Government had decided that the whole sinking fund principle must go.
  That seems to me almost as though a doctor were to say that because a finger was damaged the whole of the arm must go. In the preceding debate we have had the principle applied to hereditaments with a long life, where the sinking fund, whether notional or otherwise, must of necessity be quite small, but if all the arguments which we have heard in that long debate have any force for the industry or undertaking with a hereditament which has a long life, then they become even more powerful in the case of the industry or undertaking with a hereditament which has a very short life.

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  I want to try to illustrate the point by reference to radio rediffusion. I need hardly say that, unlike the hon. Member for Harrow, Central, I have no interest to declare in radio rediffusion, financial or otherwise. I am a radio enthusiast and I like twiddling the knobs, so I should never want the benefit which many people find in radio rediffusion. Radio rediffusion gives a programme, or programmes received by land line or radio, and then sent out over a wire network to the homes of those who undertake to pay for the service. The companies pay rates on the buildings which they use—there is no complaint about that—and also on the wire network which they use; and it is that network which is gravely affected by the provisions of the Bill.
  As the hon. Member for Harrow, Central pointed out, such a network has a short life. It has been estimated at ten years, but in parts of the country it has a life of only three or four years because climatic conditions can affect it. Each year, therefore, a radio rediffusion company must set aside a certain sum of money for the replacement within ten years of the whole of its wire network. Whether rate relief is allowed to such a sinking fund, it will have to be in existence.
  No company faced with a ten-year prospect of having completely to replace most of its most important asset, can run without preparing for that year by year through a sinking fund. That is true over twenty years or over fifty years, but it must be particularly true of any business faced every year with the prospect that something like half or even more of its capital will shortly be destroyed and have to be replaced.
  Operators of radio rediffusion will have to carry the increased rate burden which is placed on them by the Bill and will still have to carry the sinking fund which they must have. This will increase the cost of their service and they say that they will have to increase their charges. As they increase their charges, their rating assessment will go up and a vicious spiral will occur which will, in this tiny industry, as in the great water industry which we have been discussing, seriously jeopardise its existence.
  The second point that these companies make is this. When they replace their wire network, it is extremely unlikely in
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  radio, which is developing so fantastically swiftly, that the replacement will be identical with what they previously had. Radio rediffusion, like everything else in electricity, is developing a new technique and new ranges of service, and, when the wire network comes to be replaced, some new programmes may be provided on the service which they give, or they may add television or may be able to develop the number of programmes sent over one wire, as the telegraph has been able to do. The change in the pattern of a town's structure may cause a revolutionary reconstruction of the network, and companies will always be uncertain whether these new developments, these replacements or modified replacements, will be allowed to count under the new Bill for the replacement charge which the Bill permits to be offset when calculating the rateable value.
  The whole benefit of a sinking fund, as against annual replacement, is that if a company sets aside money year by year in a sinking fund for replacements, when the time comes it may make a replacement which is technically superior to the one which it had originally, and it is not tied up with any taxation considerations at the end of the period from using the sinking fund in the best interests of the industry. Smashing the sound principle of building up a sinking fund for future replacements seems to me to jeopardise the existence of the firms whose capital assets fade away so rapidly as ten or twenty years, and for a young industry and new companies setting out in radio rediffusion the new proposals are exceptionally grievous. They start with a new network, they have no annual repairs in their first years, there is nothing which they can offset in reduction of their rates, and yet, year by year, they will be meeting the expense of setting aside a sinking fund and will be paying rates on the amounts which they so set aside. As there are about 400 of these radio rediffusion services, and as they serve about one million people, who, to my mystification as a radio enthusiast, prefer that kind of radio entertainment, it may be that as a result of the proposals in this Bill a million people will be faced with new charges for a service which they find very convenient and which they like very much.
  I would urge the Minister, in his reconsideration of the whole of this

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  Clause, to look at the principle of the sinking fund, and not to throw it out of the window merely because some people abuse it, but to remember in particular the people for whom we are arguing in this Amendment—those people whose hereditaments have, by the nature of things, a very short life and who must set aside yearly quite a considerable sinking fund, and who stand to be penalised very heavily under the provisions of the Bill as at present drafted.
  5.15 p.m.
  Sir Frank Medlicott: During the debate on Second Reading of this Bill, I ventured to draw the attention of the Parliamentary Secretary to the fact that not only water undertakings are affected by the proposal in Clause 4 (8), but other kinds of undertaking as well. As a good deal of time has rightly been given today to discussing the position of water undertakings, I think we should be very grateful to my hon. Friend the Member for Harrow, Central (Mr. Bishop) for giving us the opportunity of discussing the particular problems of certain other industries. Like my hon. Friend, I would say that, although I have no technical interest as a director or shareholder to declare, I ought to mention the fact that I have for many years been associated with this industry professionally as a legal adviser.
  If the case for the water undertakings is strong, then the case for the radio relay industry is overwhelming, and I hope we are to have at least as helpful an indication from the Minister on this Amendment as he has given in regard to the portion of the Bill which we have just been discussing. Figures have already been given to the Committee concerning the great disparity in rating liability between various kinds of undertakings, and I do not need to enlarge upon them, except to give one more figure.
  Some of the water undertakings are now concerned at having to pay rates amounting to 13·7 per cent. of their working profits, but, under the proposals of this Bill as it stands at present, the radio relay companies and certain other companies might have to pay rates up to as much as 31 or even 33 per cent. of their working profits, which no one can regard other than with great alarm.
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  However, I do not want to deal only with that particular industry, but to confine the rest of my remarks to the general question of sinking funds. It has been said that we National Liberals are only distinguishable from our Conservative colleagues by the enthusiasm with which we defend Conservative principles. Whether we may take that seriously or not I do not know, but certainly the principle of the sinking fund is a principle of conservation which certainly appeals to me, speaking for myself.
  On this side especially we have always spoken critically of men or organisations which live a hand-to-mouth existence and fail to set aside year by year some appropriate sum to provide for the renewal of capital equipment. Indeed members of the Government and hon. Members on this side have frequently emphasised the importance of renewing that plant and equipment on which our production and employment so largely depend. This Bill, even as it is proposed to be amended, would appear to indicate that the Government are proposing to depart now from that well-established doctrine.
  I support what was said by the hon. Member for lichen (Dr. King) about the effect of departing from the sinking fund principle and compelling those in charge of these undertakings to reach out for rating concessions by expending money at some time which is dictated by rating considerations, rather than by circumstances. The great advantage of the sinking fund is that the undertakings concerned are able to embark upon necessary expenditure at the time when the circumstances make it most desirable in the interests of the industry concerned, and not at some accidental time which may be necessary from the point of view of rating relief.
  I would also commend what has been said by several speakers who have suggested that such anomalies and defects as may appear to have been found in the working of the sinking fund system are surely not sufficient to justify the entire system being scrapped, especially after it has been in operation in one industry after another for the greater part of a century.
  There is ample opportunity for the Revenue and rating authorities to seek

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  out and correct any anomalies or irregularities which appear in the operation of sinking funds without doing away with the principle altogether. I would also suggest that it is really rather extraordinary that such a tremendous departure from principle should be slipped apparently almost accidentally into what is called a Miscellaneous Provisions Bill. Such a change would have great consequences, and I hope that it will not be made.
  For all these reasons, I suggest that the case which can be made out, not only for the radio relay industry but for all those industries mentioned by my hon. Friend the Member for Harrow, Central is so overwhelmingly strong as compared even with that for the water undertakings that the whole of the proposals of the Government under this heading need to be looked at a second time.
  Mr. Douglas Houghton: I support the general case put forward by other hon. Members. I presume that the Minister's promise to reconsider the whole matter between now and the final stages of the Bill will apply to these hereditaments as well as to others. Yesterday we heard all about water, but nothing about radio relay services or other hereditaments covered by exactly the same principle in arriving at the rateable value.
  Clause 4 as it stands covers relay services in exactly the same way as it covers waterworks. The Amendment and the long Schedule which the Minister proposed—and which he has now withdrawn—would have applied equally to those other undertakings. I hope, therefore, that the Parliamentary Secretary can give an assurance that his right hon. Friend will welcome opinions and representations from all interests which may be affected, and that the Relay Services Association, which has kindly sent hon. Members information about its grievances, will now take advantage of the opportunity given to send its views to the Minister.
  One of the disadvantages we have all been under this afternoon is that most of the representations we received and studied related to the Bill in its original form, and we have not had the assistance of the considered views of these various
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  interests about the Amendment which the Minister put down at a comparatively recent date. I make no criticism, but after all the Bill was given its first Second Reading on 6th April. It lay fallow, so to speak, in its present form during the election, and it was not until very recently that the Minister's substantial Amendment could be considered by us as Members of the Committee and by the various interests concerned.
  I hope that the Minister will bear in mind that his formula should be comprehensive and its application not restricted to water undertakings. It may be that different considerations will arise and that the formula will require considerable thought later. Already we have seen that the Minister had the three-year average, the ten-year average, and the pre-war ten-year average with suitable adjustment for the rise in costs since 1939. It may be that some account will have to be taken of these undertakings with short-lived fixed assets.
  I do, however, remark that none of the papers that I have received on this very complex question of the sinking fund in relation to the profits basis of assessment has put forward any alternative to existing practice. That is a pity—unless, of course, it is felt that there is really no acceptable alternative to existing practice. As I see it, what it really amounts to is a difference of professional opinion as to how to apply the 1925 Act to the valuation of this type of hereditament with fairness to those occupying it and with general equity to other ratepayers.
  Perhaps tradition or some kind of professional convention has held the day since 1925. It has probably held the day since the Parochial Assessments Act of 1836, but the professional advisers and others who have considered the matter under the old regime have never really considered whether or not it was a satisfactory and fair basis. Now, of course, the eagle eyes of the professional men in the Inland Revenue are looking at it again. They take nothing for granted—whether it has been in operation since 1836 or since the Battle of Hastings. I presume that they say "This is wrong, and has been all along and we want to put it right."
  That is especially so as there are now signs that the sinking fund basis is being

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  used in a way which is producing some quite strange results. I will put it that way; I shall not repeat the Minister's words when he said that in certain circumstances it was a scandal. I am not in a position to know, but I quite understand that it may be reducing these assessments beyond anything that seems reasonable, having regard to the general position of rateable values.
  I trust that all this will be taken into account. I have no interest in this matter whatsoever. I only offer this modest contribution because some of my constituents are in relay services. I can count probably none of them among my supporters; nevertheless, they are my constituents and I will support them even though they do not support me. In parenthesis, I may add that the next Election is quite a long way off.
  May I offer a constructive suggestion? I am thinking aloud on this—I confess that I have not studied the matter closely—but questions of depreciation are surely being discussed and decided by the Inland Revenue in reference to the taxation of profits. There must be a clue there. I know that if depreciation is taken on a reducing value basis there is not written off at the end of the day the total historic cost of the asset, but at all events the depreciation allowances for taxation—especially on the type of undertaking which we are now discussing—might offer a possible basis for an agreeable compromise or settlement.
  It might also apply to other undertakings, but I do not feel that the sinking fund basis, which we have had so long and which is so deeply entrenched traditionally, is necessarily the modern method. There may be an alternative, but I hope that that suggestion will be studied by the Minister, and the Inland Revenue consulted as to whether some method of applying depreciation used for taxation purposes might be adopted as a basis for adjustment of the deduction for replacement in the case of this type of hereditament. I throw it out for what it is worth.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. W. F. Deedes): The hon. Member for Sowerby (Mr. Houghton) referred to some difference of professional opinion, but there is an extraordinary unanimity of Parliamentary opinion, and
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  I must meet the points raised by the hon. Member for Harrow, Central (Mr. Bishop) and others as to the special problem concerning this industry.
  I should say at once that the assurance given by my right hon. Friend a few minutes ago—perhaps the hon. Gentleman was not here—does cover all the undertakings which fall within this group. I think he made that quite clear to my hon. Friend. We shall, of course, welcome views and ideas, such as have been asked for from the water undertakings, from this industry as well as from any other source. It is recognised, as my hon. Friend for Norfolk, Central (Sir F. Medlicott) and the hon. Member for Itchen (Dr. King) stressed, that there are special circumstances in this industry. There are special problems and anxieties. I think I am right in saying that the essential difference between this and other industries is the life of the installation, which must be short in terms of years. That is accepted.
  5.30 p.m.
  Our discussion on this Amendment has, I think, been less on the Amendment than on the general subject of sinking funds and the proper treatment thereof. It would not be proper or wise of me to prejudge future discussions by any general observations now on sinking funds with respect to this or any other industry. The assurance which my right hon. Friend has given covers this industry as well as the general subject.
  I ought to say one word specifically about the Amendment moved by my hon. Friend and to say why we should in any circumstances be in some difficulty about accepting it. I think I am right in suggesting that his purpose in moving this Amendment was to exclude the wireless relay undertaking from the provisions of the Section which has been under discussion, the reason being the life of the installation and the fact that the life of the parts is known to be less than twenty years.
  The first point that I should make is that the effect of excluding such undertakings from the provision of the Section would be rather wider than my hon. Friend envisaged. It would also apply to parts of a public supply undertaking which have a life of twenty years or less, and even some plant and machinery of water undertakings which have a life of twenty years of less. The

  239
  effect, therefore, of this Amendment would be to seek to exclude short-term items in whatever industry was concerned, in the water industry as well as anywhere else. Any water undertaking would have to distinguish between the short-life asset and the long-life asset.
  I need not stress to the Committee that in practice that would lead to certain obvious administrative difficulties. I do not like exaggerating administrative difficulties, but the difficulties which would arise may clearly be foreseen. There would obviously be great scope for contention on the probable working life of different types of equipment. That would be a fruitful source of discussion and contention—the different types of plant forming part of the same hereditament. For that reason—the difficulty of working this provision in practice—I have to say that we do not consider the Amendment workable and, therefore, we cannot accept it in this form.
  I hope that the anxieties of my hon. Friend which caused him to move this Amendment have to some extent been allayed by our earlier proceedings, and that therefore he will not feel that the loss of this Amendment is fatal to the undertaking on whose behalf he spoke. I also suggest that, in the circumstances, this attempt to draw a line through undertakings or parts of undertakings and to place them on one side or the other of a certain length of life would be very difficult to work in practice.
  Mr. Bishop: I am grateful to my hon. Friend for what he has said. May I say that I am not at all surprised to learn that my draftsmanship is not adequate to express the principle that I was trying to establish? I am sure that what I wish to do by this Amendment would be done better if the drafting were in better hands. It was the intention of the Amendment to cover short-life hereditaments not only in a particular industry but generally. If that is practically impossible in the way that the Amendment seeks to do it, I hope the Government will see whether there is another way in which it can be done. May I say how grateful I am to my hon. Friend for what he has said, and, in view of the assurance that the whole matter is being reconsidered, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Motion made, and Question proposed, That the Clause, as amended, stand part of the Bill.
  Mr. F. H. Hayman: Before this Clause is disposed of, I should like to mention the concern which at least one local authority in my constituency, Falmouth, has expressed relating to a water undertaking. The Urban District of Camborne-Redruth in which I live has large water projects in hand and is very concerned about how it will find the money to finance them. I hope that the Minister will ensure that no water undertakings in counties like Cornwall will suffer financially. It is hard enough to be able to provide a sufficient water supply without having to face additional financial burdens under this Bill.
  As a layman in these matters, I would say that there has been a conflict of opinion between the Treasury and some independent financial experts who from time to time appear before Select Committees of this House as to whether public water undertakings are not called upon to pay Income Tax heavier than private water undertakings. I am not satisfied with the reply which the Chancellor gave on that point. I also remember that not long ago this House gave approval to a Bill dealing with rural water supplies and sewerage, which added £30 million to the amount to be raised by taxation in this country.
  Sir F. Medlicott: As one representing a rather different area—a part of East Anglia—may I express some anxiety over the possible effect of this Clause upon the provision of extensions of piped water supplies? We in East Anglia are greatly concerned about the drift of workers from the land, and we realise that the provision of piped water is one of the vital amenities. We are moving forward in that field, and we hope that nothing in this Bill will place any financial obstacles in the way of what we are endeavouring to achieve.
  Question put, and agreed to.
  Clause, as amended, ordered to stand part of the Bill.

  Clause 5.—(RATING OF GAS BOARDS.)
  Mr. F. Blackburn: I beg to move, in page 8, line 32, after "manufactured" to insert "or stored."

  241
  There are other Amendments to the third Schedule which are linked with this Amendment and whose purpose is the same as this one. They deal exactly with the same problem. I raised this matter in the first place in the last Parliament on the Second Reading of the Bill on 6th April. Unfortunately, in his reply the Minister did not find time to refer to this problem. I am not blaming the Minister, because obviously a Minister cannot reply to every problem that is raised during a Second Reading debate, and possibly the Minister thought that this was a matter of small concern. It may be a matter of small concern to the Minister, but I can assure him that it is a matter of great concern to quite a number of smaller local authorities. Of course it is not a universal problem, but it is one which is likely to arise very much in different parts of the country as the development of the gas industry takes place.
  I am sure the Minister would not wish to single out a particular section for unfair treatment, yet it is quite clear that if the provisions of this Bill relating to the rating of gas boards becomes law, they will operate unfairly on a number of rating authorities within whose areas no gas manufacturing works are situated but within whose areas there are hereditaments for the storage of gas, coke and other residuals. I am hoping that I shall get a great deal of support from all sides of the Committee on a matter of simple justice.
  It is the policy of gas boards to concentrate manufacture of gas and to close smaller gas-making plants but to continue to store gas locally at some distance from gas-producing plants. I understand that much progress has already been made in implementing that policy. I shall be quite frank about the matter. Although at the moment this is not a constituency problem, it is likely to be so in the very near future, hence my considerable interest.
  Under present methods the rateable value of works, whether used for gas manufacturing or not, accrues to the area in which they are situated. The new method in the Bill, after setting out the methods for determining the aggregate value of the undertakings, will provide for the apportionment of that value
  242
  among the rating authorities covered by the undertaking in the proportion which the number of therms supplied by the board in a rating area plus nine-tenths of the number of therms, if any, manufactured in that area bears to the total number of therms supplied by the board to consumers in the whole of the area plus nine-tenths of the total number of therms manufactured in the whole of the area of the board. It will be seen, therefore, that the apportionment is made solely on gas supplied and gas manufactured and there is no provision to cover hereditaments for storage of gas, coke and other residuals. The consequence will be that rating authorities within whose areas stores are situated will derive no rateable value from them, although they usually cover a substantial area of land which, if occupied by other hereditaments, would produce rate income.
  Is it really the wish of the Minister to deprive those local authorities of rate income merely because those hereditaments are used only for the storage of gas? I do not think so. This afternoon the Minister said—I made a note of his words—that it was his duty to see that the rate burden is shared as equitably as possible. If a gas undertaking occupies a large area within a rating authority area, in view of what the Minister has said, it is his duty to see that it bears its share of the rate burden. Is it not a fact that hereditaments of a similar nature, not occupied by gas boards, such as oil tanks and coal stocking yards, are rateable? The formula in the Bill for apportioning the aggregate area to rating areas is based solely on therms of gas and ignores all other products and by-products.
  If gas is to be the sole basis, it would appear to be equitable to include gas storage in the formula. That should not provide much difficulty because, presumably, gas boards for their own purposes will maintain records of gas stored in particular holders, or groups of holders. If so, there should be no great difficulty in ascertaining the amount of gas, expressed in therms, stored in each rating authority area in any particular year. I see no difficulty at all about the assessment.

  243
  5.45 p.m.
  By calling attention to this particular problem and showing how some rating authorities are likely to suffer because of the present policy of the gas boards, we are not arguing against the concentration of production. We want to stress to the Minister that it is only just that consideration should be given to the problem which is facing areas where gas production is brought to an end. I hope I have convinced the Minister that there is a problem and that under the present provisions of the Bill some authorities will be—or, in the case of my constituency, are likely to be—unfairly treated vis-à-vis other authorities.
  Whether the form of this Amendment is the best way of dealing with the problem, I do not think I am competent to say, but, if the Minister can suggest other words which will more adequately deal with this injustice, I should be very happy to accept them. I hope I shall have a little more success with this Amendment than I had with the Amendment I moved yesterday on behalf of certain local authorities. I also hope that I shall get support from hon. Members on all sides of the Committee.
  Mr. Nabarro: I am very much in sympathy with what is proposed by the hon. Member for Stalybridge and Hyde (Mr. Blackburn), but I would hesitate to support his venture this afternoon. If I did so it would mean dealing in isolation with only one aspect of a very widespread grievance in the nationalised carbonisation industries, the gas industry areas boards throughout the country and in the parallel case of the electricity industry. I do not think that it is possible to deal with the matter in isolation.
  The case made by the hon. Member rests on the fact that in those areas where gas production has actually ceased there are only storage depots or yards and insufficient apportionment is being made from the central pool. That particular grievance may be multiplied by scores of similar cases in the gas industry and the electricity industry and—without encroaching upon discussion of Amendments, which, I hope you will call later, Sir Rhys—on the commercial activities of those boards. I maintain that the central pool system which was devised
  244
  in 1948 did not anticipate development in the gas and electricity industries of the character and type that has taken place in the last seven years.
  Mr. Blackburn: Would the hon. Member give one example of a gas undertaking which has ceased to be a gas producing plant and which is suffering under the present system of rating?
  Mr. Nabarro: I am sorry, but I do not understand the hon. Member. The gas industry is developing a grid system to supplant the shutting down of uneconomic works, but one cannot talk of the production of gas without considering the essential by-product of gas, which is coke. That involves widespread storage of coke, not only at the carbonisation works, but at various establishments in areas where there may not be gas producing units. I maintain—and would oppose the Amendment for this reason—that it would be quite wrong in principle to isolate from the whole of this very difficult problem the one aspect which has formed the subject of the Amendment.
  Mr. Hayman: I support the Amendment, because it seems to me that there is no close analogy between the electricity and gas industries. As far as I know, the electricity industry in Cornwall, which is the area I know best, has had only one power station in its history. In my constituency there are, or were, four gas producing plants, and, as my hon. Friend has said, they occupy precisely the same area as they did before. There is very good reason why, in small towns with small rateable values, a concession of the kind proposed by my hon. Friend should be granted and should not be mixed up with a thousand and one other issues which might be drawn in to complicate the picture still further.
  Mr. Deedes: I appreciate, as the hon. Member for Stalybridge and Hyde (Mr. Blackburn) said in moving his Amendment, that there is here a problem which is of concern, not to a great many, but to a certain number of local authorities.
  Mr. Blackburn: The number is likely to increase.
  Mr. Deedes: The hon. Member's Amendment seeks, in effect, to add a third element to the main elements which

  245
  are the basis of the gas formula, to safeguard the position of those local authorities which find themselves in the position of storing gas without its receiving recognition, as it were, in the formula which has been agreed.
  The difficulty about the Amendment is that it would involve a substantial change. In fact, it would involve a reorganisation of the formula for the apportionment of the adjusted total of rateable values within the areas of the boards: that is, the formula contained in the Bill. As I think the hon. Member knows, the formula was a matter which occupied considerable discussion between all the local authority associations and the gas boards, and it was agreed between them. What they had in mind during their discussions, I think, was an equal division between two main elements: the manufacture of gas—that is, the gas works—and the sale of gas, which embraces the mains, the service pipes, the showrooms, and so on. The effect of the Amendment is to bring in a third element besides those two main elements which have already been agreed and it would involve recasting the formula, which, in the short term, would not be a very helpful step.
  The hon. Member said he was convinced that there was a problem and he hoped I would agree. Perhaps I may take this opportunity to clarify the situation on the pool position, which has again arisen today; this, of course, will come into the consideration of the gas industry, which will be included in the consideration of pooling arrangements.
  Perhaps I may make this quite clear to my hon. Friend the Member for Kidderminster (Mr. Nabarro), who has spoken on the Amendment. This is exactly what I said when I made the first statement on this subject; it has not altered in any way. The proposal is that the pool arrangements, which involve the Transport Commission and electricity, and which, as I said at the time, do not preclude gas and would, obviously, include gas, shall be reviewed immediately after revaluation comes into force. That would be in the autumn of 1956. I am not in a position now to say whether that will involve legislation, but if it does involve legislation it will get legislation. The object would be that the revised arrangements should be operating by April, 1957. Therefore, this proposal is
  246
  not in the realm of never-never-land, as my hon. Friend suggested earlier in our proceedings, but is a quite definite proposition which will be undertaken.
  My answer directly to the Amendment is that I do not think we can accept it in the short term, involving, as it does, the recasting of the formula, but that it is unquestionably a matter which would come in, if it is desired by the local authorities concerned to bring it in, to later consideration of the gas industry as a whole.
  Mr. Blackburn: I find the Minister's reply wholly unsatisfactory. There is a problem here. It seems to me grossly unfair that if, because of the concentration plans of a gas board, a rating authority which at present manufactures gas ceases to manufacture gas and is used merely for storage purposes, although it covers exactly the same area the amount which it will receive in rates will be considerably reduced. Therefore, in view of the unsatisfactory nature of the Parliamentary Secretary's reply, I hope that my hon. Friends will support me in the Division Lobby.
  Mr. Raymond Gower: I should like to ask my hon. Friend one question. I understand that there were prolonged negotiations about this matter between the local authorities and the various gas boards. Was the point which the hon. Member for Stalybridge and Hyde (Mr. Blackburn) has raised agreed or in any way brought forward?
  Mr. Deedes: Without notice, I do not wish to say how this matter was left in the discussions.
  Mr. Blackburn: I believe that this matter was raised after the conversations had taken place.
  Mr. Tom Brown: I had no desire to intervene, but I want to appeal to the Parliamentary Secretary to give this matter further consideration. As my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn) has pointed out, there is an injustice here, a glaring injustice.
  In the concentration which has been taking place since the nationalisation of the gas industry, many of the smaller units which were production units have now gone out of commission, but they

  247
  maintain storage space for two or three purposes, and they are in duty bound to do this. I have in mind my own town where—I say this with pardonable pride—I happened to be the chairman of the gas undertaking for many years. When that undertaking went out of commission from the productive point of view, we had to maintain storage space for the neighbouring undertaking, which was the production unit. The purpose of the storage was to maintain the supply to three towns. It is manifestly unfair that that undertaking, through no fault of its own, must bear the rates.
  In view of the forcible arguments which have been advanced, the Parliamentary Secretary should take this matter back and consider it before Report. I agree that there has been discussion between the Urban District Councils' Association and the Ministry, it is the local authority that will bear the brunt of the expense. I appeal to the Parliamentary Secretary to undertake to consider this matter before Report and introduce something that is rather more fair and equitable.
  Mr. Powell: I am sorry that the hon. Member for Stalybridge and Hyde (Mr. Blackburn) intends to take this Amendment to a Division. While having great sympathy with the object behind it, I believe that in the form in which the hon. Member proposes to meet the problem there are insurmountable difficulties.
  Mr. Blackburn: The Minister did not make his reply because of the form in which I put the matter forward.
  Mr. Powell: The hon. Member will agree that if those difficulties could only be met by a complete recasting of the entire formula, it would not be practicable or desirable to do so at this stage.
  Mr. Blackburn: I do not see why it would not be practicable.
  Mr. Powell: At any rate, I should like to emphasise that it is not possible simply to include storage with manufacture on the basis of the present formula. The present formula allocates rateable value in accordance with (a) consumption and (b) production—production as measured by units manufactured and consumed. One cannot equate or treat in the same fashion units produced and units stored. There is no correlation between the amount of gas stored at any one time and the amount of gas that is produced over a period of time.
  Therefore, simply to put a figure representing units stored into a formula which was designed for units produced over a period of time would make nonsense of the formula, and create as many injustices and difficulties as it removes, if not more. I hope, therefore, that the hon. Member will not press something which is quite impracticable.
  Question put, That those words be there inserted:—
  The Committee divided: Ayes 202, Noes 261.

  Division No. 7.]

  AYES

  [6.0 p.m.

  Ainsley, J. W.

  Castle, Mrs. B. A.

  Edwards, W.J. (Stepney)

  Albu, A. H.

  Champion, A. J.

  Evans, Albert (Islington, S.W.)

  Allaun, F. (Salford, E.)

  Chapman, W. D.

  Evans, Stanley (Wednesbury)

  Allen, Scholefield (Crewe)

  Chetwynd, G. R.

  Fernyhough, E.

  Awbery, S. S.

  Clunie, J.

  Fienburgh, W.

  Bacon, Miss Alice

  Coldrick, W.

  Finch, H. J.

  Baird, J.

  Collick, P. H. (Birkenhead)

  Forman, J. C.

  Balfour, A.

  Collins, V. J.(Shoreditch & Finsbury)

  Fraser, Thomas (Hamilton)

  Bartley, P.

  Corbet, Mrs. Freda

  Gaitskell, Rt. Hon. H. T. N.

  Bence, C. R. (Dunbartonshire, E.)

  Cove, W. G.

  Gibson, C. W.

  Benn, Hn. Wedgwood (Bristol, S.E.)

  Craddock, George (Bradford, S.)

  Greenwood, Anthony

  Benson, G.

  Cronin, J. D.

  Grenfell, Rt. Hon. D. R.

  Blackburn, F.

  Crossman, R. H. S.

  Grey, C. F.

  Blenkinsop, A.

  Cullen, Mrs. A.

  Griffiths, David (Rother Valley)

  Blyton, W. R.

  Daines, P.

  Griffiths, Rt. Hon. James (Llanelly)

  Boardman, H.

  Dalton, Rt. Hon. H.

  Hale, Leslie

  Bottomley, Rt. Hon. A. C.

  Darling, George (Hillsborough)

  Hall, John T. (Gateshead, W.)

  Bowden, H. w. (Leicester, S.W.)

  Davies, Harold (Leek)

  Hamilton, W. W.

  Boyd, T. C.

  Deer, G.

  Hannan, W.

  Brockway, A. F.

  de Freitas, Geoffrey

  Harrison, J. (Nottingham, N.)

  Brown, Bt. Hon. George (Belper)

  Dodds, N. N.

  Hastings, S.

  Brown, Thomas (Ince)

  Dugdale. Rt. Hn. John (W. Brmwch)

  Hayman, F. H.

  Burke, W. A.

  Dye, S.

  Healey, Dennis

  Burton, Miss F. E.

  Ede, Rt. Hon. J. C.

  Henderson, Rt. Hn. A. (Rwly Regis)

  Butler, Herbert (Hackney, C.)

  Edwards, Rt. Hon. John (Brighouse)

  Herbison, Miss M.

  Callaghan, L. J.

  Edwards, Rt. Hon. Ness (Caerphilly)

  Hewitson, Capt. M.

  Carmichael, J.

  Edwards, Robert (Bilston)

  Hobson, C. R.

  Holman, P.

  Mayhew, C. P.

  Skeffington, A. M.

  Holmes, Horace

  Mellish, R. J.

  Slater, Mrs. H. (Stoke, N.)

  Houghton, Douglas

  Messer, Sir F.

