HC Deb 07 February 1957 vol 564 cc644-734

Question again proposed, That the Bill be now read a Second time.

5.14 p.m.

Mr. Mitchison

I was pointing out that the total effect of Clause 1, so far as I can judge from the figures which the right hon. Gentleman gave me as recently as 31st January, in column 228 of Written Answers, appears to be £219 million. The persons who are to get the benefit of that are, as to three-eighths, the class known as shops—about £82 million in all; and as to the remaining £137 million, the miscellaneous class. Apart from the shops, the remaining banks, and practically the whole of the City of London, for instance, and of the commercial centres of the large towns are included in the miscellaneous category. Those old and valued friends of hon. Members opposite, the breweries, are also included, the public houses, the cinemas, and the theatres and the rest of it. In fact, far the greater part of that type of property is included.

There is a further point. The Treasury valuer has indicated to the local authorities associations that the principles laid down by this Clause for dealing with commercial property in private hands will be applied in dealing with offices and the like, corresponding, I suppose, to commercial property, when the Crown makes its usual contribution in lieu of rates. It is, of course, a formal difference and no more, and Crown property has not been dealt with yet.

Therefore, at least £219 million is going to the relief of the joint stock banks, the breweries, the theatres, the cinemas—I am not sure that I do not grudge it to them rather less than to some other people—and the shops. Oddly enough, as hon. Members will realise, that fine figure the small shopkeeper—and to do him justice, we all know him and respect him—is not the only shopkeeper. There are others. There are large multiple stores. There are big trading concerns which have branches, sometimes through subsidiary companies, all over the country.

Mr. Peter Remnant (Wokingham)

Like the Co-op.

Mr. Mitchison

I quite agree with the hon. Member—and the Co-op. And the Co-op line about this is that it wants a general review of local government finance, and I earnestly trust that the remaining shopkeepers will be as public-spirited as the Co-op and will say to the right hon Gentleman, "We quite recognise your political motives for introducing this Clause now, but we would prefer to do the right thing and have a general review of local government finance and the re-rating of industry."

I wonder if they will do that? I do not want to rouse any unnecessary heat—I do not feel any—but, really, this small shopkeeper business must not be overdone. He very often was a bit undervalued in the past. That is, what the local authority associations point out, and they know about these things. The small shopkeeper is only a very small part of it when we come to the mass of the business. There is Mr Isaac Wolfson, with all his subsidiaries—Great Universal Stores, I think it is called—spread all over the country. There is Unilever—some of the giants of modern finance, sorely in need of rating relief. By comparison, there is the small man in his house, whereon, at the moment, he is to be called to pay double his previous rent. I do not know how it appeals to hon. Gentlemen opposite, but I just do not like it.

That is how it is coming down on the local authorities. Those are the people who are to be relieved—and who has to pay? Looking at the table, the two relieved classes amount to rather over 40 per cent. of the total, in rateable values. The domestic ratepayer accounts for roughly 50 per cent. The remainder, including the present rateable values on industry—not what they ought to be paying, but the form of the 75 per cent. concession is, of course, a reduction in the rateable value and, therefore, in the present figures—well, there is only 9 per cent. left for all the rest. In substance, what it will come down to is that there is only £219 million for the benefit of the shops and miscellaneous group, to be paid practically entirely by the domestic ratepayer.

That is one side of the thing. What about the local authorities? I ask the right hon. Gentleman the Minister of Housing and Local Government particularly, just to remember what the position of local authorities is at present. They will, no doubt, benefit by a very small amount from the reduction in the Bank Rate that was announced today, but, by and large, they are making necessary expenditure. There is very little within their discretion nowadays. I say with confidence that there is nothing that could be called extravagance by local authorities. Their expenditure is controlled in many ways. Hardly any of it is uncontrolled, and they are having to borrow at a rate of interest that is totally beyond anything in their experience before, and beyond their expectations in recent years.

They are being called upon increasingly to pay more and more for what they have to provide. They are being called upon to pay more and more for the necessary services that are, after all, one of their primary functions. House building is costing more; so are education and welfare. One of my hon. Friends said just now that Manchester is likely to have a 2s. additional rate, quite apart from the 2s. which it will get out of Clause 1 of the Bill. Here are these local authorities struggling with high interest rates and with increasing costs, the conscientious ones struggling with the complete removal of the housing subsidies which helped them in one of their really essential functions, and the Minister is going to put on their backs £219 million for the benefit of the banks, the brewers, Unilever and all the rest. That is really what this Bill comes to.

