LOCAL GOVERNMENT BILL

HC Deb 09 December 1957 vol 579 cc901-1020

Order for Second Reading read.

3.33 p.m.

The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke)

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

One thing to which almost everybody has assented ever since the war has been the need for Parliament to tackle a comprehensive Measure reorganising local government. This is it. There may be argument about the methods: there can be no argument about that general aim. The Government set out their methods in three White Papers which we debated at the end of July. With minor changes, to the chief ones of which I shall be drawing attention as I go on, this Bill follows the White Paper proposals, and in these rather special circumstances I hope that: the House will approve if I concentrate my speech today on the main features of the Bill, and particularly those on which criticism or misunderstanding have arisen.

A Bill of this size is a big task, and we are setting forth on a long journey. Hon. Members who have themselves played an active part in their own local government—and that is one of the strengths of this House of Commons—will, I know, follow through to the end. I hope that other hon. Members will do so, too, even if some of the local government jargon does sound like Sanscrit to them. Each of our constituents is more likely to come in touch with local government services every day of his life than with most of the other topics on which we legislate here. Whatever our differences, the House has a common interest in doing all that Parliament can do to secure an efficient and responsible local government system.

The pattern of the counties and of our county boroughs has hardly changed for forty years and more, although the whole world has changed around them. The pattern of our county districts has been virtually unaltered since the reviews carried out by the county councils in the 1930s. A great deal of the financial basis of local government has either not been revised at all since that time or has been altered in a rather limited and haphazard way, and yet the circumstances in which local authorities have to function have changed almost beyond recognition.

At a number of points it is simply not possible to put off changes any longer. The only real choice is between piecemeal alterations with all the obvious disadvantages and a comprehensive Measure based on a properly considered plan. I remember that in recent years the House has rejected one Private Bill after another on the ground that a comprehensive and not a piecemeal approach was wanted.

In another aspect the Bill has a claim to wide support, and that is in its retention of the broad lines of our existing system of local government as the framework within which, as far as possible, the reorganisation should take place. The present system has given rise to a number of problems, but there is no general view, I am sure, that at this stage it ought to be scrapped altogether and replaced by something completely different. What almost everybody is calling for is an overhauling and an improvement of the present system.

The Bill does not, therefore, purport to mark out an entirely new pattern for local government. It does not lay down a detailed and comprehensive set of principles which must govern all the revisions and alterations to be made. What the Bill does do is to contain basic provisions which are of fundamental importance.

The theme of the financial provisions is to strengthen the local character of local government—[HON. MEMBERS: "No"]—through enabling local authorities to exercise greater responsibility over the spending of money in their own areas, and in the provisions relating to reviews of areas and status everybody concerned—the local authorities, the two Local Government Commissions and the Minister—are enjoined by the terms of the Bill to secure effective and convenient local government. There are indications in the Bill which firmly point to the manner in which effective local government is to be achieved, but without going too far and ordaining rigidity. Go too far towards rigidity, and then, if the laying down of principles is to be more than a mere collection of cliches, there will inevitably be a restriction on the free exercise of judgment by the reviewing bodies, by the Minister, and, finally, by Parliament itself, as to what is best in the particular circumstances of an area.

Nothing would be easier than the prescription of rigid doctrine; for instance, the rigid doctrine that every authority in a conurbation must be of a certain size regardless of local conditions; but it would be quite the wrong way to go about this job. It would be unrealistic to try to settle within the terms of the Bill itself detailed answers to questions so intricate and so local as the pattern of local government in a conurbation area or in a county. The most that we can do and the most that we should do is to determine the scope and the procedure and the basic principles, where basic principles are essential. The right framework of local government for each neighbourhood needs patient local investigation and discussion, and not a precise and uniform pattern laid down centrally without regard to local circumstances or local feelings.

This means that there will be a big responsibility on the Local Government Commissions and on the county councils in carrying out their reviews. My aim, when the Bill becomes law, is to appoint commissions whose members can be trusted to look at the local government picture in a fresh and objective way without preconceived notions for or against the existing arrangements in any particular area. The members will not, in any sense, be "representative" as regards the various types of local authority, but they will certainly include members who have had experience of the matters with which local government is concerned. As to the county councils, they already possess local knowledge and contacts that should be invaluable in carrying out their reviews and in considering the pattern of county districts in their own counties.

Part I of the Bill deals with the financial proposals. They have aroused more comment and criticism and have given rise to more misunderstanding than has the rest of the Bill. Therefore, I propose to devote a considerable part of my speech to them. The proposals in Part I assume that local authorities must continue to obtain the bulk of their revenues from rates and from Exchequer grants, apart from their income from house rents, and so forth.

We have thoroughly examined the possibility of tapping other sources of local revenue. Nobody would be better pleased than I if some means could be found of providing local authorities with a steady source of revenue proportionate to their needs and easy to assess and collect, but none of the new suggestions which have been made, whether for a local Income Tax or for the transfer to local authorities of the product of one or more of the national taxes, satisfies these tests.

Local rates and Exchequer grants together must, therefore, continue to provide most of the money for meeting the cost of local services. The rating system is a tried and, on the whole, a satisfactory means of raising local revenue. It may be desirable from time to time to adjust the incidence of rates between one kind of ratepayer and another, but there is no sound case for a major recasting of the whole rate system.

This brings me to the Government's cardinal proposal, the new general grant from the Exchequer. There is to be a total sum allocated for each year and fixed in advance for two or more years at a time. Clause 2 is the vital Clause here. It requires the Minister to take into account the rate of expenditure on the whole range of services which the grant covers and any probable fluctuation in demand—such as a "bulge" or otherwise passing through the schools in the years ahead—and the need for developing services and the extent to which, having regard to economic conditions, it is reasonable to develop them. That is all set out in Clause 2 (1) The critics of the general grant have not read that Clause.

The procedure for deciding the amount of the grant is laid down in Clause 1. There must be consultation with the local authority associations before the Order which fixes the grant is made, and the Order will require an affirmative Resolution of each House. So, the grant will be assessed after a careful weighing of all the relevant evidence, and the Government proposals will then be open to parliamentary debate. There will be opportunity for regular and public review in the House of the cost and the future needs of the grant-aided services and for scrutiny each time of what the Government of the day propose to do about the level of the grant.

Why does the Opposition dislike the opportunity, such as has never existed hitherto, for periodic discussion of the progress of important local government services and of the help being given and proposed to be given to those services from the Exchequer? Why are the Opposition dead-set against adopting a system under which the annual totals of grant from the taxpayer will be committed fairly and openly and on a reasoned basis, instead of being discovered only after the event, as now, by adding tip the amounts which happen to become due as a result of the workings of all sorts of differing specific grant arrangements?

That is what is happening now. It is a hotch-potch, not a system. Why do the Opposition clamour for this hotchpotch? The general grant Orders will be on the record and the Government will be quite ready to be judged by what they contain. The House will notice that the Bill also provides, in Clause 2 (4), that the total amount of the grant can be adjusted if unforeseen changes in the level of prices and costs occur which are such that the local authorities should not be called upon to carry the additional burden unaided.

Mr. G. R. Mitchison (Kettering)

The right hon. Gentleman is in refreshingly combative mood, but he appears to have forgotten that even his Ministry's Estimates are open to discussion, including his own salary. Nothing could be broader.

Mr. Brooke

The hon. and learned Gentleman has evidently not been Financial Secretary to the Treasury and does not know how these figures conic up some times years after the event.

After having arrived at the total grant, the next step is to distribute it between the local authorities. The share payable to each council will be determined by a formula based upon factors that are objective, mainly factors of population weighted for this special circumstance or that. The items composing the formula can be examined in Committee, but I want to say at this stage that there is nothing inflexible about the way in which the formula is to be applied.

I have come across some misunderstandings on this. I tried to give in the White Paper on Local Government Finance an example of how the formula would work. Some people have failed to realise that that was only an example. The point is, and hon. Members will find this in Part II of the First Schedule, that the weight to be attached to each factor in the formula is left to be fixed as part of the grant settlement for each period and is not laid down in the Bill.

That weighting will be the subject of negotiation and, if necessary, of debate in just the same way as is the total of the grant. The object of all this is to assure to each receiving local authority a share of the general grant which properly reflects the overall needs of the services and which is adjusted to take account of particular local conditions in so far as they affect local needs.

A grant that is calculated and paid in this way has decisive advantages compared with a percentage grant system. The need for Departments to check and scrutinise details of the expenditure on the services is done away with. I sometimes wonder whether hon. Members ever realise how formidable is the amount of checking of percentage grants that goes on at the moment. It results in a great deal of delay. The settlement of large sums that will be payable from the Exchequer to local authorities is held up some times for years. What is still more important is that the new system assures to the major local authorities a source of income which is on the same footing as their rate income, in that it is available for them to apply in the best interests of their own services.

The terms of the Opposition Amendment show that hon. Gentlemen opposite think it is a bad thing to put greater responsibility on local authorities in this way. We on this side of the House believe that within the broad framework of national policies it is a good thing to give local authorities as much discretion as is reasonably possible as to the way in which they provide local services, and the relative allocations they make to each service to suit local needs.

The main point about a general grant is simply that whatever total amount is given will be made available and can be used in a grown up and responsible way, rather than by a method which diminishes responsibility in those who receive the money and encourages meddling by those who give it. Of course, this means that the Government propose to treat the local authorities as bodies which can be expected to apply themselves responsibly to the tasks which Parliament has laid on them. We are prepared to trust the elected representatives of the people. I fear that the Association of Education Committees is not.

Now I want to deal with the allegation that the main purpose behind the general grant proposal is a progressive transfer to local authorities of the burden of the Exchequer contribution to the cost of local government. There is nothing in this Bill to justify or to support this view. There is no intention whatever of using this change of system as a surreptitious means to cut down the standard of provision of education or any other service.

Some critics think that they detect something sinister in the fact that my right hon. Friend the Chancellor of the Exchequer backs the proposal for a general grant. The general grant will help the Chancellor to budget properly, to see where he is going; and that is not simply in the interests of the Chancellor, but is in the interests of the nation. I am certain that the general grant will act as an incentive to local authorities to get the utmost value for their money, which must be welcome to any Chancellor and ought to be welcome to everybody else.

Mr. Mitchison

I am most grateful to the right hon. Gentleman for giving way. Is there anything in the Bill which says how much the general grant will be, or which prevents the Government of the day from cutting it down to whatever figure they think appropriate?

Mr. Brooke

The amount of the general grant will be settled by Parliament after full debate in this House. I rather suspect that some fears may have arisen from a misreading of what was stated about reduction of grants in paragraphs 26 to 29 of the White Paper on Local Government Finance. Paragraph 26 draws attention to the fact that the proportion of Exchequer grants to rates is now as 6 is to 5, and then goes on to refer to the importance of reducing the dependence of local authorities on Exchequer grants if that can possibly be done.

All this was written in paragraph 26 to go with the paragraphs immediately following. Those following paragraphs state that the rerating of industry will produce additional rate income of about £30 million a year, half of which will be at the expense of the Exchequer through loss of tax. Then they go on to explain the Government's proposals for a partial offset of the benefit of rerating by a reduction in Exchequer aid. The words used are in paragraph 29: The reduction in grants will, therefore, be limited to £20 million I would not have thought that this passage in the White Paper could have been misread but, as it as been, I want to say as plainly as I can that paragraphs 26 to 29 are directed to the specific proposal to reduce grants by £20 million a year over and against the increase of £30 million in the rate of income of the local authorities.

The net proceeds of rerating are being divided between ratepayer and taxpayer in the ratio of 2 to 1, though their contributions to local revenue are in the ratio of 5 to 6. In money terms the effect of the Government's proposal will be that ratepayers, other than industrial ratepayers, will be £10 million a year better off than they would otherwise have been, and, averaged over the country, that is equivalent to a 4d. rate.

The other criticism I have heard is that the general grant proposal threatens the standards of various services. This criticism comes almost exclusively from the education side. Education is far and away the largest service concerned, but there are other important services for which grants will be given in just the same way, and it really is rather noticeable that there has been hitherto no substantial criticism of the inclusion in the general grant of the local authority health or welfare or child care services. Those who have these services at heart—and there are many people who are quite as keenly devoted to them as others are to education—have the wisdom to see that no threat is offered to these services by proposals for strengthening the local authorities which administer them.

I realise that many teachers and others have been speaking from a genuine anxiety to see education continue to go forward, and with a genuine belief that education will go forward faster if each local education committee can feel that someone else will bear three-fifths of the cost of everything it decides to do. I respect their sincerity much more than I respect the moral quality of that last argument.

All I will say, since my right hon. Friend the Minister of Education will be speaking tomorrow, is that education, like every other local government service, must benefit from plans that are designed to make local government more effective. I fancy that those who argue that education should be excluded from the scope of the greater financial responsibility given to local authorities by the Bill are really saying that local authorities should not be responsible for the education service and that it should be run from London. That is a view which we on this side of the House cannot share. Of course, there must be compliance with overall national policy. The Bill provides, in Clause 3 (3), for standards and other requirements to be prescribed by the Minister concerned, and this is in addition to powers which Ministers already have to lay down certain standards.

We shall not hesitate to use these powers where it is necessary to set a standard of performance, but there is no intention to use them to impose requirements and controls except where national policy is at stake. It is certainly not in the mind of any member of the Government that local authorities as a whole will need to be prodded or threatened to provide an acceptable level of services, but Clause 3 enables the Government, with the assistance of the House, to deal with a case where there is failure to achieve or failure to maintain acceptable standards. Certainly, from all my own local authority experience, I have not the slightest doubt that the general grant is a great step towards better local government. Far from damaging the services, it will lead to their being more thoughtfully administered.

Before I leave the subject of grants, I want to remind the House of the improvement we are making in the Exchequer Equalisation Grant. Under its new name of "Rate-deficiency Grant" it is to be extended to county districts and to Metropolitan borough councils as well as being payable to county and county borough councils as it is now.

This grant-in-aid of the authorities whose rate resources are below the national average serves a thoroughly useful purpose, but up to now it has had the defect that its benefits have been indiscriminately spread over all the ratepayers of a county, whereas the rate resources of individual districts within the county often vary widely. We shall remedy this weakness and the Bill will secure greater equity between rating authorities within a county.

I come now to the changes in the rating system which I mentioned earlier. Clause 9 rerates industrial and freight transport hereditaments from 25 to 50 per cent. The other rating provisions in the Bill make important minor improvements in the system, but hardly call for any special explanation at this stage. The essential fact to keep in mind is that industry's share of the total rate burden was put up by about half as a result of the 1956 revaluation. Now, the doubling of their rateable value by the Bill on top of that previous increase will mean that the share borne by industry in 1959–60 will be about three times as big as it was two years ago.

That is quite apart from the increases in liability for rates which industry and all ratepayers bear as a result of the increase in the rates actually levied since two years ago; comparing the current year, 1957–58, with 1955–56, that increase by itself is estimated to be nearly one-third. In the present economic circumstances, and remembering the effect of costs on exports, the Government decided that rerating to 50 per cent. constituted as heavy an addition to overheads as industry could safely be required to bear.

If the Opposition disagree, I hope that they will direct their minds to the figures I have given. Almost all classes enjoy some form of derating in the sense that they are not fully rated on current values. The effect of the Government's proposal will be that industry will have increased its contribution to rates since before the 1956 revaluation by a greater proportion than any of the broad classes of ratepayers. Estimates based on the known figures of last year suggest that this re-rating of industry should produce an additional rate income of £30 million a year. The amount in 1959–60 may, in fact, be substantially higher than that.

While I am on the subject of rating, I would like to mention one matter which, I know, has been causing concern to some hon. Members, and that is the rating of charities and other similar organisations. I have come to the conclusion that we need a thorough investigation of that position to see whether we can evolve a more satisfactory settlement than the one embodied in Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955. I have, therefore, decided to appoint a committee to go into this matter and to advise me. I hope to be in a position to announce the membership and terms of reference of the committee shortly.

I do not want to leave the financial part of the Bill without referring to central controls over local authorities.

Mr. John Diamond (Gloucester)

Before the Minister leaves, the question of rates, has he worked out the addition to overheads on the re-rating of industry which he has mentioned? What proportion of manufacturing costs over the country does it amount to? It is important from the point of view of exports.

Mr. Brooke

I have worked out all these things. I would remind the hon. Gentleman that one must think not only of the prosperous industries, but also of the struggling industries. One must also bear in mind that within an industry there may be individual firms doing well and individual firms which are finding it hard to keep going.

As I have said, I do not want to leave the financial part of the Bill without referring to the central controls over local government. It is implicit in the whole approach to the proposals in the Bill that we should relax any unnecessary controls exercised by central Government over local government. We recognise that there are such controls, some on quite minor matters, but which are none the less irritating. In the sphere of local government we have, therefore, agreed to review central controls as such. We have started discussions with the local authorities. We are making progress and, in the end, we hope to be able to make some useful changes. Some of them may call for legislation. Other controls are exercised administratively or through regulations, and in those cases it will be our aim to make any changes without delay.

Of the reorganisation proposals in Part II of the Bill, the most far-reaching are Clauses 19 and 20 and Clauses 25 and 26, dealing with the so-called "special review" areas, otherwise known as the "conurbations". So far as I can judge, these proposals for the conurbations have been widely welcomed. For these five areas the Commission will be at liberty to suggest changes affecting counties, county boroughs, districts, joint boards and functions of all kinds. There is the possibility of a complete redrawing of the whole local government picture in one of these special review areas. I am sure that it is right that this should be so if local circumstances warrant it.

Mr. Percy Collick (Birkenhead)

The Minister has said that in one of those areas there is the possibility of the whole picture being redrawn. Which area?

Mr. Brooke

I said that the Commission will examine the five areas described in one of the Schedules to the Bill. There will be power for this House, by Order, to add further areas later. Once again, what I was seeking to do was to explain that when the Commission was examining any one of these five areas it would be at liberty to make the most far-reaching recommendations, to recommend no change at all, or virtually anything in between. It is right that if one proposes to make this sort of special review of the mixed-up pattern of local government in a built-up area, one should give the examining Commission as wide a range of power to make recommendations as seems reasonably possible.

Mr. J. T. Price (Westhoughton)

The Minister has just said, if I understood him aright, that these proposals have met with general acceptance. According to information that I received today from the Lancashire County Council—which is one of the largest and most important county authorities in the country—general acceptance has not been given in the manner the Minister is suggesting. Here, in a memorandum, the Council says—[HON. MEMBERS: "Speech"] I am entirely in your hands, Mr. Speaker, but this is a point of substance. After all, we are listening most courteously and attentively to what the Minister is saying. He said that the proposals have met with general acceptance. The memorandum issued by the Lancashire County Council, which covers my constituency among others, says that that is not the case.

Mr. Speaker

Order. The hon. Member may at a later stage tell us what is in the memorandum. In the course of an intervention it is sufficient for him to indicate that he does not agree with what the Minister has said.

Mr. Brooke

I do not think that this is a part of my speech on which we need get combative. All I was seeking to establish was that there had been a wide measure of agreement that that those five areas should each be looked at. I was not suggesting that this part of the Bill necessarily received the unanimous approval of everybody, still less that everybody agreed upon what exactly the boundary of the area should be. I know from contact with local authorities in different parts that I am entitled to say that there has been general agreement that it is desirable to undertake a general review of built-up areas like this.

I wanted to make a further point to illustrate the possible range of recommendations that one might get from the Commission. One possibility is that need will be found for a new kind of local government pattern which might contain no county boroughs at all, but a new county and a set of county districts with a special distribution of functions worked out in the light of the particular needs and circumstances of the area. Clause 20 is wide enough to make provision for that. I am not saying that that will be the actual outcome anywhere, but the Commission will be free to recommend anything from a solution like that at one extreme to no change at all at the other.

Mr. Collick

Can the right hon. Gentleman tell us a little more about this? It is tremendously important to the five areas. I happen to represent part of one of them, and we are very interested in the matter. When the right hon. Gentleman makes such a suggestion as he has done, I think he ought to amplify it.

Mr. Brooke

What I am doing is simply repeating within the bounds of a Second Reading speech on a long Bill what has been before Parliament for more than a year. This plan was set out in the first White Paper presented by my predecessor in July, 1956, and it was included in the general debate that we had at the end of July, and, so far as I am aware, it has never been radically challenged up to this point.

I was going on to explain that the Commission will not have power to settle anything itself. What we are seeking to do is to have a review and an analysis made, and the recommendations of the Commission will then go forward to the Government, and it will be for the Government to decide, in the light of that, what proposals to present to Parliament.

There is a wonderful opportunity here, and I want to secure it, for trying to work out really practical local government arrangements which are suited to the individual special needs of each of these great areas. But it will not be the Commission which will decide. The Commission will only recommend. The Minister will then consider the situation, and Parliament will decide. As I said, there are provisions for adding to these special review areas or varying their boundaries. That is a simple, common-sense precaution, because we cannot know the exact answers to these questions before the reviews have started, and it would be wrong to make no provision in the Bill for any flexibility at all.

The problems of Greater London, as the House knows, are being looked at by a Royal Commission, and, in effect, the operation of Part II and Part III of the Bill is suspended in that Royal Commission area, but there is provision in the Bill for applying those parts subsequently so far as is appropriate within the Greater London area if need be, for example if the Royal Commission recommends, and the Government decide, in the end, in favour of no fundamental departure from the present set-up. Clause 18 provides for every conceivable change in the pattern of counties and of county boroughs that may be needed outside these special review areas.

Clause 33 says that for promotion to county borough status it will be a presumption that a population of 100,000 is adequate to support the discharge of county borough functions. It may be that a non-county borough already has a population of that order within its boundaries; or it may expect to have it soon by natural growth of numbers; or the Commission may be considering an area rather bigger than the existing borough has. In any such case the figure of 100,000 is to be neither an indispensable minimum nor an automatic qualification for the higher status. There are other factors which will have to be considered as well, and the effect on the county is perhaps the most obvious of these.

By Clause 34, this figure of 100,000 is proposed to be substituted for 75,000 as the population needed before a Private Bill seeking county borough status can be promoted. This follows logically from the provision in Clause 33. Indeed, Parliament actually considered it right to make this change as far back as 1945, and the figure reverted to 75,000 in 1949 only as a kind of by-product of the dissolution in that year of the Local Government Boundaries Commission. In any event, Clause 34 will prohibit these promotion and extension Bills for a period of fifteen years.

I hope that the House will agree that when the comprehensive and far-reaching reviews and alterations authorised in the Bill have been carried out, there ought to be for some years a kind of standstill and a breathing space during which the making of further changes should be undertaken only on the Government's responsibility. That is the explanation for the 15-year period.

Clauses 28 to 32 deal with the county reviews to be carried out by county councils. They will enable county reviews, for the first time, to be comprehensive in relation to all kinds of county districts; that is to say, to non-county boroughs, urban districts and rural districts. Here again, all the county council can do is to recommend. The decision will lie with the Minister and with Parliament. I have given assurances in public, and I repeat them here in Parliament, that there will be no prescribing of a rigid minimum population for county districts. If any figure of that kind is given to the county councils, it will be as guidance to them only.

I think that everybody agrees that some small boroughs and some small districts cannot survive just as they are, with powers and boundaries unaltered, for they really are too weak, and, in particular, they may not be able to attract and pay good enough staff. The Bill must provide for cases like this arising, but there is nothing in the Bill that prejudges which they will be. It may be right to enlarge a small borough, it may be right to join it with a neighbouring urban district, in which case the whole of the new area will be a borough, but there may be cases where no alternative can be seen but for the small borough to go in with an adjoining rural district.