  Slater, J. (Sedgefield)

  Howell, Charles (Perry Barr)

  Mikardo, Ian

  Smith, Ellis (Stoke, S.)

  Hubbard, T. F.

  Mitchison, G. R.

  Snow, J. W.

  Hughes, Cledwyn (Anglesey)

  Monslow, W.

  Sorenson, R. W.

  Hughes, Emrys (S. Ayrshire)

  Moody, A. S.

  Sparks, J. A.

  Hunter, A, E.

  Morrison, Rt. Hn. Herbert (Lewis'm, S.)

  Steele, T.

  Hynd, H. (Accrington)

  Mort, D. L.

  Stewart, Michael (Fulham)

  Hynd, J. B. (Attercliffe)

  Moyle, A.

  Stones, W. (Consett)

  Irving, S. (Dartford)

  Neal, Harold (Bolsover)

  Strauss, Rt. Hon. George (Vauxhall)

  Isaacs, Rt. Hon. G. A.

  Noel-Baker, Rt. Hon. P. (Derby, S.)

  Stross, Dr. Barnett(Stoke-on-Trent, C.)

  Janner, B.

  Oram, A. E.

  Summerskill, Rt. Hon. E.

  Jeger, George (Goole)

  Orbaoh, M.

  Swingler, S. T.

  Johnson, James (Rugby)

  Oswald, T.

  Sylvester, G. O.

  Jones, Rt. Hon. A. Creech (Wakefield)

  Owen, W. J.

  Taylor, Bernard (Mansfield)

  Jones, David (The Hartlepools)

  Padley, W. E.

  Taylor, John (West Lothian)

  Jones, Frederick Elwyn(W. Ham, S.)

  Paling, Rt. Hon. W. (Dearne Valley)

  Thomas, Iorwerth (Rhondda, W.)

  Jones, Jack (Rotherham)

  Pannell, Charles (Leeds, W.)

  Tomney, F.

  Jones, James (Wrexham)

  Pargiter, G. A.

  Viant, S. P.

  Jones, T. W. (Merioneth)

  Parkin, B. T.

  Warbey, W. N.

  Kenyon, C.

  Paton, J.

  Watkins, T. E.

  Key, Rt. Hon. C. W.

  Pearson, A.

  Weitzman, D.

  King, Dr. H. M.

  Peart, T. F.

  Wells, Percy (Faversham)

  Lawson, G. M.

  Popplewell, E.

  West, D. G.

  Lee, Frederick (Newton)

  Price, J. T. (Westhoughton)

  Wheeldon, W. E.

  Lever, Leslie (Ardwick)

  Probert, A. R.

  White, Henry (Derbyshire, N.E.)

  Lewis, Arthur

  Proctor, W. T.

  Wilkins, W. A.

  Lindgren, G. S.

  Pursey, Cmdr. H.

  Willey, Frederick

  Logan, D. G.

  Rankin, John

  Williams, David (Neath)

  MacColl, J. E.

  Reid, William

  Williams, Rev. Llywelyn (Ab'tillery)

  McGhee, H. G.

  Rhodes, H.

  Williams, Ronald (Wigan)

  McInnes, J.

  Roberts, Albert (Normanton)

  Williams, W. R. (Openshaw)

  McKay, John (Wallsend)

  Roberts, Goronwy (Caernarvon)

  Willis, E. G. (Edinburgh, E.)

  McLeavy, F.

  Robinson, Kenneth (St. Pancras, N.)

  Wilson, Rt. Hon. Harold (Huyton)

  MacPherson, Malcolm (Stirling)

  Rogers, George (Kensington, N.)

  Winterbottom, Richard

  Mahon, S.

  Ross, Willliam

  Woodburn, Rt. Hon. A.

  Mainwaring, W. H.

  Shinwell, Rt. Hon. E.

  Yates, V. (Ladywood)

  Mann, Mrs. Jean

  Silverman, Julius (Aston)

  Zilliacus, K.

  Marquand, Rt. Hon. H. A.

  Silverman, Sydney (Nelson)

  Mason, Roy

  Simmons, C. J. (Brierley Hill)

  TELLERS FOR THE AYES:

  Mr. Arthur Allen and Mr. Short.

  NOES

  Agnew, Cmdr. P. G.

  Carr, Robert

  Foster, John

  Aitken, W. T.

  Cary, Sir Robert

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Allan, R. A. (Paddington, S.)

  Channon, H.

  Freeth, D. K.

  Alport, C. J. M.

  Chichester-Clark, R.

  Galbraith, Hon. T. G. D.

  Amery, Julian (Preston, N.)

  Clarke, Brig. Terence (Portsmth, W.)

  Gammans, L. D.

  Anstruther-Gray, Major W. J.

  Cole, Norman

  Garner-Evans, E. H.

  Arbuthnot, John

  Cooper, Sqn. Ldr. Albert

  Glover, D.

  Armstrong, C, W.

  Cooper-Key, E. M.

  Godber, J. B.

  Ashton, H.

  Cordeaux, Lt.-Col. J. K.

  Gomme-Duncan, Col. A.

  Atkins, H. E.

  Corfield, Capt. F. V.

  Gough, C. F. H.

  Baldook, Lt.-Cmdr. J. M.

  Craddock, Beresford (Spelthorne)

  Gower, H. R.

  Baldwin, A. E.

  Crookshank, Capt. Rt. Hn. H. F. C.

  Graham, Sir Fergus

  Balniel, Lord

  Crosthwaite-Eyre, Col. O. E.

  Grant, W. (Woodside)

  Banks, Col. C.

  Crouoh, R. F.

  Grant-Ferris, Wg Cdr. R. (Nantwich)

  Barber, Anthony

  Crowder, Sir John (Finchley)

  Green, A.

  Barlow, Sir John

  Cunningham, S. K.

  Gresham Cooke, R.

  Barter, J. W.

  Currie, G. B. H.

  Grimston, Hon. John (St. Albans)

  Baxter, Sir Beverley

  Darling, Sir William (Edinburgh, S.)

  Grimston, Sir Robert (Westbury)

  Bell, Philip (Bolton, E.)

  Davidson, Viscountess

  Gurden, Harold

  Bell, Ronald (Bucks, S.)

  D'Avigdor-Goldsmid, Sir Henry

  Hall, John (Wycombe)

  Bevins, J. R. (Toxteth)

  Deedes, W. F.

  Harris, Frederic (Croydon, N.W.)

  Bidgood, J. C.

  Dodds-Parker, A. D,

  Harrison, A. B. C. (Maldon)

  Biggs-Davison, J. A.

  Donaldson, Cmdr. C. E. McA.

  Harrison, Col. J. H. (Eye)

  Bishop, F. P.

  Drayson, G. B.

  Harvey, Air Cdre. A. V. (Macclesfd)

  Black, C. W.

  Dugdale, Rt. Hn. Sir T. (Richmond)

  Harvey, Ian (Harrow, E.)

  Body, R. F.

  Duncan, Capt. J. A. L.

  Harvey, John (Walthamstow, E.)

  Bossom, Sir A C.

  Duthie, W. S.

  Hay, John

  Bowen, E. R. (Cardigan)

  Eccles, Rt Hon. Sir D. M.

  Heald, Rt. Hon. Sir Lionel

  Boyd-Carpenter, Rt. Hon. J. A.

  Eden, Rt. Hn. SirA.(Warwick&L'm'tn)

  Heath, Edward

  Boyle, Sir Edward

  Eden, J. B. (Bournemouth, West)

  Hill, Rt. Hon. Charles (Luton)

  Braine, B. R.

  Elliot, Rt. Hon. W. E.

  Hill, Mrs. E. (Wythenshawe)

  Brooke, Rt. Hon. Henry

  Emmet, Hon. Mrs. Evelyn

  Hill, John (S. Norfolk)

  Brooman-White, R. C.

  Errington, Sir Eric

  Hinchingbrooke, Viscount

  Browne, J. Nixon (Craigton)

  Farey-Jones, F. W.

  Hirst, Geoffrey

  Bryan, P.

  Fell, A.

  Holland-Martin. C. J.

  Buchan-Hepburn, Rt. Hon. P. G. T.

  Finlay, Graeme

  Holt, A. F.

  Burden, F. F. A.

  Fisher, Nigel

  Hopkinson, Rt. Hon. Henry

  Butcher, Sir Herbert

  Fleetwood-Hesketh, R. F.

  Hornsby-Smith, Miss M. P.

  Campbell, Sir David

  Fort, R.

  Horobin, Sir Ian

  250

  251

  Horsbrugh, Rt. Hon. Florence

  Macmillan, Rt. Hn. Harold (Bromley)

  Sharples, Maj. R. C.

  Howard, John (Test)

  Macpherson, Niall (Dumfries)

  Simon, J. E. S. (Middlesbrough, W.)

  Hudson, Sir Austin (Lewisham, N.)

  Maddan, M.

  Smithers, Peter (Winchester)

  Hudson, W. R. A. (Hull, N.)

  Maitland, Cdr. J. F. W. (Horncastle)

  Smyth, Brig. J. C. (Norwood)

  Hughes Hallett, Vice-Admiral J.

  Manningham-Buller, Rt. Hon. Sir R.

  Soames, Capt. C.

  Hughes-Young, M. H. C.

  Markham, Major Sir Frank

  Spearman, A. C. M.

  Hurd, A. R.

  Marlowe, A. A. H.

  Speir, R. M.

  Hutchison, James (Scotstoun)

  Marshall, Douglas

  Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

  Hyde, Montgomery

  Maude, Angus

  Stanley, Capt. Hon. Richard

  Irvine, Godman (Rye)

  Mawby, R. L.

  Stevens, Geoffrey

  Jennings, J. C. (Burton)

  Maydon, Lt.-Comdr. S. L. C.

  Steward, Harold (Stockport, S.)

  Jennings, Sir Roland (Hallam)

  Medlicott, Sir Frank

  Steward, Sir William (Woolwich, W.)

  Johnson, Dr. Donald (Carlisle)

  Milligan, Rt. Hon. W. R.

  Stoddart-Scott, Col. M.

  Johnson, Eric (Blackley)

  Molson, A. H. E.

  Storey, S.

  Johnson, Howard (Kemptown)

  Morrison, John (Salisbury)

  Studholme, H. G.

  Jones, A, (Hall Green)

  Nabarro, G. D. N.

  Summers, G. S. (Aylesbury)

  Joynson-Hicks, Hon. L. W.

  Nairn, D. L. S.

  Sumner, W. D. M. (Orpington)

  Keegan, D.

  Neave, Airey

  Taylor, William (Bradford, N.)

  Kerby, Capt. H. B.

  Nicholls, Harmar

  Teeling, W.

  Kerr, H. W.

  Nicholson, Godfrey (Farnham)

  Thomas, Rt. Hn. J. P. L. (Hereford)

  Kershaw, J. A.

  Nicolson, N. (B'n'm'th, E. & Chr'ch)

  Thomas, Leslie (Canterbury)

  Kirk, P. M.

  Nugent, G. R. H.

  Thomas, P. J. M. (Conway)

  Lagden, G. W.

  Oakshott, H. D.

  Thompson, Kenneth (Walton)

  Lambert, Hon. G.

  O'Neill, Hn. Phelim (Co. Antrim, N.)

  Thompson, Lt.-Cdr.R.(Croydon, S.)

  Lambton, Viscount

  Ormsby-Gore, Hon. W. D.

  Thorneycroft, Rt. Hon. P.

  Lancaster, Col. C. G.

  Osborne, C.

  Thornton-Kemsley, C. N.

  Langford-Holt, J. A.

  Page, R. G.

  Tiley, A. (Bradford, W.)

  Leather, E. H. C.

  Pannell, N. A. (Kirkdale)

  Turton, Rt. Hon. R. H.

  Leavey, J. A,

  Peake, Rt. Hon. O.

  Vane, W. M. F.

  Leburn, W. G.

  Pickthorn, K. W. M.

  Vaughan-Morgan, J. K.

  Legge-Bourke, Maj. E. A. H.

  Pilkington, Capt. R. A.

  Vickers, Miss J. H.

  Legh, Hon. Peter (Petersfield)

  Pitt, Miss E. M.

  Vosper, D. F.

  Lindsay, Hon. James (Devon, N.)

  Pott, H. P.

  Wade, D. W.

  Linstead, Sir H. N.

  Powell, J. Enoch

  Wakefield, Sir Wavell (St. M'lebone)

  Llewellyn, D. T.

  Prior-Palmer, Brig. O. L.

  Walker-Smith, D. C.

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Profumo, J. D.

  Wall, Major Patrick

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Raikes, Sir Victor

  Ward, Hon. George (Worcester)

  Longden, Gilbert

  Ramsden, J. E.

  Ward, Miss I. (Tynemouth)

  Low, Rt. Hon. A. R. W.

  Rawlinson, P. A. G.

  Waterhouse, Capt. Rt. Hon. C.

  Lucas, Sir Jocelyn (Portsmouth, S.)

  Redmayne, M.

  Whitelaw, W. S. I. (Penrith & Border)

  Lucas, P. B. (Brentford & Chiswick)

  Rippon, A. G. F.

  Williams, Rt. Hn. Charles (Torquay)

  Lucas-Tooth, Sir Hugh

  Robertson, Sir David

  Williams, Gerald (Tonbridge)

  Macdonald, Sir Peter

  Robinson, Sir Roland (Blackpool, S.)

  Williams, Paul (Sunderland, S.)

  MoKibbin, A. J.

  Rodgers, John (Sevenoaks)

  Wilson, Geoffrey (Truro)

  Mackie, J. H. (Galloway)

  Roper, Sir Harold

  Wood, Hon. R.

  McLaughlin, Mrs. P.

  Russell, R. S.

  Woollam, John Victor

  Maclay, Rt. Hon. John

  Sandys, Rt. Hon. D.

  Macleod, Rt. Hn. lain (Enfield, W.)

  Sehofield, Lt.-Col. W.

  TELLERS FOR THE NOES:

  MacLeod, John (Ross & Cromarty)

  Scott-Miller, Cmdr. R.

  Mr. Wills and Mr. Wakefield.

  Question put and agreed to.

  The Deputy-Chairman (Sir Rhys Hopkin Morris): Perhaps it would be for the convenience of the Committee if, with the next Amendment, in page 9, line 21, we discussed the Amendment in page 9, line 22, to insert a new paragraph (c), and the new Clause in the name of the hon. Member for Kidderminster (Mr. Nabarro), to amend Section 85 of the Local Government Act, 1948.
  Mr. Nabarro: I beg to move, in page 9, line 21, to leave out from "mainly" to the end of line 22 and to insert:
  "for purposes other than the manufacture, storage and distribution of gas."
  In addition, Sir Rhys, I should like to discuss the proposed new Clause which is printed as the second item on page 53 of the Notice Paper.
  Mr. Blackburn: On a point of order. Could we have in more detail an idea of what is happening?
  The Deputy-Chairman: I said at the beginning that, if the Committee thought fit, we could take the Amendment which has now been moved together with the Amendment in page 9, line 22, and the new Clause which appears at the bottom of page 70 of the Notice Paper.
  Mr. Nabarro: I apologise to the Committee. I read my reference to the new Clause from yesterday's Notice Paper from which I had cut it. It is printed at the foot of page 70 of today's Notice Paper.
  The effect of the Amendment, and the new Clause read in conjunction with it, is to exclude from Section 85 of the Local Government Act, 1948, all premises and hereditaments of the gas and electricity undertakings which are not of a productive character. It follows, therefore, that it seeks to exclude from the 1948 Act offices and showrooms of the gas boards and offices and showrooms of the

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  electricity boards. On Second Reading we had a fairly long discussion upon the relative rating arrangements for commercial and shop premises, and I think that it was agreed in all parts of the House that where there was direct competition between a nationalised undertaking's showrooms and shop premises and the showrooms and shop premises of a private business the rating arrangements should be on all fours with one another and on equal terms.
  I do not believe that even the most sincere proponents and supporters of nationalisation believe that any undertakings or businesses falling within the general ambit of a publicly-owned undertaking should be given advantages which are not accorded to their private enterprise counterparts. [An HON. MEMBER: "Why not?"] The answer is to be found in comparing the retail activities of an area electricity board's shop with those of its comparable private enterprise shop a few hundred yards down the road. They both, for instance, sell television sets, radios, cookers, electric fires, and a wide range of proprietary articles.
  I do not believe that there should be any injustice between bodies of ratepayers. We should not discriminate in favour of a business that happens to be owned and operated by a nationalised undertaking and thereby penalise, in the matter of rates, a business operated by a private enterprise undertaking or, for that matter, by a co-operative society, for co-operatives are also interested in this problem.
  I demonstrated during a Second Reading speech that the central pool arrangements, about which there has been a good deal of controversy both on Second Reading and in Committee yesterday and today, do not operate satisfactorily and fairly, either with regard to the productive hereditaments of the gas and electricity undertakings or in respect of the purely commercial and retail hereditaments, such as showrooms and shops.
  6.15 p.m.
  The position is not always very well understood. It might be helpful if I quoted what the British Electricity Authority itself has to say about the payment of rates. Paragraph 375 of the Authority's last Report for the year ended 31st March, 1954, states:
  "Payments in Lieu of Rates (Table 3).—These amounts are payable by the Authority
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  under the Local Government Act, 1948, to the Minister of Housing and Local Government for the benefit of local authorities in England and Wales, and to the Secretary of State for Scotland for the benefit of local authorities in Scotland with areas outside the North of Scotland District. The amounts payable vary according to changes in the average rates levied by local authorities and in the amount of electricity supplied to consumers. They increased from £14·05 million in 1952–53 to £14·76 million in 1953–54."—
  And here are the operative and interesting words—
  "Of this increase of £0·71 million, £0·61 million is due to higher local rates and £0·10 million to the expansion in sales of electricity."
  That is only £100,000, in respect of expansion of sales of electricity.
  I want to fasten on that last sentence. Only £100,000 increase in rates was paid by the whole of the nationalised electricity undertaking, both the B.E.A. as the productive unit and all the area boards as distributing and selling units on £14·05 million, therefore representing an increase in rates in respect of expansion of electricity sales of less than 1 per cent. for the full year. That is, less than 1 per cent. more in rates was paid as a global amount for the whole of the industry. But by how much did sales increase? They increased by 6·9 per cent. It follows, therefore, that the nationalised electricity undertaking as a whole paid only a tiny increase in rates compared with its increase in sales.
  The equally important point which flows from that is that one cannot separate, in the amount of the increase in the rates paid, the amount attributable to the increase in generation of electricity and the amount attributable to the increase in commercial activities. And it is with the increase in commercial activities, conducted in shops and showrooms owned by nationalised industries, that we should be concerned today.
  No rates at all are being paid by a large number of nationalised gas and electricity industry showrooms. In respect of showrooms which have been opened in the last three or four years at least, the local authority in the area of which the showroom happens to be situated receives no increase at all in the allocation from the "pool." I went to very great trouble not long ago to check that point in the case of a shop in the area of the Midlands Electricity Board. I wrote, first, to the chairman of the board and

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  said, in effect, "In connection with a particular new showroom which you have opened, which previously was a private enterprise shop, would you please tell me how much extra in rates your board is being called upon to pay in respect of your having taken over this private enterprise shop and converted it into an electricity showroom?"
  Does the hon. Member for Openshaw (Mr. W. R. Williams) wish to intervene? He keeps on muttering to himself.
  Mr. W. R. Williams: I was just wondering whether the chairman answered the hon. Member.
  Mr. Nabarro: That is a particularly obtuse interruption. If the hon. Gentleman would wait a moment, I will read an extract from the reply. The chairman of the board said that the sums so paid to the central pool—
  "are distributed by the Minister in accordance with Section 100 to which you refer, and they are divided by the Minister among the Rating Authorities in England and Wales as the Act provides, but Area Boards are given no knowledge by the Minister of the amount of the sum which is attributable to any particular hereditament."
  Mr. Williams: Is that all the letter?
  Mr. Nabarro: No, I have read only the extract which refers to this shop.
  From there I went to the clerk of the local authority in which the showroom is situated and I asked him how much the local authority is getting in rates from what was a hairdresser's shop and is now converted into an electricity showroom. He replies:
  "… the fact is that the Midlands Electricity Board recently opened certain shop premises in High Street, Stourport-on-Severn (formerly a hairdresser's shop). The premises are now an Electricity Service Centre and a retail trade in electrical appliances and equipment is also carried on there. By virtue of Section 85 of the Local Government Act, 1948, no rates are paid to the Council by the Electricity Board. This fact was brought to the notice of the Council and they"—
  Labour members on the council included—
  Mr. William Ross: Does the letter say that?
  Mr. Nabarro: No, that is my interpolation.
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  The letter goes on:
  "expressed the opinion that it seemed to be a case of unfair competition with other Retailers in similar commodities who have to pay rates. The former shop premises had a rateable value of £30 and would normally be paying a sum of approximately £40 per annum in rates at the present time. There are no other retail premises of nationalised industries other than this Urban District area who are escaping payment of rates."
  Mr. Lindgren: Did the hon. Gentleman take his research further and find out how the pool payment to the local authority had increased?
  Mr. Nabarro: I am grateful to the hon. Gentleman for prompting me to complete the picture. While I do not wish to be too lengthy about this matter, may I say that I took it to its logical conclusion.
  I asked the clerk to the local authority to send me particulars of the payments made to his authority from the central pool since the date of electricity nationalisation in 1948 to the latest convenient date. He sent me the figures, which showed that the first payment in 1949 was of £14,321 in respect of the local power station which had been nationalised. The showroom was not there then. That amount has been decreased by 10 per cent. each year in arithmetical progression and thus it will be finally extinguished in 1957. No addition has been made in respect of these shop premises.
  If the hon. Gentleman cares to check on similar cases in all parts of the country—for this is a widespread grievance—of new gas showrooms or new electricity showrooms being opened, he will find that the local authorities of the areas in which the respective shop premises are situated have received no additional benefit from the central pool. I submit that this places a serious and inequitable burden upon the counterpart private enterprise shopkeepers. In 1948, when the Act to which we are referring today was passed, there was hardly such a thing as the commercial activity of an electricity showroom in so far as it concerned retail sales. [HON. MEMBERS: "Oh!"] Wait a moment. [An HON. MEMBER: "Where does the hon. Gentleman live?"]
  Mr. J. A. Sparks: Probably on Bodmin Moor.
  Mr. Nabarro: The hon. Gentleman says "probably more." If he looks up

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  the power cuts in 1948 and the action of his right hon. Friend the Member for Battersea, North (Mr. Jay), he will find, for example, that a 100 per cent. Purchase Tax had been put on electric fires, and electricity showrooms were being discouraged from the sale of electrical appliances consuming current, and the circumstances then were very different from the circumstances today.
  Mr. Lindgren: May I rise to the protection of my hon. Friend the Member for Acton (Mr. Sparks)? The hearing of the hon. Member for Kidderminster (Mr. Nabarro) is as defective as his facts, because my hon. Friend said that the hon. Gentleman probably lives on Bodmin Moor.
  Mr. Nabarro: That interruption is nearly as obtuse as the earlier one by the hon. Member for Openshaw.
  I submit that the commercial activities of these nationalised showrooms have steadily increased in the last three or four years and that they are now selling proprietary electrical appliances on a large scale. In fact, the sale of proprietary appliances such as refrigerators, television sets, radio sets, cookers and heaters is now a large part of their business along with the sending out and the collection of electricity accounts. Since the sale of electrical appliances is a large part of their business, I see no reason why they should be subsidised by the general body of ratepayers and taxpayers and let off what is their normal rating responsibility and liability.
  The hon. Gentleman the Member for Wellingborough (Mr. Lindgren) interrupted a moment ago to suggest that my facts were defective. He interrupted my Second Reading speech to the same effect. Then, five minutes afterwards, he was sitting in glum silence. Immediately after my Second Reading speech, he had the courtesy and the magnanimity to admit that my facts were exactly right, as they are exactly right today. I think, Sir Rhys—Sir Charles——
  Mr. Lindgren: Wrong again.
  Mr. Nabarro: No, not wrong again. I was very quick on the mark as Sir Rhys left the Chair.
  I say, Sir Charles, that it ill becomes a Tory Government to support a system
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  which will give subsidies from private enterprise to these nationalised shopkeepers. I say that it ill becomes a Tory Government to support a system of giving advantages to the nationalised and publicly-owned shops which a Tory Government is not prepared to give to the private enterprise counterparts. In fact, these nationalised shops in all parts of the country are either paying no rates at all or are paying much less than their due proportion, and in few cases are those rates going to the local authority in which the shop premises are situated.
  I opposed the previous Amendment because I said that it would be wrong to deal with the storage of gas as an isolated matter in this grievous problem of the inequitable operation of the central pool under the 1948 Act. These commercial premises, the showrooms and shops of the electricity and gas boards, are another facet of the same problem. I said that I sympathised with the hon. Gentleman. I hope he will sympathise with the case I am making about the shops, because I believe that this leads us on to the logical conclusion that it is much too long to wait until 1957 for these grossly inequitable arrangements to be revised.
  I want a start to be made today, and by the acceptance of this Amendment and of the new Clause we would restore a position of equity in the matter of the retail shop premises. I will repeat what that is. The position of equity is that each one of these shops and showrooms owned by a gas board or by an electricity board should be assessed for rates by the Inland Revenue and, the rateable value having been established, the rates then levied should be paid to the respective local authorities in which the shop premises are situated.
  6.30 p.m.
  Mr. A. E. Oram: The Amendment in my name, in page 9, line 22, at the end to insert:
  "or
  (c) occupied by a Gas Board wholly or mainly for the manufacture of products other than gas."
  is not altogether unrelated to the Amendment which has been moved, but I hope that my speech will not be too closely related to the speech to which we have just listened.
  My Amendment arises from special circumstances in my constituency, but I

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  assure the Committee and the Parliamentary Secretary that it is by no means a minor or parochial matter. It happens to be particularly clear and serious in East Ham, but I know that other boroughs are very much concerned. I know that Tottenham and Edmonton, for instance, are very much interested in the matter.
  The Beckton gas works, which is situated partly in my constituency, is a huge undertaking. I believe it is the largest in Europe. It is responsible for about 40 per cent. of the gas production of the North Thames Gas Board. It stretches through the three boroughs of East Ham, Barking and Woolwich. The important thing from the point of view of the Amendment is that, by an accident of geography, it happens that the boundary between East Ham and Barking also divides the gas works premises into two parts. In East Ham are the products works and considerable storage capacity for coal, coke, and so forth, and the gas manufacturing part of the premises is entirely in Barking.
  The formula laid down in the Third Schedule will have the effect of giving all the rateable value arising out of the premises to Barking and depriving East Ham of a considerable amount of rateable value because East Ham will not be able to claim that any gas is manufactured in the borough. Yet we have extensive gas premises in our area with a rateable value of more than £7,000 which produces a revenue equal to a 3d. rate. Consequently, the result of the application of the formula will be very serious for the East Ham ratepayers.
  I believe that my Amendment will provide part of a solution to the problem. It proposes that the products works shall be treated as a third category of excepted premises. I believe that it is reasonable and sensible because the products works are related not so much to the gas industry as they are to the chemical industry, when one considers the types of products, such as drugs, perfumes and disinfectants, which are obtained from them. It seems reasonable to treat them as separate from the gas producing works.
  I hope that the Parliamentary Secretary will say that he can accept my Amendment or some form of words to serve the same purpose. Otherwise,
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  East Ham and similar places will have huge areas devoted to the gas industry, but not actually manufacturing gas, which are sterile from the point of view of development of the borough. In our case, the premises are unsightly and a nuisance in some respects, from the point of view of air pollution and so forth. Yet, if the present proposal goes through, the area is likely to produce no revenue at all for us. I urge the Parliamentary Secretary to treat the matter in a favourable light.
  Mr. Charles Williams: I urge the Government to take a rather different line from that indicated in some of the speeches which have already been made from the Government Front Bench. There is a very great deal of feeling in the country that gas and electricity premises should make a contribution to the rates, but somehow or other they seem to be avoiding making any contribution.
  In almost every local authority area today there is very grave difficulty about rating. We are discussing what seems to the ordinary person, and, apparently, to the majority of the Committee, to be a real grievance on the part of local authorities. Where really prosperous concerns, which are really shops and ought to be treated as shops, seem to escape making a contribution to the rates, a real feeling of grievance is aroused on the part of everyone who realises what is happening.
  This is not merely a small or local matter; it affects wide areas of the country. For that reason, I say frankly to the Government that it would be extremely unwise if they did not, at any rate at this stage of the Bill, say they will look into the whole matter of these premises and reorganise the position before the Bill leaves this House, because things cannot be left to continue as they are at present. I am not inclined to say very much in Committee and on Report stages of Bills, but here we have something which goes beyond the ordinary position of a slight difference of opinion here or there. It is a matter affecting the feelings of almost every local authority in the West Country that I know, and many other places as well.
  Sir F. Messer: I want to give an illustration of the situation which exists in an area which I know very well. There

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  is an enormous gasworks which is partly in one borough and partly in another. There is an entrance to the works from one borough, and that borough is held responsible for services. I have listened almost continuously to these debates and have waited to hear the reason why rents are paid. It seems to be forgotten that rates are paid in return for services which are given. If that is correct, it is inequitable for an organisation to ask for services to be rendered and then pay no rates for the services.
  In the case of the large gas works which I am citing, the works themselves happen to be in one borough. The rest of the establishment, which is concerned with the storage of coal and administration, is in another borough. One borough will be getting all the rates under the formula, but the other will be losing the £5,000 per year which it has hitherto received. Can the Minister really justify that? I suppose that I shall be called parochial if I say that one borough is Tottenham and the other is Edmonton. It is possible that the hon. Member for Edmonton (Mr. Albu) may try to justify it on the grounds of expediency. Whatever grounds he may use, it is obviously an injustice to ask one borough to provide all the services required while the other borough gets all the rates derived from that area.
  When I was in local government we always had this inequity of assessment, but we tried a rough-and-ready method by which we assessed the value of the place. Here we can assess the value, but in a way which gives to only one of the partners concerned in the transaction the reward for the services rendered. I support the Amendment in the hope that the Minister will explain why he holds it to be right that those who do the work shall not be paid and others shall get the reward of the work they do not do.
  Mr. Powell: I want to support the Amendment moved by my hon. Friend for Kidderminster (Mr. Nabarro), which will deal incidentally, as it were, with the problems to which the hon. Member for East Ham. South (Mr. Oram) and the hon. Member for Tottenham (Sir F. Messer) have referred. It was an original mistake in the setting up of the pool payments system for electricity that a hereditament not directly concerned with
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  the manufacture and distribution of electricity should have been brought within its scope.
  In this Bill we are now extending—though with some very desirable modifications—the pool principle from electricity to gas. I suggest that with gas we should start on the right road and have a thoroughly logical basis by confining the pool system, in the words of the Amendment, to hereditaments which are concerned in
  "the manufacture, storage and distribution of gas."
  The pool payments system was adopted because it is extremely difficult to value for rating purposes those hereditaments which extend from one rating area to another, such as electricity lines and gas mains. For years rating authorities tortured themselves and others with the problem of allotting a rateable value to a section of the transmission line, or a section of the main, which passed through their areas. But with the merging of ownership in one hand by nationalisation it at once became possible to get rid of these difficulties by instituting a pool payments system in respect of all the hereditaments to which these difficulties applied.
  However, there was never any difficulty in valuing for rating purposes such hereditaments as offices, showrooms and similar premises not concerned with manufacture, storage, or distribution. There was no reason, therefore, why these should be brought within the ambit of pool payments.
  There is this additional inequity in doing so. The amount of electricity or gas which is produced and consumed will be roughly proportionate to the value of the hereditaments concerned with manufacturing and distributing it, but need bear no relation at all to the value of the hereditaments that are used, for example, as offices and showrooms. An undertaking may well extend its showrooms, or its manufacture of subsidiary articles, without altering the output of that one commodity upon the basis of which the pool payment for rates is varied.
  6.45 p.m.
  It was thus both unnecessary and inequitable that premises other than those directly concerned with manufacture and distribution should ever have been

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  brought within the ambit of the pool payments system. My hon. Friend the Member for Kidderminster is here proposing that we should not now make this mistake when we are instituting the system for gas, and that to secure equity between gas and electricity we should amend that part of the Local Government Act, 1948, which brought those premises within the electricity pool payments system.
  That will not disturb the temporary settlement embodied in the 1948 Act, because if it was always unjust. If it was always unreasonable that the payments in respect of rates should be varied by virtue of the amount of electricity sold, regardless of the value of other hereditaments devoted to other purposes, then we are causing no difficulty by cutting them out of the pool system at this stage and enacting that they be replaced on valuation lists. I am making the point that we are not here calling for a reopening of the pool settlement in regard to electricity. We can make this Amendment without otherwise upsetting the equity and reasonableness of the settlement as it stands in the 1948 Act.
  It may be argued that there is a remote connection between the value and the extent of these commercial premises—to give them that general and slightly inaccurate global description—and the amount of electricity or gas which is sold. Of course, to some extent that is true. To some extent gas offices, or electricity showrooms, situated in one rating area are also serving other areas in respect of the consumption of gas, or electricity.
  But that applies to all commercial hereditaments of whatever kind; for their value can never be entirely derived from custom in the rating area where they happen to be. So I can find no ground on which these commercial premises should have been included in the electricity pool payments system, or should now be brought within the gas pool payments system. I hope that the Government will see the reasonableness of excluding them in both cases.
  Mr. G. A. Pargiter: I rise to speak to a somewhat narrower point contained in the Amendment in the name of my hon. Friend the Member for East Ham, South (Mr. Oram). I am rather
  264
  sorry that the two Amendments have been discussed together, because, while the Minister might resist the wider implication of the Amendment in the name of the hon. Member for Kidderminster (Mr. Nabarro) seeking to exclude a series of things from the calculation, he may look rather more carefully at the narrower point about by-product works dealt with in my hon. Friend's Amendment.
  This is a matter of some concern, and I want to draw the Minister's attention to what will happen if the Clause stands as it is. That will mean that a by-product works which is operated by a gas board will be included in the notional calculation on the gas production and the byproduct works which is occupied by a private company such as Prince Regent Tar Distillers, or some one like that manufacturing all sorts of similar by-products, will be subject to rates. Obviously, it would be grossly unfair to those private companies were they rated in respect of by-product works and the gas companies were not.
  This is an important question in my constituency. In Southall we have what is probably the second largest works, certainly the second largest works in the North Thames Gas Board area. No less than three and a half acres are occupied purely for the manufacture of by-products, and not only the manufacture of by-products from the Southall works. Products are brought in for benzole production and other things from other gas works who manufacture their products and send them out. Therefore, it cannot be claimed that it is purely in connection with the production of gas in that one gas works. It must be treated separately if there is to be equity as between the boards and the private manufacturer producing the same articles by taking products from the gas works. I believe that there are only five separate by-product works in the country which are operated by gas boards, and in equity they should be brought in.
  On the wider question, I accept the point of view that in equity, whatever happens between one industry or part of an industry and another industry, whether nationalised or private, they should be treated the same; particularly from the point of view of the local authority which has to collect the revenue, and that is the point with which we are mainly concerned.