I am not ruling out for a moment that there are cases that ought to be considered. I take the view that a general review of local government finance is really necessary. I share, in a somewhat abstract spirit, the view which was expressed just now, that we really ought to get a uniform basis of assessments so far as possible, and then make the allowances that are due on social grounds openly and to the people who really need them.

I believe that is the right way of tackling rates. That is the way we deal with direct taxes. We make them progressive taxes. In varying degrees, under various Governments and from various points of view, we try to put the burden upon those who can afford them most. Rates are a thoroughly bad form of taxation. There is no doubt about it. They come down on one particular property, and nobody has ever been able to make them quite fair. Government after Government have produced illogical expedients to try to do in some rather crooked and unfortunate way that which it would be much better to do straight. That is my personal view, and there it is. It is not, however, only my personal view—it is everybody's view—that rates are an unsatisfactory form of taxation, and they are particularly unsatisfactory because they come down unduly hard on the small house owner. The small house owner at the moment cannot afford that sort of thing.

So far I have been talking about the people who are to benefit under the Bill. I have said very little about re-rating industry because, after all, we have had that subject ventilated before. I have said a few words about local authorities. I find it a very good rule, in considering Tory legislation, to look and see who ultimately is to get the money out of it and who is to pay it. We found that the payer is the domestic ratepayer—in another way, if hon. Members like, the local authority. We found some of the people who are going to do rather well out of it.

There is, however, one important distinction between the domestic rate and practically every other kind of rate. Those other kinds of rates on commercial property, industrial property and the rest of it are, if any profits are being made at all, a deduction from tax. That, of course, makes things very much harder for the domestic ratepayer. He can have no deduction. He is to take the burden of practically all of this £219 million—say £200 million. What is to happen so far as the Treasury is concerned?

The present Government have an absolute passion for dealing in round sums of £100 million. I have noticed it time and time again. This is about what the tenants will have to pay extra to the landlords under the Rent Bill. That is what the Chancellor of the Exchequer was going to save by a supplementary budget on his original plans. That is about what he now finds has to be paid extra. Somewhere about £100 million comes in here again. If this benefit is to be given to these people there will be less deductions of taxes. They will, therefore, pay more taxes and, as the local authority associations point out, the result will be that half—a rough figure, but somewhere about half—Income Tax and Profits Tax, remember—is going to benefit the Treasury.

At the end of this technical and at first sight fairly limited Clause we come to the end of so much modern legislation. The Treasury is taking some more out of the pockets of the local authorities, and just about that sort of sum. There are too many uncertainties in it. Not all these people are making profits. It is not possible to tell what is the exact rate of tax. I expect that somebody tucked away somewhere in the Treasury has a pretty good idea, but I doubt if the right hon. Gentleman will tell us today. He will say that that is a matter upon which we should now ask the Treasury. I think it is possible that at the moment his move happened, he saw one side of the picture in the Treasury and looked at the other side in the Ministry of Housing and Local Government, and so is the only fortunate person in the country to know the real effect of what he is doing. One never knows.

In all seriousness, I say to the Government that this really is not the time for the Treasury to try to make some more out of this rating business—because that is what they are trying to do indirectly. Of all the misleading notes that are put, quite correctly, on the outside of Bills, the Financial Memorandum in this case is about the most misleading. It is correct. It would not be possible to say anything else under our procedure, but it does not let the cat out of the bag—and that, as between the Treasury and the local authorities, is the cat.

In the last resort, the man in the small house who is going to have his rent put up, the owner occupier who is having to struggle with rising prices, the ordinary men and women all over the country, those who return hon. Members to this House, are the people who will have to pay for this untimely and naughty concession. It will be shared partly by the Treasury, and partly by a large number of commercial concerns including a few, but only a few, small shopkeepers. It is a naughty Bill, and is naughty for what it omits rather than for what is in it. The Government will not be at all surprised that we object to it on the grounds set out in the reasoned Amendment. Why have we half the cake, and only half the cake, now?