This will mean a transfer of responsibilities for county district services from the borough to the rural district, but where this has to happen the borough will remain a borough and it will be called a borough and it will retain its mayor, its mace, its charter and its property. The only changes will be that it will lose some of its powers, unless they are delegated back to it by the rural district; and it will have no aldermen.

The detailed proposals are in the Seventh Schedule to the Bill. I have given a great deal of thought to them. If they can be further improved, no one will be happier than I shall be.

Mr. G. A. Pargiter (Southall)

Will the mayor still be entitled to remuneration, and, if so, from what source will it come?

Mr. Brooke

If the hon. Member will look at paragraph 5 (5) of the Seventh Schedule, he will find that it is called not remuneration, but an allowance.

I would just revert to the safeguards in the Bill in respect of the reviews by the Commissions and the county councils. In every case the Bill insists that there must be local consultations and conferences. The proposals eventually put to the Minister must be circulated and advertised. Then, if there are objections, there will normally have to be a local public inquiry, and any Order by the Minister following from that will have to be submitted to Parliament for affirmative or negative Resolution procedure according to the nature of the alterations it seeks to make. Each county review will be dealt with in a separate Order. Those are more extensive safeguards than under the 1933 Act, or under the Local Government (Boundary Commission) Act, 1945.

I want to set at rest any fears that changes might be rushed through without proper opportunity for all concerned to get their views heard and fully considered at every stage, right up to Parliament if need be. That is my answer if anyone alleges that county reviews should be done by the Local Government Commission and not by the county councils. It cannot be denied that county councils have a longer and more intimate knowledge of their counties and local government problems than a Commission from outside could ever get, but each district council is entitled to be protected against any possibility of prejudice, and that is why we want these safeguards to be thorough and elaborate.

Mr. Collick

In the light of that, can the Minister make any guess about how many years it will be before the Bill becomes fully operative?

Mr. Brooke

I view this as a continuing process. I do not see how Parliament could tackle simultaneous Orders covering the whole of the country. As I view it, as they get going both Commissions will be sending forward recommendations, one by one or in groups, to the Minister, and the Minister, after inquiries have been held, will be sending them to Parliament. Over a period of two or three years, from the time when the first recommendations come in, there may be a flow of these Orders and I feel sure that from a parliamentary point of view that will be a most workmanlike arrangement.

Mr. Roderic Bowen (Cardigan)

Will the Franks Committee's recommendations about local inquiries be observed, particularly those recommendations referring to officers of the right hon. Gentleman's Department giving evidence when objections are being considered and to the publication of the inspector's report?

Mr. Brooke

I can assure the House that the reports of the Commission will be published and that the reports of the proposals from the county councils for county reviews will be published. I should like to give a little more thought to publication of local inquiries. Of course, the issue there will not be the sort of issue with which the Franks Committee was dealing, where there is conflict between the individual and the State. In these cases, there would be a difference of opinion between individual local authorities. This is not something to which we shall come immediately and I should like to consider what is the most practical way of arranging things.

Mr. Bernard Taylor (Mansfield)

The right hon. Gentleman has made some observations about the standstill period respecting the recommendations of the Commission, but will he say something about the standstill period respecting the review by the county councils of the county districts?

Mr. W. E. Wheeldon (Birmingham, Small Heath)

The right hon. Gentleman has given the impression that there is to be consultation between the Commission and the local authorities. Will he confirm that there will be no consultation between the Commission and the local authorities in the special review areas?

Mr. Brooke

The Commission must consult the local authorities concerned and the county council must consult local authorities in areas where a county review takes place.

I have to trouble the House with rather a long speech. Some of these questions might be more fruitfully considered later. What I am seeking to do is to show that all these proceedings are planned to be as open as possible. One hon. Member asked me whether the process of county reviews would go on for ever and another hon. Member has asked me what will happen after the county reviews are completed. If hon. Members will allow me to continue, they will find that my hon. Friend the Parliamentary Secretary will be able to deal with all their questions at the end of the debate.

Part III of the Bill, which deals with local authority functions, departs some way from the White Paper in that it deals with only the most important of the local government services for which the White Paper suggested changes. This is not because the Government feel that the functions which have been dropped from their present proposals have no need of attention. There are certainly anomalies and difficulties in the present distribution between counties and districts and the aim must be, at the next convenient opportunity, to put that matter right. However, I cannot pretend that the present position with regard to these function is of such great moment as to justify at this stage thrusting upon a wide range of local authorities a whole set of detailed changes about which we find local authorities themselves far from certain or content.

What has particularly weighed with the Government is that we are only at the beginning of possibly big changes in areas, changes which may produce a new set of circumstances and a new pattern. It seems better not to have two upheavals, but to see the new pattern first. The value of the proposals in the Bill is not at all impaired by deferring any changes in those other and lesser functions. They are being deferred, I emphasise, and they are not being rejected or forgotten.

One outstandingly important issue in the redistribution of county and district functions is the sharing of responsibility for the health, welfare and education services. The Bill deals with each of those three services. The method is to be by delegation. The Government have not been convinced that it would be wise, in this present Measure, to provide for outright conferment of responsibilities at the definite risk of splintering the administration of these three great services.

We think that 60,000 is the population figure at which it should be possible for an urban authority to secure delegation by those services as of right. In the view of the Government, there has been no decisive argument for altering that figure. Where special circumstances are established, the delegated powers may be granted to an area with a population of somewhat fewer than 60,000. The decision not to proceed with the reallocation of all the other functions has led the Government, at this stage at any rate, not to propose any change in the direction of abolishing divisional executives.

A far-reaching Bill of this character must inevitably contain a great deal of detail and from among all the detail I have tried to help the House by picking out the leading features of the Bill. The basic aims are effective and convenient local government and responsible local government. Those are the true tests. There is no truth whatever in allegations, quite without any supporting facts, that the Bill is aimed at cutting down what should properly be spent on local government services, or at shifting burdens arbitrarily on to the ratepayer.

What is true about the Bill is that it is designed to enable considerable and maybe drastic changes to be made where they are necessary for the job and functions of local authorities and local government areas. These changes will be made only where they are proved to be necessary and only after thoroughgoing examination and discussion. But changes there must be.

It is not possible to go on just as we are. These changes are the price which will have to be paid and which will be worth paying to help make local government vigorous, popular, and effective. We want to give members and staffs of local authorities a worthwhile job, not as puppets of Parliament, but as partners. It is quality that counts, but we cannot expect quality within a framework which inhibits freedom and that is why I commend this Bill, to get the framework right.

Mr. Pargiter

The right hon. Gentleman referred to the question of the exclusion of the Metropolitan area from Part III. He said that this could be brought in by an Order. I assume that he meant, but I should like it confirmed, that there is no question of any Order of this kind being made until after the Commission has reported.

Mr. Brooke

That is so. There will be no question of that sort. It seemed to the Government that nobody could foresee what form the Commission's Report would take, and it may be that for some, at any rate, of the important areas, the Commission would recommend no change and that the Government would decide on no change. In that case, it would be clearly desirable to allow the other machinery, with the safeguards in the Bill, to begin to operate.

Mr. Pargiter

It must be a subsequent operation?

Mr. Brooke

Yes, certainly.

4.31 p.m.

Mr. A. G. Bottomley (Rochester and Chatham)

I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof: this House declines to give a Second Reading to a Bill which fails to meet the increasing financial difficulties of local authorities, does not fully rerate industry or give local authorities the full benefit of partial rerating and which, by the substitution of a general grant for existing grants, hampers the development of essential social services, particularly those of education and health. The Minister has moved the Second Reading of the Bill with competence and efficiency and as clearly as possible. He said that for the last forty years what had been wanted was a comprehensive Measure to deal with local government. He said, "This is it." I was reminded of the occasion, a few weeks ago, when the hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir) was moving the reply to the Address of thanks for the Gracious Speech. One of my hon. Friends then said to me, "She has got 'it'." I think that hon. Ladies on this side have also got "it", but, clearly, local government knows, for what it is worth, directly from the lips of the Minister, that it has got it.

The Minister and myself have both had a similar upbringing in that we spent most of our early public life in the service of a local authority. I was a member of the Walthamstow Borough Council, a place where, for over thirty years, since 1921, Labour has been in power and a town where William Morris was born. Those two things will commend themselves to my hon. Friends on this side of the House. I was also Deputy Regional Commissioner for South-East England, co-ordinating the work of 16 Government Departments and having a close association with the local authorities in that area.

My own vocation before entering Parliament was that of a trade union officer for the National Union of Public Employees. Having said that I have much in common with the Minister, I also had one other thing in common, and that is, we both worked at a Ministry which was concerned with economics. I am bound to say, as a result of the Minister's speech and his preliminary action, that I think he still feels that he is in the service of the Treasury. His main theme seems to be to economise. I hope to show in my speech that I differ from him and place as the first necessity the well-being of local government.

Local government is important, because it is the positive means of enabling the citizen to participate in the government of the country. Those who, like myself, serve it, get the opportunity to use their political wisdom and experience in wider fields. I mentioned the council of which I was a member for many years. That council provided five hon. Members of this House, the late Lord McEntee, who was revered and respected by all, and, at present in the House, the hon. Member for Leyton (Mr. Sorensen), the hon. Member for Leeds, West (Mr. C. Pannell), the hon. Member for Waltham-stow, West (Mr. Redhead) and myself, who all served together on that local authority.

As I am no longer a member of that council, I think that I can pay a tribute to those councillors who render such valuable service with zeal and enthusiasm and completely voluntarily. Indeed, I would say—and I am sure that there would be no disagreement—that local government is the lifeblood of our democratic way of life. Whatever we may feel as elected representatives, the concern of all of us must surely be for the welfare of the citizens. That is not shown in this Bill.

I suppose that it is natural for any community to desire to manage its own affairs, and for that reason we want smaller units so far as possible. But we all know that, with life as it is today, some functions require wider areas for providing efficient services, such as the police, fire service, town planning, water, land drainage and trunk roads. We have all to recognise that local government is very strongly entrenched and that whenever we may want to interfere there will be opposition. Therefore, I think that we have to combine traditions with the need for efficiency. That is the justification for the Bill now before the House.

I would suggest that the Government's proposals do little to reorganise on a sensible basis the functions of the local authorities. Indeed, the main purpose of the Bill, as I see it and my hon. Friends see it, is one whereby economy will be effected in providing local government services. Part I of the Bill substitutes over a large area of local government action a block grant for a percentage grant. There is no assurance that annually the grant will be adequate or that it will necessarily reflect changes in rising costs. It is quite possible that the grant will be eroded away by inflation. There seems to be no provision to meet what with rising costs is inevitable—increases in salaries and wages.

We must remember that the Bill is being introduced after a period of economy by local authorities, imposed upon them by the Government, and that there will therefore be little opportunity of developing new and possibly better services. We know that the educational organisations in particular have made known their fears. There will be economies at the expense of school building. The Bill will, as a result of the block grant, retard development in education and it will certainly mean the retention of large classes. I do not, however, want to go into the question of education. My hon. Friend the Member for Fulham (Mr. M. Stewart) will deal with that more extensively. We tend to forget, however, that it is not education alone that will suffer. Other local government services will suffer, too—health, the fire service and town planning.

I recall the debates in this House during the passing of the 1957 Subsidence Act when my hon. Friends, quite rightly, said that the Government were putting a further burden on the local authorities, and the reply was that the town planning grant would assist. But these grants are now being done away with. The block grant will redound on school patrol crossings, because I know that some local authorities are forced to provide this service because of the percentage grant. Road safety and the whole sphere of physical training and recreation will suffer as the result of these new general grants and so will the children who are cared for under the Children Act, 1948. Old people's homes will suffer, too. These matters will be developed by my hon. Friends.

The Minister really must face the fact that what he is presenting to local authorities is freedom to do less and spend less, freedom to decide the choice between essential services without the resources to provide all those which are absolutely necessary, and freedom to find more money out of the rates for these essential services. Above all, it provides the opportunity for the Government themselves to evade their responsibilities. The general grants provide an opportunity for the Government to escape their responsibilities for making cuts in the education and health services.

There is no doubt that the block grant will have a cramping effect upon progressive authorities, and that the less progressive ones, although taking the money from the Treasury, will not improve their services; they will reduce their rates. To that extent the welfare of their citizens will suffer. The Minister says that the failure to maintain reasonable standards will be met by drastic action. I wonder what sort of action. As we know by past experience, this is only shop window dressing. Hon. Members on this side of the House are deeply apprehensive of the effect of the change in the grant system upon standards of education and health. Both those services are essentially national in character, although administered locally, and we will reserve the right to revise the grant system as and when an opportunity presents itself.

Part 1 also deals with the rating of industry. The Government propose to change from 25 per cent. to 50 per cent. Hon, Members on this side of the House see no reason why it should not be 100 per cent. It is true that if 100 per cent. rating were imposed, industry would have an opportunity of getting tax reliefs. Perhaps that fact was uppermost in the mind of the Minister when he refused to allow the full 100 per cent. The profits of industry for the first quarter of this year have risen by 4 per cent., according to the Economist statistical table. Certainly, judging by the amount of advertising that has gone on—it is more extensive than ever before—directors' fees appear to be going up.

I see no reason why industry should not accept its proper share of the rate burden. Even when the rerating is done, the Exchequer will keep £20 million of the £30 million that it will bring in. It is not as though the full effect of rerating will be met by the Government in its obligations to local authorities. Perhaps I may call the Minister's attention to the fact that by the Rating and Valuation Act, 1957, there was a derating of 20 per cent. in regard to shops and commercial premises. Will there be compensation for these losses of rateable income, resulting from Government action? We ought to be told something about this matter. In any case, in all justice, I see no reason why industry should be relieved of its proper rate burden.

Under Part II there is to be a review of local government areas in England and Wales, undertaken by two Commissions, and we are to have a Royal Commission for Greater London. The English and Welsh Commissions have power to propose changes in the area of a county or county borough; the creation or abolition of a county or county borough, and the conversion of a county borough into a non-county borough. I want to show the difficulty presented in the case of the constituency which I represent. Anyone who knows anything at all about local government will agree that Rochester and Chatham, together with the adjoining constituency of Gillingham, make up a county borough area. How can it be established? Not one of the three councils has a population large enough to enable it to become a county borough by itself. There is therefore no opportunity to expand. Will there be an opportunity for these towns to claim county borough status and powers? At present it does not seem possible, but this would appear to be a Committee point, and we may be able to deal with it in Committee.

After the Commissions have made their reviews the responsibility for reorganisation will be placed upon the county councils. The Minister knows local government exceedingly well, and understands as well as I do the difficulties that exist in a county, with its vested interests and political rivalries. I am not talking in the party sense, but the hon. Member for Maidstone (Sir A. Bossom) will know that at present, in the county of Kent, for example, the Kent County Council Conservative and Labour groups will probably be hostile to the Conservative and Labour groups of some of the county district areas when they try to obtain a greater amount of freedom to develop their services. It is necessary to consider this matter very carefully. As yet we have not had an adequate reply on the subject of whether it is right for the counties to undertake the review of county districts.

The English Commission will deal with the special review areas of Tyneside, West Yorkshire, South-East Lancashire, Merseyside and the West Midlands, and there is power to create others. But the boundaries of the special review areas seem to many of my hon. Friends to be drawn too tightly around built-up areas. Will there be an opportunity to extend these areas to cover some of the green belt around the conurbations? Whatever reorganisation is done by the Commissions, it is inevitable that there will be some redundancy. The Minister has an obligation to tell us what will happen in the case of redundant officers and staff. It is not yet clear whether there is satisfactory provision for the future welfare of these people, and a Bill of this kind should be concerned with such a matter.

I have mentioned the Greater London area and the setting up of a Royal Commission to deal with it, as did the right hon. Gentleman. The Minister referred to the White Paper of July, 1956. He will recall that in that case London was specifically excluded. There is now a rumour—I put it no higher than that—that a good deal of political pressure was put upon the right hon. Gentleman to bring this district in because his party does not like the London County Council for ever being Labour-controlled.

We must be given an explanation of this matter. We are entitled to ask the Minister why there has been a change from the position mentioned in the White Paper of July, 1956. Nobody will deny that there is need for a Royal Commission. The present structure of London local government has remained unchanged, notwithstanding the vast changes that have occurred in population, industry, commerce, transport and social services over the whole of this century. I am told that in thinking about London reorganisation the Minister consulted 109 local authorities. Some of those have told me that consultations with the Minister were a waste of time. Many of the propositions which they made have not been considered, so far as they can see.

In one case it was proposed that the Metropolitan Police ought to be included in the investigation. In 1956–57 ratepayers of London paid over £12 million towards the cost of the Metropolitan Police. There is an old maxim, "No taxation without representation." The Minister should consider whether the Metropolitan Police should be included in the inquiry. At one time the Metropolitan Water Board and other water undertakings in the area were included in the inquiry. Why are they not included now? Perhaps the Minister can tell us why they have been taken out.

The procedure that will be followed in the case of the English and Welsh Commissions is that a recommendation will be presented to Parliament by way of an Order. This is a piecemeal way of recasting local Government. I suppose that in the future, if we want to find out anything about the establishment of a local authority we shall have to hunt through a number of Ministerial Orders. This will lead to confusion. We have only to recall the workings of the Boundary Commission. As a result of what happened in that instance decisions were taken outside the House. More often than not there was little opportunity to change those decisions, and many hon. Members made the accusation that Parliament was indeed becoming a rubber stamp. In this sense the Minister has an obligation to give us more information about the placing of these Orders in relation to changing boundaries and recasting local government.

Part III seems to delegate to the larger district councils certain health, welfare and education functions now undertaken by county councils. In the White Paper other services were originally to be delegated. Why are these now out? I think the House is entitled to an explanation. Also, initially it was suggested that there should be direct conferment of these services to district councils, but that now is out and there is to be delegation. If the Minister were to give all the power he can under Part III, I am told that would affect only 16 local authorities.

With most of my hon. Friends and hon. Members opposite who at one time or another have had experience of serving in local government, I think I can say that the last war was a testing time for local government. Then local government dealt with bombing and evacuation and successfully performed its duties during the period of the greatest upheaval in our country. It was in the front line. I am reminded of a book by Winifred Holtby, "South Riding". This quotation came to my mind: But when I came to consider local government I began to see how it was in essence the first line defence thrown up by the community against our common enemies, poverty, sickness, ignorance, mental derangement and social maladjustment. We have had some high-sounding words from the Minister, but I believe that by the policy he is following he is weakening the defences of local government services—weakening them by a heavier rate burden than they can afford to carry.

I challenge him to say with authority that he is easing the position of control of local authorities by Whitehall. I say that the Minister and the Government are indirectly damaging still further the Welfare State created by the Labour Government.

4.54 p.m.

Sir Robert Grimston (Westbury)

The Amendment moved by the Opposition contains the phrase: …the substitution of a general grant for existing grants, hampers the development of essential social services, particularly those of education and health. It seems to me that the idea underlying the Amendment and the opposition which has developed in certain quarters to this Bill is a mistrust of local government. In effect that opposition is saying that local government is not fit to be entrusted with these matters, particularly education, except under the tightest control of Whitehall; in other words, that it is not capable of functioning in this or any other activity except as a sort of glorified regional office of some Ministry. That is merely another way of saying that the man in Whitehall knows best.

If that view is to prevail, it is being said that the status of what we often call in this House and outside the nursery of democracy in the free world, is to be lowered and not to be strengthened. I feel that in the context of the clash of ideas between the free world and authoritarian States which we see today that is a very sad attitude of mind to adopt.

I understand the fears of educationists and others, which are grounded on nothing but a distrust of local government, but I believe the issue whether local government can be trusted strikes at the very root of the cleavage in the world today. That is a considerable issue, but it is fundamental. I do not think the issue posed in the Bill can be judged on narrow grounds without taking into account the broad background of the state of the world today. That is one of the reasons why I come down on the side of the Minister and the Bill in adopting the system of general grant as against the specified grants.

Those are my personal views and before I go further I want to declare what I suppose is some sort of interest. For some years I have been honoured by being asked to be President of the Urban District Councils Association. Because I think it is useful, I want to put on record in this House some of the views of the Association on this Measure. I cannot give them all because, naturally, with its interests and the size of this Measure, there are many points it would like to see raised. Many are purely Committee points and not even suitable for discussion on Second Reading, but I want to mention one or two. First, I would remind the House that the Association represents a not inconsiderable part of local government, not the big units I admit, but the smaller ones which I claim—I think with some justification—are often closer to the people they serve than the larger ones.

Last Thursday a special meeting of the Urban District Councils Association was held when there was under discussion what was to be the attitude of the Association to this Bill, which had been published shortly before. Perhaps I can best brine this out by one or two quotations from the report of the executive of the Urban District Councils Association, which was placed before that meeting. On the general approach to the Bill, the executive council said this: The primary question immediately arises as to whether the Association should seek to oppose the Bill as a whole because it fails to deal comprehensively with functions. Perhaps I should here say it has always been the view of the Association that functions should be dealt with before a comprehensive Bill was introduced and it has put forward that view. I now go on with the quotation: The Executive Council believe that, on balance, it is better not to oppose the Bill as a whole and seek improvements in it. That view was endorsed by a large majority at the meeting. I do not pretend that it was unanimous, but it was a large majority. Now I come to the very controversial question of the general grant. On that the executive council said: In principle, the Executive Council consider it a step in the right direction to give county and county borough councils, General Grant, instead of a series of percentage grants, to spend and allocate at their discretion and believe that in the long run such a change will be to the good of local government. That also was put to the meeting and was passed by a small majority, the proportion being something like six to five. An amendment was then put to refer back the recommendations on general grant, but that was heavily defeated and, therefore, the recommendation of the executive council stood. I thought that it would, perhaps, be a good thing to place this record before the House.

It will be seen that, on the general approach to the Bill, and on the controversial issue, there is in the Association a balance of opinion in favour of the Bill.

Mr. David Jones (The Hartlepools)

For the sake of the record, would the hon. Gentleman allow me to ask whether he agrees that the vast majority of district councils are not education authorities and, therefore, are not affected by general grants?

Sir R. Grimston

I entirely agree with the hon. Gentleman, but, of course, the Amendment moved by the Opposition condemns the whole of the general grant, so that from that point of view it is just as telling.

There are, however, a number of matters on which amendment will be sought in the Committee stage, and without going into too much detail I propose to refer to some of them. The Urban District Councils Association is very uneasy concerning the intention of my right hon. Friend to give guidance to county councils concerning minimum populations in connection with the county reviews under Clause 28. I quite realise what my right hon. Friend said about this matter in his speech today, but it is felt, despite what he said, that the test whether an existing authority is to be done away with or merged should always be whether such an authority is doing its job efficiently and whether there would be such improvements by any proposed change as would justify that change being made.

My right hon. Friend will recollect that in paragraph 15 of the Appendix to the first White Paper there are set out the nine factors to be taken into account in a review of county districts. They are as follows: Community of interest; development, or anticipated development; economic and industrial characteristics; financial resources measured in relation to financial need…; physical features including…means of communication; population—size, distribution and characteristics; record of administration by the local authorities concerned; size and shape of the areas; wishes of the inhabitants. The Urban District Councils Association feels very strongly that if the Minister gives guidance upon the point of minimum population, whatever figure he gives and whatever he says surrounding it, it will tend to become rigid, and that proposals will tend to be worked out to fit the figure instead of being considered entirely on their merits.