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  The whole question under discussion may be too wide a subject for the Minister to deal with this afternoon. The Minister may take that view, having regard to the whole of the implications, because we must think how it affects the Transport Commission when we talk about showrooms and premises occupied for purposes ancillary to the main undertaking. Whatever the Minister may say about this wider question—which he may not be able to consider at this stage, or he may indicate that the matter will be examined—the revenue of local authorities will be affected considerably.
  Quite apart from what the Minister may say about that wider aspect, this narrower point in the further Amendment deals with the question of by-products. Equity between private and public enterprise in rating these concerns is essential because they are separate concerns manufacturing such things as benzole, perfumes, drugs and medicines. Obviously their products come from the by-products of the gas industry. But, except that they have to be produced in order to produce gas, they have no relation to the gas industry as such. They are part of the chemical industry.
  No one would suggest that the chemical industry should be regarded as part of the gas industry, because materials used in the chemical industry are by-products from the gas industry. Equally, therefore, it should not apply in the case of the gas boards. I think that the gas boards would be the first to admit that in regard to by-products they must, in equity, be treated in the same way as any other industry would be treated. As I say, this affects only five by-product works, but they are very important, and I hope that the Minister will indicate that he is prepared to accept the Amendment which covers the point.
  Mr. John Hay: I support the Amendment moved by my hon. Friend the Member for Kidderminster (Mr. Nabarro) and supported by my right hon. Friend the Member for Torquay (Mr. C. Williams) and my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). That is not intended in any way to diminish the importance of the Amendment discussed by hon. Members opposite. I consider this another example of the difficult field in which we are working, but I wish to confine my remarks to the
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  point raised in the Amendment which has already been moved.
  One of the biggest problems facing local authorities today is how they may obtain the highest possible rateable value. Their expenses are going up, largely as a result of what Parliament has done, and I do not think that we should deprive them of any real and legitimate opportunity to obtain additional rateable value. Undoubtedly, this question of gas and electricity showrooms is a grave one. My hon. Friend the Member for Kidderminster, in moving his Amendment, pointed out how unjust it is that the owners of ordinary commercial premises who are trying to compete with nationalised gas or electricity undertakings in the sale of appliances have to pay full rates while no rates are paid in respect of the gas and electricity showrooms. I think that, not least from the point of view of local authorities, we ought to look carefully at the position. I believe a strong case can be made out, and I hope that the Ministries represented on the Government Front Bench will not consider this matter far too big to deal with by means of an Amendment and a new Clause, as we have sought to do.
  I admit that the Amendment and the new Clause are pretty wide in their scope. They include not only showrooms but a number of other types of premises occupied by these boards not solely for the manufacture or distribution of the primary products for which they are responsible. That is not vital to the case. It may well be, if the principle is accepted by the Government, as I trust it will be, that the time has come for a re-examination of the whole matter to ensure that these boards bear in their commercial activities a fair share of the rate burden equivalent to that borne by ordinary competing commercial undertakings.
  It surely should not be beyond the ingenuity of the Government, after consultation, if necessary, with my hon. Friend—who is by no means backward with ideas in these matters—to find some way by which the problem may be resolved. I would urge my hon. Friends on the Front Bench, who are no doubt closely considering this matter at this very moment, to tell the Committee today that they consider there is a strong case made out and that they will look into it carefully.
  Mr. Charles Pannell: I go a good deal of the way in this matter with the hon. Member for Kidderminster (Mr. Nabarro) and in so far as there was not a noticeable degree of sympathy with him from some hon. Members on this side of the Committee I wish to re-state his arguments in a way in which they will come into line with certain principles held on this side of the Committee.
  There are various forms of Socialism, of which nationalisation is only one——
  Mr. Hay: That is true.
  Mr. Pannell:—and municipalisation is a good form of Socialism in itself. Some of us may deplore certain aspects of nationalisation in so far as there was a disappearance of popular control over many trading undertakings. If we examine the whole of the finances of local authorities in 1939 we find the global figure to, be £600 million. Of that figure, £200 million was collected in rates; £200 million in grants in aid and £200 million was the income from the trading services. An examination of the figure today would show the loss to local authorities as a result of nationalisation projects.
  Some of these things were inevitable, but if we are arguing on the basis of equity I think we should argue in favour of local authorities being given sufficient revenue to discharge their functions. The weakness that I notice in the arguments of the hon. Member for Kidderminster is that though he was arguing that one ratepayer should be treated in equity with another, and that one shopkeeper should be treated in equity with another, he was also arguing that the previous discussions on gas, water and electricity were good arguments to support his own. He did not go further and suggest, or even hint, that if we are to have equity the question of re-rating of industry must be brought in.
  It seems to me that hon. Gentlemen opposite always show a predilection against nationalised industry in sorting this out. The re-rating of electricity or gas showrooms is really a small element when we consider the loss of rateable value to many authorities as a result of derating.
  7.0 p.m.
  I will turn only to one borough to exemplify my argument. I should not recognise the new hon. Member for
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  Burton (Mr. Jennings), but I pick out that constituency because, if we go through the whole of the statistics of the Institute of Municipal Treasurers, we see that the Borough of Burton-on-Trent has the highest sewerage rate in the country. That borough pays a rate of over 4s. 2d. for sewerage and sewage disposal as against an average of less than 1s. 4d. over the whole country.
  Why does it pay it? It pays it as a result of the brewing interest. It is very hard on the drains, whatever it may be on human beings. The brewing industry of Burton is completely derated even though that industry, through boom and slump, has never failed to pay dividends of less than 25 per cent. Though the industry thrives it is derated because it is presumed to be a productive industry. Three-quarters of its rates are given away.
  There is another aspect of the matter which was part of the considerations of the 1929 Derating Act. Hereditaments that came in after the passing of that Act in the form of Exchequer grants were not to be given any element of compensation in relation to the compensation paid to the local borough. Since then, new hereditaments have not ranked for Exchequer grants.
  If my hon. Friend the Member for Acton (Mr. Sparks) were here, he would probably tell the Committee of the tremendous factory development which has taken place in his constituency, and for which the local authority receives no compensation whatsoever. It seems to me that if the hon. Member for Kidderminster is putting forward his argument in the cause of equity—on which I am prepared to join with him—he must be consistent and say that it is not necessarily fair to come down against nationalised industries in the matter of a few showrooms while whole blocks of industries are let off.
  Mr. Nabarro: I did not introduce this matter today, because my Amendment does not deal with the productive side of industry, but I should like to draw the attention of the hon. Gentleman to something I said on 17th June:
  "I did not wish necessarily to infer in my brief intervention in the speech of the hon. Gentleman that I was in disagreement with him about the problem of industrial derating and re-rating. What I would enter a caveat upon

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  is that if there is to be any alteration in the arrangements for the rating of general industry, the same provisions must apply to that 25 per cent. sector of industry which is nationalised."—[OFFICIAL REPORT, 17th June, 1955; Vol. 542, c. 975.]
  Mr. Pannell: I look forward with interest and pleasure to the speech which the hon. Gentleman intends to make when, later, my hon. Friend the Member for Acton moves an Amendment which would have the effect of re-rating industry. We shall be very pleased to hear what the hon. Gentleman then has to say. If he does not support my hon. Friend's Amendment, he will not be supporting the cause of equity, and his speech this afternoon will merely amount to a typical Tory attempt to attack nationalised industries.
  Mr. Nabarro: Certainly not.
  Mr. Pannell: At least I am consistent. I am quite prepared to join in the issue and to say that the hon. Gentleman has made out a case in a limited sphere. But if the hon. Gentleman is arguing equity as between one person and another and one undertaking and another, then he must at least say that particularly that sector of private industry which has not been properly rated since 1929 and which has often made considerable profits should again be brought into rating at the present time.
  Mr. Sparks: I have listened with great interest to the case which hon. Members opposite have made for the Amendments on the Order Paper. It is quite clear that they seem to have nationalisation on the brain. They can think of nothing else. As my hon. Friend the Member for Leeds, West (Mr. C. Pannell) has said, we shall listen with very great interest on Thursday to the arguments on the Motion for the repeal of industrial derating, because the arguments which have been used by hon. Gentlemen opposite on this issue apply much more forcibly to that Motion.
  It is a fallacy to assert that the showrooms of the electricity and gas undertakings are not taken into consideration for rating purposes. It is quite true, of course, that the showrooms do not pay rates direct to the local authority as such. Industry does not pay 75 per cent. of its rates direct to the local authority, and freight transport does not pay rates direct to the local authority.
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  Therefore, if it is argued that nationalised industries are not paying an equitable proportion of their rates, the Minister has the power to revise the formula under which a global assessment is arrived at. I can assure the Committee that all these showrooms, whether used by the electricity or the gas undertakings, are bound to be taken into consideration in the same way as the effects on them are bound to be taken into consideration.
  Mr. Powell: Even if they did not exist before 1948?
  Mr. Sparks: Yes, because the formula under which the electricity and the gas undertakings pay their global figure takes into consideration many other things, such as production, output and consumption.
  In the national interest, it has been our policy to encourage and to stimulate the increasing use of electricity, in particular, in order to conserve our coal supplies. There is no doubt whatever that the greatest and widest publicity is given by the electricity authorities to the development, use and sale of appliances and tools in order to popularise and to encourage the greater use of electrical energy. [Laughter.] Hon. Gentlemen may laugh, but the fact remains that these things are all taken into consideration under the formula on which the global assessment is fixed.
  If the Minister is not satisfied that he is not getting enough out of that, he has the power to vary the formula and to increase it if he thinks fit. But the distribution of the global figure is quite another matter. It may well be that the basis of distribution is inequitable, and that may be the cause of the complaint of the hon. Member for Kidderminster (Mr. Nabarro).
  My main reason for rising to say a few words on this series of Amendments is because in my constituency there is a very large playing field owned by the North Thames Gas Board. That playing field is rated at £733 and we receive an income of 22s. in the £ from it. Under the terms of the Bill, my local authority will lose that rateable value. It will henceforth be thrown into the global assessment to be distributed over a very wide area. That means that my local authority will lose a substantial part or probably nearly all that rateable value, whereas other authorities

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  outside the area will gain to that extent.
  I know that I am arguing on a very small and minor matter, because I do not suppose that gas authorities have many of these playing fields, but, from the point of view of my local authority, this is a rather serious matter because it will lose the rateable value of this very large playing field. Other authorities outside our boundaries will reap the advantage of our loss.
  We feel, therefore, that the right hon. Gentleman should exempt playing fields in addition to the other things which he has exempted in Clause 5. This is a relatively small matter but one which, in justice and fairness, ought to be exempted from the global assessment. The right hon. Gentleman will know that the local authority has to bear the expense of maintaining access to this large playing field, and the general drainage and sanitary facilities all have to be provided by the local authority at great cost. Therefore, I ask the right hon. Gentleman to give us an assurance that he will reconsider this question of playing fields and see if it is not possible to exempt them from the general global assessment. If he will give an undertaking to look into the matter, I feel satisfied that, on the basis of fairness and equity, he will appreciate the point of view of my own local authority and will be willing to do something about it.
  Mr. J. Langford-Holt: As I understand it, we are not discussing tonight whether nationalised industry as such should or should not pay rates, or whether it is at a disadvantage compared with private industry. Nor are we discussing whether electricity showrooms should or should not pay rates. What we are discussing is whether one type of showroom should pay rates and another type should not. We have firstly to consider the interest of the nationalised industries, secondly of the local authorities, and thirdly of the ordinary person—the consumer.
  So far as the electricity undertakings are concerned, we are not considering the production of electricity. We are considering the showrooms and what one might call the non-productive side of their operations. There are three main sides to their operations—supply, contract and the retail or sales side. The terms which the electricity boards are
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  able to give for their supplies depend very largely on conditions under which the other two operate, namely, the contracting side and the sales side. Any advantage they receive from one must come off the other.
  7.15 p.m.
  Any hon. Member who has tried to find out exactly how the electricity boards divide up their various electricity undertakings into those which show a loss and those which show a profit will probably have met with as much success as I have. In my constituency, there is a feeling on the part of electrical contractors and retailers that they are at a disadvantage. They are, as ratepayers and consumers, subscribing to their own doom and their own loss of income and loss of business. That is their feeling. Added to this, and looking at this matter from the local authority point of view, it would seem as if they would again have to subscribe as ratepayers to their own undoing. If the Minister cannot accept the Amendment as at present worded, I would ask him to state on behalf of the Government his acceptance of the principle of equity and equality between two types of undertaking doing the same type of job in the same type of place.
  Mr. Percy Daines: I hope that the hon. Member for Kidderminster (Mr. Nabarro) will not think me obtuse when I say that I support his Amendment. As I am sure that he will not press it, I can do so with perfect safety. I cannot see how, in principle, anyone on my side can oppose it. After all, the case for public service or public enterprise rests, not only on it being socially desirable, but also on the principle of efficiency. If, in practice, it means that this branch of the sale of electrical goods will not stand the fair test of competition with private trade and with the Co-operatives as well, then I think there is an overwhelming case for revision.
  My information is that the profit margin on electrical fittings is very substantial. I do not favour the present system at all, neither do I favour some figure being added to the global sum. I think it is perfectly reasonable that each showroom should have to stand the fair test of competition. I am not making any particular co-operative point. The Co-operatives may have a little feeling

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  about this, but to no marked degree. It seems to me idiotic, to put it mildly, for those of us who claim that public enterprise can stand the test of efficiency to want to wrap it up in cotton wool.
  I think that this question of showrooms has grown up over the years. At first, it was just the distribution of a few fittings, and now we get elaborate fittings. I have one point of difference on fact with the hon. Member for Kidderminster. Certainly in the area where I live I have never noticed the public electricity undertakings selling radio and television sets. If they do so, it is news to me; it is certainly not general.
  Mr. Nabarro: Last Saturday afternoon I went down to the M.E.B. showroom in High Street, Stourport, to which I referred in my Second Reading speech on this matter on 17th June, and listed every proprietary electrical appliance shown in the window, These included television sets, radios, electric cookers, electric refrigerators, electric irons, electric water heaters, electric fires, and all kinds of electrical appliances.
  Mr. Daines: I am saying that is not common in the south. In my local showroom, hair driers are sold, but that does not worry me in any way. [Laughter.] I do not know why hon. Members should laugh so much. I found out years ago that one cannot have hair and brains, and I am not dissatisfied.
  I want to turn from this very interesting subject—and avoid making another speech which may be as out of order as some of those which have preceded mine—to say a word or two about my own borough. Fortunately or unfortunately, we have in that borough the world famous Beckton gasworks. I do not think that any of us look on it with any great pride. It is the largest gasworks in the world. One has only to look at it to know that. The hon. Member for East Ham, South (Mr. Oram) objects with me that under this arrangement we are to have 200 acres of our borough—and it is a very small borough—completely filled up and sterilised in such a way that it will get no rates under this arrangement.
  At the same time, Barking and Woolwich receive the benefit because the coal gas manufacturing plant is in their boroughs; but we get sweet nothing out
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  of it. What is even worse is that these huge dumps of refuse from the gasworks pile up in our borough, in respect of which we get no recompense. Not only is there a loss of rateable value, but this infernal stuff blows over the whole of that end of the borough. It is miserable and unsightly. I suppose it is the sort of excretion which we got used to accepting under private enterprise, but it seems wrong to me.
  Heaven forbid that I should ask the Parliamentary Secretary to translate words into deeds, but I would say that we have a very strong case, which is well worthy of consideration. If the hon. Member could live up to his name for once, we in East Ham would be very grateful—at least to the extent that we should be getting something out of him.
  Mr. Kenneth Thompson: I hope that my hon. Friend has been impressed by the unanimity of opinion which has been voiced upon this subject this afternoon. Both among local authorities and in the trading community there is undoubtedly a very strong feeling about the privileged position into which the showrooms of gas and electricity undertakings are put as a result of the pool arrangements written into the 1948 Act.
  Not only does a local authority regard it as a hardship that it should be required to provide all the services for premises in its area; it is further annoyed, whenever it thinks about the matter, by the fact that electricity and gas authorities always chose the most prominent positions for their showrooms. Not only does the local authority not get a rate income from the gas showrooms but, as a rule, one or more of its most prominent and highly rated sites becomes sterilised, in the sense that no rate is derived from it.
  I hope that my hon. Friend will take the opportunity provided by this comparatively modest Measure to set an example in the case of the gas industry which can be followed in the case of the electricity industry, and in comparable matters such as the rating of railway hoardings, as soon as an opportunity presents itself.
  Mr. Deedes: We have had a long and very full discussion of these two Amendments, and it might be for the convenience of the Committee if I dealt first with the

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  Amendment of the hon. Member for East Ham, South (Mr. Oram), which deals with a point of which I am anxious not to lose sight among the many other matters which have been raised in connection with the other Amendment. I recognise that an exceptional position is created by the Beckton Gas Works. This is a local point of substance which—if I may anticipate matters—I hope to meet, at least in part, when we deal with the next Amendment, which is also in the name of the hon. Member.
  The objection to the Amendment arises from the practical difficulty in which we should be involved if we were to accept it. If it were to be put into effect it would mean that we should have to make an inspection of most, if not all, the gas works concerned, in order to determine their activity as at 1st May, 1949. Not only that; the inspection would have to be repeated periodically, to separate such premises as are occupied
  "wholly or mainly for the manufacture of products other than gas."
  That would involve a very great volume of the most complicated valuation work, which would defeat one object of the Clause which, I believe the Committee accepts, namely, the avoidance of such work. For that purely practical reason—although I take the point which he has made—I hope that the hon. Member will be content with my statement that I hope to go some way towards meeting his wishes upon the next Amendment.
  Mr. Blackburn: The Parliamentary Secretary seems to be accepting the principle that if it is difficult to put right an injustice we should not do anything about it.
  Mr. Deedes: No. With respect, I think that the hon. Member is a little unfair in saying that. The object of the Clause is to achieve simplicity, or to avoid undue complication and a great deal of complicated valuation work. Every exception which is made—and this is one—defeats the object of the Clause.
  Mr. Pargiter: Let us be quite clear what we are doing. In 1948 we accepted a valuation which had been built up by a very complicated process, dealing with by-products and the production of gas as a whole. The valuation having been arrived at and established, we then took
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  from it a notional movement of rates, up or down, and added or subtracted accordingly. In other words, there was still a valuation basis. The hon. Gentleman now says that that basis is to be removed, and a fresh basis, in relation to gas production only, introduced. This means that a works which produces only a small quantity of gas but a large amount of by-products will pay rates upon the production of gas and nothing upon the production of the by-products. That will be totally inequitable, and I suggest that if the Minister does not think again about the matter he will create some terrible injustices.
  Mr. Deedes: All I said was that the effect of the Amendment would be to involve the reassessment of all the gas works concerned, as at 1st May, 1949, because of the alternative basis of assessment.
  We have also had a very much wider discussion in relation to the Amendment in the name of my hon. Friend the Member for Kidderminster (Mr. Nabarro). Some of my hon. Friends have expressed a hope that I was impressed by the unanimity shown—with the exception of the hon. Member for Acton (Mr. Sparks)—for the Amendment, and with the expression of dissatisfaction at the existing arrangements. I can assure the Committee that during the last two days I have cultivated a very sensitive ear to what I would describe as bilateral criticism, and I was aware of the very general dissatisfaction expressed at the arrangements. The heart of the criticisms seems to be that the rating of extraneous premises belonging to the Electricity Authority was not fair to local authorities, and that this alleged injustice should not be perpetuated in our new arrangements for the gas industry.
  From that we embarked upon the rather wider question of the extent to which nationalised industries should or should not pay and, if they were to pay, how the payment should be made. The first point which I may fairly stress is that the width of the discussion has indicated a need for a review of this pool arrangement which has been referred to over and over again.
  7.30 p.m.
  That is not really taking the point. The review will start next year, and will be concluded by April, 1957, with any legislative backing which is required.

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  The very width of the discussion which we have had indicates the need for revision. If we attempted to make the alteration which was so forcefully put forward by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), we should be in great difficulty at this stage. We agreed to exclude dwelling-houses and premises occupied by the gas boards as suppliers of water from the formula.
  The formula took a considerable time to arrive at. Local authorities and the Gas Council were engaged upon it for a very considerable period. It was not swiftly done. I see that I have the assent of the hon. Member for Wellingborough (Mr. Lindgren) on that point. They took a great deal of trouble to get the formula right, until it was agreed between the local authorities and the undertakers.
  If we made, at this stage, an alteration which cut right across the formula and involved a major departure from what was agreed, certain difficulties would ensue. The arrangement would, of course, be upset, and it would be impossible for us to arrive at agreed figures for entry in the new valuation lists by the end of this year. That would defeat the object of a great many hon. Members and a great deal of what we have been discussing earlier in the Committee.
  This is no small matter. I have been asked over and over again during the debate to impress upon my right hon. Friend the amount of feeling among hon. Members about the way in which nationalised industries do or do not contribute towards the rates. The debate is impressive in itself. Surely that is the justification for the decision taken to review and revise the whole thing; but to break into the formula at this stage and to change it would delay the whole process which we are anxious to get through. I am not pleading administrative inconvenience here, but it would not be in the interests of local authorities, on whose behalf my hon. Friend moved the Amendment.
  I therefore have to say that, while we are very sympathetic towards many of the points made about the admitted inconsistency in the working of the formula, we cannot, for practical purposes, accept the Amendment.
  Mr. Hay: Would my hon. Friend be prepared to give an undertaking that
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  when the review takes place this point will not be lost sight of and will be one of the cardinal points to be taken note of?
  Mr. Deedes: In view of what has been said this afternoon, that is the least I can do. I give an undertaking that when the review takes place that point will be borne in mind.
  Mr. Pargiter: I understood the Minister to say that he would go some way to meet the Amendment moved by my hon. Friend. What would he do to meet the points which were made?
  Mr. Deedes: I said I hoped that the points which the two hon. Gentlemen have in mind would be covered by what I would have to say on the Amendment which is to follow.
  Mr. Mitchison: The discussion has reminded me that tennis is being played at Wimbledon. From time to time the discussion has seemed like a game of tennis played by two opposing pairs, one in one court and the other in another court. With the court of the hon. Member for Kidderminster (Mr. Nabarro), I feel very great reluctance to interfere, for two reasons. The first is that there appears to be a number of highly-promising splits on the benches opposite, and they have been increasing in volume, depth and vigour during the discussion on the Bill.
  The second reason is the more serious one that I feel great sympathy with what the Parliamentary Secretary has just said. The fact that the whole matter is to be reviewed next year and the year after, means that then and not now seems the most appropriate occasion to discuss questions relating to electricity and to other public storage premises.
  This trouble and any injustice there may be stem from the original Act of 1929 which, when, under a Tory Government, derating industries to the extent of three-quarters, expressly excepted public supply undertakings. That was the root of the trouble, and since then there has been constant discussion of what is and what is not a public supply undertaking and what is and what is not a retail shop. It is by no means clear that premises occupied by an electricity authority partly as shops and partly as offices are necessarily retail shops in the ordinary sense of the word. The point has been investigated in private enterprise

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  cases and has given rise to considerable difficulty and rather fine distinctions.
  Let me turn from that to the points raised by my hon. Friends in connection with by-product works and similar undertakings in the gas industry. I am glad that the Parliamentary Secretary appreciates that Beckton in particular, and no doubt one or two other cases, raise serious questions for the local authorities concerned, and that something has to be done about them. The Parliamentary Secretary has put us in some difficulty by indicating that the rabbit, if I may so describe it, the highly-beneficial rabbit—not affected by myxomatosis or whatever it is called, I hope—is to be brought out on the next Amendment. Consequently, we do not know what to do with the Amendment which we are now considering. We should have pressed it to a Division. As it is, the more sensible course seems to be to wait and see what this rabbit is like when it comes out of the hat on the next Amendment.
  I have long entertained a belief in the presence in the Ministry of Housing and Local Government of a Chinese mathematician primarily concerned with the operation of the Exchequer equalisation grants. From time to time this gentleman seems to disport himself in other matters. In dealing with the rating of gas boards he has produced, particularly in connection with the revision affecting local authorities, a formula so intricate and difficult that I appreciate the problem of interfering with it.
  It is true that if one took into the reckoning the stored gas in addition to the manufacturing gas, the additional benefit to be given for manufacture, or manufacturer and storage as the case may be, leads one into some difficulties not only of abstruse mathematics but also of practical application. For that reason we hope that the rabbit which is to be produced on the next Amendment will be a fine, thriving animal and, in more plain language, that something will be done to meet the very obvious difficulties in the case of these by-product plants.
  The question of the storage of gas arises as well as that of the manufacture of gas, and there are cases where a gas board is storing gas in an area and using a considerable amount of building and space for the purpose but the gas is neither
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  manufactured by the board nor is it gas for which the board is primarily responsible. What happens in my constituency and I understand, also, in relation to the Steel Company of Wales, and no doubt other similar enterprises, is that the board buys considerable quantities of gas from an adjacent steel works and distributes and sells it as ordinary gas. That seems to me to raise parallel problems to those which we have been discussing. For the moment, therefore, we should like to wait and to see what is coming out of the hat on the next Amendment.
  Mr. Nabarro: The discussion which I was privileged to initiate nearly three hours ago has proved stimulating and instructive though somewhat discursive, and I am grateful to the Parliamentary Secretary for advancing at least two or three steps beyond the statement which he made on Second Reading about the forthcoming review of the operations of the central pool system for rates on nationalised hereditaments.
  When he replied on Second Reading he referred merely to a review, but today—and I noted his words carefully—he referred to a review and a revision, which is what all of us want. I would point out to my hon. Friend that we have to wait for two years for any serious revision of the present arrangements and any redress of the grievances which have been put from all parts of the Committee, and if it is possible to reduce that period I hope he will do so.
  In the meantime, if hon. Members ask my right hon. Friend for particulars of the allocations from the central pool which relate to individual hereditaments, I hope that my right hon. Friend will feel no restraint in giving those particulars, because that forms a large part of the grievances. I am grateful to him for expediting matters. I beg to ask leave to withdraw the Amendment.
  Hon. Members: No.
  Amendment negatived.
  7.45 p.m.
  The Temporary Chairman (Sir Gordon Touche): I understand that the hon. Member for East Ham, South (Mr. Oram) does not wish to move his Amendment to line 22. It would be convenient to discuss with his Amendment to line 25 the Amendment to the Third Schedule, in page 19, line 48.
  Mr. Oram: I beg to move, in page 9, line 25, at the end, to add:
  (7) Where any premises occupied by a Gas Board and used by them in part for the manufacture of gas and in part for other purposes shall be situate in more than one rating area, any gas manufactured in such premises shall, for the purposes of this section and the Third Schedule to this Act, be deemed to be manufactured in the whole of such premises.
  I need not detain the Committee very long since the Amendment relates to the same set of circumstances as those which I outlined earlier. In reply to the last debate, the Minister raised my hopes that he will be kinder towards this Amendment than he was on the previous occasion. I hope he can confirm my hope that, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison) said, the rabbit which he produces from the hat will be a worthy one.
  I believe that the Amendment will deal satisfactorily with the boundary problem which I outlined in relation to the Boroughs of East Ham and Barking. When the Bill was originally drafted I do not think that it was intended that it should produce a situation of inequity between neighbouring boroughs. It will be recognised, however, that the formula as at present drafted will, in fact, do that in the rather important case of the Beckton Gas Works. I therefore hope that the Amendment and that to the Third Schedule will be acceptable to the Minister and that we shall reach a satisfactory solution to what might otherwise be a thorny local problem in our area.
  Mr. Deedes: As I indicated when we discussed the last Amendment, we are prepared to consider sympathetically the point which the hon. Member for East Ham, South (Mr. Oram) has in mind here. He is concerned about the case of a gas works divided by a local authority boundary and he wants both local authorities to be credited with rateable value attributable under the formula.
  This is a reasonable point, and I agree that it would be reasonable to look on the whole premises as one entity in which the parts are interdependent and to regard the production from such a plant as coming from the whole and not from any particular part. The Inland Revenue had hoped to be able to deal with the problem administratively. If the point is to be covered by legislation, we shall have to give some thought to the apportionment of value between the local
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  authority areas concerned. In our opinion, the method proposed by the hon. Member for the Third Schedule would produce inequitable results in cases where there has been a substantial extension of works in one of the areas since 1949.
  We should like to look closely at that, but, while recognising that the apportionment of the value of works between two local authorities may create some difficulty, my right hon. Friend is prepared to consider sympathetically the point raised by the Amendments, and we will see what we can do before the next stage.
  Sir F. Messer: In view of what the Parliamentary Secretary has said, I will not argue the point. There is already an apportionment in the case of the works bordering Tottenham and Edmonton. The rateable values have already been decided as between the boroughs—Edmonton, £18,194, and Tottenham, £9,885. Consequently, if there has been a change as a result of development in one area more than in another, there ought not to be difficulty in assessing the value.
  Mr. Blackburn: By accepting the principle of this Amendment, surely the Parliamentary Secretary has accepted the full justice of the Amendment which I moved earlier. The only difference between the two is that in this case everything is on one site, whereas in the other case there is a distance between. I am quite happy to know that the principle has been accepted here and that the Government will try to do something about it, but I ask the Parliamentary Secretary to see whether there is any difference whatever between the principle of this Amendment and the principle of the Amendment which I moved earlier.
  Mr. Pargiter: May I draw the Parliamentary Secretary's attention to the inequity which again will be caused as a result of this decision, although I do not quarrel with it? Suppose, for example, that in one borough there is a byproduct plant and in another borough a gas-production works. The area which has the by-product works will be credited with some of the gas production in the other area. But if the whole happens to be within the curtilage of one area and there is a by-product works, there will be no credit for the by-products which the works are producing. Even now, the