Before I resume my seat, there is one document to which I should like to refer. Here is an institution which is certainly as mild as any dove. It is called the Institute of Municipal Treasurers and Accountants—technical people, whose journal is full of advertisements for insurance, calculating machines and things of that sort, who have no political views at all. It takes something to provoke a body like that to produce their leading article headed "Poujadism"—this is a reference to a gentleman in France who kept a stationery shop at one period—"pays off". I will quote only the first and last sentences: Shopkeepers and commercial men must have rubbed their eyes in undiluted pleasure at the present that Mr. Sandys popped into their Christmas stockings. At the end, it says: Poujadism grows with any success it has to feed upon, and the Federation of British Industries"— this is in connection with re-rating of industry— will be quick to learn from the embattled 'shopocracy' that even in this country Poujadism pays. I quote that because of the source from which it comes. I hope that hon. Members will not accuse me of saying that I do not recognise—certainly, I do—that this Clause would cover some hard cases, I recognise that there is some inconsistency, quite considerable inconsistency, between the present assessments of domestic premises and shops. I recognise all that. But the Bill and this Clause in it is not the right way to deal with it. What we have in the Bill is, in fact, the result of political pressure by chambers of trade and so forth. It is no more urgent—it is indeed less urgent—than the re-rating of industry, and both those things ought to have been dealt with together in a general review of local finance.

5.31 p.m.

Mrs. Lena Jeger (Holborn and St. Pancras, South)

I beg to second the Amendment.

It has been ably and, if I may say so, interestingly moved by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). He is one of the few people who can make the higher levels of local government finance seem not so abstruse and difficult to understand as they often appear to be when many other hon. Members speak upon the same subject.

At the lowest level, of course, local government finance directly affects every single individual's pocket. I wish to support the Amendment particularly from that point of view. The Bill not only affects every household budget by reason of the increase in rent which must follow the increase in rates, but it will have a general effect upon the rise in the cost of living, and that is particularly to be deplored at this time.

Nobody on this side of the House disagrees with the thesis that something must be done about local authority finance. In fact, we are all waiting for something to be done. We are still waiting for the statement which was promised on 20th December by the then Minister of Housing and Local Government, who said: The major question, … of the derating of industry, is one of the large issues which will be dealt with in the full statement that I have promised after the Christmas Recess."—[OFFICIAL REPORT, 20th December, 1956; Vol. 357, c. 1476.] It might be said that today is after the Christmas Recess, and it will still be "after the Christmas Recess" for a long time to come. But I believe that the use of those words led hon. and right hon. Members of the House to expect that the statement would be produced soon after Christmas, 1956, and not after another Christmas.

The difficulty about the Bill, and one reason why we must oppose it so strongly, is that instead of taking a step forward towards uniformity of rating, it is, by introducing a further measure of derating, taking us farther away from any uniformity. The Parliamentary Secretary, in opening the debate, referred to the difference, in valuation between domestic and shop premises; but surely the House recalls that the Bill which provided for domestic premises, to be rated on their pre-war s value provided for that only in this first valuation, and in 1961 the second valuation was to be assessed on the post-war value. We had all hoped that by 1961 we should have taken a step further towards uniformity in the basis of rating.

We now have, instead of that, a completely arbitrary and piecemeal approach to the problem. For many local authorities, it has come at a most inconvenient time in the financial year, at a time when they have already made some progress with the estimates for the coming year, as indeed by the middle of February, they certainly need to have done. Instead of there being some comprehensive Measure being put forward, we are faced again with what has been stated in the House to be a temporary measure. I submit that we cannot expect local government finance to be conducted for much longer on this purely temporary and arbitrary basis, with local authorities not knowing from month to month whether the Government of the day, for purely political reasons, is going to spring on them some basic change in the system of rating which completely disorganises their finances.

I cannot emphasise too strongly the necessity for waiting until we have a complete review, including the derating of industry, to enable a lasting, comprehensive settlement to be arrived at, so that local authorities know where they are. I cannot see how it is right to try to remove what one hon. Member this afternoon referred to as discrimination against shopkeepers by imposing a discrimination against householders. I should have thought that, if there is a discrimination to be put right, it should be put right at the expense of those who are now enjoying quite unnecessary privileges.

I am very sorry, too, that there is no provision in the Bill for any compensation to local authorities for their loss of revenue. It will be recalled that when the Local Government Act, 1929, was passed there was provision for a block grant to make good to local authorities their losses under derating. In fact, a sum of £27¼million was set aside by the Exchequer to compensate local authorities for their losses under derating. Now, there is nothing to suggest that the present Government are making available to local authorities any sum to assist them in the present situation such as an addition to the Exchequer's equalisation grant. In fact, the evidence is to the contrary.

Mr. I. J. Pitman (Bath)

There is a difficulty about this, that whereas the block grant went as compensation to every local authority for industrial derating, with the change in the Exchequer equalisation grants there are many local authorities which are not getting the advantage of that. The relativity has been grossly disturbed.

Mrs. Jeger

I should have thought that, with all the resources of the Treasury, there could somehow be produced, if there was the wish to do so, some way of making good to the local authorities this money which they are about to lose. An extra contribution to the Exchequer equalisation grant is an obvious way to meet the point.