There is a further point. My right hon. Friend has to perform semi-judicial functions under the Bill, and it would seem that the issuing of such guidance by him would rather tend to disqualify him from carrying them out. I would say to him that whilst nobody would wish to retain unaltered a small county district which quite obviously has not the financial resources to maintain an adequate staff, on the other hand there are many small and efficient local authorities which might conceivably be forced out of existence quite unnecessarily if a population figure is to become the dominant criterion as a result of the Minister giving guidance in this regard. For all these reasons—

Mr. H. Brooke

I have been listening to my hon. Friend very carefully. He used the phrase "dominant criterion." I have never given any indication, either in public or in the House, that population should be a dominant criterion. All the other factors must be taken into consideration. But one anxiety is to make sure that these county councils carry out their reviews on a more or less uniform basis so that we shall not have to go over the whole work again. That is what is in my mind in suggesting that there would be value in mentioning the general minimum population figure, though not in any way as a rigid figure.

Sir R. Grimston

I am obliged to my right hon. Friend. I am rather glad that he intervened, because what I want to put to him is that there is a very genuine fear that if he mentions a figure, or gives guidance on a figure at all, willy-nilly—although he does not desire it—it will tend to become a dominant consideration. That is the fear which underlies the reasons which I now put to him to reconsider whether he really things that he must give a figure at all in order to get the result he wants. I ask my right hon. Friend to do that because there is real anxiety on the point.

I now turn to another point, the maintenance of district unclassified roads and the double burden which falls on borough and urban district councils in this regard. They have to maintain their own unclassified roads, and by virtue of the county precept they have to contribute to the maintenance of unclassified roads in the rural districts.

It has been computed that in 1956–57, when the capitation grant was operating, the average difference for the country between urban districts and rural districts was 1s. on the rates. Under the proposals of the Bill, with the rate-deficiency grant, it is computed that the difference will go up by over 100 per cent. to 2s. 1d. I would merely say to my right hon. Friend tha there is here a problem which needs looking at.

Under paragraph I of Part I of the First Schedule planning grants will be absorbed into the general grants. As the House knows, some of the costs arising under planning are of uneven incidence as between one local authority and another, and also uneven in incidence as between one year and another in relation to the same authority. For these reasons, and without impinging upon the general principle of the desirability of general grants for other reasons which I have stated, I think there is a case for the matter being looked at again.

I should like to give the House an instance of what I have in mind. Some county districts it does not affect my own part of the world—are very much affected by subsidence. As the House knows, we have recently legislated on the subject. I understand that what may happen is something like this. It may be that the National Coal Board is refused permission to extract coal because there may be a risk of subsidence causing damage to an important building or an ancient monument, or, on the other hand, damage to a sewer or reservoir which might put a whole local community out of commission. Under those circumstances the National Coal Board would have a claim for compensation against the local authority. Obviously, this might entail very large amounts for a very small authority.

Under the Bill the local authority would not even get the 50 per cent. grant under planning which in itself, as a matter of fact, might be quite inadequate in circumstances of that sort. Here I again suggest to my right hon. Friend that there is a problem which in the later stages of the Bill will require attention. There are other points which should he looked at during the Committee stage, but there are many hon. Members who wish to speak in the debate and, therefore, I will not detain the House further at this juncture.

In conclusion, I wish to say again that I believe that, broadly, the Bill will give fresh strength and inspiration to local government. If we believe that local government is an essential part of the pattern of our democracy, we should, I think, seek a reorganisation which makes it virile and makes service in it worth while to the type of individual whom we wish to attract. I believe that the Bill seeks to do just that, and for that reason I hope that the Amendment will be rejected and that the Bill will be given a Second Reading.

5.10 p.m.

Mr. Denis Howell (Birmingham, All Saints)

I am glad to have an opportunity to speak in the debate. I do not want to follow the line that has been taken by the hon. Member for Westbury (Sir R. Grimston), who seemed to be presenting a brief on behalf of the Urban District Councils' Association. Satisfactory as that may be, the hon. Gentleman did not discuss most of the important principles of the Bill, which I think the House will want to consider.

The Minister's speech was, for a Bill of this magnitude involving wholesale changes in the lives of the people of this country, very weak, notably because he did not go into the detailed effect of the Bill. It was very significant that when my hon. Friend the Member for Gloucester (Mr. Diamond) intervened to ask the right hon. Gentleman about the new rate burden on industry in relation to the cost of industrial products, the Minister was obviously floundering and was unable to give us any guidance at all. On a Measure of this kind, that was unworthy of the right hon. Gentleman.

I shall concentrate my remarks upon the financial provisions of the Bill, but I would say, first, that there is much room for argument on Part II of the Bill. The proposals put forward are very nebulous, but it may be that only nebulous proposals could have got so wide an area of agreement from every conceivable kind of local authority association. That was inescapable.

We are especially concerned about the dangers in respect of the proposed conurbations. I share the view that the proposed West Midlands area, which affects my constituency in Birmingham, is much too narrowly drawn. It consists almost entirely of built-up areas, where local authorities have overspill problems but have no land in which to settle the surplus population. Apparently, the surrounding authorities which have land are largely excluded from this conurbation. I ask the Parliamentary Secretary to tell us whether it will be possible, when the Local Government Commission reviews this conurbation, to widen the area on a more sensible basis than is at present proposed.

On the financial provisions, the Government's case is that their proposals will give local authorities much more autonomy and flexibility than before. That is the argument that I want to examine. Having looked at it in detail before today, I have reached the fair conclusion that the proposals in the Bill are a complete fraud and confidence trick that the Government are now perpetrating upon the country, the bill for which will be paid by the ratepayers for years to come. Until we have the detailed evidence which we did not have in the Minister's speech today, we shall be entitled to say that the Government wish to put the finance of an expanding education service and other essential local authority services upon the ratepayers and to take it off the taxpayers.

That is iniquitous. Whatever might be said for the taxpayer and his burden, obtaining taxes from the people on the basis of earnings is a much more equitable way of financing essential services than obtaining it by way of local rates. What are the services that we are to discuss and which will be covered by the new grants? They are education, health, fire service, children's department, town and country planning, road safety, road patrol, the school crossing patrol, electoral registration and National Assistance. I wish to look at each of these services and at the various regulations laid down by Ministers and Acts of Parliament.

It has occurred to me, and no doubt to other hon. Members, that the amount of autonomy which local authorities can have is the difference between the minimum standard which the Government will accept and the actual standard which local authorities are now observing. That difference is so negligible as to make complete nonsense of the Government's argument about more autonomy and flexibility.

Two services are not to be involved in the proposed changes. They are police and Civil Defence. There is no nonsense here about the local authority having more autonomy by being able to decide what can be done with the local police force. As one who served for many years on the Birmingham Watch Committee, I am glad that the arguments which are applied to services like education and health are not applied to the police. The Government cannot allow a local authority to decide to reduce the size of the police force, or to sack one or two of its assistant-chief constables. Of course not. [An HON. MEMBER: "What about Brighton?"] I did not want to mention Brighton, because I might be out of order. What the Government are doing in the Bill reminds me of Brighton.

Why have the Government excluded Civil Defence from the Bill? They know perfectly well that their proposals will make local authorities look at their expenditure, and that the one service which the authorities will be tempted to cut is Civil Defence. If a local authority has to decide between reducing some of its essential services and carrying out a crazy measure of Civil Defence which everybody knows will be useless in the next war, there will be a great temptation to cut Civil Defence. The Government know that, and that is the reason why Civil Defence is excluded.

Now I want to look in detail at what we are being told about the greater extent of local autonomy and flexibility. First, election expenses. I do not know how much will be left to local authorities to bear election expenses. Canvassing will have to be carried out and there must be office accommodation and publicity, such as posters, to tell the people whether they are on the electoral roll or not. We shall get a 50 per cent. grant for this. The cost of printing the lists of electors is decided by the Stationery Office, I was informed upon inquiry, so there is no vestige of local autonomy in regard to printing.

In Birmingham, the total cost of running the electoral registration office is £30,000 a year, of which the ratepayers will pay £15,000. This is not a sum which is reducible, because the service is prescribed by the Government; even if it were, the effect would be so microscopic as to be negligible, even to those Conservatives in the city who still believe that the Bill will give us some extra freedom.

I bring forward the comparison with Birmingham in relation to all the services involved because Birmingham is the largest county borough and I have the honour to represent part of it. The cost of the services in the city should be a clear indication of the cost in the rest of the country.

I come to road safety, the school crossing patrol and the motor patrol. We spend just over £3,300 per year on accident prevention. What scope is there to save money in that direction? Very little indeed. Even if we can save, what effect will it have on the total expenditure? We spend about £1,500 a year on school crossing patrols and there are 300 of them. We have to pay the wages and buy equipment—mackintoshes, Wellington boots, signs, and all the rest of it—for school crossing patrols and we are being urged every week by parents to provide more. The fact is that in Birmingham this service is operated by the watch committee on behalf of the Ministry of Education. The committee has considerable difficulty in resisting demands for patrols at almost every corner near a school and, therefore, I submit that there is no scope for saving on that item.

The police motor patrols come under the terms of this Bill and the House may be interested to know that in Birmingham we have 36 motor cars on patrol and 5 attached to driving schools. We get a grant for the cost of loudspeakers and for wireless installation on motor-cycle patrols. I have been into this matter with the chief constable and I find that the growing traffic chaos in the city makes this an expanding service. Local councillors are demanding more and more police activity to enable traffic to get through the city and one can hold out very little hope, none at all so far as I can see, that there could be any saving or room for flexibility in this matter.

Town and country planning is next on the list. This department is completely hedged in by controls from Whitehall. The hon. Member for Westbury (Sir R. Grimston) referred in rather disparaging terms to control from Whitehall. Hon. Members on this side of the House do not believe control for the sake of it—[Laughter.] I must say to hon. Members who laugh that every one of these services is completely hedged about by minimum standards laid down by Act of Parliament, and if the Government were honest about this matter, in addition to producing this Bill, they would produce amending legislation to the various minimum standards under which local authorities have to act. Because the Government do not produce amending legislation to afford flexibility regarding the standards which are insisted upon, we may be quite satisfied that the whole of this business is a fraud.

Grants are secured from the Ministry of Transport and Civil Aviation for roads, but the Ministry lays down rigid regulations governing the width and the sort of roads which local authorities may build. The Ministry does not give approval for the capital expenditure unless those regulations are complied with and there is no flexibility in that direction. As far as sewers are concerned, it is even worse, and rightly so. Rigid standards are laid clown about the type of sewer which it is permitted to build. So far as I can see, there is no possibility of any local authority being permitted to depart from those regulations.

On the question of grants in connection with town and country planning, and zoning and densities, I need only remind the House, as is well known by hon. Members who serve on local authorities, that every local authority has to present a development plan and will have to produce more plans. The Minister approves development plans and he decides whether a plan shall be carried through or not. There is no scope whatever for local authorities to depart from the development plan. They are, and will continue to be, completely tied up by the Minister, because he sanctions development plans. Here again, there is precious little local independence or autonomy.

In the National Assistance section there is the welfare department and here, I suppose, there is a little more scope for cutting down. But I cannot believe that any local authority, faced with the problem of dealing with a growing number of old people and those living on their own, would want to cut down on accommodation for old persons. I cannot believe that even this Government would propose such a thing. But if they did cut down on homes for old persons, the alternative would be an increased cost to the Health Service, for if these old people cannot go to homes run economically by the local authorities they will go into institutions run by the Health Service, so there will be no saving here. The same applies to temporary accommodation for people in need.

Let us examine the children's department. Whether we refer to residential nurseries, children's homes, facilities for boarding out, approved schools, or remand homes, the various categories coming under this head, quite rightly—and especially since the Curtis Report and the legislation which followed—are rigidly controlled by the Home Office. Where is the Home Secretary? Why is he not present in the Chamber? I wish to discuss one or two things which are the responsibility of his Department, and the right hon. Gentleman certainly has a lot to answer for.

The Home Office lays down the most rigid standards for the welfare of orphan and neglected children and that is a right and proper procedure, as every hon. Member would agree. Before that was so, hon. Members on both sides of the House, particularly hon. Members opposite, created a "devil of a rumpus" which resulted in the Curtis Report. It is no use hon. Members who shouted for control of the services for deprived children now decrying the fact that we have such control. They know perfectly well that the Home Office lays down tight standards and that they demanded them along with other Members of this House.

Now to fire brigades, another responsibility of the Home Office. Does any hon. Member think that there is room to cut down on the standards of fire brigades? We know that under the 1947 Act, which covers the building of new fire stations and schemes for fire prevention, fire cover and mutual aid, regulations are imposed by the Secretary of State. There is no possibility of any local authority going below the standard laid down by the Home Office and enforced by Home Office inspectors. I do not know of any authority which goes above the standards laid down by the Home Office. We do not find that local authorities rush round trying to spend more money on fire brigades than is necessary, though it would appear that hon. Members opposite sometimes think that happens. This is a service which is strictly regulated and local authorities have to pay attention to the regulations if they do not want the Home Secretary to interfere.

Wages and establishment regulations are laid down by the National Joint Council. Wages is the biggest item in fire prevention costs. That makes it impossible to provide any room for manœuvre. Other specifications are laid down by the Central Fire Brigades Advisory Council which, I am told, regulates almost everything, even the type of uniform and the standard of cloth used in its manufacture. So I am justified in saying that whether this Bill becomes law or not there is no room for saving.

We come now to health and education. First on the list under health is the child welfare service. Nobody would suggest cutting down on that. The question of cutting down on dental services does not apply, because no local authority can get dentists. I know that hon. Members opposite would like to close all day nurseries, but when we consider that these day nurseries are provided for children of unmarried mothers, and so forth, it will be seen that there is very little room for manoeuvre there. Can we cut down on the domiciliary and midwifery service? This is doing excellent work, and if it were cut down the cost on the hospital service would be increased considerably.

The same applies to domestic help, vaccination, immunisation and ambulance services. Is it suggested that there is any need to cut down on the ambulance service? Most authorities keep the ambulance service strictly under review. In Birmingham, the fire brigade provides a 24-hour ambulance service as an economy factor and I know of no one who suggests that this could be improved upon. Looking at the health service in Birmingham, it is impossible to see where there could be any great saving other than at the expense of an alteration in the service which would transfer the cost from the local authority to the national Exchequer by increasing the need for hospitalisation, and so on.

Mr. Dudley Williams (Exeter)

Could the hon. Gentleman tell me—I am not trying to score any party points—whether, under the new proposals, Birmingham will receive more or less money than in the past?

Mr. Howell

I am not going to be drawn into that one at this stage, although I would certainly be prepared to debate it in Committee. On the surface, looking at the White Paper, it would appear that we are receiving more—

Mr. Mitchison

No.

Mr. Howell

—but, in any case, Birmingham suffered very severely when the last change was made in the block grant system. In fact, taking into account our commitments and services, the Birmingham finance authority will not accept that we shall be any better off. The city councillors, both Conservative and Labour, have passed a resolution saying that we shall be much worse off.

Mr. Mitchison

My hon. Friend will agree that no promise has been made about the amount of the general grant. Figures have been given as an example, but no more.

Mr. Howell

I am obliged to my hon. and learned Friend. I accept what he says. As I said to the hon. Member for Exeter (Mr. Dudley Williams), even on the basis of the figures being true, they would be most unsatisfactory.

Education is responsible for 85 per cent. to 90 per cent. of the expenditure which we discuss in this Bill. Incidentally, I am glad to see that we have with us the Minister of Education and the Parliamentary Secretary, who both represent parts of the City of Birmingham. We shall do our best to rectify the position immediately the effects of the Bill are made known to the ratepayers of Birmingham.

I want to go through the services for which the Minister is responsible and ask him whether he will introduce amending legislation, or whether he will tone down the standards of the services which he and his Department have laid down. If he will not do so, it makes complete nonsense to introduce these proposals to the House.

The minimum standards for primary and secondary schools are laid down under the School Grant Regulations of 1951 and they are as follow: size of classes—under three years, 15 pupils; between three and five years and 11 upwards, 30 pupils; between 5 and 11, 40 pupils. The Minister must know that there is hardly an authority in the country which can reach those standards. Far from having any room for manoeuvre, if the Minister adheres to his standards there must be considerable expansion.

I do not want to weary the House with too many figures, but I should like to point out that according to Table 9 of the Ministry of Education Report, 1956, out of a total of 69,822 classes, 34.5 per cent. are above the statutory minimum standards. On the Minister's own figures this presents a hopeless task to any local authority. There is no flexibility because no authority is up to the standard which the Minister has set.

In the case of special schools, here again the School Health Service and Handicapped Pupils Regulations, paragraph 34, hampers every local authority in the country. There is no room for any manœuvre of any sort. Table 43 of the Ministry's Report for 1956 shows that 23 per cent. of all special school classes in the country are understaffed. The Standards of School Premises Regulations, 1951, Part IV, paragraphs 24 to 26, lay down, without any option to any local authority to depart from them, standards for the sites, the size of playgrounds, teaching standards, auxiliary accommodation for special school staffs, and so on. Here again, the local education authorities are narrowed down without any of the flexibility or autonomy about which the Minister talked so glibly today.

The Further Education Grant Regulations, 1946, prescribe the standards for advanced technological training and commercial art schools. There is no autonomy for local authorities and no proposal by the Government to alter the state of affairs. These Regulations regulate premises and teaching staffs. Indeed, on the subject of technical education, the House will be aware that the White Paper of 1956 said that to increase by half the output of students from advanced courses of technical colleges and a proportional increase in the lower level was to be the Government's aim, if the Government stand by the White Paper—and I am pleased to see the Minister nodding how—can any local education authority do that job within the ambit of this Bill and of the regulations that are laid down'? It means an expansionist educational policy supported by the Government, and a financial policy which makes it impossible to carry out.

The School Health Service and Handicapped Pupils Regulations, 1953, lay down the standards for dental and medical inspection and the number of pupils to be inspected. We all know that these standards are not complied with because of the difficulty of getting dentists and nurses. Here again, if there is any change, it has got to be an expansion and not a contraction. On the training of teachers the Minister has a regulation under which he can insist that local authorities should train teachers. So one could go on.

I think I have said enough to indicate that on every one of the proposals in this Bill where it is intended to apply the block grant system instead of the old percentage grant system, there is no room for any self-respecting local authority to manoeuvre. It proves that the whole premise on which the Bill is based is completely rotten and without proper foundation, and I am not suprised that most local education authorities, whatever their political complexion, do not support it.

I have one final point to raise on local education finance, and I will give the figures relating to Birmingham.

Mr. Stephen McAdden (Southend, East) rose—

Mr. Howell

I am sorry; I cannot give way now.

It will interest the House to know that in the city, out of a total expenditure of £6,900,000, £4,604,000, that is to say, 67 per cent. of our educational expenditure, is devoted to salaries. Thus, 67 per cent. of education expenditure is completely untouchable by any local authority. We are 750 teachers short. What will be the situation in Birmingham, if these proposals go through, when, in two or three years' time, we have coming along 400 or 500 teachers, who are now going through training college. There will be no extra money from the Government, and there is no proposal to produce extra money. It will mean an extra 5s. rate for the ratepayers of Birmingham to bear, but no money at all from the Government.

This is not the first time that the House has had this sort of recommendation before it. In pursuing my researches, I was amazed, in studying some previous Reports, to come across the wording in page 123 of a very infamous Report, the Geddes Report of 1922, which I had long thought every self-respecting public man in this country had regarded as buried with as indecent a funeral as possible. In the summary of conclusions on education, this is what is said in No. 6: The estimates for the Board of Education for the year 1922–23 should be reduced from £50,600,000 to £34½ million (which is approaching twice the 1918–19 provision), a reduction of £16 million which, with the automatic reductions in Scotland, will yield £18 million, and we recommend that whatever proportion of the reduced sums is to be paid to Local Authorities should he so allotted by the Board of Education that the vicious results of the percentage grant system shall be terminated forthwith. The Geddes Report is being implemented thirty-five years later. The only difference between an implementation of the Geddes Report and the Government's Bill today is that the Geddes Report had the honesty to say that the desire was to cut down on education and on local authority expenditure, whereas the present Government are doing all the things which Geddes recommended but are trying, by subterfuge, to deceive the country and the House by saying that these same things are being done for the good of local government.

5.42 p.m.

Mr. Hubert Ashton (Chelmsford)

The hon. Member for Birmingham, All Saints (Mr. D. Howell) has gone into very great detail and suggested that all the various local government services will suffer as a result of the proposal to change from the percentage to the block grant. Throughout, he has argued from the premise that block grants mean that there will be materially less for local authorities than under the present percentage grants. There is some confusion in people's minds, in that the hypothetical figures included in the White Paper on Local Government Finance, of July, 1957, which are repeated, to some extent, in the Bill itself, are hypothetical figures representing the position as at 1956–57.

As the Minister said from the Box this afternoon, these proposals have been developed on the basis of the three White Papers, in discussion with all the local authorities, and I, for my part, take the view that both he and his predecessor are to be congratulated upon tackling with resolution what is obviously a very thorny problem and upon coming to the House with a Bill. We have been told, for example, that there will be immediately a further £10 million available, which is equal to a 4d. rate throughout the country.

In Part I of the Bill, we can see that all the features referred to by the hon. Member for Birmingham, All Saints, will have consideration in the autumn of 1958 before the general grants are arrived at. As I understand from the Minister today, the authorities themselves, having reached that stage, will be able to make their own comments upon the amount of money which will be made available to them.

I suggest to hon. Gentlemen opposite that the assumption that there will be these great cuts is no more than assumption. I remember that in 1949, when we devalued the £, there were considerable cuts and quite serious economies. There were two cuts of 12½ per cent. in building costs. These things had to be faced in the interest of the country as a whole. I am not, however, suggesting for a moment that there will be any particular cuts in the future.

I am sorry that the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley) is not in his place at the moment. We should first, I think, like to congratulate him upon the new subject for which he has accepted responsibility at the Box, but, if I may say so, I was a little surprised by his attitude and approach to the problem, suggesting that the proposals before us are something which have been sprung upon the House. These matters have been the subject of most particular care and thought, and I believe that they deserve more careful and constructive attention than they have so far received from right hon. and hon. Gentlemen opposite.

The proposals for the general grant were first made by the Minister on 12th February this year. They immediately aroused a great deal of opposition, particularly from educationists. People have been to see me; some of them, quite obviously, had not studied the White Paper, and others were acting for political purposes—perfectly legitimate, of course, in a democracy. On the other hand, I fully realise that there is very general anxiety on this score, particularly among educationists who have considered the whole problem carefully. The Minister himself and others have said that educationists are most affected by the proposals in that they will have about 85 per cent. of the general grant.

In the light of what my right hon. Friend has said about the Bill itself, I believe it to be quite wrong to jump to the conclusion, and to tell the country, that the general grants will be materially reduced and that, therefore, all the services, education, health, child welfare, and so on, will suffer directly. That will not be so at all. We have heard terrible prophecies about unemployment and about the price of eggs. I believe that when the money is allocated to the various education authorities, of which there are 145 now, I think, the awful prophecies about what is to happen to education will not prove justified; if they do, I cannot help but feel that aldermen, councillors and their expert advisers will simply have taken leave of their senses.

This is a great human problem. Anyone in public life, be he politician, councillor, central Government official or local government official, wishes to see more money spent on his own particular empire; that is only natural. From time to time, whichever side happens to be in power, some economies are necessary, and whenever the occasion arises there is always the reply, "Yes, economise on somebody else's wicket, not on mine." It is very much easier to spend public money fairly lavishly; one is then called a progressive or enlightened authority.