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  Parliamentary Secretary must look further into the matter than he has done so far if he is to produce some degree of equity.
  Mr. Mitchison: I add my appeal to the appeals of my hon. Friends. This matter wants further consideration, not only as regards this Amendment, but as regards the relation of the earlier Amendment to the point that was made by my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn), and, indeed, the point I mentioned myself of the gas board buying for distribution gas from somewhere else. It seems to me that the questions of storage and of purchase and the question of the manufacture of byproducts are all rather closely related.
  If the Parliamentary Secretary can see his way to give an undertaking that the matter would be reconsidered on broad lines and that some provision would be put into the Bill on Report stage—I do not ask for a provision which will necessarily cover all those points; that is a matter for consideration—we should not be disposed to press this Amendment at this stage.
  There is, however, a very real injustice in certain obvious cases—the Beckton gas works is one and there are obviously others—and unless we could have something a little more definite than we were offered just now, we should be compelled to take the matter to a Division. That is not in any way a threat but an invitation in the hope that the Parliamentary Secretary will be prepared to give the undertaking which I suggested just now, or something on those lines.
  Mr. W. G. Cove: I want to strengthen the appeal of my hon. and learned Friend the Member for Kettering (Mr. Mitchison) that this matter should be looked at very carefully. I have an Amendment down to the Third Schedule and I understand that it is rather improbable that that Amendment will be called during the Committee stage. I hope that it will not preclude a thorough discussion on the Report stage, because this is not only of great importance to the constituency which I represent and to the Port Talbot area, but it is important to other areas.
  I cannot go into the merits of my Amendment now. I am only supporting
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  the appeal that the Government should look further into this matter and into the meaning of my Amendment, which has been drafted following expert advice from those intimately connected with rating and valuation in my constituency.
  Mr. Deedes: I am anxious not to mislead the Committee. It is easy sometimes at this stage to enter into a commitment which takes one further than is expected when the next stage is reached. I have indicated that in respect of this present Amendment we are prepared to look at the point which has been raised by the hon. Member for East Ham, South (Mr. Oram). I have indicated that we are prepared sympathetically to consider the point raised by the Amendment, but I am not prepared to accept the point made by the hon. Member for Stalybridge and Hyde (Mr. Blackburn) about the earlier Amendment, or to suggest that what is happening now will lead to any alteration to what has been said already in that case. I am dealing specifically with the Amendment in page 9, line 25.
  Mr. Pargiter: How does the Parliamentary Secretary provide that there shall be equity if it so happens that the byproducts works is in another borough?
  Mr. Ede: I am not quite sure what the Parliamentary Secretary has now indicated he has done. I gathered that he had accepted the Amendment as moved by my hon. Friend the Member for East Ham, South (Mr. Oram), but that he had—[Interruption.] It was not the Parliamentary Secretary to the Ministry of Fuel and Power who spoke. I do not know whether he is prompting the Parliamentary Secretary to the Ministry of Housing and Local Government as to what he should do. If that is the position, the confusion will be even worse confounded very soon.
  I gathered that the hon. Gentleman had accepted the Amendment that my hon. Friend had moved but that he found great difficulty in accepting the consequential Amendment to the Third Schedule, by which my hon. Friend endeavoured to put some teeth into the present Amendment. I should have thought that just as we have left Clause 4 (8, b) in the Bill, although it is obviously something that must be altered later, we could put this

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  Amendment into the Bill and then the hon. Gentleman, either on Thursday or on the Report stage, could make the appropriate Amendment to the Third Schedule instead of the one that my hon. Friend has thought out and which the Parliamentary Secretary is unwilling at the moment to accept.
  Mr. Deedes: Perhaps I can make the point clear to the right hon. Gentleman. I said that we were prepared to consider sympathetically the Amendment which the hon. Member for East Ham, South (Mr. Oram) had put forward, but not to accept the form of words, because the method suggested in the Amendment to the Third Schedule would lead to certain difficulties. We must look at that again before Report stage. We have accepted in principle what the hon. Member is trying to do. What I have said is that we do not accept the form of words of the Amendment.
  Mr. Ede: Do I understand that the Parliamentary Secretary would like my hon. Friend to withdraw the Amendment now before the Committee on the understanding that the Parliamentary Secretary himself, between now and the Report stage, will find a suitable form of words to go into the Clause and also a suitable form of words to be put into the Third Schedule to make the words which he will put into the Clause operative? Is that what the hon. Gentleman is trying to say?
  Mr. Deedes: I prefer to keep to my own words. We cannot accept the form of words which the hon. Member has put forward. At the same time, we are anxious to meet the point which he has brought up. I am asking that we should be given a chance to see how far we can go to meet it before Report stage, and we shall produce something then.
  Mr. Mitchison: I understood the Parliamentary Secretary to say that he accepted the Amendment in principle. Is that right?
  Mr. Deedes: Yes.
  Mr. Oram: In view of the statement which has been made, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Motion made, and Question proposed, That the Clause stand part of the Bill.
  8.0 p.m.
  Mr. E. G. Willis: There is one question I would ask. The Bill does not apply to Scotland, but we are told in the Explanatory and Financial Memorandum that it brings about certain financial adjustments. This follows as a result of the change in the method of rating gas boards in England and Wales. We wonder whether the Minister can tell us what exactly those changes are and how they affect Scotland. If he does not know, perhaps one of the Scottish Ministers would tell us, though I have not seen one here. Maybe we could get one of the English Ministers to tell us exactly what the effect is in Scotland. We should be much obliged for his help in this matter.
  Sir Harold Roper: I should like to ask a question about subsection (3). I feel concern at the wording of that subsection. It appears to relieve a gas board of the effect of any additional item of the general rate or of any special rate which may be applicable to a part of the rating area that is not leviable in the area as a whole. This seems closely related to what we have been discussing for the last three hours and, therefore, it is not necessary that I should go into it in detail.
  However, it seems to me it should receive attention, for it appears to be inequitable, in that it seems to reduce the amount, which may be regarded as fairly due to a local authority, by reducing the amount of the rates payable by the gas board. The reason for that is not clear. It may be a matter inconvenient to remedy, but I should be glad if my hon. Friend could explain the purpose of it——
  Mr. Ross: I bet he cannot.
  Sir H. Roper:—and at least give the point his consideration when reviewing the position as a whole.
  Mr. Ross: I must press this matter of the absence of the Scottish Ministers. If the Government have done anything in this and the last Parliament they have given us a feather-bedding of Scottish Ministers—a Secretary of State, three Joint Under-Secretaries of State and, to make weight, in another place, a Minister of State. Yet here we are, discussing the only Clause of this important Bill which has a consequential effect on Scotland, a

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  consequential effect on Scotland's financial position, and there is not a single Scottish Minister on the Front Bench to tell us how Scotland will be affected by the Clause. In the absence of any of the Scottish Ministers who are supposed to be looking after Scotland's interests, perhaps one of the English Ministers who has an affinity with Scotland may be able to draw on his knowledge of Scottish law and say how Scotland will be affected.
  We are told in the Explanatory and Financial Memorandum that:
  "The Bill does not extend to Scotland, except for the purposes of certain minor financial adjustments consequential upon the provisions relating to Gas Boards …"
  This is the Clause relating to gas boards.
  What is to be the effect on Scotland's financial position? Will it be to Scotland's advantage or disadvantage? If it is to be to Scotland's advantage, then the Government can depend entirely on our support in seeing the Clause safely through the Committee, but if it is to be to our disadvantage not only shall we vote against it but we shall be forced to take stern measures against the absent Ministers who are supposed to represent Scotland in the Government.
  Mr. Cyril Bence: I wish to support my hon. Friend the Member for Edinburgh, East (Mr. Willis) and my hon. Friend the Member for Kilmarnock (Mr. Ross). This is a very serious matter. There was an inquiry under the chairmanship of Lord Sorn which led to certain proposals for rating reform in Scotland. Before we examine rating reform in Scotland on the basis of the Sorn Report we want to know what exactly this Clause will do. We do not know. There are some minor financial adjustments affecting Scotland. What are they? We do not know whether they will be advantageous or disadvantageous. When we set about reforming the rating system in Scotland, if we do, it may be said that these proposals here affect the basis of the equalisation grant from the Treasury to Scotland, because these proposals may increase the valuation of properties in Scotland. We want to be told before we let this Clause go by, or we shall have to divide against it.
  Hon. Members: There is a sort of Scottish Minister.
  Mr. Ross: But he is beyond the Bar and not in the Chamber yet.
  Mr. Bence: It would be interesting to hear whether the hon. Gentleman the Member for Edinburgh, South (Sir W. Darling) could enlighten us by saying how Clause 5 affects the finances of Scotland. Now that the hon. Gentleman has come in, I can tell him that that is what we want to know.
  Sir William Darling: It is out of order.
  Mr. Bence: The hon. Gentleman has come into the Chamber midway through a discussion on a very important matter concerning Scotland, and as he does not understand it, and did not hear what was said before, he does not propose to hear what follows, but simply says, "It is out of order," and leaves the Chamber.
  Mr. Ross: He did not want to have to make a speech.
  Mr. Bence: We have had other examples showing how Tory Members are not interested in the affairs of Scotland. Indeed, we had an example of that this morning.
  Mr. Hayman: Is Scotland represented at all on the Government Front Bench?
  Mr. Bence: No. We are hoping that a Scottish Minister will arrive at any minute. We hope that before the early hours of the morning a Scottish Minister will be requested to be present to answer this specific question. How will this Clause affect the finances of Scotland? How will it affect the equalisation grant, the grant we get under the Goschen formula?
  There are some gas boards in Scotland with valuable properties. If there is to be a rearrangement of those gas undertakings, how will that affect the Goschen formula when grants are made to Scotland? We want to know what effect that will have when we reform rating and valuation in Scotland.
  These are very important matters, and we should be told what is the effect of these proposals on the Sorn Report, in view of the fact that the Government have stated that they are to introduce a Bill based upon the Sorn Report. The Sorn Report was drawn up long before these proposals were made, is a Report based on the rating system in Scotland

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  as it is, without the proposals of this Clause. The Sorn Committee may have to be requested to sit again. We ought to know what exactly all this means.
  Mr. Ross: If my hon. Friend cannot get the Government to produce one of the Joint Under-Secretaries for Scotland, perhaps he could get them to bring in the Lord Advocate or the Solicitor-General for Scotland by demanding their presence, too. I omitted to mention them earlier.
  Mr. Sandys: If hon. Members will look at Clause 13 (4) they will see that
  "The provisions of subsection (5) of section five of this Act, and the Fourth Schedule to this Act, shall extend to Scotland, in so far as they affect the calculation of the amount of any grant payable out of moneys provided by Parliament under any enactment applying to Scotland. …"
  That is the relevant point.
  Mr. Bence: How?
  Mr. Sandys: Perhaps the hon. Member would give me a chance to show.
  I thought it useful to point out the very limited extent to which the Clause applies to Scotland. Only subsection (5) of the Clause is involved. The reason it applies to Scotland is that the equalisation grant in Scotland is calculated as a proportion of the equalisation grant in England and Wales. That is a fact and a decision of Parliament. It is necessary, therefore, to make it clear that the retrospective changes which will be made as a result of Clause 5 in the valuation of gas boards, which will result in a retrospective adjustment of the equalisation grant, will also be carried through in Scotland, where there will be similar retrospective adjustments of the equalisation grant.
  That is the application of the Clause to Scotland and I hope that that explanation has made the position clear.
  Mr. Willis: Is the retrospection based on the 1954 Act relating to equalisation grants for Scotland?
  Clause ordered to stand part of the Bill.

  Clause 6.—(RELIEF FROM RATES FOR PLACES OF RELIGIOUS WORSHIP, CHARITABLE INSTITUTIONS, ETC.)
  The Temporary Chairman: I think it will be convenient to the Committee to discuss with the Amendment in page 9,
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  line 37, the Amendment in the name of the hon. Member for Oldham, East (Sir I. Horobin) in page 9, line 42, to insert a new paragraph (c), the Amendments in the name of the hon. Member for Wellingborough (Mr. Lindgren) in page 9, line 43, and in page 10, line 3, to insert a new paragraph (d), together with the Amendments to that Amendment, and the Amendments in page 10, lines 29, 30 and 31.
  Mr. Lindgren: I beg to move, in page 9, line 37, to leave out "and."
  If it is for the convenience of the Chair and the Committee, I do not object to taking all the suggested Amendments together, but the subjects under discussion do not seem to me unduly related, unless there is some principle involved in the other Amendments which might apply to the Amendment I am now moving.
  I will confine my remarks to the Amendments in my name, which extend the benefits of the Clause to community centres and village halls. That is the simple purpose of this Amendment.
  I am certain that everyone in the Committee will agree that the community centre and the village hall are playing a very big part in the social life of the country. They are doing very valuable work generally under very difficult circumstances. Those who are responsible for them are sometimes assisted by such national bodies as the National Council of Social Services, but sometimes they spring from purely local effort and local finance. Whatever their source of origin, they are maintained by voluntary workers who put in a tremendous amount of time and energy on behalf of the people of the community and their social life.
  8.15 p.m.
  We shall add by the Clause to the worries and anxieties of those who run these halls additional financial worries about rates. One does not want to draw a distinction between the classes of work done by different types of workers in communities. Places of worship and the halls which are attached to them play their part, but there are many parts of the country where there are no halls attached to places of worship but where there are community halls and village centres. Although they do not spring from the same sources of inspiration, these halls and community centres play

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  their part in community life, and we feel that the principle of the Clause should be applied to them.
  Sir Ian Horobin: I do not know why so many Amendments are being taken together, but it is a convenience to do as the Chair directs. It will mean, however, that I shall have to trouble the Committee at rather considerable length, because now we are going to roam over the whole question of Clause 6 and the treatment of charitable and non-charitable hereditaments. I am afraid that I shall have to ask the Committee to bear with me in a rather detailed and long discussion of a number of technical and important points.
  First, I should like to say a few words about the Amendment which the hon. Member for Wellingborough (Mr. Lindgren) has moved. I do not need to trouble the Committee at great length about that Amendment, only to say that I very much welcome this move on the part of the hon. Member in associating himself, and I am sure his hon. and right hon. Friends, with the principle that it is right and proper to take this opportunity for Parliament to lay down the types of hereditaments which, in the view of Parliament, are suitable for special treatment in the realm of local taxation. That is an extremely important principle, with which I cordially agree, and I am very glad to have support in principle from the hon. Member.
  The second point on village halls and centres is that if the Minister at a later stage feels able to accept the Amendment, nobody will be more pleased than myself. I must, however, say that I am not quite sure whether this is the best or even the correct way of dealing with the particular type of hereditament which the hon. Member for Wellingborough has in mind. The hon. Member bases his Amendment on a Section of the Income Tax Act, 1952, which is very well known to all trustees of charities. I would ask the Committee and the Minister to bear in mind that that Section is the Section upon which the Income Tax position of all charities is based. It exempts from tax chargeable under Schedule A
  "… lands, tenements, hereditaments and heritages owned and occupied by a charity …"
  The Income Tax Act deals with all charities, and it is not clear upon what
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  principle one should select a particular one out of that general Income Tax exemption to be added to those in Clause 6 for which we are attempting to obtain complete exemption.
  I should have thought that once we start doing that, we would wish to add other types of charities for total exemption, but it does not seem to me quite clear that founding ourselves upon a general exemption in the Income Tax Acts we should then pick out these two admirable classes of charities; not, as it were, put them into the Clause by name after charities and alms houses, but bring them in as a section of a general exemption under the Income Tax Acts. However, as I say, if the Minister felt that he was able to accept an Amendment along these lines, I should welcome it, because I associate myself with everything that has been said by the hon. Member for Wellingborough as to the good work done by these community centres.
  I understand, Sir Gordon, that we are to discuss these Amendments together. I come now to the point about open spaces which is the subject of the first Amendment in my name, which would add to the complete exemptions from rates private open spaces held on charitable trusts. I must address myself to two points, and I am sure the Committee will agree with me when I make the general case in favour of helping and securing open spaces, particularly playing fields.
  It is well known that the National Playing Fields Association, a body of which I am glad to feel I was one of the founders, specified many years ago a suitable proportion of land which should be open space for playing fields in a normal built-up area. It is also, I regret to say, only too well known that there are hardly any areas in any of our great towns where a proportion of anything like that desirable amount is available. Nevertheless, as a result of the work of many people over many years, great improvements have been made in the open spaces available for the young people of this country.
  I cannot illustrate better the beneficent social revolution that has taken place in these matters in my lifetime than by the happy coincidence that the present President of Oxford University Athletics is running on one of my tracks in the

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  East End of London, a track which would have been built all over by the local authority if I had not, by desperate efforts, persuaded it of the unwisdom of such a course.
  I think I may proceed on the assumption in this part of the debate that all parts of this Committee are anxious to preserve open spaces of that kind, the shortage of which is admitted on all hands. I need not go further into the point I made during both Second Readings that these open spaces are in a position of peculiar danger in this regard, apart from any other, that they are of undoubtedly great rateable value if they are once rated as an ordinary hereditament. There is no possible appeal that can be argued against the enormous rateable values which will be entered as a result of the centralised valuation in the rate. I gave illustrations of that and I need not repeat them.
  So I start with the assumption that we all realise the danger and want to help. We come, therefore, in this Amendment, and particularly in the first one in my name, to a purely typical but genuine set of problems. I think I can best put the problem that has bedevilled all the discussion which has been going on with the Ministry and local authorities amongst charitable trustees for now literally years in this way: that if we give a very high degree of protection in one way or another, we then feel compelled to narrow ourselves to the sphere in which it is given to such an extent that we find that all sorts of highly desirable open spaces are not protected, or we bring in automatically every kind of open space. Then we say to ourselves, "It really is not fair to the local authorities or others to give an amount of protection which is worth having."
  That is the difficulty which we have all been in when discussing this matter. It is upon that basis that I feel the only way in which we can tackle this open space part of the charitable problem with which we are concerned in this Clause is to proceed upon at least three grounds. We must first deal with the core, where open spaces are easily and definitely definable. For that purpose, after a lot of consideration and consultation, I do not see that we can do better than take the definition of a charity. Charitable trusts are what are determined by the courts of the land to be charities. No
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  question of definition administratively arises. There are other matters of definition with which I shall have to trouble the Committee in a moment, but they are specific. A piece of land is either the subject of a charitable trust or it is not.
  We then have the next section of the open space problem where I feel we can best—and this is the subject of the second main Amendment in my name—give the general direction without complete limitation, that they should have some limitation of their rates but not a complete exemption.
  Then we come at the periphery, as it were, to a set of open spaces held by all kinds of cricket and football clubs where there really is no alternative but to leave them to the discretion of the local authority, as far as I have been able to see so far.
  I will deal with the first, the core of the problem, those open spaces which are definitely tied up in charitable trusts for the benefit of the community or some sections of it. Some of them are very big and valuable. I am trustee for more than one with a value running far into six figures. The assets at stake are, therefore, enormous. However, open spaces, though they are very valuable in the sense that far-seeing trustees bought and developed them in areas which have later been built on, are not an asset while being used for the purposes of the charity. On the contrary, they are then a very big liability.
  Areas held in charitable trusts are important for another reason, in so far as they are areas the security of tenure of which for the purposes for which they were designed is greatest. One of the great problems is that many open spaces are held on leases or by agreements and are frequently lost as a result of changes in circumstances.
  8.30 p.m.
  I am asking the Committee to say that, just as Parliament decides that a church should be exempt from rates as it is not a fit subject for local taxation, Parliament should apply the same principle to open spaces which are definitely tied up in charitable trusts for the benefit of the people, usually the young people, though it may be the old as well. Admittedly, there are some difficulties. It may be held by some that "charities" might bring in bodies which some hon.

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  Members might doubt should be exempted.
  Rightly or wrongly—rightly, I think—right hon. and hon. Gentlemen opposite in passing the Town and Country Planning Act, 1947, decided, when dealing with the matter for the purposes of that Act, not to go behind the definition of "charity." Section 85 gave special treatment to operational lands in the occupation of charitable trusts. I think I carry both sides of the Committee with me when I say that, though there are no doubt some charities which might be held on an unsympathetic consideration not to be as worthy as others of complete exemption, nevertheless precedent is on my side that more harm than good would be done in attempting to go behind the definition of "charity." I am sure that the right hon. Member for Bishop Auckland (Mr. Dalton) agrees that the precedent of the 1947 Act should apply here.
  The Minister may say that other definitions of what I refer to as the central core of open spaces are possible. One might be based on the Physical Training and Recreation Act, 1937. That has advantages which might appeal to some local authority administrators because not only would the hereditament be governed by the general provisions of that Act, which are wide, but grants by the Ministry of Education under the Act have to be made in accordance with regulations laid down from time to time by the Treasury. By using a definition of that kind it might be possible to give complete exemption to a set of hereditaments, which would be more amenable to administrative control. I am, on the whole, of the opinion that there is a very strong case for exempting from local taxation open spaces which are definitely tied up in charitable trusts.
  Mr. Mitchison: In view of the advice that he has taken and the care that he has taken in framing his Amendments, I wonder whether the hon. Gentleman could answer two questions which are troubling me. My recollection is that in the Section of the Town and County Planning Act which he mentioned land used for agricultural shows and reserved for that purpose has been treated as "charitable land," to use a short phrase. Would such land be covered, on the advice that he has taken, by his Amendment? My second question is a much
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  simpler one. Would the playing fields of Eton be covered?
  Sir I. Horobin: Those are both matters on which only the courts can give a final decision and, as I am coming to a very complicated case which is troubling all of us and which has just been decided by the House of Lords, it will ill become me to endeavour to do what the Government did earlier—step in front of a decision of the courts and get myself into the same sort of trouble as we were in earlier about water works.
  My point is that what is or is not a charity is a matter for the courts to decide. It is a matter which they have to decide for a number of reasons, as everybody will remember, affecting testamentary decisions—whether a gift has to have been given within one year or five years of death to be exempt from tax. This is a matter which is being decided by the courts all the time. Speaking very cautiously, I should have thought that it was very difficult to claim that an agricultural show was ipso facto a charity.
  The proper way to test that, if a local authority felt aggrieved and believed that it was not obtaining rates from a hereditament which it did not hold to be charitable, is for the local authority to adopt the remedy which the Birmingham Corporation used and ask the courts to decide whether it is charitable or not.
  Hon. Members: What about Eton?
  Sir I. Horobin: The same thing applies to Eton. I do not know whether the courts have ever been called upon to decide if Eton was charitable or not, just as I do not know whether the Governors of Eton put in a claim under Part VI of the Town and Country Planning Act. There are several Old Etonians here. I do not know whether any of them can tell me. Did the Governors of Eton make a claim to the Central Land Board under Part VI of the Town and Country Planning Act? Perhaps the right hon. Member for Bishop Auckland would care to answer that. I see that he remains seated. Like me, he is too wise to be drawn.
  There is nothing new in this provision. Whether an open space or other open hereditament is or is not a charity arises under the Town and Country Planning Act and under Income Tax provisions, and could be decided in the ordinary way.

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  Here is a comparatively easy way of deciding whether a piece of land, as has to be decided under the Town and Country Planning Act, should get the benefit of special protection, and I feel that it should.
  Captain Christopher Soames: I was interested in the point raised by the hon. and learned Gentleman for Kettering (Mr. Mitchison) about agricultural shows. I think that my hon. Friend will agree that it would not be wise if the Amendment enabled privately-owned land on which every year there took place a county agricultural show automatically, to be exempted from rating because of that. Is this not an example where, by endeavouring to remove some anomalies and by taking away a large amount of discretion from the local authorities, my hon. Friend has put in their place a lot of new anomalies?
  Sir I. Horobin: I do not think so. The position is almost inconceivable. I cannot imagine that there is any land in this country held on charitable trust—if it would be charitable, which I doubt—where the point of the charitable trust was that the land should be used for agricultural shows. I do not think the point has any substance. I must appeal to the Committee. We are here dealing with a very serious and grave problem, and we must not start trying to pick imaginary holes.
  Mr. Hayman Mr. Hayman rose——
  Sir I. Horobin: I am troubling the Committee at great length. I hope I shall be allowed to continue.
  Mr. Hayman: While we have a great deal of sympathy with the objects of the Amendment, I think that the hon. Member is wrong in discounting as almost impossible the idea that any considerable amount of agricultural land in this country might be held by charitable trusts. It might be land near towns which could be very valuable and used as car parks, too.
  Sir I. Horobin: Really! If it is suggested that any court in the land would hold a car park as being occupational charitable land, I think that we are getting a long way from the realities of my Amendment. I appeal to hon. Members to allow us to get on with the discussion.
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  So much for the Amendment dealing with open spaces held in charitable trust. I come now to the far wider but equally serious matter of general charities, covering the whole field of clubs, Y.M.C.A.s and so on, and the great university settlements known to so many of us. I do not need to go again over the points which I made on both Second Readings of this Bill—which met with considerable support from hon. Gentlemen on both sides of the Committee—about the impossible position in which the owners of those hereditaments are placed. They are completely at the discretion of the local authorities. They cannot object and they are subjected to hopeless pressure at any time. Indeed, as hon. Members pointed out, it is invidious for local authorities if they are left without any principle upon which to act in this matter.
  The utter absurdity of the position into which we are getting can perhaps be best illustrated by a fact, which I have not yet given, arising out of the position of a very large charitable hereditament in another part of England of which I happen to be one of the trustees. It is a building which I think I can say is unique of its kind on this side of the Atlantic. In order to endeavour to be as reasonably sympathetic as possible, the Inland Revenue provisionally put a value on it—which in itself was something like five times the present value—on the basis of it being a warehouse for flock mattresses. Anything more unreal and absurd could hardly be imagined. This is a type of hereditament where I feel that there would be a serious and genuine objection to complete exemption. I propose, in the second Amendment standing in my name and the names of my hon. Friends, that there should be some reduction. I have put in the figure of three-quarters, but there is no magic in that figure, and I will say a word about that in a moment. Beyond that it should be left to the discretion of the appropriate authority.
  I think it fair that there should not be a complete exemption for this kind of more general hereditament. I do not see why they should be a charge on the local authority, because, after all, they have to have their dust collected, and so on, and it is fair that they should pay something towards it; unless—as I am glad to say is sometimes the case—local authorities de-

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  cide to exempt them even from that. But it is difficult to see why a hereditament of that kind should contribute to, say, the education rate when they are, in fact, relieving the local authority of a great burden in that respect.
  There is only one other point which I wish to make, if, as I hope, the Minister is sympathetic to this principle. It is that for the general charitable hereditaments there should be a proportionate secured reduction in rates, but that it should not be too low. There is always the danger in these matters that the minimum will become the maximum and that we may do more harm than good. On the other hand, there is a very good precedent for a reduction of this kind where there are special circumstances.
  To take one obvious precedent, one might mention allotments. The three-quarters exemption on allotments has nothing whatever to do—as may be imagined by some people—with agricultural derating. It dates back to the Public Health Act of 1875. As allotments do not benefit from a great deal of the services, they pay rates at a lower level, and I think that is a good precedent for what I am here suggesting. There are precedents such as the Halifax Act, which exempts 90 per cent. and—I will not weary the Committee by reading it in detail—one of the Edinburgh Corporation orders which was previously repealed by this Bill but has gone out of it in this new form, and which would give even wider exemption.
  8.45 p.m.
  I hope, therefore, that the Committee will feel that a strong case has been made out for, on the one hand, giving complete exemption to a very narrow but vital type of hereditaments, namely, open spaces held on trust, and, on the other, for giving a less but substantial security to the much wider field of other charitable hereditaments.
  We are left, of course, with the whole field of what one might call near charities where, so far, we can see no alternative but to leave them to the discretion of the local authorities. There is one advantage in that, of course, which is that there will be a definite and very strong inducement wherever possible to put hereditaments which are not yet in charitable trusts into
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  them, particularly in the case of open spaces and playing fields.
  I am very glad to have the support of the hon. Gentleman opposite who is most knowledgeable in these matters and speaks with much greater knowledge on matters connected with county councils than I can claim to have. But we all ought to bear in mind that just as we want to give an incentive to people to do this kind of work and to preserve this kind of properties, so we want to put every inducement in their way to see that such properties are as far as possible permanently tied up.
  For my own part—and I apologise for speaking so long, but we are dealing with such a variety of problems—I would say just this. If, as I hope, the Minister can see his way to go further, well and good. Personally, I should be only too glad to see a very much wider range of open spaces given complete exemption. I have drawn the Amendment as narrowly as possible for fear lest if one draws things too widely one gets nothing. If the Minister feels that village halls and open spaces are so important to the country that he would wish to give them complete exemption, I should be only too glad. If the second Amendment, which gives a limited but valuable complete three-quarter exemption can cover more than the almshouses and charitable hereditaments which are mentioned in it and if it were put lower down in the Clause so that it would cover these wider hereditaments not run for profit, I should rejoice.
  In the light of the discussions that took place on the two Second Readings, my two Amendments seem to be the very minimum to secure and to preserve pieces of work which have been of untold benefit particularly to the young people of our country and which are at the moment in grave danger as a result of measures which were taken for totally other reasons. It is right and proper that Parliament should lay down some general principles. I have suggested these two, but if others can produce better ones, so be it. As I say, Parliament should lay down some general principles on these fields of benevolent activities just as it has laid down principles to cover such things as churches and other things to which I have referred.
  I am sorry to have taken up the time of the Committee for so long, but these