As my hon. and learned Friend has pointed out, the Bill is opposed by every single local authority organisation in the country. These are composed of men and women of no particular political persuasion, but people who are closely concerned with having to apply the Bill, and surely they are the very people whose views should carry some weight with the Government.

The Bill will have an especially harsh effect in London. I make no apology for being parochial, because I conceive it to be our job to try to assess the impact of the Bill on the people whom we represent. Over the whole of England and Wales, domestic tenancies account for about 59 per cent. of the total rateable assessments. In London, the figure is only 29 per cent.

In my borough, the Borough of St. Pancras, only 29 per cent. of our rateable premises are domestic. Therefore, it is upon that 29 per cent., that minority, that the burden of the Bill will fall, and because there are so few the impact will be proportionately heavier. This will come at a time when householders are facing heavy increases as a result of the Rent Bill, which is before the House, when the housewife is confronted with ever-increasing rises in the cost of food to feed her family, when fares to work has gone up, and when there are increases in the cost of living on almost every major item of expenditure.

If I may refer to the particular circumstances in St. Pancras as an example, I should say that the figures which I quote have been carefully worked out by the Borough Treasurer. I was rather sorry that the Parliamentary Secretary, in opening the debate, seemed to suggest that there was something unreliable in the estimates which had hitherto been given.

In the present financial year, the borough had to raise £2,503,000. To do that, we levied a rate of 14s. 6d. in the £, which seemed quite enough to those of us who had to pay it. On the new basis, to raise that same sum, we should have to levy a rate of 17s. in the £—that is, an increase of 2s. 6d. in the £—to raise only the sum that we have used this year. The indications are that next year we shall need more money, owing to the policies of the Government, which have deprived us of housing subsidies, which have imposed high interest charges and which, in so many ways, have sent up the costs of materials and of services which local authorities need. I find it very difficult to explain to my constituents why their rate should be increased by 2s. 6d. in the £, and certainly I shall not go to a great deal of trouble to make any excuses.

We must face fairly the position of the small shopkeeper. It is difficult to deal with it separately but I remember many occasions when, in discussing subsidies, for instance, right hon. Members on the Government Front Bench have said that subsidies were a had thing because they provided help to everybody in order to help a few people. Surely, that is exactly what the Bill is doing. It is saying to all the banks, the big offices, commercial firms and great chain stores, two of which have recently put out a free bonus issue of shares, "In order to help the little shopkeeper, we are giving you all a present."

In my borough, about 2 per cent. of all the rateable assessments relate to shops with living accommodation over them. That is the core of the small shopkeeper population. I know that there are others, because there are small shopkeepers who do not live over their premises, but that 2 per cent. is the core of the small shopkeeping population. Although a certain number must be added thereto, it is not an enormous number.

As anyone who knows St. Pancras realises, we have in the borough the headquarters of many wealthy commercial undertakings. On every side there are rising great cliffs of office buildings, occupied by prosperous firms, paying out high dividends to their shareholders. It is very difficult for us to explain to the householder that because of the financial situation of these great firms which happen to find their home in our borough, the householder must be penalised. It may be that nobody—

Mr. Bevins

The hon. Lady is developing a most interesting argument and I recognise from what she says that St. Pancras is a rather special case. [HON. MEMBERS: "No."] I wonder whether the hon. Lady, who obviously wants to be fair to the House, would tell us to what extent the assessments of those so-called wealthy commercial firms went up on reassessment and by how much the rate poundage in St. Pancras came down last year as a consequence?

Mrs. Jeger

The point is that many of them went up on value. The other difficulty is that in the case of many of the new blocks, some of which have been in rateable occupation since June, another Department for which the Parliamentary Secretary is not responsible is so far behind with its assessments that we have not been able to collect any rate income at all.

The income lost to the borough council from that cause will be £372,000. It is not good enough for the hon. Gentleman to go back in this matter, because we are all trying to look forward to a fair and uniform basis of rating.

We have in St. Pancras a total of 15 per cent, of premises comprising shops, banks, cafés and so on, and 12.25 per cent. of office building. When the Bill was introduced this afternoon, no case was made out for relieving such premises of rates.

Mr. Graeme Finlay (Epping)

As one of the hon. Lady's constituents in Holborn—she has been rather forgetting Holborn and mentioning St. Pancras—may I point out to her that the rates of most householders in the Holborn section of her constituency went down substantially as a result of the last reassessment?

Mrs. Jeger

The fact that domestic rates went down last year seems very little reason for putting them up this year in order to help the Prudential, which I do not include among my poorer constituents.