If, on the other hand, an authority has a little care and anxiety about spending public money, it is occasionally dubbed mean and backward. Responsibility for public expenditure must be accepted somewhere, some time. I suggest that the Bill will mean that responsibility for this expenditure will rest nearer home and that is no bad thing. Moreover, I hope and believe that the amount of money available will be much greater than some of the gloomy prophets opposite have suggested.

There will be many points to be discussed in Committee on this complicated Bill, but I have two which I wish to mention here. In Clause 1 (7) it is proposed that the grant period shall he not less than two years. I am a member of a county authority, and I know that there is a feeling in the County Councils Association that, having regard to the considerable alterations which are to take place, the review might, in the first instance perhaps, be made in the first year. It may be recalled that in the case of the revaluation, the present enlightened Government decided that if any section of the community was seen to have suffered hardship the matter would be not only looked into, but put right, and this we did.

As regards education. Part II of the First Schedule states that in calculating the general grant, among many other factors, there will be an estimate of the number of children under the age of 15. I want to be quite sure that this will cover the changes in the number of children who go from primary to secondary schools; and I gathered from what my right hon. Friend said this afternoon that that is so. In the County of Essex, we have a huge child population. The "bulge" is now moving from the primary to the secondary school stage and the cost of secondary education is much higher. I have no doubt that the formula is sufficiently flexible to take account of that fact.

Part II of the Bill concerns the review and alteration of local government areas. I regard it as a pity that the Local Government Boundaries Commission, under the chairmanship of Sir Malcolm Trustram Eve, was put into cold storage. Nevertheless, the Commission did a lot of hard work on which, no doubt, some of the matters we are discussing today are fundamentally based. I welcome the setting up of the Commissions and the Royal Commission on Greater London, because I consider that we in Essex would not properly be able to consider our problems unless the London conurbation was first considered.

I believe that the terms of reference of the Greater London Commission have been drawn sufficiently wide for the Commission to consider that enormous problem and I believe that when the other Commissions are set up the same position will apply to them. There are, naturally, great anxieties in the minds of many people concerning various local troubles, but a Second Reading debate is not the occasion to raise such matters.

In the administrative County of Essex, we have a vast area of 1 million acres, a population of 1¾ million and 43 authorities on whom we precept. Although I am a member of a two-tier authority—a county council—I incline to think that the best form of local government is, perhaps, a fairly compact county borough of the right size. [HON. MEMBERS: "Hear, hear."] That is not all I have to say on this subject.

I am glad that when referring to population figures of 100,000 or 60,000 my right hon. Friend said that they were merely a target and not definite figures. I hope that the Local Government Commission will have very wide terms of reference and take all factors into account and that the question of 100,000 or 60,000 will not be a paramount consideration. Having said that, however, it would be disastrous in counties like Essex or Kent to take away all those who might get county borough status and to leave the bare bones of something which would be difficult to operate.

Another point is that the Local Government Commissions may make recommendations whose effect would be to make local government not merely more local, but perhaps slightly parochial. In other words, a large county such as Essex has the point of view of both the town and the country. It would be a pity if the new proposals, when eventually put into operation, did not take account of that aspect of this important matter. Indeed, on this aspect of these great proposals, I agree with the recent article in the Economist which urged the Commissions to be bold.

In Clause 17 (2), the Minister is given power to add to the number of special review areas. We cannot always expect to have such a splendid man in the office as my right hon. Friend as Minister of Housing and Local Government, although, of course, we hope that he will long continue to remain in his present position. Instead of leaving this matter in the hands of the Minister, my feeling is that if it has to be done, it would perhaps be better done by legislation.

My right hon. Friend referred in his speech to Clause 26, which relates primarily to special review areas, and he said of the proposals in this and in another Clause relating to special review areas that there might be far-reaching recommendations. I wish to refer to water supplies and must declare my interest in that I am President of the Water Companies' Association, an office without profit but certainly not without interest, particularly in the light of some of the comments we have heard from hon. Members opposite.

In Clause 26, the Commission or the Minister is empowered, on the review of a special review area, to make proposals regarding the establishment of a joint water board and the transfer to that board of the undertakings of statutory water undertakers, whether wholly or partly outside the special review area. The Bill, therefore, apparently envisages a reorganisation of water supplies to conform with the local government pattern.

While I appreciate that account must be taken of the case where a local government water undertaker disappears, it seems that the further step of introducing local government considerations as determining the scope and organisation of the water supply system is open to objection. My right hon. Friend will remember that the terms of reference of the Royal Commission on Greater London contained no reference to water supplies.

Provision is made in the First Schedule to the Water Act, 1945, requiring the Minister to hold a local inquiry in any case where objections are made by a statutory water undertaker affected by a compulsory amalgamation. This Bill does not appear to contain a similar requirement and my feeling is that the Minister's powers under the Clause are perhaps very great indeed. I suggest that reorganisation of the water industry should be effected only by means of the various water Acts, reinforced by the Minister's statements from time to time.

Clearly, we are today discussing something which affects the lives of each and every one of us throughout the country. Local government is the administrative machine of legislation for which we here are responsible. We must have our differences—at times, perhaps, bitter differences—but I hope that we may have an objective debate. The Amendment is of a rather negative nature.

I hope, too, that this debate may attract the attention of people who find their local government extremely boring, as indeed, it is, although very hard work and very exacting. But perhaps it is not sufficiently realised that we spend about £1,500 million in local government throughout the country each year. This is very big business and I believe and hope that the Bill will make it better business.

5.59 p.m.

Mr. William Ainsley (Durham, North-West)

The hon. Member for Chelmesford (Mr. Ashton) and I had the pleasure and honour of visiting West Germany at the beginning of the year to review the structure of local government there, and I shall refer to that by way of illustration later. I remember that as a boy I used to get a penny a week for my pocket money, and occasionally I would go into a shop and plunge 50 per cent. of it into buying what we called a "lucky bag." This Local Government Bill seems to me nothing more nor less than a "lucky bag." Is there any hon. or right hon. Member here who can tell us what will happen to local government finance because of the Bill? What are the local authorities going to get? How is local government to be run? What is the criterion to be?

I feel very concerned about the effects of the Bill on my own county authority, and these are some of the questions which cause anxiety. In the nineteen-thirties Durham County was a distressed area, and we were then spending £¾ million annually on public assistance out of the rates. That £1¾ million a year was being spent because of the industrial depression. Then the Government relieved industry of rates and brought in what was then a block grant to give assistance.

At the same time, a Royal Commission was set up under the late Captain Euan Wallace, and it considered the finances of the north-east area. That Commission made its findings known, but we are still waiting for those findings to be put into operation. Shall we have to wait as long as we have had to wait for the findings of that Commission to be implemented before the implementation of the findings of the Commissions to be set up under the Bill?

I have had the honour to be the Chairman of Durham County Education Committee and also the Chairman of the County Council, so I have some knowledge of the workings of local government and of the effects upon it of things done by Parliament or by commissions. In consequence, I challenge the statement of the Minister in the White Paper on Local Government Finance (England and Wales) that the percentage grant is discriminatory in its effect and an encouragement to expenditure. Is there any hon. Member who has experience of local government who will go as far as the Minister and make such a statement? He ought to have the honesty to withdraw such a statement that is casting a reflection upon hon. Members of this House who have themselves had, or are having, experience in local government.

Throughout my service in local government in my county I have been a member of the Standing Joint Committee. The Standing Joint Commitee is composed of equal representation of the County Council and of the Magistrates' Courts Committee. It has no responsibility so far as the electorate are concerned. The elected representatives on the County Council have that responsibility, which is a balancing factor, but the Standing Joint Committee is responsible to the Home Office and local government has no control over the rates it levies. At a meeting of the County Councils Association this matter was brought up. We sought to bring standing joint committees under the control of county councils for financial reasons, and argument to that effect was accepted, but at the next meeting the decision was reversed because of vested interests. That is why the Minister dare not bring the police authorities into the general grant, for they have to keep police forces going and see that a reasonable standard is maintained.

Besides the police services there are other services which are controlled by the Home Department. If the Government are so anxious to have this all-in block grant, why do they not apply it to those other services also? Surely in local government one service is as essential as another? I remember when the fire services became a responsibility of the local authorities, but there is only a 25 per cent. grant for the development of fire services. The Minister promised he would look into this and give further consideration to increasing the percentage for the fire services. Are they to be taken into consideration with the all-in block grant? Will that undertaking be taken account of in the block grant?

In providing educational services, no two local authorities are alike. The Minister of Education, by his recent circular, placed an embargo on the development of educational services in rural areas, even although in County Durham we still have all-age schools. In the rural areas of the county there are still blacklisted schools.

The Minister of Housing and Local Government, at the beginning of his speech today, said this Bill was introduced because it was urgent. The urgency of the need arises because of this Government and previous Tory Governments, and for this simple reason, that they have given Tory freedom to industrialists, which has caused congestion in the London and Greater London areas and similar areas by denuding the rural areas. The Distribution of Industry Act has never been applied, or the implementation of its provisions even encouraged by the Tories. So we are faced with the problems we are in today.

I said I would cite local government in West Germany by way of illustration. In West Germany there is no central authority controlled by the Bundestag. There are different States, and those different States include industrial and rural areas. Land tax in the industrial areas brings in greater revenue, especially for education, than that raised in rural areas, and in rural areas children are leaving school at 14, whereas in industrial areas there is some semblance of secondary education until the age of 16. In some schools, children remain until 18. All this is because there is no central control.

This Government will take this country into a situation like that in West Germany. There will be no equality of opportunity for our young people when there are rich areas with high rateable values because of density of population and an increasing amount of industry going into the congested areas and denuding the rural areas.

The provision of educational facilities is one of the biggest administrative tasks in local government. There is to begin with a great variety of education, with nursery schools, primary schools, secondary schools, further education and so on. There are also voluntary organisations, providing for adult education, which receive grants, and they are concerned about these proposals. I have received letters protesting against the block grant because of its effects upon them in my own county. We agree, do we not, that education takes the major portion of the grant? It will continue to do so.

We should have to bring the chairmen of committees together and, with the need to have regard to the rate that could be carried by the county, we should have to pool or postpone some of the developments which we were most anxious to carry out. These are the problems which local authorities will have to face when they receive the lump sum. It means stagnation, which means death to some local authorities. That will be the result of the block grant.

I plead with the Government to have second thoughts about the block grant, but if it must be a block grant let all services be included so that one and all suffer and we shall know exactly where local government stands. The effect will not be seen in the lifetime of this Government. It will be seen in the years to come, in the impoverishment of standards in the upbringing of our boys and girls. It will be reflected in our national standards when we are seeking to make our way and take our place in a world which demands more and more technicians and scientists. I appeal to the Government to have second thoughts on this Measure and, if possible, to allow local government to go on developing the social services so that men and women throughout the land shall continue to be treated as human beings.

6.11 p.m.

Mr. E. M. Cooper-Key (Hastings)

I am sure that the hon. Member for Durham, North-West (Mr. Ainsley) will forgive me if I do not follow him in his remarks, but I have promised to be brief and I know that many other hon. Members wish to take part in the debate.

I welcome the Bill as an important and enlightened piece of legislation. There has been no major change in the county or county borough pattern of Government since the last century and, as regards finance, the position in a number of important fields has remained as it was in 1929. On the other hand, there have been enormous changes during the century in the geographical distribution of population and industry, and it is clearly time that the structure of local government should be brought up to date.

Whereas this is the intention and aim of the Bill and what, in fact, it succeeds in carrying out, nevertheless in one respect it fails to recognise a change which has taken place in one section of the nation since the war. I am referring to those areas popularly regarded as holiday resorts, and especially those on the south coast.

I wish that we could get Ministers and the gentlemen in Whitehall to get out of the way of thinking that these places are prosperous areas. Very few of them are prosperous, and one or two are in a very bad way indeed. Some of these towns were badly hit by the grant changes in the Local Government Act which was introduced by a Labour Government in 1948. The introduction by that Act of the Exchequer equalisation grant payable only to the so-called poorer authorities automatically excluded most of the coastal towns from a share of the grant. Some of these resort towns have had considerable difficulties arising from the effect of the 1939–45 war, and it was hoped that the Minister's review of the equalisation grant would provide some relief from the harsh effects of the 1948 Act.

Not only do many towns derive no benefit from the review of the equalisation grant, but they are likely also to lose substantially from the new block grant proposals. In fact, in the case of Hastings, a further annual loss of about 1s. rate is probable, or roughly about £50,000 a year. We have heard recently on the highest authority that the great majority of the people in this country have "never had it so good". That is substantially true, but since the war it is fair to say that the class of people who make up the ratepayers of Hastings have never had it so bad. In this area there is a very high proportion of the new poor.

Mr. Joseph Slater (Sedgefield)

Six years of Tory Government.

Mr. James Griffiths (Llanelly)

The Battle of Hastings.

Mr. Cooper-Key

Moreover, we have the highest proportion of old people in the country. Our empty properties are numerically the highest proportionately of all the 83 county boroughs. Our National Assistance figures are high. The number of our unemployed is three times the national average. At this time the provisions of the Bill could be disastrous.

I should like to say a few words about the rerating of industry. Hastings has one of the smallest proportionate rate yields from industrial premises. I think that the method of deduction of the £¼ million from the general grant in respect of rerating of industry is particularly illogical. The result of this rerating will leave us £6,000 a year worse off than if industrial rating remained at the present level of 25 per cent. of net annual value.

During the passage of the Bill I intend to table certain Amendments, but at once I could mention some constructive suggestions which the Minister might accept. By so doing he would be recognising the special difficulties which Hastings and other coastal resorts are experiencing. First, with the grant formula, a greater share should be given in respect of people over 65 years of age. Secondly, the deduction of £8¼ million from the general grant should be recovered from local authorities in proportion to their gain from the rerating of industry. Thirdly, the deduction of the product of a 1s. rate should not be made.

There are also a number of other suggestions which local authorities of areas such as I have mentioned have already put before the Minister. The Minister's patience and sympathetic approach to these people's problems have been very much appreciated by all those who have come in contact with him. If as a result of these representations the Government realise that changes have taken place in these areas and amongst this class of ratepayers, they have not been in vain, but I should like an assurance from the Minister, when he comes to reply, that towns such as Hastings will not be further penalised in the matter of Government grants.

6.19 p.m.

Mr. Tudor Watkins (Brecon and Radnor)

I cannot follow the hon. Member for Hastings (Mr. Cooper-Key) in his remarks. Although he criticised a great part of the Bill, he still welcomed it. If he would like my support for some of his Amendments, provided he supports mine, we might be able to make a deal. I want to declare my interest in being an alderman of a county council and representing in the House 21 local authorities, two county councils, one non-county borough, 7 urban councils and 11 rural district councils. I do not think there is anyone else in the House who has that record, and I say nothing about the 130 odd parishes which I also represent.

I have to say in favour of Part II of the Bill that there is need for a review. There are quite a number of authorities in my constituency where a 1d. rate raises under £30. It is ridiculous in these modern days that a council has to call for a 2d. rate to buy a new typewriter. The days of part-time officers are also over in 1957. I see no sense at all in a clerk maybe writing to himself twice in a day because he happens to be the part-time officer of three local authorities, as happens in my constituency.

I welcome the review in that respect, but the review must carry with it something which I hope the Minister will note in relation to the Local Government Commission for Wales. I welcome the Minister's assurance that some members of the Welsh Commission will be bilingual. I speak for Wales in asking the appointment of Welsh-speaking people.

If the Minister is so sure about that, why can he not write it into the Bill? I am sure that this would be welcomed all round. It is also the view of the Welsh county councils and of the County Councils Association that the Bill should specify the appointment to the Commission of persons with a knowledge of Welsh affairs, one of whom at least Should be Welsh speaking.

Paragraph 37 of the White Paper, which deals with the status of local authorities, states: No significant alterations should be made in the boundary between England and Wales, and even minor adjustments to it should require the consent of the county councils concerned. Why cannot that important announcement in the White Paper also be written into the Bill? I hope that my hon. Friends who serve on the standing committee will try to initiate a discussion to ensure this happening.

I hope, too, that when a review is made by the Commissions and county councils that the question of population will not be the only criterion. From my experience on a county council I realise the necessity for having someone to represent what I call the human services; that is to say, education, housing and the welfare of young and old. Remote representation for widespread areas is of no use. I hope, therefore, that the Welsh Commission will make the unit as local as possible in order to achieve an effective service. I am sure that the Minister will bear in mind our geographical difficulties in Wales in his advice to the Commission.

Coming to Part I of the Bill, I hope that the Minister will note particularly the following resolution on the general grant which was passed on 26th July, 1957, by all the Welsh counties, with the exception of one, at a meeting of the Welsh Counties Committee: This Committee objects to the Government proposals to substitute a General Grant for the system of percentage grant, as they consider that no other type of grant can deal as effectively as can a percentage grant with all the degrees of need to be found between one local authority and another and with the fluctuations in expenditure that arise from causes beyond the control of local authorities. Why was that resolution passed? I suggest, first, that the effect of the pre-war depression, both in the industrial and rural parts of Wales, meant that provision could not be made for human needs in a way which the local authorities would have liked in that period. Therefore that leeway has to be made up, and the percentage grant has been found to be the best means of enabling the authorities concerned to develop the services so vitally required.

Those vital services are expensive in the rural counties, and the large area of some Welsh counties, combined with a small population, leads to enhanced expenditure. I hope this point will be borne in mind. May I illustrate it by the estimated figure per head of population to be met from rates and Government grants? The average for England for 1957–58 is £20 15s., whereas for Wales it is £24 12s. 1d. The average for the counties examined by the Mid-Wales Land Commission is £35 19s. 4d. and, therefore, the percentage grant is of vital concern to those counties.

Now I will give the House the figures for individual counties. For Radnorshire, which I have the honour to represent, it is £38 2s. 3d., for Montgomery, which is represented by the hon. and learned Gentleman sitting below me, it is £37 4s. 11d., for Cardiganshire it is £32 1ls., for Merioneth it is £29 19s. 8d., for Breconshire it is £28 18s. 9d., as compared with the average for England of £20 15s. The figure of true rate-borne expenditure is 13s. 11.7d., and for the five mid-Wales counties it is 14s. 8.7d. I hope, therefore, that when the grant is examined the particular needs and problems of such counties will be borne in mind.

Now I turn to education. The rural counties are alarmed at the suggested grant, and Glamorgan has made it plain that if called upon to operate a Bill of this kind it will mean that though students will be trained there they will not be allowed to teach outside Glamorgan. This indicates the feeling in the Principality. It is important to realise that it is far more expensive to educate children in Wales than in England. This is borne out by the figures showing the expenditure per head of population. In England the figure is £12 9s. 4d., and in Wales it is £15 Os. 8d. In the three Mid-Wales counties it is £18 3s. 4d., so the House will see how alarming are these figures.

Another important factor is the higher percentage of child population. In England it is 145 per thousand of the population, and in Wales it is 167 per thousand, so education is bound to be more expensive in Wales. In addition, I hope the Parliamentary Secretary will note that the Welsh rural counties have had a great programme of development, but over and over again they have been asked to restrict their building programme—even within the last fortnight.

We are entitled to ask what is to happen to education in the future. Is the Welsh Joint Education Committee to continue under a general grant basis? I would remind the Minister that the Committee has been good to him in advising about the overall grant to Wales. It is important for us to be reassured in that respect. We also want to know what will be the future rôle of the Joint Education Committee in Wales.

Now, in fairness to my county of Brecon, I must tell the House that we have a development plan for 1950–1968 totalling £2,604,250. So far only one project has been completed and there is one under consideration. Imagine what will happen to Breconshire. It has been estimated by our council treasurer that in the next ten years a 6s. 10d. rate will be required. If the basic grant is merely on the average expenditure for the last five years, this means that the bulk of the capital expenditure required for the authorisation of education in our county will have to come from the rates. Incidentally, this takes no account of increases in costs since the development plan went to the Ministry.

I hope that the Minister will also bear in mind the fact that, although the low density provisions will help some of the counties, they will not solve the problem. The declining population formula is too rigid, and not a single Welsh county benefits by it. I have looked at the list and I have noticed that prosperous counties and boroughs are getting some help because of declining population. Despite the continued depopulation in the rural parts of Breconshire—and they are stabilising themselves in some industrial parts—they will receive no assistance at all. I hope that rural technical education will be examined. We are not complaining about the Government's technical education programme in Wales. It is a programme to which we are looking forward. I think more should be done regarding rural technical education. I hope the Minister will have a statement to make before the end of the debate about the representations made to him by the County Councils Association against the pooling of the expenditure on technical education. It is detrimental to rural counties. Why should he take £29,000 from the Welsh education committees? Why should Welsh counties lose £29,000, as appears from the Bill? is it to let Hastings have a crumb to help them when divided amongst 144 authorities?

Finally, the Minister knows something about mid-Wales, because he is interested in it. But his policy is wrong regarding mid-Wales. He will recollect that the Council for Wales and Monmouthshire stressed in paragraph 114 the very heavy burden to be carried by the general rate. To what extent will the Bill help that? The White Paper, with which the hon. Gentleman had something to do, says this in paragraph 59 (11): Substantial assistance is given to Welsh rural authorities through the Exchequer equalisation grant. Proposals have recently been made, however, which would probably have the effect of reducing the grant at present received by some of the Welsh counties. No conclusion has been reached on these proposals, and the Government will bear in mind the views of the authorities concerned, and will give a great deal of thought to the position of the Welsh authorities, before proposing any change. I am sure that the Government have given it every consideration. But my information is that not a single Welsh rural county will benefit by this change. I am sure the Minister did not do it purposely. If the Minister wants to substantiate the policy on Wales which he has enunciated, something must be done to relieve the heavy burden of rates in the Welsh rural counties. If the Minister says that there is something in the Bill to help them, I will feel very much obliged. The conclusions of the Mid-Wales Report assured continuance of considerable facilities for financial assistance. When is that assistance coming? How will the Welsh counties fare? Can the Minister give some information about that?

I am sorry to say to the House that I have concentrated on a problem in which we have had and, I am afraid, we shall continue to have too many White Papers unless there is something done about the human problems. There are not only cattle, grass, sheep, and so on in Wales, but there are human problems. The percentage grants system, which we were glad to have, has been very good to those particular areas. The equalisation grant has been good. We do not want to lose that. I hope that during the course of the Bill the Minister for Welsh Affairs in his capacity of Minister of Housing and Local Government will have a special look at the mid-Wales problem.

6.35 p.m.

Mr. Dudley Williams (Exeter)

I do not propose to comment on the speech of the hon. Member for Brecon and Radnor (Mr. Watkins), because he is so obviously an expert on the problems of Wales. My only tenuous connection with Wales was severed some hundred years ago when my family left the Principality.

I want to refer to the speech made by the hon. Member for Birmingham, All Saints (Mr. D. Howell). I asked him whether, under the proposed distribution of the total sum shown in the White Paper, Birmingham would receive more than it will receive under the present methods for 1956–57. I appreciate the point made by the hon. and learned Member for Kettering (Mr. Mitchison) that no specific sum has been mentioned for the future when the scheme starts. I was, of course, referring to the example shown in the White Paper on Local Government Finance. I am certain that, under these proposals, Birmingham will receive more than it has received this year. This question interests me, because I represent the City of Exeter which will receive considerably less under the proposals outlined in the White Paper.