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  are matters dear to my heart, and, I am sure, dear to the hearts of many other hon. Members in all parts of the Committee. I hope that the Minister and the Committee will give sympathetic attention to them.
  Mr. Lindgren: May I intervene—I was about to say for the benefit of the Minister, but I do not want to put it in that way. The hon. Member for Oldham, East (Sir I. Horobin) has raised two important matters of law. On this side of the Committee we are extremely fortunate in having an eminent lawyer who has been absent from the Chamber and has now returned with a number of volumes. As I do not want to see the Minister put to disadvantage, could we be told whether we are likely to have the presence of Law Officers of the Crown when considering the definition of charities and the arguments likely to arise concerning them?
  Mr. Sandys: I was not aware that any very difficult questions of law were likely to arise, but if they do I will see whether I can get in touch with one of the Law Officers. I do not think that this will be a legal debate. We all recognise the difficulties of defining a charity, but I doubt whether any legal gentleman on either side of the Committee will be able to be of very much assistance to us in that matter.
  Mr. Sparks: There is one aspect of the problem which the hon. Member for Oldham, East (Sir I. Horobin) dealt with, and I do not want to dispute with him the main substance of the case which he has made. I think that we should take into consideration to some extent the use which is likely to be made of the open spaces held by charitable trusts. This is a constant source of discontent in many built-up areas, where there is a shortage of open space, and where most of the open space which is available is in private hands and is used, not for the benefit of the local inhabitants, but for other people who come into the area, use it for the time being, and go away.
  In London and the Greater London area, a good deal of open space is not available to the local people for use. It is let to all kinds of bodies—very deserving, desirable people, such as members of cricket clubs and works sports clubs—but they are not the people who live in the area. The people who live in the area
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  are not able to have access to the open space or playing field for any of their local purposes. I think it would be a little hard on local authorities if we were to say that in cases like that these bodies should be exempted from any contribution to the rates.
  Whatever open space is considered, particularly in a built-up area, there is a certain amount of expense which falls upon the local authority in connection with it. I will not say how much or how little. I do not think that anyone knows precisely how much or how little. Therefore, I feel that the right hon. Gentleman—I do not want to confuse the straightforward issue which the hon. Member for Oldham, East has put forward—should take into consideration this aspect of the problem, namely, the use to which an open space or playing field is being put. If it is to be exempted from rates, surely the ratepayers and the people in the area should have reasonable access to it. I do not suggest that they should have a monopoly of its use, but that they should have reasonable access to it for local purposes.
  If that were so a stronger case could be made for its exemption from a rate contribution, but if it is not to be available for local people, being reserved specially for people who do not live in the area, it is difficult to justify its complete exemption. I ask the right hon. Gentleman to bear that point in mind, because this problem affects many authorities in built-up areas, and areas where open space is very scarce and the little which is available is in private hands and used for private purposes.
  Mr. Sandys: I know that it is not usual on these occasions for a Government spokesman to intervene at an early stage, but I think it might be helpful if I do so on this occasion in order to deal with some of the issues which have been raised. I am, naturally, available to reply again later if need be.
  We are now discussing three Amendments together, and in my view it is extremely convenient that they should be discussed together—for the simple reason that it is not easy to form an opinion upon proposals for the exemption or preferential treatment of certain types of property owned by charitable and other organisations until we have decided what line is to be taken towards charities as a whole. If a satisfactory solution can be

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  found for charities generally, some of the other problems may disappear.
  I want to make one or two preliminary observations about the Amendment in the name of the hon. Member for Wellingborough (Mr. Lindgren), in page 10, line 3, who said that community centres and village halls owned by charitable organisations—defined, as he says, as those which are exempt from Schedule A Tax on the ground that they are charities—should be altogether exempt from rate contributions. He is well aware that as the Bill stands those organisations would come within the provisions of subsection (4), and it would, therefore, be open to local authorities, at their discretion, to give them either total exemption or such remission as they thought fit.
  The hon. Member is asking that these village halls and community centres should be treated in exactly the same way as church halls. The reason church halls are exempt is that the churches themselves are already completely exempted from rates by law. It is felt that since a very great part—and a growing part, nowadays—of a church's activity takes place in the church hall, it is desirable to extend the exemption to church halls, except to the extent that those halls might be used for profitable ventures.
  9.0 p.m.
  The community centre or village hall held by a charity is not in the same position as a church hall; at any rate, the justification for exempting it is not the same. It does not represent an extension of an existing exemption of some building, like a church. That is the main reason why I question it; but in these preliminary remarks I am not attempting to present a final view on the matter.
  If we gave total exemption to community centres and village halls belonging to charities there would be a strong case for exempting other halls owned by charitable organisations and used for non-profit-making purposes. This is one of the matters in which one thing inevitably leads to another. Other halls belonging to charitable organisations come within the scope of subsection (4), and one would have to consider, logically, exempting them if one were to exempt the community centre or the village hall.
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  We should address our minds, first, to the problem of avoiding fresh confusions and anomalies. There are already quite enough of them in this field. We need a means of dealing with village halls, community centres and other institutions, including the open spaces referred to by my hon. Friend the Member for Oldham, East (Sir I. Horobin), as part of the general problem of charities, with which I am sure we are all sympathetic.
  These three Amendments raise, in different ways, several distinct and difficult issues. I hope that hon. Members will help me by addressing their minds to these problems, which are very real, in trying to arrive at a correct solution. The first question raised is, "Should relief for charities be provided by giving discretion to local authorities, as the Bill proposes?" This is as near as we can get to a continuation of the existing procedure under which local authorities give sympathetic assessments. Now, when they no longer are the valuation authorities, they cannot give sympathetic assessments.
  We have introduced the nearest thing to it, which is to give local authorities the power to use their discretion in exempting altogether, or omitting to some extent, as they think fit, the rates payable on charitable properties. The property itself will be fully assessed, like any other property, by the Board of Inland Revenue, but the Board, from its central position, cannot exercise the discretion which has been used in the past by local authorities in appropriate cases.
  Should relief for charities be provided by giving discretion to local authorities? Or should we substitute a statutory remission of four-fifths for these organisations, as proposed by my hon. Friend the Member for Oldham, East, or total exemption of certain classes of property, as proposed by the hon. Member for Wellingborough?
  The views of local authorities have been expressed by a number of hon. Members in the course of our debates It is my duty to put the facts before the Committee. When these Amendments were put down I sought the views of local authorities through the machinery of the local authority associations and it is right that I should read to the Committee a letter which has been circulated to a

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  number of hon. Members and which gives the views of one local authority association. This is a typical letter which I have received on the subject:
  "My Association are most concerned at the Amendments which have been put down by Sir Ian Horobin and others and by Mr. Lindgren"—
  It will be seen that it is impartial to both sides of the Committee. I am not associating myself with the letter, but I think it right that the Committee should have this information before it. The letter continues:
  "to add private open spaces, community centres, village halls and almshouses to the exemption to be given to church halls under this Clause. We feel that this goes far beyond the reasonable extension of the existing exemption from rates of churches and chapels which is provided by the Clause. We also strongly object to the Amendment on page 10, line 31, to compel rating authorities to forgo rates to the extent of four-fifths of the value of properties used as almshouses or occupied for charitable purposes. We feel that rating authorities, who possess local knowledge of the needs, can properly he trusted to exercise discretionary powers with regard to charitable properties. So much depends on the facts in each case and the problem is not by any means confined to so-called national charities. The effect of these Amendments will be to diminish the rate income of local authorities or to subsidise charities at the expense of local rates."
  The letter finishes with this sentence:
  "We consider that if Parliament desires to give further aid to charities it should provide the money out of national and not local resources."
  I thought it my business to put that point to the Committee, as I am trying to put before it the issues as I see them.
  I turn to the second issue. In dealing with concessions which would be defined by Parliament in some form of statutory exemption, we must ask whether they can be confined to charities. My hon. Friend the Member for Oldham, East said that it is difficult to decide exactly what is the type of organisation which should properly enjoy these advantages. Whatever definition we take, the position will be very unsatisfactory. Various examples have already been given on this and an earlier occasion. There is no doubt that whatever ready-made definition we take we shall find that we include organisations which, though deserving, are perhaps not in need of relief and exclude some organisations equally deserving and perhaps in fat greater need of this relief.
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  May I read to the Committee the recent remarks made on the subject by the Royal Commission on the Taxation of Profits and Income, which went into the matter? The Report, which was published the other day, refers to the evidence given by the Master of the Rolls, Lord Stern-dale. The Commission evidently agreed with his views. Lord Sterndale observed:
  "The whole subject"—
  he was speaking of charities—
  "is in an artificial atmosphere altogether … and when one takes gifts which have been held to be charitable, and compares them with gifts which have been held not to be charitable, it is very difficult to see what the principle is on which the distinction rests."
  The Commission went on to say:
  "Other judges have declared themselves baffled by the task of deciding according to law what is and what is not a charity."
  Later, the Commission said in the Report:
  "the present situation is hardly less than chaotic and the prevailing uncertainty does not do credit to the tax system."
  There is no doubt that there is no satisfactory definition of what a charity is or of the type of body which we have in mind. We all know what we have in mind and the type of organisation which we feel is deserving and which we would like to help, but when we try to put it in the form of a subsection of a Clause in a Bill, we find ourselves in very great difficulties.
  The third issue which these Amendments raise is this. If we are to extend the application of the remission to other classes of property, where should the line be drawn—when I say "remission" I include exemption or remission—for there have been various suggestions that we should include organisations of a different kind; my hon. Friend mentioned some of them and others were mentioned on Second Reading. If we are to extend these exemptions or remissions to further classes of property, where are we to draw the line?
  Before we can consider the extension of the list and the enlargement of the field, we really have to try to make up our minds whether we are thinking of a discretionary power to local authorities or of a statutory remission or statutory exemption. The list which was drawn up and which is embodied in the Bill, I think the Committee should know, was

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  drawn up after very close consultation with the National Council of Social Services, which is the acknowledged organisation to which the Government normally turn for an expression of view on the interests of charitable organisations in general.
  If it is decided to stick to the discretionary basis which is now contained in the Bill as drafted, it would no doubt be possible, if the Committee so desired, to consider a further extension of the classes of organisation to which a local authority would have a discretion to grant exemptions or remissions. If, on the other hand, the statutory basis, allowing no discretion to the local authorities, as is proposed in the Amendments——
  Sir I. Horobin: My right hon. Friend unwittingly, I think, is giving a false impression. That is quite definitely not the intention or the effect. It is precisely to have both. I argued to the Committee at some length that it was impossible to have either, for the reasons I gave, and that what we should do was to have a wider list with discretion and a narrower list with a statutory limit.
  Mr. Sandys: I did understand that. My point is that if we were generally to adopt or extend the statutory basis, it would have to be confined to a more limited class of organisation such as charitable trusts.
  9.15 p.m.
  I was going on to say, before my hon. Friend interrupted me, that probably the right answer—it is the one we have adopted in the Bill, at any rate—is to go in for both types. We have, exempted church halls and we have the rest of the properties in the discretionary class. We have to consider whether we want to extend that class to other organisations such as charitable trusts. At once, we come against the difficulty of definition.
  If we leave the discretion to local authorities to decide to which individual charitable organisations they will give exemption or remission, that allows the human element to come into play; it allows local knowledge to come into play; it allows the facts of individual cases to be assessed. On the other hand, if we define in a list, in certain categories, the organisations which are to be totally exempted, those which are to get the
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  four-fifths, or whatever the proportion may be, although that may be a good answer to the problem we shall inevitably define them in a way which, we know in advance, will be unsatisfactory. However, that may be the best thing we could do. I am not trying to prejudge the matter. It would, however, create anomalies, and nonsense in certain cases.
  I fully understand the anxieties of these charitable organisations which, in the past, have had sympathetic assessments from local authorities. They have had them year after year. They have not been revised for a long time. Now that the whole issue is to be reconsidered, even though they must assume, as I think they have the right to assume, that the local authorities will continue to be sympathetic and wish to be helpful to them, they are afraid that they may not be treated as generously as they were. I fully understand their anxiety. Theirs is a genuine fear, and it is because of that that these Amendments, in the main, have been put down.
  Mr. C. Pannell: The right hon. Gentleman says that these cases are to come up for revision and that the Bill reopens the matter, but is it not the case that the rating authorities could at any time have revised the assessments of those hereditaments on the grounds that church halls, for instance, were used for purposes other than purely parochial ones? Why should it be supposed that there is a revolution in taxation to be brought about by the Bill?
  Mr. Sandys: The hon. Gentleman is quite correct. At any time, of course, the rating authorities could have reviewed and revised the sympathetic assessments which they have been giving for a long time. However, that very seldom happened. These sympathetic assessments, having been given, were continued. Now every rating authority will be obliged to consider the list again. It will now, under the Bill when it becomes an Act of Parliament, have to exercise the powers given it by the Measure, and decide which charities are to be given this special treatment, and to what extent it will exempt or remit their rates. I think it is natural that the charitable organisations should feel some anxiety, and it is that anxiety, I have no doubt, which has prompted these Amendments. There is anxiety, no doubt, among these charitable organisations on this score.

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  The objective which, I believe, we all share is to find a way of ensuring relief and security to deserving, public-spirited organisations fairly and even-handedly all over the country.
  I have explained to the Committee some of the difficulties which this problem raises. I have not tried to provide an answer at this stage, because I think that it is essentially the kind of problem which a Committee of the House of Commons ought to try to sort out together. We know what we want to achieve and I think that we all see the difficulties. I shall listen with close attention to any views that are expressed in debate.
  Mr. G. R. Howard: Would my right hon. Friend be prepared to say that there is one case where it would be wrong to allow discretion to the local authority, namely, the Royal National Lifeboat Institution? There are 148 stations, of which a hundred are not assessed. The other forty-eight are assessed. This is unfair. They should be included specifically, because this is a national organisation.
  Mr. Sandys: I do not want to go into cases of individual organisations, but that is a good example of the kind of anomalies which have crept into this business.
  Mr. Mitchison: I am sure that everybody in the Committee appreciates not only the fact that the Minister has spoken now but the real help which he has given to the Committee by stating his own reasons and feelings for what he has put in the Bill and also the fact that he has told us that he would attend to the discussion, that he expected something from it, and that his mind and the mind of the Government were not closed on this matter. If I do not follow exactly the particular way in which the right hon. Gentleman put it, it is not because I differ from him in the least about the questions that are involved. Am I right in thinking that we are not discussing any Amendments beyond the Amendment in page 10, line 31?
  The Deputy-Chairman (Sir Rhys Hopkin Morris): I understand that we are discussing all the Amendments from the Amendment in page 9, line 37, to the Amendment in page 10, line 31.
  Mr. Mitchison: I asked that question because it seems to me, with respect, that the question of what additions should be made to the discretionary remitments really arises on the later Amendments which at the moment we are not considering. Therefore, what we have to consider at the moment is whether any change should be made either in the class of absolute exemptions or in the class of what I would call discretionary remitments or reductions. We on this side of the Committee are seeking to make one specific addition, with relation to community centres and village halls, to the absolute exemptions. The right hon. Gentleman replied to that, in effect, "You are making a new addition which is not linked with any existing exemption in the way in which church halls are linked with the churches themselves, and therefore that is an innovation the limits to which one does not clearly see."
  I would say that, though it is perfectly true that community centres and village halls are not linked to any existing exemptions, they are quite closely linked to the addition which the Minister proposes to make by way of church halls. On this side of the Committee, as I am sure on the other side, we all welcome the addition of church halls, but, if I may take the example of villages, one has cases of a village where a church hall is used for social purposes under the supervision and general control of the parson, while in another village one has a village hall which is not under the control of the church in any way but conforms in its constitution and its management to the general rules that have been prescribed or recommended in these matters by the National Council of Social Service and is of course a charity. If, in fact, church halls in villages are to be exempted, and there are many of them, there is no sufficient difference between the functions of the church hall and the village hall not to entitle the village hall to a similar exemption.
  I would like to put the matter a little more broadly. If we go back into the history of this country we find that churches at one time performed a rather wider function than that merely of places of religious observance. I remember that in at least one church, Thaxted, for a considerable time an effort was deliberately made by the parson to extend

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  its use, I would not say for social purposes, but for community purposes, and to some extent that is taking place in a number of other churches now. I know of one London church not far from this place where there is a considerable use of the church building in that way, and it is rather hard to say where the church ends and where the church hall begins in those activities.
  I can see no real distinction in modern times between many of the functions and community services that are carried out in a community centre or village hall and other similar services which might in the past have been carried out in the church itself. I view with apprehension the hon. Member for Carlton (Mr. Pickthorn) on the opposite bench, and I am sure he will correct me on this matter if I am wrong.
  To put the matter generally, I would say that under modern conditions and in our modern society a community centre or a village hall, subject always to its charitable nature, was entitled to promotion into the same class as any church or chapel hall; that it had an importance to the community whose centre it was which was at least parallel with and as valuable as that of the church or the church hall—and when I say church I include chapel. That is the reason why we selected these two types, and I agree they are broadly similar. One would regard a community centre in a town as corresponding generally to the village hall in the village, though I have no doubt there will be some individual differences.
  As to the point which has occurred to several hon. Members, that these places have a definite value for letting and are extensively used for all sorts of activities, that is safeguarded in the case of church and chapel halls, and the same safeguards would apply, and conveniently, to community centres and village halls. Therefore, speaking for my right hon. and hon. Friends on this matter, we would definitely like to see that not very large but important class of places included in the absolute exemption.
  We have also put down, and we are now discussing, a rather different type of place which again we do not put forward with quite the same confidence, but we should like to consider it on the question of absolute exemption. I refer to almshouses, which occur at present specifically
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  by themselves as a special class in the discretionary group. It seems to me that there is a case—though not one that we feel with the same intensity as in the instance of community centres and village halls—for putting them into the absolute exemption class. They have, of course, to be charitable, and I imagine there are few places called almshouses which would not qualify.
  9.30 p.m.
  In a charitable almshouse there is performed a duty rather than a service which devolves on the community as a whole and may in this case be carried out by a private charitable agency. This country is rather short of proper accommodation for elderly folk. I will not raise that broad question on the discussion of this Amendment, but we must all recognise if we look at the matter frankly that the more we have of that type of accommodation the better, and the more use that can be made of what exists the better. That use has a certain public character and discharges what we all recognise to be a public duty, even though it is discharged by a private charitable agency.
  In the simple name of the duty which we all owe to those who have spent their active lives in the community, we feel that almshouses have special claim. It does not seem to be very relevant, to most of us at any rate, that some almshouses may be wealthy bodies. They are nonetheless charitable bodies. The question seems to be whether their wealth could not properly be applied to some similar charitable purpose, and that is not a question upon which we need to embark today. On the question of rating, some of us at any rate—I put it no higher than that—think that almshouses are worthy of consideration for absolute exemption.
  I turn for a moment to the two matters raised by the Amendment in the name of the hon. Member for Oldham, East (Sir I. Horobin). I confess outright to him and the Committee that on Second Reading it occurred to me that it was to some extent anomalous that some things should be exempt from Schedule A Income Tax but not at the same time from rates. The answer is that this is one of those practical anomalies which we must accept, because if we tried to exempt all charities from rates we should find some absurd consequences.

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  I mentioned by way of an interjection the case of an agricultural society's ground which is a private open space devoted to charitable purposes. It has been held to be so in the case of the Yorkshire Agricultural Society. It seems to me that it is carrying the matter beyond our common intention to make the suggestion in a case of that sort. Another instance is provided by the playing fields of Eton. I understand that the Eton urban district depends, not unnaturally, very largely upon the college for a considerable proportion of its rates. Though no doubt the playing fields do not pay a very large part of the rates, I think it is carrying it rather far to use such sweeping words as those in the hon. Member's Amendment. Perhaps he might find it possible to reconsider the matter and see if there is not a smaller grouping that could effect the object he has in mind.
  Sir I. Horobin: Do I take it that the hon. and learned Gentleman agrees, following his principle that there should be certain additions to the list of complete exemptions, that in their nature open spaces, if of a somewhat narrower character, have just as strong a case as almshouses—about which I agree with him—although some almshouses are as wealthy, or even far wealthier, than Eton?
  Mr. Mitchison: I am sorry to disappoint the hon. Gentleman, but I am afraid that in my next sentence I intended to say that he would find it uncommonly hard to find suitable words and in that case the best solution would be to leave them to discretionary exemption by local authorities.
  I can only give the Committee my honest and considered opinion, and I am not sure on that point how far my right hon. and hon. Friends would support me, although I think that they would. I am quite certain that on the four-fifths Amendment he would find little or no support on these benches. We feel that the question of a reduction or remission of the rate, the sympathetic poundage in lieu of the sympathetic assessment, is one for the local authority to put to itself and that there is no more reason why it should be compelled to exempt the whole of this very wide group to the extent of at least four-fifths than that it should be compelled to exempt it to the figure of any other vulgar fraction that occurs to
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  the minds of hon. Members from time to time.
  The cases must be widely different, because the group itself goes a good deal beyond charities. It goes into the class of cases where the objects are mainly charitable, and it would be a very wide group, indeed. I feel that with open spaces in general—and even more as regard other bodies whose objects are mainly charitable—there is every reason for leaving that to the discretion of the local authorities.
  I, too, have made inquiries of the National Council of Social Service, and I believe I am stating the position correctly when I say that the National Council of Social Service is content with the pay or concession that is offered by the Government in this Clause, but, like other people who are from time to time offered a concession or pay, it would not be particularly averse to its being made a little larger. After all, the suggestion we are making in our Amendments is really quite small and I hope that the right hon. Gentleman will look particularly at the point of community halls and village centres and remember to what extent it has been the policy of one Government after another to try to encourage these places, particularly the village halls in many villages which sorely need them as a centre.
  In modern times we have been obliterating squirearchy to some extent. On this side of the House we are not averse to that, but we feel that if we are to do that, we must at least provide facilities for village democracy, and the village hall plays an important part in that. Similarly, as regards community centres, we are encouraging new towns and new sections of towns—I hate to say overspill, but that word is associated with it—in different parts of the country, and if we are to turn these new towns and extensions of old towns into real communities, a community centre becomes a social necessity, and, I should have thought, nearly a moral obligation on all of us. I do not like rating moral obligations, whether they be religious or social.
  Captain Soames: When my right hon. Friend was speaking, I had the impression at the outset that he had an open mind about this whole matter. But as he developed his arguments, I gained the

  315
  impression that he was coming down more and more in favour of maintaining the discretion of local authorities.
  The hon. and learned Member for Kettering (Mr. Mitchison) has just given us excellent reasons why village halls should be included in the non-discretionary category. My hon. Friend the Member for Oldham, East (Sir I. Horobin) gave excellent reasons why open spaces should be included in that category, and I am sure that many hon. Members could put forward excellent reasons for many charities to be included in the category for which no discretion is allowed at all.
  I believe that a considerable point of principle is involved in this matter. Obviously, we all hope that the best arrangement to aid these charitable organisations will be arrived at, but there is here involved an important principle concerning the power of local authorities. It appears to me, in view of the grave doubt which, I consider, is felt by my right hon. Friend on this matter, and which, I am sure, is shared by many hon. Members, that it would be a great mistake for this Committee further to clip the powers of local authorities, unless an overwhelming case can be made against discretionary powers. I do not believe that such a case has been made out; nor do I believe that it could be, even though we were to argue far into the night or into the early hours of tomorrow morning.
  Lying behind these Amendments is a fear on the part of certain hon. Members that charities are not to be assured in future of a fair deal from all local authorities. Therefore, they regard it as important that these charities be protected by being written into the Bill; that either they be completely exempted from rates or exempted up to the level of four-fifths.
  In Bedford, there are a number of very large charities. I do not think that any of them would complain that they have not had a fair deal, and more, from local authorities over many years. My hon. Friend the Member for St. Ives (Mr. G. R. Howard) raised the question of the Lifeboat Institution, and I think that is a good example of the need for some tidying up to be done. But I do not consider it sufficient—and I think that hon. Members would find it difficult to advance the argument—to support an argument
  316
  that charities throughout the country do not get a fair deal from local authorities.
  Even were that possible, I should have thought that some form of compromise, such as the Charities Commission, could be arrived at. Then, in the event of a charity feeling that it was not being treated fairly by a local authority, it could appeal to the Commission. For instance, it might well be that a charity had been getting a greater remission than it was now receiving, and it might be considered that personalities were entering into the matter. The charity could then appeal to the Commission.
  I think that much stronger arguments have to be put forward by those who favour taking away the discretionary powers of local authorities than have so far been put forward in this Committee before such a step is taken. I think it would be wrong to take away that power unless an overwhelming case were made out for so doing.
  9.45 p.m.
  Mr. Wade: I wish to approach this problem from a slightly different point of view. I believe that the whole Committee is most anxious to arrive at a right and proper decision. We are all deeply interested in community centres and playing fields as well as in church and chapel halls. At the same time, we should be aware that there may be disadvantages as well as advantages in being in inclusion in the category described as complete exemption.
  If I say a few words about the Clauses dealing with church and chapel halls it may, perhaps, illustrate what I have in mind. I think that the extension of the exemption to church and chapel halls and to similar buildings is a welcome step. Great changes have taken place since the Poor Rate Exemption Act, 1833, was passed, which exempted buildings used for public worship.
  It is generally accepted that the work of a church or of a chapel today goes far beyond the confines of the actual building. It is no longer the case that a building is used exclusively for religious worship. Similarly, church work involves work among young people and youth movements of all kinds. There is not the same demarcation between the church and the chapel, on the one hand, and the buildings used in connection with them on the other.