I want to bring to the attention of the Minister the reasons for my constituency receiving less, and I hope that he can do something about it. Exeter, of course, suffers from a problem similar to those mentioned by the hon. Member for Hastings (Mr. Cooper-Key). In the White Paper it is calculated that the amount of money that Exeter would receive under the block grant system would be about £367,000. This figure is more than £80,000 less than it will receive during the current year. I want to bring to the attention of the Minister the reason for this considerable drop. I think he will agree, when he hears the reasons, that there is probably a case for dealing specially with local authorities of this nature.

The general grant is calculated by taking the total amount of the existing grant and dividing by the number of pupils in the country. This penalises local authorities which have pressed on with the problem of providing adequate educational facilities. As I understand the situation, they will be penalised as compared with those authorities which have been dilatory.

This problem is very important in Exeter. We have had to initiate very considerable redevelopment due to the damage done in the city by enemy air attack. We made our plans on the assumption that we should receive financial assistance from the central Government on the present lines. In our redevelopment we have created housing estates on the edge of the city which are of considerably lower population density than those areas in the centre, which are very densely populated, with the result that the schools which have been provided for those housing estates have a relatively small number of pupils in their classes. In addition to that, being the county city with no area very close which is densely populated, we have to provide many services which are relatively more expensive than if they had to be provided in more densely-populated areas.

By far the most serious reason for our failure to receive what we think is a fair proportion of the total block grant is that the City of Exeter, like certain other resorts on the south coast, is relatively highly rated and thus does not qualify for any rate-deficiency grant. The reason for the relatively high rateable value of a county capital like Exeter is that it has to provide facilities for great numbers of people who live outside its boundaries. It has a relatively high proportion of shops, and it has to provide highways and enormous car parks for the people who conic to the city to shop, consult professional advisers and so on. The rate-deficiency grant takes no account of these facts.

I have always thought that the rate-deficiency grant or the Exchequer equalisation grant were intended to bring the low-rated authorities up to a reasonable level. However, the highly-rated areas will again be penalised by the method of calculating the general grant under the Government's proposal. This is because there will be a deduction from each authority's basic share under the White Paper of an amount equal to the product of a 1s. rate. Therefore, the low-rated areas not only receive the benefit of the rate-deficiency grant but also have less deducted from their basic rate.

I suggest to my right hon. Friend that he should look at the question again and ascertain whether there is a case for the rate product deduction factor being, if not deleted, at least greatly amended. If that were done, it would go some way to meet some of the present criticisms.

I also want to refer to the question of the rerating of industry. There is a reference to this in paragraph 28 of the White Paper, which says: While rerating increases the product of rates it has the direct effect of reducing the product of income tax, profits tax and surtax. It is plain, therefore, that some reduction of grants must accompany the rerating.… I do not feel that this attitude is justified. In April this year, the product of the rates was decreased by 20 per cent. when we derated commercial properties. [HON. MEMBERS: "Hear, hear."] I hope I shall not get too much support from hon. Members opposite, because I am certain that if that happens, I shall not be able to win my point with my right hon. Friend.

What occurred in April resulted in an increase to the Exchequer in Income Tax and Surtax yields, but no compensation was paid to local authorities. In view of the attitude taken by the Exchequer in that instance, I find it difficult for the present attitude to the derailing of industry to be maintained. It goes without saying that local authorities which have little or no industry again suffer by not getting the benefit of increased contributions from industrial premises.

I also wish to draw the attention of my right hon. Friend to the question of the 5 per cent. addition to authorities in Greater London. This addition to a section of local authorities comes off the general grant, and, therefore, it affects the total amount which is available to the other local authorities throughout the country. I find it difficult to understand and to accept the definition of the Greater London area. It is defined as all those areas which are wholly or partly within the Metropolitan Police area. This seems to me to be going rather a long way, for it brings in the whole of Essex, the whole of Kent down to Dover, the whole of Hertfordshire and the whole of Surrey. [HON. MEMBERS: "No."] I stand to be corrected on that point.

Mr. G. Lindgren (Wellingborough)

Surely it should be "Dartford", not "Dover"?

Mr. Williams

My information was that it extended to Dover, but I accept what the hon. Gentleman says. At all events, a large part of this area is well outside the Metropolitan Police area, and I find it difficult to justify the authorities concerned having this assistance.

I am sure the Government are on the right lines in having the idea of giving local authorities more responsibility and greater opportunity to decide how their money is to be spent, but I am concerned about the methods by which the calculations have been made for the various authorities and I hope my right hon. Friend will look at this matter again while the Bill is passing through its various stages.

6.46 p.m.

Mr. Arthur Skeffington (Hayes and Harlington)

In July, the Minister of Housing and Local Government, addressing 1,000 delegates in Edinburgh, said that local government reorganisation was long overdue. He rather implied that other people had shirked it. He went on to say that he was the man who would do the job. I should have thought that it would have been better if that brave statement had been made by somebody else, but whether or not that is the case, it is clear that his boast would not be achieved in this Bill, in which there were no courageous new steps.

The Bill falls to be condemned under two heads. The first is on local authority functions and areas. Here one might have expected some new thinking and radical change, which the Minister himself has indicated are overdue. Indeed, he has talked about the inadequacies of the small authorities. Nevertheless, we find that very little is to be accomplished.

On the other hand, when we come to the financial proposals, we see the most fundamental change that has been made since the First World War, a change which has been deplored by all the municipal associations and by practically every educational body. Indeed, I have not come across an association of people interested in local government which has been able to make out any case for the block grant.

Therefore, the Bill starts off needing very considerable defence, and I thought that it did not get that from the Minister. I expected that he would reply vigorously to some of the criticisms, of which he must be very well aware, in a much more comprehensive way than he has thought fit to do.

The changes proposed in Part I in connection with the substitution of the percentage grant by a block grant will bring very considerable uncertainty to all local authorities; as the General Secretary of the National Union of Teachers said at a meeting not far from this House recently; uncertainty where, in the past, there has been, at any rate, comparative certainty. A local authority which at present embarks upon a new scheme of one kind or another can be assured that if the scheme is approved by the appropriate Government Department a proportion of the expense will be returned to it. In future, there can be no such guarantee. Indeed, there is every likelihood that in the competition between different services of the same local authority, which have hitherto been regarded as complementary and not competitive, many new schemes will not be initiated. Councillors will not want to indulge in fights between one committee and another. As a result, some municipal activity will not be undertaken at all.

What nauseates me is the excuse which the Minister and others constantly make that all the proposals in Part I are solely aimed at making local government more independent. That has not been supported by any valid argument—we have certainly not heard one this afternoon. In the first place, the new proposals of the block grant are to be reviewed every two years, so that at the end of that period there will always be great uncertainty about the future. The associations will be making their representations to the Minister. Local authorities in the different categories will be making the very best case they can to their associations and the Minister. To pretend that all this going cap in hand to the associations and the associations going to the Minister will not bring more uncertainty and more dependence on the Government, is to shirk the whole issue.

Secondly, Clause 3 gives Ministers the widest powers to withhold a grant from any local authority which has not maintained services to an adequate standard. I am all for that. It is a necessary sanction, because there are authorities which, for one reason or another, might not maintain services properly. However, to pretend again that that is not a direct interference from Whitehall is nonsense. This power will be more comprehensive and simple than those existing at present. It will be much easier for Whitehall to interfere with the financial arrangements of local authorities than has been the case in the past for some Departments. To say that all that is being done in the interests of the independence of local government is absolute humbug.

The position was put very well in a letter which appeared in the Daily Telegraph a few weeks ago from someone who said that he was an "erratic Conservative". The letter reads: We do not really know what is the object of the exercise He meant the exercise of substituting block grants for percentage grants. He went on: Is it to decrease the sum at present found by the Chancellor of the Exchequer from taxes and spent on education, or to ensure that it does not greatly increase in the next few years (very difficult years, because the 'bulge' will be passing through the more expensive secondary schools)? If so, I see the point. A nation cannot, or should not, spend on education money which it has not got, or has decided that it prefers to spend on television, subsidised houses, cigarettes and the rest of it. But would it not be fairer to come clean and say so, instead of quietly arranging for the blame to be put on local authorities when the schools stop being built because the money is not there? At any rate, the hon. Member for Nottingham Central (Lieut.-Colonel Cordeaux) is to be congratulated on his frankness. He is quoted in the Schoolmaster, the journal of the National Union of Teachers, as having replied to the N.U.T., on 6th December, as follows: The most essential problem which faces the Government in the domestic field at the present time is to stop the rise in the cost of living, and to attain this object we have got to effect economy in local government expenditure as well as in national government expenditure. There can be no doubt that the adoption of the block grant will effect very great economy in the former sphere. That is the purpose—very great economy in local government expenditure. Why could not the Minister have said that instead of all the nonsense and humbug about making local government more independent?

I want to give a few figures to the House. This change which hon. Members on this side of the House and which all local authority associations and the Association of Education Committees believe to be designed for economy is made at a time when education is under its greatest strain. In the Report of the Ministry of Education for 1956 we are reminded that in the maintained schools there were 6,600,000 children which is 1 million more than in 1950. By 1961, there will be 250,000 more children still. The secondary school population was up 130,000 in 1956. By 1961, as the erratic Conservative said in the Daily Telegraph, the bulge will be going through the secondary schools and the secondary school population will be 800,000 up. In 1956, there were 3,000 more classes in secondary schools with more than 30 pupils than in 1955 and there were more than 38,000 such classes in secondary schools all together. This is the time when, under the pretext of giving local authorities more independence, the Government have decided to introduce financial proposals which will make the lot of education authorities extremely difficult.

Clause 9 deals with the rerating of industry. I found the Minister completely unconvincing in his argument restricting rerating to 50 per cent. He said that industry is now paying, or will be paying, three times as much as it paid two years ago. So is practically every other ratepayer, because we have had our first revaluation for thirty-five years. By exercising pressure, shopkeepers and commercial firms were able to avoid paying quite as much and domestic occupiers are paying on 1939 values. They will be paying more by 1961, but all classes of ratepayer, except farmers who are exempt, are paying more than two years ago. It is, therefore, not surprising or wrong that industrialists should be paying more than they were paying two years ago.

While the Minister put the case in that way, he gave no indication of the total amount involved. He suggested that the new heavy burden of industry would be about an extra £30 million. He did not tell the House that in 1955 industrial profits were £3,500 million. So industry could well afford another £30 million. Nor did the Minister test the figures in any other way. Perhaps I may remind the House, by quoting these figures, of the capacity of some industries to pay a few pounds per year more for using the services of local authorities.

In 1954, the brewing industry spent nearly £1¼ trillion advertising, but, throughout the country, paid in rates only £268,000. We all know how many local services brewing uses—water, drainage, and so on. I do not begrudge the brewing industry idle expenditure of £1¼ million on advertisements, but it can well afford to pay more than £268,000 in rates. In 1955, the drugs industry spent more than £4 million on advertising, but only £113,000 in rates. To suggest that industry cannot bear such a burden even if multiplied by three is a fantastic proposition.

The motor car and cycle industry, in 1955, spent £2,300,000 on advertising and paid only £412,000 towards rates. An industry which can afford that amount for advertising can also afford to pay its proper share of the rates, like every domestic householder. With industrial profits running at the rate of nearly £3,500 million a year, an extra £30 million which full rating would demand would be well within the capacity of industry which, in any case, would be entitled to proper relief from Income Tax and so would not be worse off.

I want briefly to refer to areas and functions. Here again, there have been so many qualifications, not only in the White Paper but in the Minister's speech, that it seems to me that there will be very little change. It is obvious that there has been a great fight between the associations—the Association of Municipal Corporations, which wants a one-tier system of government and the County Councils Association and District Councils Associations which want a two-tier system.

Even where the district councils are to be given powers in connection with health, welfare and education, such powers are merely to be delegated. Even at this stage I appeal to the Minister to consider whether those powers could not properly be conferred on the authorities. That would avoid duplication and would save paper work and manpower. Neither the smaller local authority nor the county council feels really responsible. We get the worst of both worlds administratively and that does not make for the best service for the citizen.

I hope that there will be a change in the suggestion that county councils should review the areas of districts within them. I am quite certain that this must be done by an independent body. The Minister said, this afternoon, "Who knows the areas better than the county councils?" That is one of the reasons why we should not ask them to decide changes. They know too much about local conditions, are subject to too many pressures and sometimes do not like to act. This would be very much better left, after proper consultation with all concerned, to an outside and independent body.

I should like to say one word about the areas of special review mentioned in the Third Schedule. I am certain that some new form of organisation will have to come for the great conurbations. I do not think that, under the present structure, we can deal successfully with problems like overspill and drainage and comprehensive areas of planning and water. Very large authorities, even the London County Council, have found great difficulty in dealing with overspill, as has Birmingham and other large authorities. I feel that the Minister has drawn the boundaries much too tightly around the built-up areas and has omitted other conurbations not mentioned in the Third Schedule. In any event boundaries ought to be so drawn as to include an area of green belt. If we did that I think that we would get an area which would be comprehensive and could provide services for both the town and the country, and prevent some of the artificiality which we have had about boundaries before. It is important to preserve the balance between town and rural areas.

A great opportunity has been missed in this Bill. I should like to see all functions possible go to the authority on the lowest level; on the doorstep nearest to the people. Undoubtedly it would be necessary to enlarge some of the small authorities. I do not mind keeping the mayors or the chairmen, but I think that some merging of administration could be done. I would pass every function that can be effectively carried out down to the lowest possible local authority level. In the areas of conurbations some large organisation must be created to deal efficiently with the less human subjects like overspill and drainage.

I realise that if these proposals were accomplished we should have to look at the county councils, because some of their functions would have disappeared. But there would still remain education. What greater function could there be for a county council than education? I should be happy for these great authorities to concentrate on education. I look forward to the time when the right hon. Gentleman and his hon. Friends opposite are removed from office and we can get a Government which will really get on with this job of the essential reorganisation of local government.

7.3 p.m.

Mr. T. L. Iremonger (Ilford, North)

I rise to welcome and support the Bill. I have only one or two quite minor and gentle points to make, and I hope that I shall not detain the House very long.

I should like for a moment or two to follow what was said by the hon. Member for Hayes and Harlington (Mr. Skeffington), because I must honestly say that my experience has been the exact contrary to his. He said that his own contact with people in local government did not enable him to find any support for the general principles of the Bill. I think it only fair to say that, so far as I am concerned, my contacts in my own borough have been exactly the opposite and that I have found that the whole principle has been very warmly welcomed and its wisdom generally recognised. I do not want to go further than that in praise of the Bill on behalf of my own borough, because my borough has a particular grievance, with which I have the greatest sympathy, which I propose to refer to later.

On the actual question of the financial principle of the general grant, I must say that opinion has been very warmly in favour of the Bill. In fact, it has been often said to me, as it must have been said to many hon. Members, that members of local authorities have been unable to avoid a slight feeling of guilt when they were aware, as they could not fail to be aware in committee, of the wave of relief and enthusiasm Which went through the committee when it was pointed out that certain expenditure attracted grant. That human situation one can well understand, and I should not have thought that it would be forgotten or needed to be pointed out in this House.

I should have thought it was a little unwise for hon. Gentlemen opposite to have been so very hard and vindictive about any suggestion which hinged on the word "economy". I do not think it is quite fair, even as a debating point, to equate economy with a cut in expenditure. I should have thought that the whole point was simply this, that if we said to a man, "Right, I will give you £40 for your own and for every £40 you spend I will supplement it with £60 more" he would undertake the expenditure in a slightly less responsible way than if we said to him, "Here is £100; spend it as you think fit."

Mr. Lindgren

If he gets the £100.

Mr. Iremonger

I am coming in a moment to the hon. Gentleman's point about whether he gets the £100. I am glad that he has raised it.

Two other hon. Members spoke on points which I think deserve comment. The hon. Member for Brecon and Radnor (Mr. Watkins) has left his place, hut, unless I misunderstood him, I think he rather missed the whole point of the Bill, because it seems that he was saying that because Wales has a very high ratio of children she will come badly out of the general grant. It seems to me hardly possible to square that with the second part of the First Schedule, which goes into the question of weighting, where surely the point is very clearly made and covers the hon. Gentleman's difficulty. The First Schedule says that, having taken the "prescribed sum", the basic grant shall be made up by multiplying it by the estimated number of children in the population under 15, with a similar formula for children under the age of five. Unless I entirely misunderstood the argument of the hon. Gentleman, I think he has overlooked that. I do not think it is fair to say that that feature in the economy of a local authority will cause it to suffer from the general grant.

I also want to follow up a point made by the hon. Member for All Saints (Mr. D. Howell). He developed the point which was seized upon with the greatest glee by the National Union of Teachers, which, on the face of it, is a very acceptable argument. He said, "Why not include the police grants in the general grant?" I must say that when I saw that argument I thought, "Yes, indeed, why not?" It sounds very fishy. The Government care about maintaining law and order but they do not care about education. They are prepared to "economise," if I may use the vocabulary to which hon. Gentlemen opposite subscribe, in education but are not prepared to "economise" on the police.

In fairness to the Minister of Education and to his Parliamentary Secretary, I think it should be recognised and that it will be within the memory of the House that this was dealt with by the Minister with great attention and, I think, great fairness in the debate on 26th July, when he said that the Government would have been only too glad if they had been able to include the police grant in the general grant, but it was not possible—quite apart from the Metropolitan area difficulty, which is another matter again—to devise a formula which would work in respect of the keeping of public order in a number of different areas, in the way that they could for the education of a certain number of children in different types of area.

Hon. Members

Why not?

Mr. Iremonger

It just is not possible. Of course it is open to hon. Gentlemen to say, "Of course it is possible to produce a formula; here is one". It is up to them to produce it, but, on the information we are given from my right hon. Friend, who had taken the best advice the Government could get, and wanted to find a formula, the Government was unable to get one. Unless we are going to impugn the honesty of the Government, we must accept the fact that that police argument, which is a very subtle one, falls to the ground and should not be accepted.

I want to make a further point about the teachers' case. They seem to me to have been very naughty indeed. They have not done their homework. In fact, they have done rather worse than merely omitting to do their homework. What they have done is to crib from the homework of Ronnie Gould, who has got his sums wrong, anyway. I have found that the teachers who have come to me have read very carefully the National Union of Teachers' circular; they get very hot about the police service point; but they have not read the White Paper on Finance, and certainly not the Bill.

If they had read paragraphs 19 and 20 of the White Paper they simply would not have had the face to raise their principal argument—which would be a very serious one if it were valid—that it is impossible to provide for the expanding needs of developing education services under the general grant system, because paragraph 19 says, in fact, that the grants are to take into account the need for development of the services… Also, paragraph 20 says that increases during the grant period of such magnitude that they cannot reasonably be carried in full by the local authorities will be made up to local authorities by further interim Exchequer grants. If the teachers had taken the trouble to go to the source and to study what the Government had said, although they might have been quite justified in saying, "We do not believe the Government," they could not have said that the Government were not making this provision.

Mr. Lindgren

Can the hon. Member tell me what provision the Government are making? Are they going to make a grant which will meet one-third, one-tenth, or two-thirds of the cost?

Mr. Iremonger

The hon. Member has led me on to my next point, which is to examine what the Government have said in the Bill. They have said, in Clause 2, that: In fixing the annual aggregate amount to be prescribed under the foregoing section the Minister shall take into consideration, the need for developing those services… If he takes into consideration the need for developing the services, and the services are developing, and he makes a grant accordingly, the grant cannot fail to be more than it was before the services were developed.

How are we to be satisfied that that is so? The Bill provides for the fact that these grants have to be put into an order, which is debated in the House. The teachers cannot have it both ways. They may be able to say, "We trust Parliament and the Minister to run the education service," but they cannot then say, "When it comes to deciding the amount of grant, which is to be debated on the Floor of the House of Commons, we do not trust them."

Mr. Lindgren

Is not the hon. Member aware that no Tory peace-time Government has a creditable record in regard to education?

Mr. Iremonger

If I wanted to insult the hon. Member I would say that he was running true to form. I do not want to insult him. I do not think that I should take up the time of the House with trivialities of that nature.

I was talking about the Government's intention to provide funds for developing education services, and I was saying that the matter would be debated in Parliament. I do not see how any hon. Member could possibly deplore the practice—which will be operating for the first time since the war at any rate—of allowing the question of the expenditure of taxpayers' money to be debated in full in the House. We are responsible to our constituents, but at the moment all we can say to them is that we do not know where the money goes; it is just doled out according to the say-so of local education authorities. We provide it statutorily, but we are not responsible for the way in which it is spent.

I would rather be able to say, on behalf of my constituents, "We think that this amount should be spent," or not spent, as the case may be. The constituents would be able to see representatives of the local education authority and say, "We want more and better schools and you will have to budget accordingly." That is the question that would be debated in the council chamber, and it would be thrashed out by candidates at the local elections. The local education authority would have to answer to the electorate for the money it had spent. In that case we should probably have more than 30 per cent. polls at local elections, which would be a good thing.

I should like to know whether or not I am right in what I conclude to be the correct answer to the very sincere doubts expressed to me by the teachers, who have said, "How are we going to be assured that the standard maintained by the local authority is going to be a good standard? How can we know that we shall see a developing standard in education?" I have tried to work out in my own mind what the right answer is, and it seems to me that it lies in the fact that the Minister has power to make Regulations under Clause 3 (3) laying down certain standards, and also that he still has, as his main instrument and mandate, the Education Act, 1944, Clause 71 (2) of which provides for inspection to see whether standards are being maintained and Clause. 99 of which gives the Minister power, in default of the necessary standard being maintained, to run the service himself. I should have thought that that was the ultimate sanction.

Nevertheless, I should like the Minister to clarify the position a little. I should like to know how the procedure would work in the ultimate case of the sanction being applied. We know that these sanctions are inserted as the ultimate recourse, and are not normally applied, but is it not the idea that if a local authority or education authority does not do its job the grant will be reduced? It is obvious that the Government will not say, "You cannot manage on £X; see how you like it on £X minus £Y," but the position is not clear in the Bill, and I have not been able to find out from inquiries elsewhere exactly what will happen. What the Minister would presumably say is, "You are not keeping up the correct standard on your general grant. You are falling down on education. We shall reduce your grant by £Y, which is what we think it should cost to maintain that standard, and we shall maintain it ourselves." I am merely trying to see what is the Government's intention, because the sincere doubts which have been expressed to me in this connection should be cleared up at this stage.

My next point refers to the special educational problem which exists in Essex, which accommodates large numbers of children in its new towns. It seems to me, having looked at the provision for weighting grants, that Essex may be in a peculiarly unfavourable position in that if the grant is made by order in a certain year, and the grant runs for two years, being weighted in respect of children under the ages of 15 and 5 respectively in the county at that time, and if then, in the succeeding two years, more and more families with their children come into the new housing estates in the county, by the end of the period the grant will not be adequate to provide for the extra number of children who have come in in the meantime.

This is a slightly difficult and complicated matter, but I think that my hon. Friend will appreciate the difficulty. It may be provided for in the Bill, although it does not seem to be. Perhaps we can be given an assurance about that.

Finally, and coming nearer home still, may I say a word about the Borough of Ilford? I support this Bill and welcome the principles in it, but I must say that I am profoundly disappointed regarding the situation in my own borough. We have been fobbed off time and time again. Bills for county borough status have been presented in this House under a procedure whereby they were never given a Second Reading. Time and again we were told, "Never mind, chaps, you just wait, we will fix you"—we have certainly been "fixed"—"and everything will be all right when we come to the great clear-up." The answer my constituents are giving is, "Will it, hell!" We find now that the Fourth Schedule neatly takes us out. We are in the Metropolitan area. We—

Mr. Lindgren

And yet the hon. Member says, "Trust the Tory Government"!

Mr. Iremonger

We are penalised in two respects. First, the County of Essex contains in it parts of the Metropolitan area. The Metropolitan area has to be settled before we can have the special review in Essex. The Metropolitan area depends on a Royal Commission, which may mean a delay of anything up to five years. During all that time, Essex must wait for its own problem to be solved. The other difficulty is that Ilford which, by every possible criterion over the last 30 years, should have county borough status, is told to line up in the queue and see what is coming.

I can see that the most frightful things might be coming, and my real criticism of the Government is that the structure of local government in Greater London is no matter for a Royal Commission to report on. It is a political issue—not a Party political issue, of course—and should be decided on political principles. I do not think that a Royal Commission should be asked to try to solve this problem for the Government. They should make up their own minds about what to do. They should create a large number of County Boroughs on the outskirts of London—I do not mind so much what they do about the middle—and prominent among those county boroughs should be Ilford.

7.21 p.m.

Mr. Arthur Moyle (Oldbury and Halesowen)

I was surprised at the critical attitude to the Government policy set out in this Bill which the hon. Member for Ilford, North (Mr. Iremonger) revealed in his final remarks, having regard to what he said in support of the general grant. I admire the credulity of the hon. Member, for he is prepared to pin his faith to the Bill without knowing what will come out of the bag in the shape of a general grant. He refers to the teachers being caught up in what he regards as mere propaganda in their attitude towards the general grant. I would reply that I know of no local authority in the country which has anything good to say about the general grant.

I invite the House to examine Clause 2 (1, c). Clause 2 begins: In fixing the annual aggregate amount to be prescribed under the foregoing section the Minister shall take into consideration— and now I quote from paragraph (c)— the need for developing those services and the extent to which, having regard to general economic conditions, it is reasonable to develop those services. The word "reasonable" is open to wide and differing interpretations. It would be possible for two judges to come to opposite conclusions about the meaning of that word in that context. The word "need" in relation to "need for developing" could be coloured by prevailing economic circumstances. I do not understand how the hon. Member for Ilford, North can say with such certainty that the general grant will be an improvement on the percentage system.

I invite him to look at the 1944 Education Act where he will see that, among other duties, the Minister of Education—I express it in my own words—is enjoined by Parliament to see that every child in the country has an education in accordance with its aptitude, age and ability. What does the Minister of Housing and Local Government say? He does not announce that he will ensure on behalf of his right hon. Friend that every child, no matter where it may live, shall have such an education. He says, "I will see that a condition of the grant I propose to make based upon certain undefined factors"—they are indicated but are not defined—"is that the child shall have a minimum standard of education." I say, therefore, that in introducing a general grant in substitution for the present percentage system, the Government, by the Bill, are betraying the interests of the child and are doing it in the interests of economy. There is no question about it.

The hon. Member speaks about freedom and independence, but he knows very well that under existing legislation there is little freedom from the central Government for any local authority. My hon. Friend the Member for Birmingham, All Saints (Mr. D. Howell) dealt with that point adequately and effectively. Having given a great deal of thought to the arguments in favour of a general grant and those against, I have come to the conclusion that the only freedom which local government will enjoy by it is the freedom to spend less money.

In a debate in this House on 26th July, the Minister said that an ideal form of local government would be to establish administration at the lowest level; in other words, to secure that local government administration was carried out at the point nearest to the people affected by it consistent with efficiency and economy. That, of course, is the ideal. That is the basis upon which we should consider any reorganisation of local government, but if we study the White Papers issued by the Government, in preparation for this Bill, and if we study the Bill itself, we must conclude that even had the Bill been drafted in the office of the County Councils Association, the advantages accruing to county councils could not have been improved upon; because the county councils are the only bodies which will derive any benefit from the Bill. Other local authorities outside county boroughs will get little or no advantage.

We are told that some of the county boroughs will be subject to review. The county councils know that in the process of this review some county boroughs will disappear. Others, of course, will be established. But on balance, the county councils will not lose anything. The county council is the authority conducting the review of county districts and also the authority to decide what functions shall be allocated to districts within a county, subject to the fact that it will be responsible for policy. In advocating this, the Minister said in reply to an intervention, that the county council was more competent to judge such issues because it knew the county and had a more intimate knowledge of the circumstances.

Let us look at the procedure. I have made a fm notes of what the Minister said by way of explanation, and I hope he will tell me if I should misrepresent him. Reviewing the county districts, he said that the county council will consult with the local authorities concerned; and secondly that the county councils, having gone into the matter in consultation with the county districts affected, will then make their recommendations to the Minister. If, on the recommendations being known, there are objections to such recommendations from the local authorities so affected, the Minister will then arrange for a local public inquiry.

That means that, in the end, in so far as any decisions are taken which are operative in relation to the readjustment of any boundaries, it will not be the county council that will be the deciding factor; it will be the people who are extraneous to the county itself, and they will be appointed by the Minister to conduct the inquiry. I take it—I should like the Minister to make this point clear—that the Minister will still have the power of decision, although it will he very difficult for the Minister to counter any decision issuing from a local public inquiry.

Why go through all this expenditure of public money on a tedious procedure when it would be far better and much more effective, with a greater insurance that justice will manifestly be done, if a local government commission were appointed for the job? I ask the right hon. Gentleman to consider that in relation to the interests that are involved in such a matter. Let the Minister make no mistake about it, any attempt to revise boundaries in any local government area is dynamite to whoever touches it.

I want to put one or two questions to the Minister and, in so doing, to reinforce somewhat the point that was made by the hon. Member for Exeter (Mr. Dudley Williams). I know that this is a Committee point, but I should like to put it on the scoring board. I refer to those local borough councils, like Oldbury and Halesowen, which are heavy-industry boroughs, which lost a great deal through derating and recently lost 20 per cent. as a result of the derating of commercial premises. I should like to know whether such a loss of revenue is to be considered in relation to the fixing of the general grant.

Secondly, if the present policy of unclassified roads be made a charge upon the county as a whole, will such an impost upon the local authorities in any way figure by way of compensation in the general grant? In short, will it be one of the factors?

The other point is this. I think the Minister said that it was not proposed to dispense with the divisional education executives. The White Paper says that those authorities, which the Minister describes as most-purpose authorities, will administer certain of the education services, but the minimum in the Bill and in the White Paper is 60,000. A large number of authorities were excepted for the purposes of the Education Act, 1944, and I should like to ask the Minister whether these excepted districts will continue unchanged under the Bill where the population, such as in the case of Oldbury, is just about 55,000 and is therefore below the minimum laid down in the Bill.

This Bill is a county councils' charter. It could not have been better drafted in the interests of the county councils had they done it themselves. But if we are to revitalise local government we should do two things. First, we should restore the complete rating of industry; and secondly, there should be conferred directly upon these local borough authorities, by the Government and not by delegation by the county councils or by the Commissions, certain essential purposes within their own communities. By that means we shall revitalise local government, but we shall not do it so effectively by any other measure and certainly not by the provisions of this Bill.

7.36 p.m.

Mr. John M. Temple (City of Chester)

I shall not follow in detail all the arguments of the hon. Member for Oldbury and Halesowen (Mr. Moyle), but I shall comment upon one or two of his observations in the course of my speech.

I shall concentrate on Part II of the Bill, which has not received quite the highlighting which it might have received this evening. However, before I pass to Part II, I should like to make one or two general observations on Part I. I am quite convinced that the principle of general grants is right. I know that educationists have fears, but I equally believe that those fears will, in the long run, prove unfounded.

As to the rerating of industry, I believe that the provisions in the Bill whereby industrial rating is to be increased to 50 per cent. is getting things about right. An observation by the Minister today, which I welcomed very much, was his announcement that he would set up a committee on the rating of charities. I believe that that committee will receive the endorsement and support of all sections of the House.

I said that I would concentrate on Part II of the Bill, and especially on the part relating to the review of local government areas. I feel that I should speak of the county and locality which I represent. I represent the City and County Borough of Chester, and in addition a part of Cheshire. I believe that my county will be more affected by Part II of the Bill than will any other county in the country. I wish to speak particularly about the counties which are contiguous to special review areas. I believe that Cheshire is certainly the most affected. There are other counties which are affected to a similar extent, but Cheshire is concerned by reason of the fact that two special review areas seriously impinge on the county. The county borough offices and the county council offices are within my constituency.

I entirely approve the provision for setting up these Commissions to review this very difficult subject. The hon. Member for Oldbury and Halesowen (Mr. Moyle) referred to the touching of local authority boundaries as political dynamite.

Mr. Moyle

Yes.

Mr. Temple

He is probably right in that, but I have confidence that my right hon. Friend the Minister can easily handle dynamite.

I welcome the scope and flexibility to be given to these Commissions. I believe that that will prove their strength.

Mr. Moyle

Ever since the Minister has been in his present office, he has been throwing political dynamite about everywhere.

Mr. Temple

My right hon. Friend has shown himself amply able to deal with things stronger than dynamite. That has certainly been true during the short period in which I have been in the House.

I thoroughly approve of the idea of flexibility in appointing the Commissions, because no special review area will be like another. I am a little concerned, however, about one direction which the Commissions are to be given. By Clause 17 (1), it is provided that the Commissions shall have regard to what is desirable in the interests of effective and convenient local government. I do not feel that we are going quite far enough there; "effective" and "convenient" are not very strong words.

I seriously suggest that before the word "effective" we should put the word "economic," for, if we are to create economic special review areas and, likewise, economic and efficient counties behind them, the result will be of far greater importance and benefit than would be produced by paying attention to mere convenience. I do not altogether subscribe to the word "convenient". We may be told that the Parliamentary draftsmen, when they draw these things mean "economic and efficient" when they use the word "effective". Perhaps my hon. Friend the Parliamentary Secretary will indicate whether the word "effective" embraces "economic and efficient"; if so, I shall be satisfied.

I welcome the proposal that the Commissions shall review the special review areas. This provision will affect my county in a way which will not, I know, be in any way unique; there is a county borough within the county, and there may be other county boroughs having the idea that they may wish to extend their boundaries. I make the plea that the Commission, when it sits and considers the effect on one county, shall, at the same time, sit and simultaneously consider the county boroughs within the county. The object of my argument is that, if the Commission sits and considers one section of a county, sitting and considering later another section, then turning to consider county boroughs either within or without the county—the ones without perhaps having ideas about taking from the county—we may well be left with a pattern in the county which will be uneconomic.

I am concerned all the time with developing local government throughout the country in economic units. The primary object of the Commissions is to review the special review areas themselves, but I am equally concerned with the areas left behind. The truncated counties must be left as economically workable units. In this respect, I should like to give two details about my own county. If the two conurbations of Merseyside and South-East Lancashire are brought into being and their rateable values are deducted, the rateable value of my county will go down by 57½ per cent. If the county boroughs extend their boundaries, the county will be truncated to the extent of 62 per cent. of rateable value.

I am not one to object to the position of the conurbations. I was born on Merseyside and I can see a great deal of reason for the creation of a special review area there; equally, I can see the argument as it applies to South-East Lancashire. But we must have regard to what is left behind and ensure that each unit is an economic unit at the end of the process. I am, therefore, particularly emphatic when I suggest that the words "effective and convenient" in the direction given to the Commissions are not strong enough.

It has been suggested by two hon. Gentlemen opposite that the special review areas have been drawn too tightly round the built-up areas. The reverse is true in the case of Cheshire. As regards the Merseyside conurbation, I would suggest that there has been too much green belt included. I have drawn a certain amount of strength from having some conception of the workings of the Departmental mind, and I believe that the Departmental mind often includes a great deal to start with, it being possible to give way a little as it goes on. I hope that that will be so here.

I have emphasised that economic conditions should be paramount. They are more important than convenience. In this connection, I recommend to my right hon. Friend that he studies carefully what was said last week by my right hon. Friend the Postmaster-General who, when he was discussing the affairs of the Post Office, said that he had called in a well-known firm of consulting accountants to advise him on the structure of his Department. I believe that local government is very big business. If one were reorganising a very big business today, one would automatically think of consulting accountants. If this suggestion is not acceptable to the Departmental mind, I would suggest that an organisation and methods team should be attached to the Commissions.

The object behind my suggestion is this. What we are discussing is really a business, and the economic efficiency and health of each business entity will be a factor of extreme importance to the people living in the areas concerned. I am particularly anxious that advantages from an administrative point of view should be reflected in the saving of money when the special review areas are set up. I believe that if we establish further tiers of administration, only to go on adding to the cost, we shall not bring about a state of affairs any better than that which we have today.

I have concentrated on the economic side of local government, and I should like now to put a rather more sentimental point to my right hon. Friend. I believe that it will have his blessing, if I judge aright the way his mind works. I hope that tradition will not be forgotten when the reorganisations take place. My county is one of the two Counties Palatine in the country, having been founded as a County Palatine by William I, and there is an immensely strong tradition there. I know that the same will be true in many of the counties which are contiguous with the conurbation areas. Let us not lose that tradition.

Firmly believing that tradition is worth a great deal, I make an earnest plea to my right hon. Friend that what is old should not be destroyed unless we are quite certain that something better will be created. Economics must be the transcending factor, but we should not be obsessed by that one factor when considering this Part of the Bill. Although we shall be judged largely from the economic standpoint, tradition has a part of major importance to play, and we must not forget it.

The Bill is a good one, and I expect that it will, with modest modification, prove to be a great Bill.

7.50 p.m.

Mr. C. W. Gibson (Clapham)

I should like, at the outset, to say something about the only Part of the Bill for which I have any great enthusiasm; that is, the suggestion of a Royal Commission to consider local government in London. That has been necessary for a good many years and I am glad that it is to be done.

I am sure that if it is to be done effectively, the consideration must cover the whole of the Metropolitan Police area. What I am not so sure about is that even a Royal Commission will produce anything which will by any means secure general agreement from the local authorities in the area. We ought, however, to try it, and I hope that the Royal Commission will succeed in producing something which commands general agreement and gets rid of some of the utter waste of expenditure on municipal officials in the Greater London area which exists at the moment.

The first point I want to stress is that Part I of the Bill, which deals with the change from a percentage to a block grant, is wrong. Not only will it create difficulties for our education services all over the country and for health and other services for which at present we get a percentage grant, but I think it is wrong in principle. I consider it to be contrary to all the teachings of history. The idea has been tried more than once. Percentage grants were turned into block grants, but within a few years they had to be turned back again into percentage grants, because the block grant system inevitably works badly and creates difficulties and delays for adventurous-minded local authorities wishing to conduct experiments.

Education authorities in particular should be encouraged to venture into new methods and new ideas, but if the whole of the increased cost is to be borne out of the local rates, there will be a tendency—not so much in London while we have our present majority, but certainly even in London—to slow down some of the rather exciting experiments which have been conducted in education since the war.

What I am most concerned about is that the Government should have reintroduced the block grant on the ground that it will extend freedom to the local authorities. I do not think that it will. In any case, it has been stressed that the Minister is retaining the power to lay down minimum standards. As one who has had some experience of the interference which can come from a Government Department, at least in all kinds of building work, in the laying down of minimum standards, I should be very sorry for some local authorities when they want to venture out.

I believe that the real reason for the change is that the Government may save Treasury money. Everybody outside this House believes that—not only the teaching authorities and the associations of educational authorities, but responsible organs of the Press. I have with me an editorial published in The Times on 21st November, which said, among other things: The change to block financing makes sense only if it becomes the means of markedly reducing Exchequer aid, so obliging local authorities to raise more funds from their own resources and enabling them to assume greater responsibility. The last words are just a little bit of sugar to gild the pill. The effect will be to reduce expenditure by the State and to push it on to the local rates, even if the Government could honestly say that that was not what they wanted.

I believe that that is what the Government are after. They have been doing it in many other aspects of public life since they took office. In this case, they will ultimately make big savings, even if the first block grant produces for the local authorities as much money as they are getting at present.

That is not, however, the end of the story. Inevitably all the costs of local government are going up. The Times, in the same editorial on 21st November, said: For the present rating system is poorly equipped to bear the larger burden the Government rightly want it to assume… The rating system will have to bear the larger burden for which it is poorly equipped.

Most people with any knowledge of local government would agree that, by and large, in view of the rising costs and the reduced value of the £ since the end of the war, and all the other financial difficulties caused by the cutting down of subsidies and the raising of interest rates, local authorities are being put into greater and greater difficulty, as has been shown by the fact that many of them are stopping many of their activities which involve capital expenditure. Here we have the word of The Times supporting what we on these benches have been saying for months past, that the local authorities cannot be given the freedom to go ahead to adventure, in which we believe, because of their difficulties in raising their rates in a manner which will not be unfair to their ratepayers.

The present system of rate raising is nonsense. The way in which the derating of industry is working out is becoming idiotic. I discovered to my surprise that the following industries are derated under the 1929 Act: factories for the blending of butter, tea, whisky and oil, the sorting of rags, scrap metal, wool, beer bottles, coffee grinders, builders' yards, newspaper offices, works canteens and laundries. To my recollection, not one of these categories was thought of when the Bill to derate industry was introduced, but they have been brought within the ambit of the Act by subsequent High Court decisions. This makes absolute nonsense of the whole thing and, what is most important, imposes upon the ordinary household ratepayer a much heavier burden than he should bear.

Let me give an illustration of the effect upon London. The total net annual value of all rateable properties in London is £119¼ million, but the actual rateable value, on which we draw rates, is only £96 million. The difference between the two figures is accounted for by £9¾ million lost by the derating of industry and £13½ million lost by the 20 per cent. de-rating of offices and commercial premises by the Government a few months ago. All local authorities, therefore, have a double burden in the derating of both shops and industrial premises.

To the London ratepayer this means, at the present rate of derating, the equivalent of a 10d. rate. If all factories and industrial hereditaments paid their full rate on their full 100 per cent. rateable value, and if we had not had this nonsense about the 20 per cent. off commercial premises, the London household ratepayer would be paying a rate 10d. less than he is paying now. That is a considerable matter in these days of high costs. With industrial derating increased from 25 per cent. to 50 per cent. there would be a difference, for it would reduce the amount from 10d. to 3½d.

I cannot understand how any Government concerned about the burdens which the ratepayers bear could refrain from properly imposing the full 100 per cent. of the rateable value of all shops and industrial premises. They are all receiving the benefit of the services for which we all pay, yet, as one of my hon. Friends has shown, these industrial premises are paying in rates only a very tiny proportion of the amount they spend on advertising, and they could very well afford to pay the full 100 per cent. I hope that one day we shall see that brought about.

Even with that, though, the present rating system is wrong in that it discourages improvements and penalises the man or woman who tries to be adventurous in his or her small business or at home. The more improvements that they make the more rates they pay. That is all wrong.

The Minister said, he could not see any possibility of any new source of revenue, but if he had looked hard enough he would have seen examples in Denmark, for instance, in most of the countries of the Commonwealth, and, according to one of my hon. Friends, in Western Germany, where a large proportion of local income is raised from local rates on land values. Landowners are the only people who take an enormous tribute from the community without paying any local rates as landowners, and I say that if the Government are looking for any new source of income for local authorities they ought very seriously to consider whether they could do something similar to what, for instance, New York has done, and put a tax on land values. To the extent they do that they will lighten the burdens of the people who are at present bearing very much more than their share of the cost of local government rates. They might even be able to avoid this historically rather futile process of changing from a percentage grant to a block grant, thereby imposing, what all history shows to be the result, much heavier burdens on the local ratepayers than are fair and proper.

Our local authorities ought to be adventurous, and I believe that if they were given their head we should see great developments in local democracy. Unless they can find adequate revenue that will not be done. Difficult as it is at the moment many of them are trying. One good reason for not making this change proposed in the Bill lies in the real interests of local government and local government freedom.

I am struck by the fact that nobody outside this House seems to have a good word to say about the Bill. All the local government associations and the local government Press, most of the national Press, all the teachers' organisations of all kinds, are all against it. I have no doubt that there is some personal vested interest in some of the protests, but the fact remains that history has shown that if this House transforms this kind of percentage grant into a block grant it inevitably fails to work and that the House has to legislate for the percentage system again.

Therefore, I say to the Government, drop Part I of the Bill altogether. That will not make any difference to the rest of the Bill. Let it go. Let us have proper consideration through these Commissions, and the Royal Commission on local government in London, and the reorganisation of local government, but let us stop this nonsense of trying to save money for the Treasury at the expense of the poor people who pay rates on the ordinary houses in this country.

8.5 p.m.

Major Sir Roger Conant (Rutland and Stamford)

I find that almost everything I had intended to say to the House has already been said, and far more persuasively and coherently than I can possibly say it myself. There is therefore scarcely any need for me to address the House, and I would not do so but for one matter on which I feel very strongly indeed.

I represent the County of Rutland—I think there are very few hon. Members who can claim to represent a whole county—and half its neighbour as well, and I am horrified—

Mr. George Thomas (Cardiff, West)

Two whole counties are represented by one hon. Member over here.

Sir R. Conant

I am speaking of England. I am only concerned with England.

I am horrified to find that the Local Government Commission for England will be empowered by the Bill to recommend the abolition of a county. In other respects, I support the Bill. I think that on the whole it will certainly be an advantage to my county, and to the rest of my constituency, but I feel that this power of the Commission to recommend the abolition of a county and the redistribution of its area among other counties needs reconsideration.

I have no fear that the Commission is likely to recommend the abolition of Rutland on grounds of inefficiency or on any other like ground because we are able to provide at present satisfactory services for our inhabitants, in some cases by cooperation with our neighbours, in such matters as technical education, as do many other counties. I believe that we provide for our inhabitants at least as good services as many larger areas.

Our danger lies, I feel first, in the fact that planners are tidy-minded people; they would not be good planners if they were not; and secondly because of the popular misconception that smallness and inefficiency must go hand in hand. That is where our danger of extinction lies.

As I understand this Bill, if a recommendation for the abolition of a county were made by the Commission there would not need to be any local inquiry. It is at the discretion of the Minister. I am sure that in such a case my right hon. Friend would feel he must have a local inquiry, but under Clause 23 (3) he need not do so if he thinks he is "sufficiently informed." He has, it is true, to lay an Order before Parliament giving effect to the recommendations of the Commission, and it is possible to have a debate. Such a recommendation is likely to apply in practice only to a small county, and there would be only one Member concerned; no one else would be interested in what happened to the small county. What happens if the Member is ill or if he is abroad? We can all recall instances in history in which the most controversial matters have, to the delight of the Whips, passed through unconsidered because they have come up at a strange and unexpected hour. It is therefore theoretically possible—I do not say it is likely to happen in practice—for a county which has been in existence literally since Domesday to disappear off the face of the map and without having a chance to express its case in public.

Mr. Lindgren

The hon. and gallant Gentleman has a grievance against Dodd, too, because Dodd, under "Rutland", says "see Lincolnshire".

Sir R. Conant

Yes, but if the hon. Member looks up "Lincolnshire" he will probably see it says "see Rutland".

Such a change, if it were ever necessary, should be carried out only by agreement, or a large measure of agreement, with the county to be abolished.

The procedure laid down in the Bill for a report by a Commission, a local inquiry at the discretion of the Minister—and I agree that it should be at his discretion to avoid frivolous objection—followed by an affirmative Order—is quite adequate when considering the alteration of county boundaries but it is unsuitable when we are considering destroying the traditional loyalties and affections which exist in the case of a county. Such a method would not convert the inhabitants of a county that was abolished into loyal citizens of its successor. Nor would it persuade councillors who are accustomed to travel 15 to 20 miles to committee meetings that it was in the public interest that they should travel 60 miles to a different centre to attend meetings of a bigger authority. I would therefore ask my right hon. Friend that this proposal for the abolition of counties, which are among our oldest units of administration, should be taken out of the powers of recommendation of the commission.