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  In these circumstances, I think it quite right to make this extension, but in considering the advantages we must, of course, keep in mind Clause 6 (3). Where a hall is let rates may be levied on the net amount after allowing for expenses. I do not know whether in the future difficulties will arise in interpreting the expression "expenses attributable to letting."
  I will give one example. A building belonging to a religious denomination was let to a local authority which offered a rent of £150. On going into the figures, it was estimated that the expenses inevitably involved in the letting, including lighting, heating, cleaning and certain extra payments to the caretaker, amounted to approximately £150. The local authority was very reasonable and very generous. It accepted that estimate and offered an additional £75 in rent.
  I assume that in that case the net rent will be £75. I fear, however, that difficulties may arise in interpreting the expression "expenses attributable to letting." It may be that some religious denominations will be put to a considerable amount of work and trouble, and possibly worry, in the future in supplying the necessary figures for the Inland Revenue authorities.
  On the whole, I have found local authorities rather more human than Inland Revenue officials. Therefore, before deciding enthusiastically in favour of extending the category of total exemption, we should consider the other aspect, namely, that if village halls, which are sometimes let for various purposes, are included in this category, the trustees may incur an additional burden of responsibility and some disadvantage as well as certain advantages. I am, therefore, inclined to favour retaining the discretion which lies in the local authority.
  I believe that there is a great deal to be said for including playing fields in the class of total exemption. It may be that, on balance, there is something to be said for including village halls, but I am anxious to point out that it is not altogether an advantage to be put into the category of total exemption. There are advantages in being included in the discretionary class whereby the local authority which has knowledge of the local circumstances will, I think, deal fairly with a particular charity.
  Viscountess Davidson: I am sure we are all grateful to the Minister for having spoken so early in the discussion and for having shown that he is sympathetic to our anxieties. I want for a moment to speak about almshouses. As a member of the Council of the National Association of Almshouses, I am particularly interested on the effect of the Clause on almshouses. Up to a point, the position under this Clause is satisfactory. The local authorities may, at their discretion, remit rates on almshouses, but that means that we are in the hands of the local authorities. Relief or remission may be given by the local authorities of the rate payable on any hereditament, including, of course, almshouses, where poverty can be established.
  We fear that we may still be faced by some local authorities which have refused to remit the rate where poverty has been clearly established, and which may not take advantage of the new proposed provisions. We have actually had cases where, although poverty has been clearly established, the local authority has said that it will not remit the rate because there is a sympathetic valuation, and it does not see why it should give any further relief by remitting the rate itself.
  Many of us have had similar letters to the one read out by the Minister. We fully appreciate the difficulties expressed in that letter, and they have been expressed by many of us. Those of us connected with almshouses are very anxious about their future, and it was because of that anxiety that I was anxious to say a few words supporting the Amendment put forward by my hon. Friend the Member for Oldham, East (Sir I. Horobin).
  Mr. Ede: I find myself in some difficulty, because I happen to be president of two organisations which may be in conflict on this matter. I am President of the Commons, Open Spaces and Footpaths Preservation Society, and I am also President of the County Councils Association. As neither body has communicated with me on this subject, I propose to use my own discretion.
  The Committee is greatly indebted to the Minister for having intervened so early in the debate, because he focussed the issues which we have to decide, and he asked us three specific questions to which, I think, we ought to be able to

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  give, each according to his own conscience, a specific answer. The Minister asked whether local authorities should have discretion. I am quite certain that we shall have to leave some discretion to local authorities. Then he asked whether exemptions should be confined to charities. My great difficulty in that connection is in regard to the definition of a charity. The Bible says that
  "Charity suffereth long, and is kind,"
  but not all people are kind to Charity. A certain class of charity may have a strong claim for consideration, but there are other bodies which are not charitable by legal definition which have an almost equal claim.
  I see the right hon. and learned Member for Kensington, South (Sir P. Spens) sitting on the benches opposite, and in the absence of an English Law Officer of the Crown—although I notice that we are now favoured with the presence of a Scottish Law Officer to listen to a discussion upon English law—I would point out that I am very concerned——
  Mr. Sandys: I do not want it to be thought that the Law Officers are lacking in courtesy to the Committee. They are available and can attend very shortly if any point of law arises.
  Mr. Ede: I do not want them to be here while I am speaking, because I am quite prepared to rely upon my own judgment, in the presence of the right hon. and learned Member for Kensington. South—for once, in a corporate capacity, I paid to have his opinion, but I have never paid for the opinion of English Law Officers.
  The third question which the Minister asked was where the line should be drawn. I share the fears of the hon. Member for Oldham, East (Sir I. Horobin) with regard to the future of some of the playing fields in the hands of well-established charities, if they are left to the discretion of local authorities. If my hon. Friend the Member for Acton (Mr. Sparks) will not mind my saying so, I think that his speech illustrated the kind of difficulty that will arise. It is quite clear that the only place where charities which are charged with the duty of providing playing fields for the centres of great cities will be able to find the land is in the suburbs, or beyond the suburbs.
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  The London County Council has already bought playing fields in the parish in which I live. When I was Chairman of the Surrey County Council, I arranged jointly with the London County Council the purchase of the site to which it now conveys children from the centre of London and from some of the south-western suburbs of London. The children are conveyed 14 or 15 miles in order to enjoy organised games which are something beyond playing tag upon an asphalt playground. That is a very serious problem for the future.
  10.0 p.m.
  My experience under the Rating and Valuation Act, 1925, presented me with formidable problems of the proper rating of playing fields and sports accommodation in suburban areas. Take, for instance, a piece of land, let on a commercial basis to a club of middle-class suburban people of very limited means, like typists and clerks in London. It might be a piece of land accommodating four tennis courts. When one considered the rent that could be obtained for it and had to assess the rates according to the rent that was being paid, the clubs concerned were presented with most formidable financial propositions. I do not know on what other basis the Inland Revenue Department will be able to assess the playing fields in which the hon. Member for Oldham, East and other hon. Members are very interested.
  I would like to have found some way to include playing fields, some definition enabling us to deal specifically with grounds that come into the category of playing fields provided at an uneconomic rent for the use of clubs for youths and maidens who otherwise would have very little opportunity of enjoying the recreation that comes from organised games. The provision of such opportunities for young men and young women is among the first of the social purposes that we ought to provide for adolescents and those who are a little older.
  Let us face up to it: we shall encounter the kind of feeling voiced by my hon. Friend the Member for Acton. I do not complain that he voiced it. I know how strong the feeling is in such areas. I lived at Mitcham, where London University has very considerable playing fields. At the time the area was not too

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  well equipped with playing fields, so many people felt that it was rather rough to see London University using exclusively fields that might otherwise have been available for themselves.
  Local authorities differ very much in this matter. Perhaps I might give a kind of cognate instance. It is the case of Crow versus the Lancashire County Council, over the repair of voluntary-school playgrounds. It resulted in an amazing situation. Mr. Crow was the local government auditor who surcharged the Lancashire County Council for having contributed towards the repair of voluntary schools playgrounds. In the end, the House of Lords decided against Mr. Crow, not because there was a duty on the local authority to repair such a playground but because it had the discretion.
  I happened at that time to be associated with three local education authorities. Jarrow, which was then a Part III education authority, took advantage of this discretion and paid the whole of the cost of the repair. South Shields paid nothing. Surrey split the difference and paid half. Under the Act of 1944 that situation was dealt with. The local authority is now responsible for the repair. I very much fear that the same kind of difference may exist.
  Because of the sacrifices that some local authorities may be asked to make, it may be difficult indeed for them to take the view which I am sure the majority of this Committee hopes they will take. I do not know whether the Minister could consider having another category of case where, if the local authority reached a decision, there could be an appeal either to the Minister or to some other person in order that reasonable equality of treatment could be secured for the whole country.
  I am bound to say, dealing with his three questions, that I think the local authorities should have a discretion. Once we make exemptions we could not confine them to charities. When he asks me where should the line be drawn, I can only say that I have always been a very poor hand at freehand drawing and I should not like to attempt to draw the line in the Committee. I support the Amendment moved by my hon. Friend the Member for Wellingborough (Mr. Lindgren), and I hope that almshouses may also be included.
  Sir Patrick Spens: I had not intended to speak until we reached the Amendment to line 31, but in view of the references to myself by the right hon. Member for South Shields (Mr. Ede) I should like to make some comments on these Amendments. Legally, the Amendment moved by my hon. Friend the Member for Oldham, East (Sir I. Horobin), concerning playing fields and open spaces, would offer a firm legal definition, and these could easily be included in the category of total exemptions. Open spaces and playing fields held on charitable trust would be something which the law courts and the judges would have no difficulty in defining. Nevertheless, as the right hon. Gentleman indicated, and as we all know, the legal definition of a charity is something different from that which we, as laymen, regard as a charity.
  I suggest that that category should be included in the total exemptions, which would leave a large number of open spaces which most of us would consider were held on very similar trusts and which equally should be legally exempted. They would have to go into the discretionary class, but I do not think there would be anything against that. Private firms or other organisations could, if they wished, vest their open spaces in trustees for charitable purposes and get them into the total exemption class. If they did not care to do that they would be dependent on the good will of the local authorities. I should have thought that that would be a perfectly satisfactory solution.
  Mr. C. Pannell: I want to say as strongly as I can that the utmost discretion should be left with local authorities. I have found it rather sickening in the past to listen to those who, before they came here, served on local authorities, who apparently thought that discretion was all right when they were members of local authorities but who, when they became Members of Parliament, tended to think that local authority members were not quite what they used to be. Theirs was an Olympian detachment.
  Yesterday I took the hon. Member for Crosby (Mr. Page) to task for some words he said about local authorities on Second Reading, words which were a complete caricature of what takes place. In parenthesis I intervened when the Minister was speaking to say that this reassessment

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  which is to take place is nothing new. Thinking the matter over, I remember that when I served on such a body we annually had presented to us a list of sympathetic valuations with a report from the officer on whether there would be any difference in the year under review in incomes and other circumstances.
  I return to what the hon. Member said, which was:
  "There is very often conflict in these matters between a local authority and a charitable institution."
  I should very much like to know, if he succeeds in being called, what is his experience in these matters or whether he speaks from the usual prejudice that we get from the other side of the Committee. The hon. Member even went on to use these words:
  "We have the playing grounds in parks of local authorities alongside the playing fields of charitable bodies, and undoubtedly"—
  that is a very strong word in that context—
  "there is on occasion a certain amount of jealousy, if not antagonism, by the local council towards those who are competing with them in providing these amenities."
  Competing with them indeed! They are both in the public service.
  A local authority does not want to compete with anybody. There is no vested interest in elected bodies. The average member of a local authority serves in that spirit. He goes on to a local authority generally in the public good. Or is this idea of competing a charge against the officers of a local authority rather than against the members? This was not a legitimate expression of advocacy by the hon. Member, but was merely blind prejudice.
  "It would be perfectly within the power of the local authority"—
  said the hon Member—
  "by failing to make sufficient remission, to smash those who are providing the competitive amenities …"
  Does the hon. Member really believe that, or was that merely another of the occasions when he gets on his feet and does not quite know what he is saying?
  Mr. Page: The hon. Member is goading me to answer. I stand by every word I said.
  Mr. Pannell: Some people get on their feet and say silly things, but when they read what they have said they usually have the humility to repent. Can anyone in this Chamber defend that sort of language about the local authorities, that they are out to smash charities?
  The hon. Member was saying:
  "smash those who are providing the competitive amenities, and then graciously offer to purchase them out at the local authority's own price. I am not saying that that is the intention of this Bill"—
  it was the Bill of his right hon. Friend—
  "but it seems to me to provide an irresistible temptation to local authorities at times to use their powers under the Bill for their own ends."—[OFFICIAL REPORT, 17th June, 1955; Vol. 542, c. 971.]
  A local authority is a corporate, elected body, elected from year to year to serve the generality of the ratepayers. Broadly speaking, whatever we may say at Election times, my experience of men and women who get on to local authorities is that they usually try to administer their affairs in a spirit of equity. I can honestly say that I know of no council, whatever its political complexion, who would be so biased as the hon. Gentleman imagines. I think that this springs from his own imagination. I do not think that he has much experience in local government affairs. It indicates his bias. I have served on assessment committees and rating committees, and I have never seen this bias against charities.
  We all know what the national charities are. The hon. Member for St. Ives (Mr. G. R. Howard) mentioned the Royal National Lifeboat Institution, a good example of a national charity which we all admire. But the difficulty is the local charity. The most generous sort, I suppose, is when the mayor runs a benevolent or Christmas fund. Anything run by or through the mayor is given extra special facilities, because the mayor is the Queen's representative within the borough.
  The difficulty of all this, when one examines the case for a remission of rates, is to examine the balance sheet first. If there is the kind of general income of £100 of which £98 has been pocketed by the organiser, there is no remission at all. But there is a general "know-how" in local authorities through the fact that because they are officers or members of the council spread over the wards, they know whether a charity is good or phoney.

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  Therefore, it is a good thing that we should leave within the local authorities as much discretion as we possibly can.
  10.15 p.m.
  Sir Hugh Linstead: The Royal National Lifeboat Institution has been referred to by the hon. Gentleman and by my hon. Friend the Member for St. Ives (Mr. G. R. Howard). There is a problem which the hon. Gentleman's proposals do not meet. How can he justify a hundred lifeboat stations being exempted from rates by a hundred local authorities while forty lifeboat stations have to pay rates to forty authorities? I do not put the question in a hostile way. What can be done to iron out such an anomaly?
  Mr. Pannell: I cannot justify it, but to be fair we must ask the forty local authorities why they are doing what they are. Presumably, their case has not been put. That is the pattern of local government. It is a various pattern. It allows for local circumstances and feelings. It is not a diktat from Whitehall. The hon. Gentleman would not wish to judge a body of persons without its case being heard, and, although I am not attempting to excuse those forty local authorities, I say I do not know why they are doing what they are, and I think we ought to inquire about the matter before judging, and so be fair.
  Rating authorities, when considering remissions, consider them in committee, and confidential information is often passed. I am not now speaking of the Royal National Lifeboat Institution. One can imagine that under the procedure envisaged by my right hon. Friend such a national charity would be a recommended charity. I would add that there are some national charities which are administered in some localities better than in others.
  I remember from my experience of remissions that from time to time came to me, among others, for consideration, that we had to meet the difficulty of a lack of frankness on the part of organisers of charities. I remember, for instance, that some parsons were more commercially minded than others; but I say no more about that.
  Local authorities are elected bodies, and no matter on which side of the Committee an hon. Member who has had experience in local government may sit,
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  he ought not now so lack humility as to say that he is more disinterested in the public service than members of the local authorities, and we here should consider the local authorities not as junior partners but as local partners in the government of the country and in our way of life.
  I do not want to go into the question whether the concessions can be extended to other charities. That is another matter. I am making the general plea that local authorities should be regarded as what they are, bodies to be trusted, bodies under the public gaze, bodies which can be removed by the votes of the people. If, occasionally, they make mistakes, the electorate, in the last resort, has matters in its own hands. There is the local Press, too, to keep an eye on local proceedings.
  I regret that an hon. Member should adopt an extraordinary moral tone, saying, "Local authorities are not of the calibre they were when I sat on them." We must avoid that frame of mind, and appreciate the fact that local authorities have a job to do, and that Parliament cannot do it all.
  Mr. Sandys: We have had a pretty full discussion on the various issues involved, and it may be convenient if I say a few words now in reply to the debate. All the speeches have shown a keen desire to help these charitable organisations and others which play such an important part in our British public life. We have a Welfare State, we have many Government services, but we still pride ourselves very much on the part which is played by voluntary organisations of various kinds and by the organisations which have been set up as charities within the general meaning of the word. I am sure it is the desire of the Committee that we shall discharge our responsibilities and obligations towards those organisations which play such an important part and to which the country as a whole is so much indebted and has been indebted for so many years.
  Earlier, I put a number of issues to the Committee which seemed to me to present difficulty and which raised serious problems. I am grateful to hon. Members for the way in which most of them addressed part of their speeches to the questions

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  which I put, though I must be frank and say that they have not altogether solved all of the problems for me. I noticed that most hon. Members advised that local authorities should have a wide measure of discretion in these matters and that a number of hon. Members expressed the view that local authorities should be trusted to do the right thing by and large.
  Most hon. Members who expressed those views at the same time made exceptions in respect of some particular charity for which they had a specially soft spot in their hearts. There was general expression of the view that local authorities should be given discretion and then there was a particular issue which it was thought should be exempted for fear that local authorities might be insufficiently sympathetic towards that organisation. That is only natural. All of us have aspects of this problem in which we take special interest, and I think that the debate has very much reflected the cross-section of opinion on these matters.
  Pleas were made for special treatment of village halls, community centres, almshouses and playing fields. I listened with great attention to the speech of my hon. Friend the Member for Oldham, East (Sir I. Horobin) and the speech of the right hon. Member for South Shields (Mr. Ede), who both concentrated to some extent on this point. I think that the playing fields are in a special class, not necessarily—though that is a matter for consideration—because they are playing fields but because I am not satisfied that they are fully covered by subsection (4) as it stands. Even if the Committee accepts that it shall be left entirely to the discretion of the local authorities, I am not satisfied that under subsection (4) they have the full scope which they would need to exercise that discretion.
  Quite clearly, therefore, that point would have to be looked at whatever the decision in principle as to whether there should be statutory exemption or that the matter should be left to the discretion of local authorities. I have great sympathy with the case which has been made for playing fields. I am sorry that the hon. and learned Member for Kettering (Mr. Mitchison) should have thought it necessary to go out of his way to express the hope that the playing fields of his own school would not benefit from the exemption which we were discussing. Be
  328
  that as it may, we have certainly benefited greatly from the hon. and learned Member's education at that fine establishment.
  I have to be careful in making any promises of concessions in such a matter because hon. Members who have taken part in these debates are well aware that few concessions can be made which do not lead to other concessions. It is like the game of one thing reminding a person of something else. One thing leads to another and it is difficult to draw the line with any conviction at any special point.
  Therefore, I do not think the Committee will expect me at this stage to come out with any cut-and-dried solution of these problems. We have had a debate which has been extremely helpful from my point of view, because it has revealed fairly clearly the feeling on these issues in various parts of the Committee. We have had a pretty good expression of opinion on the question of the extent to which local authorities should be given discretion to deal with these matters; on the question of statutory exemptions; on the difficulties of defining, and different views about how we should define what is and what is not a charity.
  Personally I feel better capable of addressing my mind to this problem with a view to trying to meet what I believe is the general desire of the Committee. My only task in this matter is to try to find a solution which will meet with general acceptance. It is really the public conscience with which we are concerned, and it is not always an easy thing to define that in a Bill.
  I hope, therefore, that hon. Members will look upon this debate in the same way as I have done and will not press me to state exactly what our attitude is on all these matters. I would like to study carefully the debate in the OFFICIAL REPORT and to bring forward on the Report stage proposals which I would hope will go some way towards meeting some of the points which have been raised during this debate.
  Mr. Mitchison: I only rise to say that my right hon. and hon. Friends and myself feel that community centres, village halls and almshouses should be entitled to statutory exemption and we would like to press that matter to a Division.
  The Chairman: Will the hon. Member for Wellingborough (Mr. Lindgren) withdraw his Amendment?
  Mr. Lindgren: I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Lindgren: I beg to move, in page 10, line 3, at the end, to insert:
  "and
  (d) any community centre or village hall, in respect of which exemption from tax chargeable under Schedule A is granted under
  section four hundred and forty-eight of the Income Tax Act, 1952 (which provides for exemption from tax in respect of lands owned and occupied by charities)."
  Mr. Sparks: I beg to move, as an Amendment to the proposed Amendment, after "any" to insert "almshouse."
  Amendment to the proposed Amendment agreed to.
  Question put, That the proposed words, as amended, be there inserted:—
  The Committee divided: Ayes 167, Noes 229.

  Division No. 8.]

  AYES

  [10.29 p.m.

  Ainsley, J. W.

  Grey, C. F.

  Pannell, Charles (Leeds, W.)

  Allaun, F. (Salford, E.)

  Griffiths, Rt. Hon. James (Llanelly)

  Parker, J.

  Allen, Arthur (Bosworth)

  Hale, Leslie

  Paton, J.

  Attlee, Rt. Hon. C. R.

  Hannan, W.

  Pearson, A.

  Awbery, S. S.

  Hastings, S.

  Peart, T. F.

  Bacon, Miss Alice

  Hayman, F. H.

  Popplewell, E.

  Baird, J.

  Healey, Denis

  Price, J. T. (Westhoughton)

  Balfour, A.

  Henderson, Rt. Hn. A. (Rwly Regis)

  Price, Philips (Gloucestershire, W.)

  Bartley, P.

  Harbison, Miss M.

  Probert, A. R.

  Bellenger, Rt. Hon. F. J.

  Hobson, C. R.

  Proctor, W. T.

  Bence, C. R. (Dunbartonshire, E.)

  Holman, P.

  Rhodes, H.

  Benn, Hn. Wedgwood (Bristol, S. E.)

  Houghton, Douglas

  Roberts, Albert (Normanton)

  Benson, G.

  Howell, Charles (Perry Barr)

  Robinson, Kenneth (St. Pancras, N.)

  Blackburn, F.

  Howell, Denis (All Saints)

  Rogers, George (Kensington, N.)

  Blyton, W. R.

  Hubbard, T. F.

  Ross, William

  Boardman, H.

  Hughes, Cledwyn (Anglesey)

  Short, E. W.

  Bottomley, Rt. Hon. A. G.

  Hughes, Emrys (S. Ayrshire)

  Skeffington, A. M.

  Bowden, H. w. (Leicester, S. W.)

  Hunter, A. E.

  Slater, Mrs. H. (Stoke, N.)

  Boyd, T. C.

  Hynd, J. B. (Attercliffe)

  Slater, J. (Sedgefield)

  Brown, Thomas (Ince)

  Irvine, A. J. (Edge Hill)

  Smith, Ellis (Stoke, S.)

  Burke, W. A.

  Irving, S. (Dartford)

  Snow, J. W.

  Burton, Miss F. E.

  Janner, B.

  Sorensen, R. W.

  Butler, Herbert (Hackney, C.)

  Jeger, George (Goole)

  Sparks, J. A.

  Callaghan, L. J.

  Jones, David (The Hartlepools)

  Stewart, Michael (Fulham)

  Carmichael, J.

  Jones, Frederick Elwyn (W. Ham, S.)

  Stones, W. (Consett)

  Castle, Mrs. B. A.

  Jones, Jack (Rotherham)

  Summerskill, Rt. Hon. E.

  Champion, A. J.

  Jones, James (Wrexham)

  Swingler, S. T.

  Chapman, W. D.

  Jones, T. W. (Merioneth)

  Sylvester, G. O.

  Coldrick, W.

  Kenyon, C.

  Taylor, Bernard (Mansfield)

  Collick, P. H. (Birkenhead)

  Key, Rt. Hon. C. W.

  Taylor, John (West Lothian)

  Collins, V. J.(Shoreditch & Finshury)

  King, Dr. H. M.

  Thomas, Iorwerth (Rhondda, W.)

  Corbet, Mrs. Freda

  Lawson, G. M.

  Ungoed-Thomas, Sir Lynn

  Cove, W. G.

  Lee, Frederick (Newton)

  Craddock, George (Bradford, S.)

  Lever, Leslie (Ardwick)

  Warbey, W. N.

  Cronin, J. D.

  Lewis, Arthur

  Watkins, T. E.

  Crossman, R. H. S.

  Lindgren, G. S.

  Weitzman, D.

  Cullen, Mrs. A.

  Logan, D. G.

  Wells, Percy (Faversham)

  Dalton, Rt. Hon. H.

  McColl, J. E.

  West, D. G.

  Darling, George (Hillsborough)

  McInnes, J.

  Wheeldon, W. E.

  Deer, G.

  McLeavy, F.

  White, Henry (Derbyshire, N. E.)

  de Freitas, Geoffrey

  MacPherson, Malcolm (Stirling)

  Wilkins, W. A.

  Dodds, N. N.

  Mahon, S.

  Willey, Frederick

  Ede, Rt. Hon. J. C.

  Mann, Mrs. Jean

  Williams, David (Neath)

  Edwards, Rt. Hon. John (Brighouse)

  Marquand, Rt. Hon. H. A.

  Williams, Rev. Llywelyn (Ab'tillery)

  Edwards, Rt. Hon. Ness (Caerphilly)

  Mason, Roy

  Williams, Ronald (Wigan)

  Edwards, W. J. (Stepney)

  Mellish, R. J.

  Williams, Rt. Hon. T. (Don Valley)

  Evans, Stanley (Wednesbury)

  Mikardo, Ian

  Williams, W. R. (Openshaw)

  Fernyhough, E.

  Mitohison, G. R.

  Willis, E. G. (Edinburgh, E.)

  Fienburgh, W.

  Monslow, W.

  Wilson, Rt. Hon. Harold (Huyton)

  Finch, H. J.

  Moody, A. S.

  Winterbottom, Richard

  Forman, J. C.

  Moyle, A.

  Woodburn, Rt. Hon. A.

  Fraser, Thomas (Hamilton)

  Neal, Harold (Bolsover)

  Yates, V. (Ladywood)

  Freeman, Peter

  Oram, A. E.

  Younger, Rt. Hon. K.

  Gaitskell, Rt. Hon. H. T. N.

  Orbach, M.

  Zilliacus, K.

  Gibson, C. W.

  Oswald, T.

  Greenwood, Anthony

  Padley, W. E.

  TELLERS FOR THE AYES:

  Grenfell, Rt. Hon. D. R.

  Paling, Rt. Hon. W. (Dearne Valley)

  Mr. Holmes and

  Mr. James Johnson

  NOES

  Agnew, Cmdr. P. G.

  Gresham Cooke, R.

  Nairn, D. L. S.

  Aitken, W. T.

  Grimston, Hon. John (St. Albans)

  Neave, Airey

  Alport, C. J. M.

  Gurden, Harold

  Nicholls, Harmar

  Amery, Julian (Preston, N.)

  Hall, John (Wycombe)

  Nicholson, Godfrey (Farnham)

  Anstruther-Gray, Major W. J.

  Hare, Hon. J. H.

  Nicolson, N. (B'n'mth, E. & Chr'ch)

  Arbuthnot, John

  Harris, Frederic (Croydon, N. W.)

  Nugent, G. R. H.

  Armstrong, C. W.

  Harris, Reader (Heston)

  Oakshott, H. D.

  Ashton, H.

  Harrison, A. B. C. (Maldon)

  O'Neill, Hn. Phelim (Co. Antrim, N.)

  Atkins, H. E.

  Harrison, Col. J. H. (Eye)

  Ormsby-Gore, Hon. W. D.

  Baldock, Lt.-Cmdr. J. M.

  Harvey, John (Walthamstow, E.)

  Osborne, C.

  Baldwin, A. E.

  Hay, John

  Page, R. G.

  Balniel, Lord

  Heath, Edward

  Panned, N. A. (Kirkdale)

  Banks, Col. C.

  Hicks-Beach, Maj. W. W.

  Pickthorn, K. W. M.

  Barber, Anthony

  Hill, Rt. Hon. Charles (Luton)

  Pitt, Miss E. M.

  Barlow, Sir John

  Hill, Mrs. E. (Wythenshawe)

  Pott, H. P.

  Barter, J. W.

  Hill, John (S. Norfolk)

  Powell, J. Enoch

  Baxter, Sir Beverley

  Hinchingbrooke, Viscount

  Prior-Palmer, Brig. O. L.

  Bell, Philip (Bolton, E.)

  Hirst, Geoffrey

  Profumo, J. D.

  Bell, Ronald (Bucks, S.)

  Horobin, Sir Ian

  Raikes, Sir Victor

  Bevins, J. R. (Toxteth)

  Horsbrugh, Rt. Hon. Florence

  Ramsden, J. E.

  Bidgood, J. C.

  Howard, John (Test)

  Rawlinson, P. A. G.

  Bishop, F. P.

  Hudson, Sir Austin (Lewisham, N.)

  Redmayne, M.

  Black, C. W.

  Hudson, W. R. A. (Hull, N.)

  Rees-Davies, W. R.

  Body, R. F.

  Hughes Hallett, Vice-Admiral J.

  Ridsdale, J. E.

  Bossom, Sir A, C.

  Hughes-Young, M. H. C.

  Robertson, Sir David

  Bowen, E. R. (Cardigan)

  Hulbert, Wing Cmdr. Sir Norman

  Rodgers, John (Sevenoaks)

  Boyle, Sir Edward

  Hurd, A. R.

  Russell, R. S.

  Braithwaite, Sir Albert (Harrow, W.)

  Hutchison, James (Scotstoun)

  Sandys, Rt. Hon. D.

  Brooke, Rt. Hon. Henry

  Hyde, Montgomery

  Schofleld, Lt.-Col. W.

  Brooman-White, R. C.

  Irvine, Godman (Rye)

  Scott-Miller, Cmdr. R.

  Bryan, P.

  Jenkins, Robert (Dulwich)

  Shepherd, William

  Buchan-Hepburn, Rt. Hon. P. G. T.

  Jennings, J. C. (Burton)

  Simon, J. E. S. (Middlesbrough, W.)

  Bullus, Wing Commander E. E.

  Jennings, Sir Roland (Hallam)

  Smithers, Peter (Winchester)

  Burden, F. F. A.

  Johnson, Dr. Donald (Carlisle)

  Soames, Capt. C.

  Butcher, Sir Herbert

  Johnson, Eric (Blackley)

  Spearman, A. C. M.

  Carr, Robert

  Johnson, Howard (Kemptown)

  Speir, R. M.

  Cary, Sir Robert

  Joynson-Hicks, Hon. L. W.

  Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

  Channon, H.

  Kaberry, D.

  Steward, Harold (Stockport, S.)

  Chiohester-Clark, R.

  Keegan, D.

  Steward, Sir William (Woolwich, W.)

  Clarke, Brig. Terence (Portsmth, W.)

  Kerby, Capt. H. B.

  Stoddart-Scott, Col. M.

  Cole, Norman

  Kerr, H. W.

  Storey, S.

  Cooper-Key, E. M.

  Kershaw, J. A.

  Summers, C. S. (Aylesbury)

  Cordeaux, Lt.-Col. J. K.

  Kirk, P. M.

  Sumner, W. D. M. (Orpington)

  Corfield, Capt. F. V.

  Lagden, G. W.

  Taylor, William (Bradford, N.)

  Craddock, Beresford (Spelthorne)

  Lambert, Hon. G.

  Teeling, W.

  Crookshank, Capt. Rt. Hn. H. F. C.

  Lambton, Viscount

  Thomas, Leslie (Canterbury)

  Crosthwaite-Eyre, Col. O. E.

  Langford-Holt, J. A.

  Thomas, P. J. M. (Conway)

  Crouch, R. F.

  Leavey, J. A.

  Thompson, Kenneth (Walton)

  Crowder, Sir John (Finchley)

  Leburn, W. G.

  Thompson, Lt.-Cdr. R. (Croydon, S.)

  Cunningham, S. K.

  Legge-Bourke, Mai. E. A. H.

  Thorneycroft, Rt. Hon. P.

  Currie, G. B. H.

  Legh, Hon. Peter (Petersfield)

  Thornton-Kemsley, C. N.

  Darling, Sir William (Edinburgh, S.)

  Lindsay, Hon. James (Devon, N.)

  Tiley, A. (Bradford, W.)

  Davidson, Viscountess

  Lindsay, Martin (Solihull)

  Turner, H. F. L.

  Davies, Rt. Hon. Clement (Montgomery)

  Linstead, Sir H. N.

  Turton, Rt. Hon. R. H.

  Deedes, W. F.

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Vane, W. M. F.

  Donaldson, Cmdr. C. E. McA.

  Longden, Gilbert

  Vaughan-Morgan, J. K.

  Doughty, C. J. A.

  Low, Rt. Hon. A. R. W.

  Drayson, C. B.

  Lucas, P. B. (Brentford & Chiswick)

  Vickers, Miss J. H.

  Dugdale, Rt. Hn. Sir T. (Richmond)

  Mackie, J. H. (Galloway)

  Vosper, D. F.,

  Eden, J. B. (Bournemouth, West)

  McLaughlin, Mrs. P.

  Wade, D. W.

  Elliot, Rt. Hon. W. E.

  Maclay, Rt. Hon. John

  Wakefield, Edward (Derbyshire, W.)

  Errington, Sir Eric

  Macleod, Rt. Rn. Iain (Enfield, W.)

  Wakefield, Sir Wavell (St. M'lebone)

  Farey-Jones, F. W.

  MacLeod, John (Ross & Cromarty)

  Walker-Smith, D. C.

  Fell, A.

  Macpherson, Niall (Dumfries)

  Wall, Major Patrick

  Finlay, Graeme

  Maddan, M.

  Ward, Hon. George (Worcester)

  Fisher, Nigel

  Maitland, Cdr. J. F. W. (Hornoastle)

  Ward, Miss I. (Tynemouth)

  Fleetwood-Hesketh, R. F.

  Manningham-Buller, Rt. Hn. Sir R.

  Waterhouse, Capt. Rt. Hon. C.

  Fort, R.

  Markham, Major Sir Frank

  Whitelaw, W.S.I. (Penrith & Border)

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Marlowe, A. A. H.

  Williams, Gerald (Tonbridge)

  Freeth, D. K.

  Marshall, Douglas

  Williams, Paul (Sunderland, S.)

  Gammans, L. D.

  Mathew, R.

  Wills, G. (Bridgwater)

  Garner-Evans, E. H.

  Maude, Angus

  Wilson, Geoffrey (Truro)

  Glover, D.

  Mawby, R. L.

  Wood, Hon. R.

  Gower, H. R.

  Maydon, Lt.-Comdr. S. L. C.

  Yates, William (The Wrekin)

  Graham, Sir Fergus

  Medlicott, Sir Frank

  Grant, W. (Woodside)

  Milligan, Rt. Hon. W. R.

  TELLERS FOR THE NOES:

  Grant-Ferris, Wg Cdr. R. (Nantwich)

  Molson, A. H. E.

  Mr. Studholme and Mr. Godber.

  Green, A.

  Nabarro, G. D. N.