8.11 p.m.

Mrs. Harriet Slater (Stoke-on-Trent, North)

I speak as a representative of a large city council. I declare right away that I have an interest, because I am alderman of that city council. After listening to today's debate so far, and reading again speeches made previously on this subject, I am bound to arrive more and more at the conclusion that the whole purpose of the Bill is to economise on the vital services provided by local authorities. The hon. Member for Ilford, North (Mr. Iremonger) made that very clear when he kept bringing in the word "economy" into his speech.

I, also, began to teach at the beginning of one period of economy in 1923 and I became a councillor in 1933, during another period of economy. It has been my experience that when there have been calls for economy the services that have suffered most have been the education, health, and other personal welfare services. It is no use the Minister of Housing and Local Government trying to "kid" us and people outside the House that the purpose of Part I of the Bill is to give greater freedom to local authorities. If local authorities have not the wherewithal to provide their services, freedom is of no use whatsoever.

Local government has made amazing progress over the last century and a half. Before the first Public Health Act was passed, in 1875, the country was ravaged with diphtheria, cholera and the plague, and there was a great deal of tuberculosis but, because of the powers given to them, the local authorities have been largely responsible, with the help of an improved standard of living, for the reduction in the incidence of these dreadful diseases. An amazing story of progress could also be told about education.

I look upon local government and the powers of local authorities as being, in effect, the general public's consumer protection. Members of local authorities are the nearest to the general public. The public can get in touch with their councillors very much easier than they can get in touch with joint boards or, very often, with Members of Parliament. The local authority, therefore, acts as the consumer welfare officer for the services which the public expect from both the Government and the local authority. I should very much fear any taking away of powers from local authorities or the putting in their way of difficulties which would prevent their giving increasing service to the public.

It has been said that every kind of local authority has made some protest against some part or other of the Bill. In the main, the protests have been aimed at the financial Clauses. There is no stability for local authorities in the Bill. The general grant will be made by the Minister of Housing and Local Government and the present Minister's record has been such over the last few years that neither my hon. Friends nor the local authorities have very much faith in this provision.

The Bill comes before us immediately after a series of attacks on local authority finances and on housing loans. Now the health services, and the care of the aged and young, will also be attacked. There is no real certainty about the amount of the grant that will be received, and there is no guarantee that in an inflationary period, with wages, salaries and the cost of materials rising, the method of administration or the basis of the grant can be changed quickly.

My hon. Friends have already mentioned the rerating of industry. We have considered for very long that it was about time that both agriculture and industry paid a share of the rates equal to that paid by the householder. Derating was introduced in circumstances completely different from those of today. We are living in a period when high profits are still being made in industry and householders should not be asked to bear their own burden of the rates, plus 50 per cent. of the burden on industry and 100 per cent. of the burden which agriculture should bear. Yet that is the situation which the Bill leaves unchanged. The population of Stoke-on-Trent is one two-hundredth of the national population. Rerating should provide the city with an additional income of £300,000, but the effect of the terms of the Bill is that it will receive only £100,000.

I want to speak, in particular, about the relation of the Bill to health and education. I make no excuse at all for looking with great fear at the provisions of the Bill and their ultimate effect on the education services. Education has been in the past and should be an increasingly growing service. It is easy to claim, as members of the Government do, that it is desirable to give equality of opportunity to every child, no matter who the parents may be or where the child is born. The provision of a general grant will make it impossible to make that claim, because it will mean that educational opportunity will still depend on the child's parents, on the type of local authority in the area and how far that local authority is able to call upon its people for an increased rate so that the area may make progress in education.

I am accustomed to finding hon. Members opposite, who spare no money at all on the education of their own children, being parsimonious when it comes to the education of working-class children. It has been my experience that whenever there is economy in education it has always been aimed at what used to be elementary education and is now primary and secondary modern education. It is all too easy to use the phrase used by the hon. Member for Ilford. North, that there may be too many frills in education. The question of what are frills depends upon one's sense of values. Some people would say that facilities for games and athletics, and youth work, and even the provision of university awards, are frills, but they are not so regarded at Eton and Harrow. They are considered to be essential there, and they must be considered essential for the people and the children whom I represent.

The Parliamentary Secretary to the Ministry of Education said that if a local authority wants to embark upon deliberate expansion of education as an act of local policy, the Government are determined that that must be on the authority's own financial responsibility. The obvious implication is that the Government aim at retarding a forward-looking authority. In May, 1953, a Select Committee reported on our schools. The report, which was a valuable one, stated that at every point the Committee was confronted with overcrowding, lack of schools, heavy transport costs, a shortage of teachers, and often deteriorating and even dangerous school buildings. It added that new schools became overcrowded as soon as they were opened. The Committee's Report went on to say that Some of them are no better than slums and should be either pulled down immediately or undergo drastic repair, even at considerable cost… I challenge any hon. Member who represents an industrial area to say that he cannot find slum schools still in existence there. I can find them. I know of schools in which we should not expect children to be educated. We shall be told by the Minister, or by the Parliamentary Secretary, that many new schools have been built but, in the main, new schools have only been provided to meet new housing needs and little has been done to modernise or to remove some of the slum schools. In 1925, 600 schools were blacklisted, and when the Select Committee reported 600 still remained.

It is easy for any Minister to say that we have secondary modern education and that we are endeavouring to deal with the bulge which will arise mostly in 1961. It is easy to say, on paper, that a local authority has so many school places and that, therefore, it needs only so many more. At the same time, geography enters into the question and two factors have to be considered in estimating whether a local authority has sufficient provision for school places.

My own local authority covers a long, narrow county borough, whereas another may be more in the shape of a circle and so the distance from the centre is less than it is in my own area. It is easy to say that children from one school can go to another, but transport difficulties create innumerable problems and three miles is considered a reasonable limit for a child to travel to school.

The other factor in measuring school places is the number of old schools which ought not now to be in existence. There are two such schools in my own constituency and, frankly, if I were a parent and the local authority directed my child to one of them, I would refuse to allow the child to go because that school could not possibly provide an efficient, secondary modern education.

Now I come to the question of university awards. Again, if I may be permitted to quote my own local authority, in 1945 we spent £1,000 a year on university awards and this provided for three or four girls or boys. For the year 1956–57 we are spending £49,000 on university awards and in 1957–58 we hope to raise that to £51,000.

Every local authority will be faced with a problem under the proposed block grant system. It is that if we are to economise, members of local authorities, chairmen of finance committees and others, will be wondering where they can make the first cut without many people knowing about it. University awards will provide a good opportunity because only a small proportion of people are likely to benefit from them. If that is done we shall destroy the foundation we have tried to build since 1944, namely, that if a child has ability and gains two subjects at advanced level, and if a university offers a child a place, he or she should have the opportunity of accepting it.

I could mention other education authorities which are not generous now. I shudder to think that local authorities like my own will probably be faced with the alternative of lowering the amount of grant given to the students, thereby making it impossible for children with fathers in the lower income group to take advantage of the opportunity, or of giving less, and then will start the eternal argument of the basis on which university awards are to be reduced.

Another point arises in connection with commerce, art and women's technical work. In 1946, Stoke-on-Trent had an appalling report on further education from Her Majesty's Inspector. Since that year great strides have been made. We have started a women's technical college, because a large amount of female labour is employed in the area. We hope to have a new school of commerce and we also hope that at some time we shall have a decent college of art in a city where art is the basis of most of our industry. Today, it is housed in an old building which it is impossible to modernise or adapt. I can visualise that under the proposed block grant the college of art may remain there until 2036, and we may then take out of our archives the education report of 1946 and ask, "What did the people do in between those years?"

As regards equipment and furniture, everyone who has served on an education committee knows the amount of leeway to be made up in this respect. When I started to teach, we literally counted sewing needles and pen nibs and we were lucky if we could get a second exercise book when the first was finished. For art lessons we had to make do with little pieces of art paper on which it was impossible for children to do large-scale drawings.

Mr. D. Jones

Would that be under a Tory Government?

Mrs. Slater

It was a Tory local authority, let alone a Tory Government. We had the long old-fashioned forms on which every child, no matter whether big or small, had to sit to the detriment of their backs and their general postures. That sort of thing is another example where certain people call for economy in education without understanding the need for it.

At the first education committee meeting which I attended I was raising certain points when the chairman of the committee said to me, "Young lady, we run our education very economically in Stoke-on-Trent." We were then third from the bottom in the table of expenditure by county boroughs. Through running education so badly we were nearly at the bottom of the league. I do not want to see that sort of thing happen again. Out of every £ spent in Stoke 10s. 5½d. goes on education, 6s. 6d. of which is, at present, grant. It is not very much to spend, but if we put it in another figure the weekly rate bill of a householder with a £13 assessment is 5s. 4½d.; and 1s. 10½d. of this is spent on education. I think that that is very cheap for the amount of work which has to be done.

In an age when we want to improve our technical experience and science, when the proposals of the Bill leave out advanced technology and when those who know believe it would suffer under a block grant, let the Government remember that it is no good grumbling about what Russia does or what America might not have done. Unless we begin at the very bottom and have good primary, secondary modern, and junior technical schools, to call it advanced science and advanced technology is sheer humbug and a waste of time. We must have the foundations. I ask that we shall not use the provisions of the Bill and the cry of the Government for more and more economy to attack the education of the majority of the children who, I maintain, have as good brains as some of the people who receive great educational privileges.

I am very concerned, too, about health. I remember that when I was on the Stoke-on-Trent local authority our infantile mortality rate was in the region of 70 to 144 per 1,000. That was due to several reasons. One, because there were no ante-natal and child welfare clinics; two, because many people went hungry because we had a Tory Government; and, three, because of the bad housing conditions which then prevailed. We have reduced that infantile mortality rate. I remember when we had not got a child welfare clinic, but with a struggle, we managed to open some child welfare clinics before the war, admittedly sometimes in slum building. We extended our ante-natal work and we are proud of the fact that for many years we have not lost one mother who has attended ante-natal clinics.

We are glad, also, that we have brought our infantile mortality rate down to an average of 30 per 1,000, so that we can rank with the large towns. We have done that, as I said, largely because people are fed better, mothers have not the worry during pregnancy that they had through unemployment and poverty and because of the provisions we have made for them. I do not want to hear any local authority saying, "We can cheesepare a little here and close this or that clinic." or "We need not give that clinic the equipment it ought to have." Unless we are very careful we shall find a service like that disappearing.

The health committee in an area like mine has a lot to do regarding smoke abatement and food and drugs. Do not let us think that there is no danger at present for people selling bad meat or adulterated foods. That still operates. The only reason why it does not operate to the extent that it did is the work that local authorities have done in preventing it. I do not want to see any decrease in that kind of service.

With regard to the care of the old, we have a growing ageing population. It is not good enough to say that we will increase the pension a little. We must make provision for the people who have no homes and no one to look after them. Stoke-on-Trent has opened some very good old people's homes which have a real homely atmosphere and get away from the old institutional idea. If we are to tell our people that we do riot want to move them about as if we were playing chess but propose to treat each individual as a human being, then, in our education services, in our children's committees, in our work for the aged and those who may he ill and in our public health work we must continue to advance. The Bill will retard rather than advance our work.

There are certain matters which can be considered in Committee, but I oppose the Bill purely on financial grounds. How far will progressive and forward-looking local authorities be kept back because the minimum standard which the Minister will set will be a poor one? It is on that basis that I oppose the Bill. I hope that the Minister, even at this late hour, though I have little hope of it, will again look at the matter and appreciate that he, one who claims to be interested in local government and a man who has a wife who is interested in local government, is another Minister of a Government who are introducing provisions which are really the dictates of the Treasury and not the dictates of his own heart.

8.37 p.m.

Mrs. Evelyn Emmet (East Grinstead)

I do not wish to follow the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) in her argument, but I should like to tell her that there are many hon. Members on this side of the House, including myself, who have spent years in local government—thirty-two years in my case—and are just as keen about and proud of the standard of local government as she is. I fully sympathise with her anxieties, but I believe she will find them misplaced.

I want to refer to the speech of the right hon. Member for Rochester and Chatham (Mr. Bottomley), an old colleague of mine from war-time days. In those days his sanguine temperament and optimism were always a tremendous help in solving problems. I am sorry that today he belied his real nature and descended into gloom about the prospects of the Bill.

Mr. Bottomley

Just in case.

Mrs. Emmet

The right hon. Gentleman's speech was a warning about what might happen if the Bill was not properly applied. I can reassure him about his misapprehension on that subject. Having produced the Bill, the Government will apply it with all its sanctions and safeguards and any alterations which may result from Amendments, and they are determined to make it a great success.

It is natural that at this stage there should be anxiety and criticism. I have been in local government long enough to remember the anxieties and criticisms in 1929 when the boards of guardians were abolished. Indeed, I can still remember my own alarm at being made chairman of a board of guardian's hospital with 2,000 beds. It took me a long time to get over my anxiety. I remember the National Health Service Act, 1946, coming into force in 1948 when the hospitals were taken over by regional hospital boards. Again, there were much anxiety and criticism. I was very critical myself and in certain respects I still am, being one of those people who would prefer to see hospitals remain under local authorities.

Those were very important Measures, but the criticisms were met and the anxieties were dispelled and, looking back, everybody would say that both the abolition of the boards of guardians and the introduction of the new National Health Service Act were tremendous improvements. I feel that the same thing will happen in this case, and I ask the right hon. Gentleman the Member for Rochester and Chatham to return to his cheerful and sanguine outlook in these matters.

Hon. Members opposite cannot have it both ways. The right hon. Gentleman said that the Government were evading responsibility by placing responsibility for spending of money increasingly on local authorities, thereby giving them more independence, while the hon. Member for Birmingham, All Saints (Mr. D. Howell) said that the regulations governing the spending of that money were so tight that there would be no question of freedom. Either one is right or the other wrong, or both are wrong; I do not know. They do not speak with united voices on this matter.

It is true that the administrative regulations are very tight, but they are a minimum standard and—having sat for many years on a county council, both in London and in the country—I can see no reason why good administration should not rise above the minimum standards. That is where the freedom comes in.

I see a great help in the block grant in one particular. It is of tremendous advantage—apart from others—that the grant will be paid within the twelve months in which it is due. I hope that the Minister will see his way to paying it quarterly or, at any rate, frequently and not in a block. That means that county councils will have all the money that is due to them within the year. Those of us who sit on finance and general purposes committees know only too well that under the present arrangements it is sometimes months and even years before one gets from the Government the full amount of money due to one.

If the block grant had been based on existing expenditure, it would not have been fair. However, that is not the case and the grant is based on the needs of an area carefully studied and weighted according to certain regulations and with the safeguard that for the first year the full 100 per cent. and for the second year up to 90 per cent. will be paid for those councils which suffer some diminution of grant. Even in those cases, it is better to get 90 per cent. of one's money within the year than to have to wait for months before collecting it.

Not sufficient emphasis has been put on the value of new money resulting from rerating. This source of income is bound to increase and will help county councils greatly in the new developments. I want to call the Minister's attention to three points in which I must declare an interest, as I am a Member for a division in the County of East Sussex, and an alderman on the West Sussex County Council. In that area we have a certain anxiety because neither council benefited from the equalisation grant and will not now benefit from the Greater London considerations, and the area will not do very well from the industrial rerating provisions. We should, therefore, like the Minister to consider whether, for the first years at any rate, he would make a revaluation annually and not biannually, so as to catch up with any unfairness which may have shown itself.

We are also worried about the provision for the pooling of further education. I think that this matter will have to be thrashed out in Committee because it is very technical and detailed. One can see the possibilities of friction and disagreement in areas, although it is, of course, quite obvious that technical education must be spread over substantial areas of the country.

I would also draw the attention of the Minister to the First Schedule, Part II, paragraph 7. We are rather concerned in West Sussex, where we have a new town which is growing very rapidly, that there is a provision that a supplement grant is payable if the estimated population has declined. We should like it also to be considered in the case of a greatly increased population. It may well be that the Minister has that in mind when he speaks of new developments, but I should like to accentuate this matter from the point of view of a county which has a new town.

Finally, there is a question about which I personally feel very concerned, and that is the difficulty which I foresee of manning all our councils in the future. I see nothing in the Bill and I have heard nothing from the Minister as to what sort of election areas are to be considered. It is very important that we should have regard to the manpower available locally and make certain that we do not have more divisions for a council than are absolutely necessary. It might be advisable to spread the area of representation and cut down the number of councillors on some of the local bodies. I throw that out as a suggestion, because I know that it will be more and more difficult to man all these local authorities.

May I say how much I admire the courage of the Government in bringing forward the Bill? Hon. Members opposite may think that it is a bad Bill, but they have not had the courage to bring forward a Bill at all. The Government have had the courage to bring forward this Bill, and, generally speaking, it has met with support throughout the country, with the exception of the educational world. I think that the feras of educationists are exaggerated and I am quite certain that after the Bill has gone through Committee, and everyone has contributed to its improvement, we can look forward to a new and most interesting era in local government.

8.49 p.m.

Mr. W. E. Wheeldon (Birmingham, Small Heath)

It is a very curious commentary from the Government side of the House, for the hon. Member for East Grinstead (Mrs. Emmet) to say that she supports the Bill and that it is supported in the country with the exception of education authorities and local authorities.

Mrs. Emmet

I said with the exception of the educational world.

Mr. Wheeldon

In so far as the financial proposals in the Bill are the main point and have received most discussion tonight, it is obvious that education, representing such a large percentage of local authority expenditure, is the subject against which most protests have been made.

I had intended to speak primarily about Part I, but many speeches from hon. Members on both sides of the House have dealt with Part II, and as I disagree with some of the things that have been said in that regard, I should like to make one or two comments. It seems to me that, generally speaking, the proposals contained in Part II inadequate in terms of the needs of modern local government. The Minister said that the Bill did not lay down any set of principles—and he said that with some pride.

It is in Part II that the Government have gone wrong. I know very well that they started on the wrong foot six months ago in the White Paper, which said that there was no convincing case for radically reshaping the areas of local government. After the Local Government Acts of 1888 and 1894, when we have had all the tremendous social, political and economical changes, to say that local government does not need to be reformed in any way in order to meet modern conditions is an absurd contention which cannot possibly be upheld. Indeed, it is one which practically every local government writer over the last forty years has been hammering away at. It has been suggested over and over again, in one form or another, that this House should radically reorganise and reform local government.

I complain about the lack of guiding principle which is at the disposal of the Commissions. They are to make changes desirable in the interests of effective and convenient local government. Those are rather broad and nebulous terms. I know that we have had the appointment of three wise men, and we are apparently to have the appointment of seven wise men, to whom practically everything is to be left. I know that they will be told that in their decisions they can say "county borough" or "county," or "amalgamation," or "separation," or "abolition," but when we have at long last got to grips with the reorganisation of local government some far clearer guiding principles should have been laid down by the Government.

How are we or the Commissioners to construe the words "effective" and "convenient"? Are those words to be understood in terms of the service Ito be operated? Are the Commissioners to think in terms of effective and convenient education, health or water services, as the case may be? Surely something more is necessary in local government. There is no mention about the size or population, rateable value or, most important, the active participation of the people themselves in local government. The point has already been mentioned this evening and it cannot be stressed too much.

The question of reorganisation is one not merely of effective local government. It is not something which can be settled with a slide-rule and a pair of dividers. We must have regard not only to efficiency but also to something which is of equal importance, namely, the place of the people themselves in local government.

I hope that the House will listen to one or two figures that I want to put before it. They surprise me, although I have been studying and working in local government for many years. Over a substantial part of the country today we are not getting anything which can be called genuine local self-government. We are failing deplorably to ensure that a wide cross-section of citizens have the opportunity of participating in local government.

I will quote some counties as an example In fairness, I should say that I am deliberately quoting the worst cases. I am referring to the official figures for the county council elections in 1955, the last elections. In Somerset, 77 per cent. of the seats were uncontested and in Devonshire, 89 per cent. In Cornwall, the figure was 93 per cent. Of the 242,000 local government electors in Cornwall only 2.8 per cent. voted. Some did not vote because they were uninterested, and I am not apologising for them. But the overwhelming majority did not vote because they were not permitted to, because there were no contests.

There were no contests for the simple reason that from a working-class point of view it was difficult, or rather, as the figures indicate, it was impossible to get candidates. Prospective candidates have to consider the matter in terms of distances, travelling time and other factors even when taking financial allowances into consideration. In areas of that kind, it is impossible as conditions exist today. Local government cannot work effectively because we are denying to a large cross-section of the community the right to participate directly in it. Such a state of affairs is bad for local government. It is not local government at all because local government has neither life, virtue nor validity if it is detached from the people which it should exist to serve.

I hope that the right hon. Gentleman will give attention to this matter and to the question of reorganising country areas. The proposals in this Bill fail to ensure that life, purpose and vitality about which I have spoken. Unless that is provided, local government will not remain as an outstanding example of democratic achievement.

Part I of the Bill has been condemned by hon. Members on both sides of the House. Quite a number of hon. Members opposite have found it necessary to qualify their support of the Bill. It must be remembered, indeed it is almost axiomatic, that when a Conservative Government find themselves in financial trouble they try to make a scapegoat of local government. During the inter-war years, the Geddes Committee and other committees showed that procedure being carried out, and that is what the Government are trying to do today. They make assertions about local government expenditure and extravagance, and none of them has been proved. They were not proved by the Geddes Committee, by the Ray Committee or by the Edwards Committee, and they have not been proved today. Local authorities do not spend money in that way. They are watched too closely by the ratepayers, whose sanction is sure and sound.

The real purpose of the Government is to cut down expenditure and transfer liabilities from the taxpayer to the ratepayer. Worst of all, of course, they wish to force local authorities into an intolerable position regarding the continuance of the education service. I will not speak at length on that, although I feel strongly about it, because it has been dealt with adequately by other hon. Members. I content myself by saying that I believe that at a time when contemporary events demonstrate beyond any shadow of doubt the need for the intensification and development of our educational system, it is a tragedy that the Government should bring forward proposals which are obviously so inimical to education that every educational institution in the country has protested against it.

These proposals about the general grant are brought forward at a time when local authorities are in particularly difficult financial circumstances. I have looked at the figures, and I find that in 1957–58 no fewer than 31 county boroughs out of 83 have rates of 20s. or more in the £, and that is after revaluation. That is an indication of the increasing financial difficulties in which local authorities are placed.

Those difficulties are not of the local authorities' own making. Take education, for instance. The increase in the number of children is not the fault of local authorities. Take housing and slum clearance, wanes, Purchase Tax imposed by this Government, the tax on petrol and oil which sends up the cost of municipal transport, and, last but not least, the Government's policy of high interest rates. I do not want to quote my own authority unduly, but perhaps it is a good illustration when I say that additional interest charges will cause £390,000 to be placed on the rate fund next year as a result of the policy of the present Government.

Local authorities are not irresponsible and undiscriminating spenders of public money. At least, that is not my experience, and I have been a member of spending committees. I have been chairman of a finance committee and I have had the unpleasant job of saying to the committee members, "Look at your estimates again". But I have never had to say, "Here is something which is sheer extravagance." Always there has been a legitimate and genuine desire on the part of the committee and council members to improve the services, to do something really necessary in the interests of the citizens whom they represent.