  Sir P. Spens: I beg to move, in page 10, line 32, after "any", to insert "corporation, company".
  The Chairman: Perhaps the Committee might discuss, at the same time, the Amendment in the name of the hon. Member for Falmouth and Camborne (Mr. Hayman), in page 10, line 34, to leave out "educational"; the Amendment in the name of the hon. Member for Hayes and Harlington (Mr. Skeffington), in page 10, line 34, at the end to insert:
  "or any hereditament which is occupied by a society registered under the Industrial and Provident Societies Acts, 1893 to 1954, and which is used wholly or mainly for educational or philanthropic purposes".
  and the Amendment in the name of the hon. Member for Putney (Sir H. Linstead), in page 10, line 34, at the end to insert:
  "or the advancement of science or the promotion of scientific research".
  Sir P. Spens: My Amendment is put forward on behalf of certain colleges and schools for exploratory purposes because they are not sure whether, having regard to the form of their constitution, they are, or would be, included in subsection (4). The words which would apply to them are:
  "… any club, society or organisation which is not established or conducted for profit and whose main objects are religious, educational or philanthropic."
  Those are clubs and schools which are founded by Royal Charter, Private Act of Parliament, or by companies limited by the Companies Act, 1948.
  They do not know whether they come within the category indicated by subsection (4). At present, they are in no way subject to any discretionary remission of rates by the local authority. They are subject to what I suppose would be called a form of sympathetic assessment, but they have reason to believe that the future remissions will not be so sympathetic as those in the past. In those circumstances, once the assessments have been made and the rates have been levied, it may well be that one or more of them may want to apply for a sympathetic remission or reduction of the rate so levied.
  334
  Therefore, they desire to know whether it is the Government's intention that such colleges and schools should have this right of application, or not. The words I suggest in my Amendment would give such colleges and schools the right to apply for a sympathetic remission or reduction of rates.
  Mr. Hayman: This Amendment indicates the need for the Amendment in my name, for it seems to open the door very wide to admit a variety of educational institutions, some of which may not be deserving of the consideration for which the right hon. and learned Member for Kensington, South (Sir P. Spens) is asking.
  The Chairman: Order. I did not propose to call the hon. Member's Amendment. I said that the discussion might take place on the point of the Amendment of the right hon. and learned Member for Kensington, South (Sir P. Spens). I did not propose to call the other Amendments, unless the Committee wanted to divide on them.
  Mr. Hayman: I am sorry, Sir Charles. I misunderstood.
  The word "educational" calls for clarification. We are embarking on a course which is largely uncharted. Amendments moved earlier today were suggested by the National Council of Social Service, but the Minister himself had to reply that they involved very great difficulties. When we are talking of educational institutions, one wonders what is meant and whether a building that might be taken over by the National Trust would be included in such a category.
  I should like to know what kind of institutions the Minister thinks ought to be covered by the word "educational." Is it a place where lectures are sometimes given? Is it a theatre which can qualify for some tax exemptions? We want to know whether those are included. Does he intend to include direct-grant schools and grant-aided schools, many of which charge very high fees, often so high that the majority of parents simply could not afford to send their children to those places? Did the hon. and learned Member for Kensington, South include Eton, Harrow, and the other great public schools?
  Sir P. Spens Sir P. Spens indicated assent.
  10.45 p.m.
  Mr. Hayman: I see that the right hon. and learned Member nods approval, so that we now at least know where we stand. The question was raised on the last Amendment whether the playing fields of Eton were to be included within the scope of that Amendment, and an hon. Member—I cannot remember who—told us that the Eton local authority depended very largely for revenue upon the rating of Eton College.
  I take very great exception to the provision of more privileges for a privileged class of people; for one thing, that was never the intention of the local authorities when they considered charities which might receive "sympathetic treatment." Does the hon. and learned Member for Kensington, South include the universities? We should like to know.
  Sir P. Spens Sir P. Spens indicated assent.
  Mr. Hayman: Again, the right hon. and learned Member nods assent. In that case, I do not know to what extent that would affect the revenues of the cities in which those universities happen to be; but it is quite certain that it would have a considerable effect on their incomes.
  Will the only schools to be rated be those maintained wholly out of rates and taxes, as well as some small, independent schools? It should be remembered that such schools are wholly maintained—I emphasise "wholly"—out of rates and taxes, and that those are precisely the schools where there are overcrowded classes and insufficient staff. It seems to me that we ought to give them consideration and not lose our heads about providing some reductions in rates for those schools which charge very high fees. Indeed, it has seemed to me that there might be a case for excluding the county primary and secondary schools from all rating because, under present arrangements, it is merely taking money from one pocket and putting it into another.
  The ratepayer, in the end, has to pay, but the system must be maintained, I suppose, so that the minor local authorities can derive some benefit; the education rate forms an appreciable part of the income and expenditure of these local authorities and I should have thought that the Minister of Education would have looked into that aspect of expenditure on
  336
  schools. These county schools may be the only ones called upon to bear the full brunt of the rates, although I was always under the impression that local taxation was intended to pay for the services provided by local authorities for their areas—roads, public health, water supply, and so on.
  We have been getting into a serious position in the matter of rating. The shopkeeping community has expressed considerable concern about rates, and it has bombarded hon. Members of this Committee for months about anomalies. We on this side, during the recent General Election, advocated that industrial establishments, which are making great profits, should pay a full 100 per cent. instead of the 25 per cent. as now. Farms are totally exempted from the payment of rates, and if we are to carry different classes of exemption to cover places like Eton and Harrow we shall find ourselves in a most serious position.
  Has the Minister estimated the cost of these possible remissions in rates, and may we have some clarification of the word "educational" so that we and the country may know to what extent the concessions are being made to different classes of people, and, as far as the public schools are concerned, to the section of the community that seems to be the best off? It is the shopkeepers and the owners or occupiers of domestic premises who carry 100 per cent. of rating and who, under the Bill, are likely to have to meet very serious increases.
  Sir H. Linstead: The Amendment which is in my name and which, I understand, we are now discussing, though it is not to be called, is to add words at the end of line 34.
  The purpose of this Amendment and of this discussion is to see whether my right hon. Friend can help to clarify the meaning of the word "educational," and, in particular, whether he can do anything to give special assistance to research associations connected with most of our industries in the country which at the moment, apparently, are not entitled to derating or to exemption from rates on the ground of their being charitable or educational bodies.
  What I am really asking my right hon. Friend to do is to consider whether he cannot correct an anomaly in respect of

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  scientific research associations which was created by a judgment of the High Court in 1950 relating to the Scientific Societies Act of as far back as 1834. Under that Act, these scientific research assocations in different industries were exempted from rates altogether on the ground that they were established exclusively for purposes of science, literature or the fine arts.
  One hundred years after this exemption had been instituted, the Inland Revenue authorities discovered that under the Act "science" meant pure science and not applied science. They therefore took a case to the High Court and won it, thus withdrawing this exemption from these scientific research associations on the ground that most of them were concerned with the application of science and not merely with pure science.
  I do not think that at this time of night the Committee would wish me to labour the point, so I will merely commend it for the consideration of my right hon. Friend. But there is a real anomaly here as the result of this High Court decision which I think ought to be corrected. The point I would put to my right hon. Friend is based on a letter which he was kind enough to send to me, in which he said that the purpose of Clause 6 (4) was to preserve existing rights of various charitable and educational organisations for consideration by local authorities for a reduction in rates.
  If the intention of that subsection was to preserve something that was enjoyed under the old law, I am only asking the Minister to cast back his mind to 1950, and to give to these most important scientific research associations connected with industry the privilege they had up to 1950 under the old legislation. I submit that they are as entitled to enjoy it today as they were during the hundred years for which they enjoyed it. I hope that between now and the next stage of the Bill the Minister will see whether he can do something about this point.
  Mr. Arthur Skeffington: I hope it will not be thought that the substance of the Amendment to which I would like to address myself, in page 10, line 34, would extend unduly widely the discretionary rating provisions for local authorities. The Amendment has been carefully drawn to limit the discretion to hereditaments
  338
  of societies registered under the Industrial and Provident Societies Acts; and then only to hereditaments wholly, or mainly, used for educational and philanthropic purposes. To obtain registration under these Acts bodies have to submit to rigorous examination, and they are subject to check and review of their activities and finances continually every year.
  Furthermore, members of such bodies have the right to appeal to the custodian or registrar whose duty it is to supervise the activities of bodies so registered if they consider there is any development which is not right. Therefore, it is almost impossible that any bogus body could, because of the official supervision exercised over them, get benefit, which is the subject matter of the Amendment. Many organisations registered under the Acts have halls and classrooms, and buildings used for philanthropic and educational purposes. Some of them were built a great many years ago when no alternative edifices were available. The use to which they have been put, from then until the present, has been social and educational. Those who know the work of such bodies would agree that they are performing a real community service, and it seems fair that they should be considered equally with other bodies which may be given this opportunity to qualify for discretionary rate relief.
  It is true, as I would not endeavour to conceal from the Committee, that Co-operative societies are registered societies under these provisions; but I want to make clear that the Amendment only refers to hereditaments of such societies which are wholly or mainly used for educational and philanthropic purposes. It certainly does not refer to buildings used for the trade, administration, or commercial business of Co-operative societies.
  The position of a registered society such as a Co-operative society, which I take as an example because I know more about it than I do about other societies which are registered, is that the Co-operative movement, from its inception more than a hundred years ago, made education in its widest sense a major interest and activity. In the early days, there were no buildings for this purpose, and it became customary for the societies to allocate every year a proportion of their surpluses to the provision

  339
  of buildings for educational purposes, and for philanthropic purposes, such as the provision of libraries. In many instances, these halls have been a veritable godsend to the community in which they were built In many cases, they were the only kind of large meeting place which existed, and, as I shall hope to show, that is still true today in many parts of the country.
  11.0 p.m.
  We have a good deal of evidence that these halls are used by all kinds of voluntary bodies, as well as for the educational work of the society, and it seems to us that, playing that part in the service of the community, they ought to be considered equally with any other bodies that may get this discretion rating relief from the local authority. Many church halls in our bigger towns were destroyed during the blitz. It is unlikely that all of them will be rebuilt—the funds are just not available, and parishes are being regrouped in any event; so that in the urban areas, where these halls do exist, their use is possibly of even greater importance today than it was in the past.
  I should like to illustrate the problem of a registered society like a Co-operative society by reference to one society of which I am a member. I am a shareholder of the Royal Arsenal Co-operative Society, although, as everybody knows, the amount of my influence does not depend upon the amount of shares that I hold in a registered democratic society of this kind. All shareholders have an equal, but only the same, single vote.
  The Royal Arsenal Co-operative Society, which is the second largest Cooperative society in the United Kingdom, has built 29 halls, all situated in the area of the society's trade—that is, in South-East London and in some parts of Kent and Surrey. The halls are controlled by a voluntary committee of elected persons, who are elected by the whole of the membership. About 360,000 members are entitled to take part in the election.
  The management committee, by the rule of the society, which, again, is approved by the registrar, allocates from its surplus a proportion of its funds for the maintenance of the halls and, before the war,
  340
  for the extension of halls and the building of new ones. That has not been possible since the war but that was what took place before. If these amounts are approved by the members in an aggregate series of meetings, the grant goes to those halls for the year; so that at all stages there is democratic control and knowledge of the way in which the funds are being used.
  The halls in the R.A.C.S. area have always operated at a loss. There is no question of them making any profit. Hiring charges are made in certain cases. Taking the figures for the last five years, one finds that the hiring fees for that period were £61,000 but that the expenditure was £72,000, so that there was an average yearly loss of over £2,000 on these 29 halls.
  I should like to say a word about the uses which are made of these halls, because this, it seems to me, is the kingpin of the whole argument. I have referred to one society, although a similar case could easily be made for the Manchester district and many others. In the case of many of the older inner suburbs of London, the Co-operative halls are of the greatest value, because there have not been too many halls even before the war and with the extensive bombing that went on, those that remain are now used more extensively than ever.
  In the Kent and Surrey parts of the society's area, the halls were built shortly before the last war, when housing developments were beginning to take place. Since the war there has been considerable building in all these areas, so these halls now are virtually the real community centres of many of the new housing estates. They have kept pace with developments, and in both the inner London area and the suburbs, even outside the boundaries of the County of London, these halls are performing a very valuable general community service. There are two categories of users. I am giving specific examples from one area so that the Minister can check them. They help to prove conclusively the community use which these halls now serve.
  The first use is by the education committee of the society itself. There are about 80 men's and women's guilds, some of which meet each week in those halls, and they use them also for social functions

  341
  for children or for old folk. There are about 20 children's organisations using these 29 halls, either weekly or fortnightly. About 40 general educational classes are held in the halls. A number of cultural societies use them, and even the local education authorities in some areas where other accommodation is not to be obtained hold classes. That is the first group of users, whose case will commend itself to everybody.
  Then there is a second group. Many religious organisations use these halls weekly. There are also classes for women, not conducted by the Co-operative movement, but by local education authorities under further education schemes and by other bodies. The halls are used for blood-donor sessions; about 20 old-age pensioners' meetings are held in them. The society makes them no charge or only a nominal charge. The halls are used for school prizegivings. In one place in South-East London the Co-operative hall is the only hall where the children and parents can all be accommodated together. Meal services for the old often operate from the halls. There are activities in connection with the welfare of the blind, the bazaars of charitable bodies, and so on.
  I have quoted all these examples from recent annual reports, which provide a good and, I hope, a convincing list of the activities which are carried on. I submit that it would be difficult to find any other places which serve the community to better purpose than the halls of registered societies of this kind. They are centres of excellent community work. They ought to rank equally with village halls or community centres for discretionary relief of rates in part or whole because that is, in fact, what they are. I hope that the Minister will feel sympathetically towards this plea and give us an encouraging reply.
  Mr. Sandys: I will deal with the four matters which were raised by my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens), who moved the Amendment, and the others who have spoken on other Amendments which are not to be called. My right hon. and learned Friend asked me to tell the Committee whether or not subsection (4) as now drafted included a company or corporation. If the words "corporation"
  342
  and "company" were inserted they would be governed by the rest of the subsection, which says that the corporation or company would be one
  "… which is not established or conducted for profit and whose main objects are religious, educational or philanthropic …"
  There are charities which are formed in that way. Some of them are charitable trusts, others are corporations, others are non-profit-making companies. It is certainly not our intention to make any distinction between different constitutions of charities. If, when I have taken further advice upon it, the Bill is not satisfactory on that point, I will see to it that this is made perfectly clear.
  It does not follow, of course, that all companies and corporations which comply with the definition in the Clause would automatically receive this discretion. It is a matter for the discretion of the local authorities. I mention that only because it was said in the debate that it seemed undesirable that these companies and corporations should be brought within the scope of the Clause.
  I come to the proposal of the hon. Member for Falmouth mid Camborne (Mr. Hayman) that we should exclude educational bodies altogether from the operation of local authority discretion.
  Mr. Hayman: As I said, my Amendment was placed on the Notice Paper for clarification. I did not say that I was proposing to exclude them altogether.
  Mr. Sandys: I am glad to hear that. I missed that point. I imagine that such a proposal would hardly commend itself generally to the Committee.
  The hon. Member's main point was that there were many schools which would qualify for this discretion, if the local authority chose to exercise it, which, in his view, were not in need of relief of this kind. Again, it is a matter for the discretion of local authorities. Earlier in the debate, we all appreciated the impossibility of providing a definition which, in advance, fits every case perfectly. The important thing is that, in so far as it is a question of local authority discretion, it is better to err by going too far than by not going far enough, for it is still for the local authority to decide what it wishes to do.

  343
  In inserting the phrase "educational purposes" we were not thinking exclusively or even primarily of schools. We had in mind, also, a number of other bodies within this class of educational organisations, for example, the National Institute for Adult Education, the National Adult School Union, the Workers' Educational Association, and organisations such as the Boy Scouts and Girl Guides movements. If the Amendment, which the hon. Member for Falmouth and Camborne does not wish to move in any case, were adopted, organisations of that kind would be excluded, which I am sure would not be the desire of the Committee.
  My hon. Friend the Member for Putney (Sir H. Linstead) asked that the discretion given to local authorities for the exemption from or remission of rates under subsection (4) should be extended to scientific bodies. I have much sympathy with my hon. Friend's approach to this question. We have to do everything we can to assist and encourage scientific bodies, but I hardly think that that would be an appropriate way of doing it. It would extend the provisions of the Bill very widely indeed.
  We are assuming that these are not charitable organisations, otherwise they would have been included already in the subsection. The great number of these organisations are of a wholly different character. The case to which my hon. Friend referred, which came before the courts, related to a research organisation which had been set up by an industry. One can say that it was concerned with the pursuit of scientific knowledge, but with the direct purpose of helping the business of the industry.
  Mr. Ian Mikardo: And already subsidised in other ways from public funds.
  11.15 p.m.
  Mr. Sandys: I do not think I needed that addition to what I was saying.
  It is quite enough to point out that there is no controversy over this matter. These are organisations many of which are right outside the field we have been considering in this connection. That does not
  344
  mean that I do not think they are doing important and valuable work, but I hardly think that they should be brought into a subject which was essentially concerned with charitable and educational questions arising under this Clause.
  I now come to the remarks of the hon. Gentleman the Member for Hayes and Harlington (Mr. Skeffington). The hon. Gentleman recommended that we should give rating authorities powers to reduce or remit rates on properties occupied by a society registered under the Industrial and Provident Societies Act and also used wholly or mainly for educational and philanthropic purposes. We all recognise the important work which these societies are doing, but, again, his proposal would take us a long way beyond the conception underlying this Clause. All kinds of societies can be registered under that Act. They are not necessarily non-profit-making and they come into the class referred to several times of organisations which would not be worried by having to pay rates.
  If discretionary powers to reduce or remit rates were to be extended to societies in this category, which is a very large one, there would be no good reason for not extending this discretionary power to all property used for educational or philanthropic purposes. That really would widen the field to an extent which has never been contemplated and certainly has not been proposed hitherto in the course of our debates.
  I hope that those remarks have adequately replied to the speeches that have been made on these points.
  Sir P. Spens: Having regard to what my right hon. Friend has said, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Amendment proposed: In page 10, line 34, at end, insert:
  "or any hereditament which is occupied by a society registered under the Industrial and Provident Societies Acts, 1893 to 1954, and which is used wholly or mainly for educational or philanthropic purposes".—[Mr. A. Skeffington.]
  Question put, That those words be there inserted:—
  The Committee divided: Ayes 130, Noes 193.

  Division No. 9.]

  AYES

  [11.17 p.m.

  Ainsley, J. W.

  Greenwood, Anthony

  Oram, A. E.

  Allaun, F. (Salford, E.)

  Grenfell, Rt. Hon. D. R.

  Orbach, M.

  Allen, Arthur (Bosworth)

  Grey, C. F.

  Oswald, T.

  Awbery, S. S.

  Griffiths, Rt. Hon. James (Llanelly)

  Pannell, Charles (Leeds, W.)

  Bacon, Miss Alice

  Hannan, W.

  Parker, J.

  Balfour, A.

  Hayman, F. H.

  Pearson, A.

  Bartley, P.

  Healey, Denis

  Popplewell, E.

  Benn, Hn. Wedgwood (Bristol, S. E.)

  Henderson, Rt. Hn. A. (Rwly Regis)

  Price, Philips (Gloucestershire, W.)

  Benson, G.

  Herbison, Miss M.

  Probert, A. R.

  Blackburn, F.

  Hobson, C. R.

  Proctor, W. T.

  Blenkinsop, A.

  Holman, P.

  Rhodes, H.

  Blyton, W. R.

  Holmes, Horace

  Robinson, Kenneth (St. Panoras, N.)

  Boardman, H.

  Howell, Charles (Perry Barr)

  Rogers, George (Kensington, N.)

  Bowden, H. W. (Leicester, S. W.)

  Howell, Denis (All Saints)

  Ross, William

  Boyd, T. C.

  Hughes, Cledwyn (Anglesey)

  Short, E. W.

  Brown, Thomas (Ince)

  Hughes, Emrys (S. Ayrshire)

  Skeffington, A. M.

  Burke, W. A.

  Hunter, A. E.

  Slater, Mrs. H. (Stoke, N.)

  Butler, Herbert (Hackney, C.)

  Hynd, J. B. (Attercliffe)

  Slater, J. (Sedgefield)

  Callaghan, L. J.

  Irving, S. (Dartford)

  Smith, Ellis (Stoke, S.)

  Carmichael, J.

  Janner, B.

  Sparks, J. A.

  Castle, Mrs. B. A.

  Jeger, George (Goole)

  Stewart, Michael (Fulham)

  Champion, A. J.

  Johnson, James (Rugby)

  Stones, W. (Consett)

  Coldrick, W.

  Jones, Elwyn (W. Ham, S.)

  Summerskill, Rt. Hon. E.

  Collick, P. H. (Birkenhead)

  Jones, Jack (Rotherham)

  Swingler, S. T.

  Collins, V. J. (Shoreditoh & Finsbury)

  Jones, J. Idwal (Wrexham)

  Taylor, John (West Lothian)

  Corbet, Mrs. Freda

  Jones, T. W. (Merioneth)

  Thomas, Iorwerth (Rhondda, W.)

  Craddock, George (Bradford, S.)

  King, Dr. H. M.

  Ungoed-Thomas, Sir Lynn

  Cullen, Mrs. A.

  Lawson, G. M.

  Watkins, T. E.

  Dalton, Rt. Hon. H.

  Lee, Frederick (Newton)

  Wells, Percy (Faversham)

  Deer, G.

  Lever, Leslie (Ardwick)

  West, D. G.

  de Freitas, Geoffrey

  Lewis, Arthur

  Wheeldon, W. E.

  Dodds, N. N.

  Lindgren, G. S.

  White, Henry (Derbyshire, N. E.)

  Ede, Rt. Hon. J. C.

  Logan, D. G.

  Willey, Frederick

  Edwards, Rt. Hon. John (Brighouse)

  MacColl, J. E.

  Williams, Rev. Llywelyn (Ab'tillery)

  Edwards, Rt. Hon. Ness (Caerphilly)

  McInnes, J.

  Williams, Ronald (Wigan)

  Edwards, W. J. (Stepney)

  McLeavy, F.

  Willis, E. G. (Edinburgh, E.)

  Evans, Stanley (Wednesbury).

  MacPherson, Malcolm (Stirling)

  Wilson, Rt. Hon. Harold (Huyton)

  Fernyhough, E.

  Mahon, S.

  Winterbottom, Richard

  Finch, H. J.

  Marquand, Rt. Hon. H. A.

  Woodburn, Rt. Hon. A.

  Forman, J. C.

  Mason, Roy

  Yates, V. (Ladywood)

  Fraser, Thomas (Hamilton)

  Mikardo, Ian

  Younger, Rt. Hon. K.

  Freeman, Peter

  Mitchison, G. R.

  Zilliacus, K.

  Gaitskell, Rt. Hon. H. T. N.

  Monslow, W.

  Gibson, C. W.

  Moody, A. S.

  TELLERS FOR THE AYES:

  Mr. J. T. Price and Mr. Wilkins.

  NOES

  Agnew, Cmdr. P. G.

  Cole, Norman

  Green, A.

  Aitken, W. T.

  Cooper-Key, E. M.

  Gresham Cooke, R.

  Alport, C. J. M.

  Cordeaux, Lt.-Col. J. K.

  Grimston, Hon. John (St. Albans)

  Amery, Julian (Preston, N.)

  Corfield, Capt. F. V.

  Gurden, Harold

  Anstruther-Gray, Major W. J.

  Craddock, Beresford (Spelthorne)

  Hall, John (Wycombe)

  Arbuthnot, John

  Crookshank, Capt. Rt. Hn. H. F. C.

  Hare, Hon. J. H.

  Armstrong, C. W.

  Crosthwaite-Eyre, Col. O. E.

  Harris, Frederic (Croydon, N. W.)

  Atkins, H. E.

  Crouch, R. F.

  Harrison, A. B. C. (Maldon)

  Baldock, Lt.-Cmdr. J. M.

  Cunningham, S. K.

  Harrison, Col. J. H. (Eye)

  Balniel, Lord

  Currie, G. B. H,

  Harvey, John (Walthamstow, E.)

  Banks, Col. C.

  Darling, Sir William (Edinburgh, S.)

  Heath, Edward

  Barber, Anthony

  Deedes, W. F.

  Hill, Rt. Hon. Charles (Luton)

  Barlow, Sir John

  Dodds-Parker, A. D.

  Hill, Mrs. E. (Wythenshawe)

  Barter, John

  Donaldson, Cmdr. C. E. McA.

  Hill, John (S. Norfolk)

  Bell, Philip (Bolton, E.)

  Doughty, C. J. A.

  Hinchingbrooke, Viscount

  Bevins, J. R. (Toxteth)

  Drayson, G. B.

  Hirst, Geoffrey

  Bidgood, J. C.

  Eden, J. B. (Bournemouth, W.)

  Hornsby-Smith, Mist M. P.

  Bishop, F. P.

  Elliot, Rt. Hon. W. E.

  Hudson, Sir Austin (Lewisham, N.)

  Black, C. W.

  Errington, Sir Eric

  Hudson, W. R. A. (Hull, N.)

  Body, R. F.

  Farey-Jones, F. W.

  Hughes Hallett, Vice-Admiral J.

  Bossom, Sir A. C.

  Fell, A.

  Hughes-Young, M. H. C.

  Boyle, Sir Edward

  Finlay, Graeme

  Hulbert, Wing Cmdr. Sir Norman

  Brooke, Rt. Hon. Henry

  Fisher, Nigel

  Hurd, A. R.

  Brooman-White, R. C.

  Fleetwood-Hesketh, R. F.

  Hutchison, James (Scotstoun)

  Browne, J. Nixon (Craigton)

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Hyde, Montgomery

  Bryan, P.

  Freeth, D. K.

  Irvine, Godman (Rye)

  Buchan-Hepburn, Rt. Hon. P. G. T

  Gammans, L. D.

  Jennings, J. C. (Burton)

  Bullus, Wing Commander E. E.

  Garner-Evans, E. H.

  Johnson, Eric (Blackley)

  Carr, Robert

  Glover, D.

  Joynson-Hicks, Hon. L. W.

  Cary, Sir Robert

  Gower, H. R.

  Keegan, D.

  Channon, H.

  Graham, Sir Fergus

  Kerby, Capt. H. B.

  Chichester-Clark, R.

  Grant, W. (Woodside)

  Kerr, H. W.

  Clarke, Brig. Terenoe (Portsmth, W.)

  Grant-Ferris, Wg Cdr. R. (Nantwich)

  Kirk, P. M.

  346

  347

  Lagden, G. W.

  Nicolson, N. (B'n'm'th, E. & Chr'ch)

  Taylor, William (Bradford, N.)

  Lambert, Hon. G.

  Nugent, G. R. H.

  Teeling, W.

  Leavey, J. A.

  Oakshott, H. D.

  Thomas, Rt. Hn. J. P. L. (Hereford)

  Leburn, W. G.

  O'Neill, Hn. Phelim (Co. Antrim, N.)

  Thomas, Leslie (Canterbury)

  Legge-Bourke, Maj. E. A. H.

  Osborne, C.

  Thomas, P. J. M. (Conway)

  Legh, Hon. Peter (Petersfield)

  Page, R. G.

  Thompson, Kenneth (Walton)

  Lindsay, Hon. James (Devon, N.)

  Panned, N. A. (Kirkdale)

  Thornton-Kemsley, C. N.

  Lindsay, Martin (Solihull)

  Pickthorn, K. W. M.

  Tiley, A. (Bradford, W.)

  Linstead, Sir H. N.

  Pott, H. P.

  Turner, H. F. L.

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Powell, J. Enoch

  Turton, Rt. Hon. R. H.

  Longden, Gilbert

  Prior-Palmer, Brig. O. L.

  Vane, W. M. F.

  Mackie, J. H. (Galloway)

  Profumo, J. D.

  Vaughan-Morgan, J. K.

  McLaughlin, Mrs. P.

  Raikes, Sir Victor

  Vickers, Miss J. H

  Maclay, Rt. Hon. John

  Redmayne, M.

  Vosper, D. F.

  MacLeod, John (Ross & Cromarty)

  Rees-Davies, W. R.

  Wakefield, Edward (Derbyshire, W.)

  Macpherson, Niall (Dumfries)

  Ridsdale, J. E.

  Wakefield, Sir Wavell (St. M'lebone)

  Maddan, Martin

  Rodgers, John (Sevenoaks)

  Walker-Smith, D. C.

  Maitland, Cdr. J. F. W. (Horncastle)

  Russell, R. S.

  Wall, Major Patrick

  Manningham-Buller, Rt. Hn. Sir R.

  Sandys, Rt. Hon. D.

  Ward, Hon. George (Worcester)

  Markham, Major Sir Frank

  Schofield, Lt.-Col. W.

  Ward, Miss I. (Tynemouth)

  Marlowe, A. A. H.

  Scott-Miller, Cmdr. R.

  Waterhouse, Capt. Rt. Hon. C.

  Marshall, Douglas

  Simon, J. E. S. (Middlesbrough, W.)

  Whitelaw, W.S.I.(Penrith & Sordar)

  Mathew, R.

  Smithers, Peter (Winchester)

  Williams, Gerald (Tonbridge)

  Maude, Angus

  Soames, Capt. C.

  Williams, Paul (Sunderland, S.)

  Mawby, R. L.

  Spearman, A. C. M.

  Wills, G. (Bridgwater)

  Maydon, Lt.-Cmdr. S. L. C.

  Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)

  Wilson, Geoffrey (Truro)

  Medlicott, Sir Frank

  Steward, Harold (Stockport, S.)

  Wood, Hon. R.

  Milligan, Rt. Hon. W. R.

  Steward, Sir William (Woolwich, W.)

  Yates, William (The Wrekin)

  Molson, A. H. E.

  Stoddart-Scott, Col. M.

  Nabarro, G. D. N.

  Storey, S.

  TELLERS FOR THE NOES:

  Nairn, D. L. S.

  Studholme, H. G.

  Mr. Kenneth Thompson and

  Neave, Airey

  Summers, G. S (Aylesbury)

  Mr. Godber.