The Government say that all these things are being done in the interests of freedom for local authorities. I think the plea is as hollow as a drum. No local authority believes that, and I doubt whether many Tories do either. The Minister said that he was prepared to trust the local authorities. The obvious comment is that he is prepared to trust them with the block grant but that when it comes to the percentage grant he says, "You have got to think of extravagance."

We should remember that effective local government is basically financial freedom and nothing else. The Government claim to give a greater freedom and greater responsibility to local authorities, but at the same time they are denying to those local authorities the resources with which they can exercise and discharge those responsibilities. Indeed, the local authorities have been denied the right of access to additional revenue.

This afternoon the Minister gave, in about a dozen words, his verdict on the proposal relating to local Income Tax for local authorities. In his speech on the White Paper he dismissed it even more summarily—almost contemptuously. Surely, here is something which, in terms of local government, is of vital importance. I am not saying whether it is right or wrong, but surely it deserves greater consideration from a Government which proposes to impose on local authorities something that they do not want a Government which says "Here is the time to reorganise the financial side of local government." One of the most important proposals and one of the best surveys we have had for many years on the subject the Minister dismisses contemptuously in a few words this afternoon.

The hon. Member for Exeter (Mr. Dudley Williams) began by praising the Bill in rather soft tones, but when he came to the subject of rerating it seemed that he must have been in touch with his local authority.

Mr. Lindgren

He said so.

Mr. Wheeldon

He did? It must have told him where to get off.

The local authorities have been denied the benefits of even partial rerating and, in support of that, the Government make what is a very doubtful contention. In effect, they say that rerating means lower profits, lower profits mean lower revenue, and they must safeguard themselves. For how long has the Minister held that view? He certainly did not hold it in February this year when the Rating and Valuation Act was before the House. The hon. Member for Exeter told us what happened then, and I shall repeat it.

When the Rating and Valuation Act, then a Bill, was debated in February, 1957, the Government then said there should be a 20 per cent. derating for shops and commercial premises. If they had applied their December theory in February, they would then have said, "Increased profits mean increased revenue". But they did not say that local government would be losing and they would make an adjustment; they took the lot. The hon. Member for Exeter was quite right to protest against it. Local authorities are protesting against it, and they have every right to do so. In any case, in my opinion, there is no justification for derating, though I shall not elaborate the point since it has been adequately dealt with tonight.

Local authorities have lost millions of pounds by derating, for which they receive no compensation whatever. My own local authority, Birmingham, has today about £3.8 million of industrial rateable value on which not a penny of rates is paid. Even after the Bill goes through, if it does, there will still be £2.3 million of rateable value on which no rates are paid. I have in mind in this connection prosperous concerns like I.C.I., G.E.C., Dunlop, British Motor Corporation, not to mention the good old Tory friends, the brewers.

It is monstrous and quite insupportable that, in times like these, when we see the profits made in industry, there should be doles of this kind. If any industry is in need of help, the help should be given by the Government, not at the expense of local authorities.

Before I finish, I should like to make two small but important points concerning my own local authority as it is affected by the Bill. The Minister this afternoon stressed that, under the formula, there was to be an objective valuation, and he stressed the importance of this objective valuation. I agree that, in many instances and in many conditions, it is right and proper to have what the Minister called an objective valuation or objective consideration; but we must not lose sight of what is a quite strong indictment of the Bill on the simple ground that it does not take cognisance of individual authority requirements.

In Birmingham, we have been spending millions of pounds on redevelopment schemes. Birmingham citizens and the Birmingham Council, irrespective of party, would agree that Birmingham needs these schemes. In the ordinary way, we should have received probably millions of pounds—at least, we should have received very substantial grants—in aid of these schemes had the existing law continued. Now, we are to get nothing. That will make a considerable difference in Birmingham. It is not the kind of work that can be abandoned tomorrow; it must go on. Yet we shall be faced with this continuing heavy expenditure, for which no grant of any kind will be paid and for which no allowance will be made in the general grant.

The question of teacher shortage has already been touched upon. If in the 1960s, as is quite possible, Birmingham is able to overcome the existing teacher shortage and in doing so is compelled to spend, say, an extra £400,000 a year, which is about the sum required, how much will Birmingham get by way of grant? Not a penny piece. I hope that the Minister will give serious attention to this. What are we to do about it? These are the things which worry local people and local authorities. That is why we are getting opposition from education committees and local authorities.

In paragraphs 21 and 32 of the White Paper, there is an exhibition of what I can only call sheer impertinence on the part of the Government. They talk about £40 million and say that a substantial cash benefit will be presented to local authorities. But what happens? At present, instead of the Government paying 100 per cent., they pay 90 or 95 per cent.; they are giving the local authorities short weight. When they have to pay 100 per cent., as they will have to do, they make a virtue of it. They cry, as the Minister did this afternoon. One could almost see the tears in his eyes. He said, "Look what we have lost—£40 million." But it is not Government money that they have lost, but local authority money. The Government could quite easily have paid the 100 per cent. estimated expenditure and then made whatever adjustment was necessary in the following year. The Government, however, wanted to be on the safe side and withheld that local government money, and now they make out that it is a virtue to say that they will pay cash and they ask us to notice how much the Government have lost.

In my opinion, and, I believe, in the opinion of most people who have served on local authorities and in local authority work, this is a bad day for local government. Many of those who have worked in local government get to love it and to realise what a good job of work is being done. It is something which touches intimately the welfare and the life of the ordinary citizen. One feels in local government that it is possible to do something constructively for the welfare of the people. I miss local government work very much indeed.

Today, we have had placed before us a Bill which will hamper local government considerably, not merely in terms of education, but in terms of most of the services that local government has to provide. Here is an opportunity after all these years to do something really great, to have this complete and thorough reorganisation of local government finances, to have the reorganisation of the areas, and to say exactly what functions in these modern times are suitable for local government service. We have lost that opportunity. The Government have thrown it away. They have put back once again the day when we may have really sound, effective, convenient and, what is more, democratic local government system.

9.15 p.m.

Mr. Percivall Pott (Devizes)

I am delighted to follow the hon. Member for Birmingham, Small Heath (Mr. Wheeldon) because he has covered such a wide district, but I suggest that the views put forward by him in the earlier part of his speech are as false as those put by him when he said that today is a bad day for local government. In my opinion, as one who has served in local government for twenty-five years, today is a very good day for local government.

I have listened to most of the speeches which have been made today, and I must say, knowing the long service given to local government by many of the hon. Members who have spoken, that I have been most impressed by their arguments. But there are hon. Members opposite who believe that they can run local government successfully as long as any decision that the local authorities make has to be vetted by Whitehall they have no confidence that they can make decisions without that vetting. Why should any less money be spent by the Treasury on local government services as a result of the passing of this Bill? It is suggested that the purpose of Part I of the Bill is to enable the Treasury to cut out a certain number of its grants. There is nothing in the Bill to say so, and we in this House shall be in the privileged position of being able to debate amounts to be paid to local government in future, a thing we have never done before.

For any authority which is not carrying out its duty well, the passing of the Bill is serious, because it will no longer have the opportunity to claim that the reason its plans have not gone well is the fault of the Treasury.

We have heard that local government does not get very powerful support at elections. We know that it does not. Why should it, as long as the people on local authorities are only rubber stamps of the central Government? Who decides whether a grant shall be paid or not? What causes the delays which so often spoil the whole programme which a local authority has planned for the years ahead? The fact that in local government we have to get in each case the consent of the Department. [HON. MEMBERS: "We still shall."] We shall not. We shall know exactly what sum we are to receive. We shall be in a position to decide whether to draw a greater sum on the rates by increasing them to use more money. We shall be spending the money as governing authorities, not as regional officials of a central Department.

I believe, very sincerely, that unless we do something to give local government greater right to spend the money which it collects through rates, and give it the right to spend the grants which it must have, we may as well hand the whole local government service, including education, to the central Government, and work it on a regional basis.

I believe that that would be most detrimental not only to education but to every other service which local authority handle. The Bill will give us an opportunity to advance, and to draw the very men we need on to local government bodies and into local government service. Why should any man of great ability wish to go into local government if every one of the decisions that he makes when he becomes a senior officer has to be vetoed by someone else? Why should he not go, as so many do, into the service of the central Government?

There are, of course, dangers in any progressive Bill that the House passes. There is the danger that certain authorities will not carry out their duty as we expect local authorities to do, but the Ministers have the right to bring their force to bear. I suggest, as a local government man, that if local authorities are to continue to have to look to Whitehall for sanction for every action that they take we shall not have anyone of calibre serving on our councils.

The hon. Member for Small Heath suggested that one of the difficulties in the rural counties was that the areas were too big. We know that in some districts the areas are too big geographically, but the other snag is that these very same areas are too small for the purposes of a total penny rate. That is one of the dangers with which we are faced. The great fear in the district where I serve on the local authority is that we may find too much of our high-rated area taken into a conurbation or turned into county boroughs, thereby weakening the whole of our local government set-up as we know it today.

I ask the Minister to realise that it is vitally important that the proposed Commissions should start working as quickly as possible, because their work is bound to extend over some years. Nobody believes that the two Commissions can cope with the whole of this problem in a matter of months. That period of years during which the Commissions are at work is likely to do great harm and to be extremely costly in laying out and planning for the future development. Therefore, the shorter that period the better pleased many of us will be.

I was amazed to hear from hon. Members opposite that local authorities received no benefit when industrial properties were Berated. Surely they received benefit by way of compensation.

Mr. Wheeldon

I am not quite sure whether there are many industrial properties in the hon. Member's constituency, but he should remember that from 1929 to 1948, for every piece of industrial development within the area, a rating authority received no compensation at all. In Birmingham, that fact represents millions of pounds.

Mr. Pott

I thank the hon. Member for that explanation. It is not what I had understood him to say. I agree that they received benefit for the original property which was derated, but they did not do so for the new rating.

Local government as a whole is receiving benefit now because the Government are not demanding the whole of the benefit from rerating. [Laughter.] It is all very well for hon. Gentlemen opposite to laugh, but it is a fact that if compensation is given when property is taken over, compensation is payable on its return. The Government have wisely decided to leave the local authorities with a net gain.

We are told that no local authorities approve of this Bill. I can assure hon. Gentlemen opposite that some do. [HON. MEMBERS: "Which ones?"] The majority of local authorities may not think they are getting a straight deal, but I believe that the Government are playing completely fair and giving us an opportunity to show our merit once again. Whether the general grant is right or wrong will depend on our efficiency as local authorities in handling it. Again, the division of the counties and the county districts is a test for local authorities to use their wisdom and knowledge.

I believe that we have been given an opportunity by this Bill, and I, as a local government man, am most grateful to accept it.

9.27 p.m.

Mr. G. Lindgren (Wellingborough)

We are now coming to the end of the first day's debate on the Second Reading of this Bill, and I think we all agree that it has been a good, well-informed discussion. The only person who cannot be very pleased with the debate must be the Minister himself because, except for his hon. Friend the Member for Devizes (Mr. Pott), every hon. Member opposite who has spoken has, while saying that he or she would support the Bill, shown that he or she had received instructions from a local authority to claim exemption from the Bill on its behalf. It was very qualified support from hon. Members opposite who were speaking on behalf of their own local authorities.

Most folk agree that the present structure of local government is in need of revision. My hon. Friend the Member for Birmingham, Small Heath (Mr. Wheeldon) said that the present structure had been built around the Municipal Corporations Act, 1882, the Local Government Act, 1888, and the Local Government Act, 1894. The mere change of circumstances since that time would automatically, one would have thought, impressed upon people the fact that in some respects, even though the machine has worked well in different circumstances and has taken a strain over a period of time, revision is necessary.

Also I believe that most folk will say that we cannot deal with structure without at the same time dealing with function and finance. Really the question before the House today, accepting that in some respects structure, function and finance need revision, is, does this Bill go any way towards solving the undoubted problems of local authorities? The Minister said dramatically that as regards the modernisation and reorganisation of local government, "This is it." With the greatest respect to the Minister, it is a very small "it". The Bill does very little to deal with any of the present admitted defects of local government. To put it colloquially, it is just another tinkering with the problem. It does not in any way meet the fundamental problems.

May I now deal with structure? There is no one associated with local government generally, apart from big cities, who would not admit that there are far too many too small local government units. They are uneconomic in that they have not sufficient resources behind them, and, because of their lack of resources, they cannot provide the standard of service which the inhabitants of the area have a right to expect. A survey would show the actual administrative costs in certain units of local government, to be staggering from a business point of view.

The Bill leaves the review of the county districts to the county councils. Of course, that is all wrong. I was in local government at the time of the previous review. I have been a member of a local county council for well over twenty-five years. If the Minister did not know because of his association with London's local government and not with the administrative counties outside, his Department could tell him of the wangling, wire-pulling and bargaining that went on between county councillors who said, "If you support me in the retention of my area, I will support you in the retention of your area". Of course, practically nothing was done in the review under the 1933 Act. Nothing will be done under this Bill either if it is left to the county councils on that basis.

Now I come to the question of function. Here the Bill even departs from the proposals in the White Paper, because unless I have misread the Bill—and if I have I will accept the correction—devolution to county districts has gone except for those with a population of over 60,000. There are apparently few of those authorities. On that point I will not quarrel with the Minister. I agree with him when he says that he does not hold with the fragmentation of county services into too small units by devolution, because it is costly to administer and it does not give a standard of service which the citizen ought to have.

I referred to the fact that county councils are not likely to be effective in reviewing the areas within their counties. The fact that there is almost automatic devolution to authorities of 60,000 or over is not likely to encourage county councils, in their consideration of the review of their areas, to increase the power of authorities of that size. However, many of them ought to have that increased power where there are contiguous areas which could be made into a good local government unit. The county councils would not do that because it would mean that they would then be handing over management, if not financial control, of the services of health, welfare, education and so on. County councils are not likely to be that magnanimous. Even those authorities which have been entitled to it in the past have found it difficult to secure that devolution of authority from county councils.

The financial provisions of the Bill are its worst feature. Local government has been looking and hoping for additional sources of income to meet the ever-growing cost of its services. I agree at once with the Minister that the additional forms of income which have been examined—entertainment tax, hotel tax, shopping tax and the rest—do not fill the bill. Each would assist the authorities which already have fairly substantial resources but would not help those with few resources. As the Minister said, we must stick to rates and grants.

However, the Bill worsens the position of local authorities. In spite of what the Minister has said, I repeat what every hon. Member on this side has said and what most hon. Members opposite have said, that the object of the Bill is to create a general grant in order to reduce the charge on the Exchequer and place additional costs of services on the ratepayers. As one would expect of him, the Minister has been in his place for most of the debate and has heard that statement made' by hon. Members from both sides of the House and yet not once has he intervened to say in what way that statement was incorrect. I repeat that the Bill will place additional burdens on local authorities, if those services for which they are responsible are to develop.

Here we come to the major clash between the two sides of the House. That is what should be the relationship between a central authority and local authorities. Are these services administered by local authorities purely local services, or are they national in character although administered locally? On this side of the House, we take the view that they are national services administered locally because they are human services and close to the people. However, they are national in character and important and, in no matter what part of the country they live, North, South, East or West, in the wilds of Wales, or in the densely populated cities—

Mr. E. C. Redhead (Walthamstow, West)

Beautiful Wales.

Mr. Lindgren

Beautiful Wales; anywhere one can see only a few houses is wild to me—all citizens are entitled to expect roughly the same standard of services.

On the basis of the block grant, that just cannot be done. Local government can work only within a framework created for it by Parliament. It can carry out only the functions which Parliament has decreed it should carry out. It seems to me that a block grant rather than a percentage grant will tend to slow down the rate of development, cause local authorities to lower standards and bring about much wider differences in standards between one authority and another.

The intention behind the percentage grant basis on the part of successive Governments over the years has been to facilitate a reasonably general standard of service as between one part of the country and another. I believe that the block grant feature has been introduced into the Bill so that we may return to the days when there were wide differences in service. When I first served on the Hertfordshire County Council a child in Middlesex had four times the chance of a child in Hertfordshire of entering a grammar school, and a child in the County of London had six times the chance of a child in Hertfordshire. The block grant will encourage local authorities to return to that sort of administration.

Sometimes I am accused of being a little bigotted, but one speaks from one's own experience of life. I have never found the Tory Party, in Parliament or in local government, in the van of development and progress. I have never fought a local government election—and I have fought many more local government elections than Parliamentary elections—in which the Tory candidate has not had as his main plank "vote Tory and lower rates." That is the purpose of the Tory Party in local government.

Mr. Dudley Williams

What is wrong with that? Is the hon. Gentleman in favour of raising rates?

Mr. Lindgren

I am in favour of providing the standard of service which is required by, and should be provided for, the people. If one is to provide that standard of service in education, health, welfare and physical training, it has to be paid for. Our complaint in the past has always been that the amount of percentage grant paid by the Government for many of these services has not been sufficient. Our complaint has not been about the percentage grant basis but about the fact that we have not been able to get sufficient assistance. The implication of many of the interventions by hon. Members opposite today has been that the percentage grant basis is an inducement to local authorities to spend more than they otherwise would. That is not so.

Mr. Robert Jenkins (Dulwich)

It is.

Mr. Lindgren

The hon. Member for Dulwich (Mr. Robert Jenkins) has had a long local authority experience. Can he say from his experience of any local authority upon which he has served that an unnecessary expenditure has been incurred because a percentage grant was available?

Mr. Jenkins

The hon. Gentleman has challenged me. In a previous debate on this subject I heard him say that never in his experience of county council and other local authority work had there on any committee upon which he had served ever been a question of spending more money because there was a Government Grant That is what he said, and it will be found in HANSARD. My experience is the opposite to that, on the London County Council and on its finance committee, and on the Kensington Borough Council, which is a Tory Council. When it is a question of how money should be spent, committees over and over again say "There is a Government grant here. We will spend more money."

Mr. Lindgren

I do not want to accuse the hon. Member of telling an untruth—I should be out of order if I did—but what he has said is rather disproved by the facts. If what he said were true every local authority would have its services right up-to-date. Yet there is not a single authority of which I know, unless it is the London County Council or the Kensington Borough Council, which has not schools which require improvement, playing fields which require improvement or equipment, and which has sufficient public health services, sufficient swimming baths and other recreational facilities. Every local authority of which I know has a backlog of work which ought to have been done years ago.

Mr. Dudley Williams

The hon. Gentleman is talking nonsense. He knows very well that these matters have to be approved by the central Government before they are passed.

Mr. Lindgren

I know I am only a poor working lad and my standard of intelligence is not rated very high, but if, in fact, the Ministry has to approve every piece of expenditure by a local authority, how can there be extravagance? If there has been extravagance, it has been connived at by the Government; but, of course, there has not been. The statement of the hon. Member is just as silly as the statement made by the hon. Member for Devizes, who referred to continual interference from Whitehall. Whitehall, in its general administration of the terms of reference given to it by its Minister and by Parliament, has been quite normal in its relationship with local government. There has been no interference at all.

Much has been said about education, and I do not intend to say a great deal about it now. It is, however, a serious matter to me. What I believe is worrying the educational world, the National Union of Teachers and others, is that the Bill and the grant in fact mean the end of the Education Act, 1944, and the general purpose of that Act. The Act has only just started. We have raised the school-leaving age to fifteen, and that would not have been done but for a Labour Government. It has yet to be raised to sixteen. Further education facilities and county colleges have not been established. That is not the fault of local government or of Governments but is due to economic circumstances. They have still to be established. Under the Bill further develoment of the education service will be a charge on the local rates and, in view of the fact that all the resources of local government will be required for other services, the tendency will be to delay education development.

My hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater), in an excellent speech, referred to university grants. Education at a university is one of the privileges that I have been denied. It has been one of my ambitions to see that everyone who could go to a university did so, but when I listen to hon. Members opposite speaking I wonder whether it has done them much good. I know from experience that, where there is a tendency to cut, by the very nature of things a county will cut most where it will affect the least. It may feel that it is doing the most good that way.

People talk about the bulge in education going through the primary, the secondary modern and now the grammar schools. In a year the bulge will be going through the universities, and if all these costs fall upon local education authorities—and no one has yet said that they will not; perhaps the Parliamentary Secretary will say so tomorrow—we shall be depriving post-war children of their opportunities.

The Bill drives another nail into the coffin of the Town and Country Planning Act. Ever since the Government came to power they have been undoing the work that the Labour Government were doing in fulfilment of the promises made by the war-time Coalition Government. The 1947 Town and Country Planning Act was the implementation of the Scott. Barlow and Uthwatt Reports, and the Labour Government passed it. Ever since this Government came to power they have been destroying it step by step, and now the possibility of progress in the development areas and the rest will be undermined because the small grants will be withdrawn.

I now turn to a very important service which has not been referred to today, namely the fire service. Is that a national service? Is it a service where national standards are desirable, and where proper relationships should be established between one authority and another, so as to allow for re-enforcements where necessary? I suggest that it is. At present, according to the Central Fire Brigades Advisory Council, fire services throughout the country are undermanned. In the capital city of London manpower is 20 per cent. below 1939 standards, and yet the number of fires is 150 per cent. above the pre-war level.

Mr. Robert Jenkins

As the London Fire Brigade is run by the London County Council, surely any cause of inefficiency is entirely due to the London County Council, which ought to have made representations?

Mr. Lindgren

I should not have given way to the hon. Member if I had known that he wished to abuse the privilege by making such a statement. I never said such a thing, and I never intended to say such a thing. I said that the service was undermanned—and it is undermanned because it has not been able to get the manpower. I am not complaining about the County Council—

Mr. Jenkins

That is my point.

Mr. Lindgren

I want to know what provisions will be made, because the fire brigade now comes with the general grant. It is one of the services which are likely to suffer from economies being made. Are any proposals to be made to see that the degree of protection offered by fire brigades throughout the country does not fall any lower?

We have just had a terrible rail disaster at Lewisham. The staff of British Railways is well equipped with breakdown apparatus, but my colleagues in the railway service would be the first to praise the skilful work of the fire brigades at that disaster and to express their gratitude for the provision of the excellent equipment which the firemen brought with them. But for the work of the firemen, there might well have been more deaths and certainly there would have been greater suffering. But that is not a local authority service. It was a service in the case of a national disaster.

The same thing happens on a smaller scale in respect of road accidents. Time and again the fire service is the only organisation which has the equipment necessary to extract the injured from a road accident and the resources and manpower to deal with the situation. Is that a service which should be included within a general grant? There was also the recent tragedy at a mental hospital near Maidstone where the fire brigade played a leading part.

This Bill would almost encourage a lowering of the standard of efficiency in the fire service. Very often it is a standby service. That may be the case for a period of years, certainly for months; in fact we hope that the services of the firemen will never be called on. But it is only natural that when local councils have only a few hundreds of pounds to spend, and need to economise, the services which they consider are those uppermost in their minds. I fear that the Bill will undermine the standard of efficiency both of manpower and equipment in such magnificent organisations as the fire service. If the fire service is part of our national defence system, it should be put on the same basis as the police service and taken out of the ambit of the general grant.

Both within the ranks of local government, and outside, the Tory Party has never been a friend of progress. The Bill conforms with the policy of the Government which is to stem the tide of progress in local government and undermine the good work started by the Labour Government in the building up of a Welfare State. I hope that during the Committee stage discussions we may succeed in getting Clause I withdrawn. That would at least help to make the Bill a presentable piece of legislation.

Debate adjourned.—[Colonel J. H. Harrison.]

Debate to be resumed Tomorrow.