  Nicholls, Harmar

  Sumner, W. D. M. (Orpington)

  Mr. Mikardo: I beg to move, in page 10, line 34, at end, insert:
  "or the provision by amateurs of entertainment consisting of one or more of the items specified in section ten of the Finance Act, 1949".
  A little earlier the Minister, when resisting any addition to the list of organisations to whom relief would be granted on the orders of the House of Commons without any discretionary powers to local authorities, said that he did not so much mind, or did not mind at all, another addition or two to the list of organisations to which relief could be given at the discretion of local authorities.
  I thought he was right not to want to extend the mandatory list, and equally right to want to extend the discretionary list, but so far he has not, and the Committee has not, agreed to any extension of the discretionary list. I assume, and certainly hope, that what he had in mind when he said that he did not object much to an addition to the discretionary list was that he would accept my Amendment and permit local authorities to give rate relief, partially or wholly, to amateur entertainments.
  In order to refresh the minds of hon. Members, Section 10 of the Finance Act, 1949, lists a stage play; a ballet, whether a stage play or not; a performance of music, whether vocal or instrumental; a
  348
  lecture; a recitation; and an eisteddfod. Most likely to benefit from discretion being given to local authorities would be amateur dramatic societies, amateur music and operatic societies, and, in Wales, eisteddfods. I offer apologies to hon. Members from Welsh constituencies if I pronounce "eisteddfod" wrongly, but I am sure that I am by no means the first to have done so.
  There are all over the country a large number of "little theatres," as they have conic to be called, some run by professional stage bodies, some by mixed professionals and amateurs, and some by amateurs. They are literally "little theatres." They charge low prices for seats, and are "broke" nearly all the time. Whether they are technically called profit-making or not, they never make any profit. Indeed, they have the greatest difficulty for the most part in keeping going and either fail after a year or are kept going by some well-wishers who want to see decent plays presented in towns where there are no other opportunities for having them presented and for having music decently rendered.
  11.30 p.m.
  We have one of these groups in Reading, and many hon. Members will have one in their constituencies. Ours is a little group calling itself the Progress Theatre. It runs in an adapted theatre

  349
  which has altogether 104 seats, so that if 2s. 6d. is charged and every seat is filled the most that can be got is £13. That will not go far even for amateurs who do not have to pay for services when they have to pay for light, heat and a quite heavy rating bill, as well as costs like the hire of costumes and the hire of furniture and the rest of it.
  It is not altogether clear whether these bodies would fall within the present wording of the Clause, that is to say, a
  "Society or organisation not established or conducted for profit and whose main objects are religious, educational or philanthropic".
  I think that the presentation of good plays and good music is an educational object, but I suppose that could be argued. Since it could be argued, it is not clear that it falls within the definition of the Clause. Nor is it clear whether these bodies, although they never make a profit, could be described as being conducted for profit if, as sometimes happens, they have a surplus on revenue account which they spend on capital account, for example, to pay for new seats. There is certainly one school of accountancy which would argue that, if in one year they made a profit, even though they had no money to show for it.
  Because of those two grounds it is possible that these bodies might not fall within the present wording, so I have proposed this addition to the wording. I deliberately chose, on the advice of my hon. and learned and indefatigable Friend the Member for Kettering (Mr. Mitchison), to lean on Section 10 of the Finance Act, 1949, because it is in that Section that the Chancellor has made provision to relieve these bodies from entertainments tax. Clearly, he did that because he thought that they were worthy of public encouragement and public support, including financial support.
  But his object will not have been achieved, if, as often happens in practice, the relief from Entertainments Duty is not sufficient to ensure the survival of these bodies which are killed from time to time by other factors, including all too frequently the factor of a considerable payment of rates. The Committee will be aware that local authorities have powers to spend up to a 6d. rate on the provision of entertainment. Some have exercised these powers and some have not. Some may have refrained from so
  350
  doing, not because they did not want to spend the money, but because they did not have the staff or facilities available for doing the job, or because they were too busy with other things. A partial, or total, relief from rates to a body of the sort covered by the Clause would be an easy and painless way at very low cost—in the overwhelming majority of cases it would amount to only a fraction of a penny rate—of exercising their powers to provide entertainment, without landing themselves in a lot of administrative difficulties. I believe that local authorities would welcome the opportunity of being able to assist these bodies in this way.
  Captain Soames: In order that the Committee can understand the problem involved, would the hon. Member state the rates paid by the body he has instanced? Secondly, is he seeking to include theatres which sometimes put on professional and sometimes amateur shows?
  Mr. Mikardo: I am afraid that I cannot give the exact figure, although I can say that this group states that the rates do threaten its continued survival more than anything else. On the second point, I should have thought that the power would have been limited to buildings occupied solely by amateur performers. If the hon. and gallant Gentleman will look again at my Amendment he will see that it refers to
  "… one or more of the items specified in section ten of the Finance Act, 1949".
  and that Section lays down pretty clearly what constitutes an amateur group. For the reasons I have given, I hope the Minister will find that this proposal commends itself to him, and that he will agree to its being incorporated in the Bill.
  Mr. Angus Maude: I will not detain the Committee, but there is one point which I must suggest to the hon. Member for Reading (Mr. Mikardo), and to the Parliamentary Secretary. In moving his Amendment, the hon. Member for Reading, with whose objects, incidentally, I have considerable sympathy, stated that he had decided to define these theatres by reference to the entertainment tax provisions as contained in the Finance Act, 1949. With respect to the hon. Gentleman, I do not think that

  351
  that is probably the best way of doing this, because the subsection of this Bill with which the hon. Gentleman is concerned defines the main objects as "religious, educational or philanthropic" and I should have thought that that covered a fairly well defined group. I would say that any little theatre coming remotely near to that is already exempted as an educational charity.
  That, surely, is the test which ought to be applied in giving the local authority power to exercise its ability to exempt from rates. Any little theatre, any "experimental" theatre, such as I have in my own constituency, would pass that test and is already exempted from Income Tax. That, I think, is the right test, rather than the principle of entertainment tax. Anything which passes the Income Tax test will already be within the meaning of this Bill in relation to the local authority's power to exempt from rates.
  Mr. Mikardo: As the hon. Gentleman knows, I am not a lawyer, but I would explain that the Little Theatre Guild has already taken legal advice and that that advice is that the Clause, as it stands at present, would not give exemption.
  Mr. Maude: With respect, I think that that is a matter which the Minister and the Government have still to define. I, too, have tried to discover what is the position, and my advice has been that these theatres are probably covered; but I am sure that the hon. Gentleman would welcome a ruling and an explanation from the Government.
  Mr. Deedes: The object of this Amendment is to relieve certain amateur entertainments, which are already exempt from entertainments tax. That, in effect, is broadly the object of the proposal. The items mentioned include a stage play, a ballet, a performance of music, a lecture, a recitation, or an eisteddfod.
  Without in the least denying that this is a deserving form of entertainment and one which, no doubt, makes a serious contribution to culture, I must say that that is really not the issue which the Committee has to consider. In our earlier discussion on this Clause we spoke about charitable and kindred organisations. This question does not really fall within that field at all. It may be deserving, but to accept the Amendment would be, as
  352
  I think several hon. Members are aware, to open up a very much wider field of institutions which were not only charitable, but which made their contribution to culture and which deserved some remission of this sort. If we were to take as a basis for relief of rates institutions which are already covered by provisions under the Finance Act, we should, I think, be entering on a very wide field indeed.
  With regard to the point raised by my hon. Friend the Member for Ealing, South (Mr. Maude), I will certainly check on any legal situation about which he may have doubts before the next stage of the Bill. I do not want to give a ruling on that at the moment. It is really the width of the field upon which this Amendment embarks that leads me to say that, deserving though the cause may be, we cannot accept the Amendment.
  The Chairman: Does the hon. Gentleman wish a decision to be taken, or does he wish to withdraw his Amendment?
  Mr. Mikardo: I do not wish to withdraw the Amendment, Sir Charles.
  Amendment negatived.
  Clause ordered to stand part of the Bill.
  11.43 p.m.
  The Lord Privy Seal (Mr. Harry Crookshank): I beg to move, That the Chairman do report Progress and ask leave to sit again.
  Clause 6 having now stood part of the Bill, it was not the intention of the Government that the Committee should sit late, and I do not think that it was the desire of the right hon. Gentleman the Leader of the Opposition when, earlier this afternoon, we had a certain interchange about arrangements for this Bill. I think, therefore, that this is probably the right stage for the Committee to cease discussing the Measure tonight, though it is not as far as I had understood from the right hon. Gentleman the Leader of the Opposition that he expected us to go.
  Mr. MacColl: Who made long speeches?
  Mr. Crookshank: It is not a question of who made long speeches or of the speeches which have been made. I have

  353
  no doubt that they have been valuable contributions to the debate, though I have not had the privilege of hearing all of them. The point was that the Leader of the Opposition had hopes that we should finish the Committee stage tonight and should deal with the new Clauses and the Schedules on the day which the Government have provided.
  On the other hand, it was also understood that we were not going to incommode the Committee by sitting late, and, broadly speaking, sitting late means about this time, when it is convenient for hon. Members to get home. Therefore, if the Committee now accepts this Motion, it is, so far as I am concerned, on the understanding that we conclude the Bill at the next sitting day on Thursday without sitting late. Indeed, I should hope to finish it by 10 o'clock. Whether hon. Gentlemen can give us a guarantee on that I would not know, but, so long as it is understood that we do not propose to sit late on Thursday I am prepared to ask the Committee to agree that we report Progress.
  Mr. Lindgren: I thank the right hon. Gentleman for the Motion he has moved. I think that his request is reasonable. Certainly, we on this side of the Committee will do our best to see that the completion of the Bill is reached by 10 o'clock on Thursday. Equally, I think that the right hon. Gentleman will agree that such an arrangement ought to apply to both sides of the Committee. There ought not to be an undue proportion of time taken up by hon. Members on either side.
  Mr. Crookshank: I am much obliged to the hon. Gentleman. Of course, that is not a guarantee which either he or I can give, because once an hon. Member is called he has the Floor until he elects to sit down. I think however that, with the proviso he has made, we are in agreement. We want to work together. We did not expect that the House would require more than two days for the Committee stage, and now it has been given a third. I think that that ought to be a reasonable arrangement.
  Question put and agreed to.
  Committee report Progress; to sit again Tomorrow.

AGRICULTURE (FERTILISERS SCHEME)
11.46 p.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. G. R. H. Nugent): I beg to move,
That the Draft Fertilisers (England, Wales and Scotland) Scheme, 1955, a copy of which was laid before this House on 5th May, 1955, in the last Parliament, be approved.
With permission, I would ask the House to consider with this Scheme the Scheme for Northern Ireland, if that meets the convenience of hon. Members.
These two Schemes are made under the 1952 Fertilisers Act, and they have the effect of extending for a further year, from 1st July next, the present Schemes. Both Schemes are the same in form as the Schemes now current. The only difference in the new Scheme is an increase in the amount of fertiliser subsidy payable for nitrogen and phosphoric acid. The amount of the increase is the amount which was awarded in the determination at the Annual Price Review in February.
I should briefly tell the House that fertiliser usage has responded well to this fertiliser subsidy, which was introduced in 1952 after a period of declining fertiliser usage; but in the past 12 months, which will end at the close of this month, there has been some decrease in the use of phosphoric acid and phosphates. The use of nitrogen has been about the same. There has been a check in the increased usage, probably to some extent due to the exceptionally bad weather in the last 12 months, and we want to see the increase going forward again.
The cost of the subsidy in the past 12 months, which end at the close of this month, is estimated to be £11,937,750. For the year 1955–56, the estimated cost is £15,436,260, assuming that the volume is the same as it has been for the past 12 months. The increase now proposed will raise the percentage subsidy for nitrogen from 16 to 26, and the percentage for phosphates from 32 to 36, at the present prices. The justification for the increase is broadly that, despite the increased usage of fertilisers which we have achieved in the two previous years, we believe there is scope for further increase in the usage, particularly in phosphates,

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before we reach the optimum level of usage. We are convinced, and I am personally convinced, that increased fertiliser usage is the high road to better farming, higher production, and lower costs. I believe that this increase in the subsidy rate will stimulate a further increase in usage.
11.50 p.m.
Mr. A. J. Champion: We are not opposing the Scheme. It is, in fact, one which we welcome, and I am grateful to the Parliamentary Secretary for the information he has given us in moving it. I shall not make a long speech because, obviously, Members want to get home, but I am bound to protest against the decision to bring on this Scheme on the night following the Committee stage of a Bill in which a large number of Members took a deep interest.
It was fairly obvious to everyone when the business was decided that we should be discussing this Scheme at a very late hour of the night, much too late to do it justice or to permit some of the Members who, otherwise, would have done so to participate in this debate. This Scheme has been on the Order Paper for at least a fortnight, during which time we have had many nights when it was obvious that the ordinary business would end at 10 o'clock. It is a shocking arrangement of business by the Government to bring it on at this time of night.
Having made that protest, I say that we do not oppose the Scheme but welcome the decision of the Government in this regard, because we think that these fertilisers are an essential part of production and that a production subsidy in this way is the right way to do the job. But I ask the Government, when they have this sort of Scheme in future, to try to bring it on on a night when it is reasonable for those who have to participate to stay here and do so.
11.52 p.m.
Commander Agnew: This is a late hour to debate the merits of the Scheme, but I want to place it on record that there are many people interested in horticulture, and particularly in good husbandry, who notice that there is still a significant omission in the ferti-
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lisers Scheme: that is, the absence of any subsidy for potash. The Scheme includes only nitrogenous fertilisers. I hope that at a later stage the Government will see fit to include this very important fertiliser amongst those others which are bringing such great benefits to horticulture at the present time.
11.53 p.m.
Mr. Robert Crouch: At this late hour I do not wish to delay the House, but I should like to say that of the various Measures that the Government give to assist agriculture, I consider this is the best investment of all. I think that through the greater use of fertilisers we can increase production and so reduce costs, and that in the future we shall be using much more nitrogen than we have done in the past.
I was very impressed only last week to read a report that has recently been published about what has been happening during the last five years on a small farm of about 100 acres. Five years ago, they were spending 26s. an acre on fertiliser. Last year, the figure was increased to £4 4s. But what has happened to production during that period? The net output per acre has increased from £26 10s. to £49 10s. The investment in fertiliser, and the better management of the farm with better grass, has proved well worth while. I believe that with the greater use of leys and the proper use of fertilisers, we can go a long way towards reducing the costs of our products and can increase the output from our farms.
11.54 p.m.
Major H. Legge-Bourke: I, too, do not wish to delay the House a moment longer than is necessary, but I should like to support what my hon. and gallant Friend the Member for Worcestershire, South (Commander Agnew) has just said. In welcoming this Scheme, which I realise is of enormous importance to as great an arable area as that which I have the honour to represent in this House, I nevertheless feel that in giving this support to agriculture we are sometimes apt to forget that we expect from the horticultural industry a similar reward for employed labour. Yet we do not—and cannot, I think—give the same security to horticultural growers that we can give to agriculturists.

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In an area as important in the horticultural trade as Wisbech there is, naturally, disparity between the arable farmers and the horticulturists. Some of the growers of fruit manage, I know, to grow other crops in respect to which this Scheme will be highly beneficial. Nevertheless, the majority of them feel that it is of little benefit to them.
I appreciate, of course, that one of the reasons why potash has not received the same treatment as nitrogen is that today's price of potash fertiliser is not as high in relation to the world price as the prices of others are, but I ask my hon. Friend to consider this matter again and to realise that we in this House expect horticulture to be continued at a very high level of production of very high quality crops. Indeed, we hope for ever better quality. The Scheme will be of enormous benefit to a great percentage of those in agriculture, and it seems to me a pity we should have to leave out of it such an important section of growers as those in horticulture who will not benefit, or not benefit much, by the Scheme.
Question put and agreed to.
Resolved,
That the Draft Fertilisers (England, Wales and Scotland) Scheme, 1955, a copy of which was laid before this House on 5th May, 1955, in the last Parliament, be approved.
Draft Fertilisers (Northern Ireland) Scheme, 1955 [copy laid before the House, 5th May, 1955, in the last Parliament], approved.—[Mr. Oakshott.]

CONSOLIDATION, &c., BILLS
Lords Message [23rd June] relating to the appointment of a Committee on Consolidation Bills (including Bills for Consolidating Private Acts), Statute Law Revision Bills and Bills presented under the Consolidation of Enactments (Procedure) Act, 1949, to be considered forthwith.—[Mr. Oakshott.]
Lords Message considered accordingly.
Select Committee of six Members appointed to join with the Committee appointed by the Lords to consider all Consolidation Bills (including Bills for Consolidating Private Acts), Statute Law Revision Bills and Bills presented under the Consolidation of Enactments (Procedure) Act, 1949, together with the
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Memoranda laid and any representations made with respect thereto under the Act, in the present Session:
Mr. Philip Bell, Mr. Graeme Finlay, Mr. Forman, Mr. Janner, Sir H. Linstead, and Mr. Oliver:
Power to send for persons, papers and records; and to sit notwithstanding any Adjournment of the House:
Three to be the Quorum.—[Mr. Oakshott.]
Message to the Lords to acquaint them with such of the said Orders as are necessary to be communicated to their Lordships.

WESTERN EUROPEAN UNION
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Oakshott.]
11.58 p.m.
Mr. K. Zilliacus: I rise to raise the question of the conflict between the obligations of the Western European Union Treaty and those of the Charter of the United Nations.
I do not think that the Government contest that the military obligations of Western European Union conflict with Article 53 of the Charter, which declares that no enforcement action, defined as
"action with respect to threats to the peace, breaches of the peace, and acts of aggression,"
shall be taken under a regional arrangement or by a regional agency without the authorisation of the Security Council.
Nor do I think that the Government contest that under Article 103 of the Charter, if other treaty obligations conflict with those of the Charter, the obligations of the Charter shall prevail, which is interpreted by the Foreign Office commentary on the Charter, published after the San Francisco Conference in 1945, to mean that such treaty obligations cannot be invoked if and when the occasion arises.
The Government base their case for the validity of the obligations of the W.E.U. Treaty on the claim that this is a collective defence agreement under Article 51 of the Charter, which declares that
"Nothing in the present Charter shall impair the inherent right of individual or collective self-defence if an armed attack occurs against a Member of the United Nations. …"

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What this claim amounts to is the contention that members of the United Nations may, under Article 51, conclude agreements for doing the very things that they are specifically prohibited from doing under Article 53. It is further claimed that members of the United Nations who act in this way actually strengthen the peace-keeping system of the United Nations and reinforce the Charter.
I should like to give a homely illustration to show where this claim lands us. Under the Highway Code, pedestrians have the right of way on zebra crossings. Suppose that a genius arose who managed to interpret another section of the Highway Code as conferring the right on drivers of motor cars at their discretion to drive across zebra crossings whenever they liked as fast as they liked, individually or collectively, and added a rider that this did not affect the rights or safety of users of zebra crossings and actually strengthened the Highway Code as a protection for the pedestrian. We should think that that was a curious way of interpreting the Highway Code, whereby one section destroyed the force of the other.
To understand the full import of the Government's claim, let us look at the basic principle of the Charter, which is that the business of keeping the peace is entrusted to the Security Council. The members of the United Nations agree not to take the law into their own hands on matters of peace or war and on questions of enforcement action, but to leave it to the Security Council to decide when enforcement action shall be taken and to follow its injunctions.
There are two derogations to this principle in the Charter, but they are more apparent than real. In the case of Article 53, there is an exception which allows enforcement action to be taken under regional agreements with regard to an enemy State, that is a State which was an enemy of any signatory of the Charter in the last world war. Article 107 reinforces this exception and specifies that direct action may be taken against an enemy State. These provisions were put in because the French were extremely nervous about the danger of a German attack at some unspecified period after the war and wished to be free to deal with it directly.
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It was for the same reason that the self-defence Article was inserted in the Charter, namely, to allay the apprehensions of France about Germany. But, as it stands, Article 51 endeavours to circumscribe carefully the exercise of the right of self-defence so as to subordinate it to the over-riding authority of the Security Council as the organ for keeping the peace. That is what the Foreign Office "Commentary on the Charter of the United Nations" meant when it said, pointing out the importance of this matter, that the Charter recognises
"… the explicit right of self-defence, both individual and collective, but in such a manner that the final authority and responsibility of the Security Council to maintain international peace and security is not impaired."
There are three safeguarding clauses in Article 51 designed to effect this purpose. The first says that action may be taken to meet an act of aggression
"… until the Security Council has taken the measures necessary to maintain international peace and security …"
The second safeguarding clause says:
"… Measures taken by Members in the exercise of this right of self-defence shall be immediately reported to the Security Council …"
The third and crucial safeguarding clause continues as follows:
"and shall not in any way affect the authority and responsibility of the Security Council under the present Charter to take at any time such action as it deems necessary in order to maintain or restore international peace and security."
This is the crucial clause because, obviously, if, on the plea of defence, measures are taken and action is indulged in which put the Security Council out of action and make it impossible for it to take charge of the situation, all these safeguarding clauses fall to the ground and the whole United Nations peacekeeping system collapses.
Bearing that in mind, let us look at Article 5 of the Western European Treaty, which reads:
"If any of the High Contracting Parties should be the object of an armed attack in Europe, the other High Contracting Parties will, in accordance with the provisions of Article 51 of the Charter of the United Nations, afford the party so attacked all the military and other aid and assistance in their power."
What does that mean? It means that without referring to the Security Council, on the plea of collective self-defence, the

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members of W.E.U. are prepared to indulge in a first-class war, and these members include permanent members of the Security Council. How can it be contended that such action does not affect in any way the authority of the Security Council? The Security Council would simply cease to exist.
It is really like saying that someone may drop an atomic bomb on the vicar's tea party provided he does not spill the tea. The thing is an absurdity. Action is taken on a scale which, in fact, completely wrecks and disintegrates the United Nations. The Security Council ceases to exist in a situation where some of the permanent members are fighting the others. But in the next Article, Article 6, it is declared that this Treaty
"… shall not be interpreted as affecting in any way the authority and responsibility of the Security Council under the Charter to take at any time such action as it deems necessary in order to maintain or restore international peace and security."
I should really like to know how the Government think that under Article 5 members of the Western European Union may render all the military and other aid and assistance in their power to a High Contracting Party they consider has been attacked, but that in doing so they shall not at the same time affect or impair in any way the authority of the Security Council. The thing is an absurdity. The two Articles contradict each other completely, and together they make no sense whatever.
The truth is that the founders of the United Nations never dreamed of the possibility that permanent members of the Security Council could invoke the terms of Article 51 in order to justify preparing for war against each other. The whole Article was put in to allay the apprehensions of France with regard to possible action of an enemy State outside the United Nations.
The Charter not only vests responsibility in the Security Council for keeping the peace, but stipulates that for this purpose the Great Powers who are permanent members of the Security Council must be unanimous. The Foreign Office Commentary explains that "the complete unanimity of the Great Powers is always required when the Security Council decides on enforcement action" because
"it is clear that no enforcement action by the United Nations Organisation can be taken
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against a Great Power itself without a major war. If such a situation arises the United Nations will have failed in its purpose."
Then the Commentary continues:
"Thus the successful working of the United Nations depends on the preservation of the unanimity of the Great Powers; not of course on all the details of policy, but on its broad principles. If this unanimity is seriously undermined no provision of the Charter is likely to be of much avail. In such a case the Members will resume their liberty of action."
I believe that this indicates the only serious defence that can be made of the Western European Union Treaty. To argue that this Treaty is consistent with the terms of the Charter is untenable, I have given my reasons for thinking that. But there is a possible political case for it. It is possible to argue that the Soviet Union is solely responsible for our failure to agree with that Power on basic issues since the war, and, moreover, that the West are justified in inferring from this failure to agree that there is an intention on the part of the Soviet Union to attack the West. I do not personally accept this political plea, but what I am saying is that that is the only possible line of defence of the existence of W.E.U. It amounts to pleading a political necessity for scrapping the Charter and reverting to the balance of power, sustained by military alliances such as N.A.T.O., S.E.A.T.O., W.E.U., and an arms race in hydrogen bombs.
The Russians, of course, would enter the same political plea the other way round to justify the Sino-Soviet alliance and the over-all Warsaw Convention recently concluded. None of these military alliances, I believe, is compatible with Articles 51 and 53 of the Charter. They are all power political combinations based not on the Charter but on reverting to the balance of power. If that be so, a very important practical consequence follows.
The reason I have raised this subject tonight is that we are on the eve of the four-Power talks and we have just had a conference in San Francisco—the ten years anniversary of the United Nations—at which our own Government, the United States Government, the Soviet Government and the French Government have all again pledged their loyalty to the United Nations, and have said that they will base their policy on the United Nations. Mr. Dulles went further. He

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told Mr. Molotov that there was only one condition necessary for coming to terms with the Soviet Union and that was that they should consent to base their policy on the Charter. I think that is true, but that it works both ways. It applies in the West as well as in the East.
As part of a general settlement based on the Charter there must be the scrapping of these power political alliances based on the assumption that it is not possible to come to terms. It would be quite wrong to invert the process and cause the negotiations to fail because we cling to these power political alliances. Their only justification is the alleged inability to come t o terms with the Soviet Union on the basis of the Charter, and they must not be allowed to become an obstacle to an agreement with the Soviet Union based on a return to the Charter in our mutual relations.
Of course, this cannot be done in a day. But I suggest that the very first step in this direction must be the readiness on our part, in return for the unification of Germany through free elections and under international supervision, (a) to scrap the Western European Union if we receive corresponding concessions from the Soviet Union in her alliances in Eastern Europe; (b) to admit United Germany and the other ex-enemy States in Europe to the United Nations; (c) to include them all in an all-European regional agreement based on Article 53 of the Charter and on the United Nations Economic Commission for Europe.
Further, if, as I fear will turn out to be the case, the United States insist on clinging to the West European Union, in spite of the fact that by doing so they will render any agreement with the Soviet Union impossible, then our country has a very powerful diplomatic weapon in its hands, for we can say to the Americans that since the military obligations of W.E.U. conflict with Articles 51 and 53 of the Charter, they cannot be invoked under Article 103 if the occasion arises, and we do not propose to act on them without the authorisation of the Security Council, because without that authorisation they are not consistent with the Charter.
I hope the Government will not hesitate to use that diplomatic weapon, in
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order to ensure that we get a settlement through the four-Power talks, and do not merely confirm and prolong the deadlock; and in order to take the first step in transferring our relations with the Soviet bloc from the balance of power on to the Charter of the United Nations.
I would add that in case of need—I hope the need will not arise—the Labour Party, which is by no means enamoured of West European Union—the Parliamentary Party would not agree to it and would not vote for it, and the last Labour Party Conference, by a knife-edged majority, passed a resolution which called for a contribution by Germany to collective security in accordance with the principles of the Charter, which I think rules out W.E.U.—would be quite prepared to invoke this view and to stand on it as a ground for opposing our acting under the military obligations of W.E.U., if the negotiations were to break down because of insistence on trying to include Germany in a West European alliance instead of trying to work for a United Nations settlement in Europe.
I hope very much that the Government will not encourage our American friends to cling to this alliance and balance of power conception, but will use their influence and this diplomatic weapon to try to swing the negotiations over to the Charter as being the only basis on which we can reach agreement.
12.17 a.m.
The Joint Under-Secretary of State for Foreign Affairs (Mr. R. H. Turton): Listening to the hon. Member for Gorton (Mr. Zilliacus), I was reminded of what was said of the Bourbons, that they had never learned anything and they had never forgotten anything. I am sure that the hon. Gentleman has never forgotten any of his foreign policy during his enforced sojourn in the political wilderness, because the speech he has just delivered is very nearly identical with the one he delivered on 12th May, 1949, when he was dealing with a similar argument.
There are three main differences between what he has said tonight and what he said in May, 1949. In 1949, he was attacking not Western European Union but the North Atlantic Treaty as being inconsistent with the Charter. He now says that Western Union is similarly inconsistent.

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The second difference is that in 1949 part of his argument was directed at proving that the North Atlantic Treaty was contrary to Labour Party policy and that the Labour Party was suffering then from political amnesia. Now he says that the Labour Party has come round to his point of view and, from the Scarborough Conference resolution, regards Western European Union as inconsistent with the Charter.
The third difference is that in 1949 his speech was punctuated by the applause of Mr. Gallacher, the Communist Member, but tonight there is no Communist Member to applaud the hon. Gentleman.
Let us see exactly what is the position of Western European Union and the revised Brussels Treaty. This is an arrangement made under Article 51 of the Charter. The hon. Gentleman now realises that it has nothing to do with the regional arrangements which are provided for under Article 52. There is no connection between the two.
The reason for Article 51—it is a very important reservation to the Charter, because without it there would be nothing in the way of the aggressor—is to lay down that every country shall have the right to self-defence and to collective defence. It provides, therefore, that countries can agree together to enter into collective defence. But there are certain important reservations in it. It says that whereas countries may resist the aggressor, when the Security Council takes enforcement action, then, in the words of Article 6 of the Brussels Treaty,
"the measures taken shall be terminated".
That is very important, because it means that that Article is by that proviso wedded to the Charter.
The argument that has been addressed to the House tonight by the hon. Member—and I regret that he has left me such a short time to answer it—is that the revised Brussels Treaty and Western European Union provide for immediate military action, and that such action must affect the authority and responsibility of the Security Council and must, therefore, conflict with Article 51 of the Charter.
That is surely a bad argument. He has himself read out how in the revised Brussels Treaty, after laying down in Article 5 the measures that must be
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taken for collective self-defence, Article 6 goes on to say
"All measures taken as a result of the preceding article shall be immediately reported to the Security Council."
That is in conformity with Article 51.
"They shall be terminated as soon as the Security Council has taken the measures necessary to maintain or restore international peace and security".
Mr. Zilliacus Mr. Zilliacus rose——
Mr. Turton: I am left very little time. I cannot possibly deal with the hon. Member's argument and give way. I expected to have 15 minutes.
The present Treaty goes on to say that it
"does not in any way prejudice the obligations of the High Contracting Parties under the provisions of the Charter of the United Nations. It shall not be interpreted as affecting in any way the authority and responsibility of the Security Council under the Charter to take at any time such action as it deems necessary in order to maintain or restore international peace and security."
Having read these very clear Articles, the hon. Member said that this Treaty is in conflict with the provisions of the Charter. But it is closely modelled on the wording laid down in Article 51. The hon. Member mentioned the Warsaw Treaty, and it is interesting to see the distinction between Western European Union and the provisions of the Warsaw Treaty. It is quite true that Article 4 of the Warsaw Treaty begins with words that are rather similar to the words used in Article 5 of the Brussels Treaty, but there is this difference. Whereas In the North Atlantic Treaty and the Brussels Treaty it is specifically stated, as I have shown, that the authority and responsibility of the Security Council are unaffected by these treaties, there is no similar statement in the Warsaw Treaty. Therefore, the argument the hon. Member raised against Western European Union to that limited extent might well be used against the Warsaw Treaty.
Mr. Zilliacus: I agree.
Mr. Turton: It may well be that some of the arguments I used tonight have been similar to those used by the right hon. Member for Derby, South (Mr. P. Noel-Baker) when he replied to very nearly the same speech by the hon. Member for Gorton when he was the

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hon. Member for Gateshead in May, 1949. My only defence is that truth is invariable and we who support the Atlantic Treaty and Western European Union have at all times been at pains to carry out our obligations under the Charter.
I ask the House to think for a moment of what would be the position if the hon. Member for Gorton's view were right. It would mean that the way of the aggressor would be easy. There would be nothing to stop the aggressor wreaking his will upon his neighbours, because he would know that if the Security Council did not take action there would be nothing to stop him. Surely what the hon. Member for Gorton is arguing is that the countries of Europe should go back to the law of the jungle. The hon. Gentle-
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man should know better than that, for he himself had a great deal to do with the formation of the League of Nations and with its work.
I assure the hon. Gentleman that Her Majesty's Government are anxious to conform to the Charter of United Nations, and my right hon. Friend the Foreign Secretary in San Francisco only last week gave that pledge. I am proud that this Government have been responsible for helping to form, and to ratify, the Western European Union which does provide so well for collective security in Europe.
Question put and agreed to.
Adjourned accordingly at twenty-seven minutes past Twelve o'clock.