Mr. Bevins

The hon. Lady must follow the logic of her argument. She says that we must look to the future, but she also suggests that the future will not be right until we have a completely uniform basis of valuation. When we have that, I think that the hon. Lady knows what will happen without my saying so.

Mrs. Jeger

I know that when we have a uniform basis of valuation which includes industry, we shall be gaining nearly £500,000 in rate income. I am sure that that can have only a helpful effect on the total rate burden which will have to be shared.

There are obvious reasons why we have the Bill before us. There has been a great deal of pressure from interested parties, particularly from chambers of commerce and trade and shopkeepers' organisations, and I understand their difficulties. The Government, however, must be criticised for not having met those difficulties on their own level and in their own way. Certainly, there is no justification for helping them by a system which will relieve wealthy and prosperous undertakings from rate payment and impose this heavy burden on the ratepayer in domestic premises.

This arbitrary and rather high-handed way of dealing with our local rate problem just will not do. It is not fair to the House. It is insulting to local authorities who have to face tremendous difficulties at the present time and who, when representations are made through the proper channels of their organisations, receive very scant consideration from the Parliamentary Secretary. It may be that he has in mind meeting some of these organisations and that in Committee there may be Amendments to meet their objections. I should like to think that he will at least try to meet the financial aspect of the case by promising some provision in the Exchequer equalisation fund to compensate for their losses. The Bill is a thoroughly bad and unfair Measure, and I very much hope that it will be defeated.

5.50 p.m.

Mr. Frederic Harris (Croydon, North-West)

It is, of course, quite wrong of the Opposition to impute that the Government have brought the Bill forward entirely from political motives. I am very interested in this subject, and I fully agreed with many of the points made by the hon. and learned Member for Kettering (Mr. Mitchison), particularly with reference to derating. I very well remember many hon. Members opposite appreciating, when the new valuations were published, the fact that small traders were getting a very unfair deal. The Bill has been brought forward, not from political motives, but to remedy that injustice to small traders.

It is easy to quote banks, because one is bound to bring in anomalies en route in a Measure of this kind. The fact remains that many hon. Members opposite, and certainly many on this side of the House, felt at the time that small traders were unfairly treated, and it was in answer to our pressure that the Minister promised that the matter would be remedied if injustices were disclosed.

Mr. Lindgren

The hon. Member makes a good argument, but he and his colleagues previously said that it was unfair to give a food subsidy to the millionaire in order to give one to the old-age pensioner. Can he justify, in order to give a subsidy on the rates to the little, poor shopkeepers, giving one at the same time to Marks and Spencer's and Woolworth's?

Mr. Harris

The same point was made by the hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Jeger) in relation to householders. We cannot deny that a householder today is held back to the 1939 values. Therefore, that in itself is an anomaly. What is the good of arguing from one anomaly to another like this? It was recognised by all fair-minded people that the small trader was being unfairly treated.

Mr. Sparks

The hon. Member is referring to the fact that householders were assessed on 1939 values, but a large number of the shops which are in the present valuation list were previously assessed on 1934 values, and that accounts for the present considerably increased valuation in many cases.

Mr. Harris

The hon. Member is deeply concerned. I seconded his own Private Member's Industrial Rating Bill last year. I cannot imagine that he disputes that the valuation lists, when published, were unfair to a majority of small traders. Although I fully agree that in a few years' time the new valuations will take place for householders, probably with reorganisation of local government finance, we must recognise that the householder is not at present being unfairly treated.

Mr. Mitchison

The hon. Member is making some very good points, but he will bear in mind that the Minister has to make this examination before the end of next month. It is not a question of a few years.

Mr. Harris

I was speaking of the effect of the new valuations when they were published. I appreciated the points made by the hon. and learned Member on derating.

I have my own complaints on this matter, as other hon. Members may have. I have tried to ascertain from the Borough Treasurer of Croydon the effect of all this on Croydon. Whereas throughout the country the effect is an adjustment of 7 per cent. on the rate burden as a whole, in Croydon it will amount to about 6 per cent. We in Croydon, as the result of the Bill, will lose, on valuation, about £300,000.

The result of all that would normally mean an increase of 1s. in the rate poundage but, owing to the other points, which the Minister detailed, relating to proposals about the gas and electricity industries and the British Transport Commission, there will be an adjustment against that of about 2d. in the Croydon rate. Therefore, the whole effect will be about 10d., so far as we can ascertain at present.

People throughout the country, and particularly hon. Members of the House, are most anxious that there should not be excess Government or local government expenditure at present. We want to be sure that there is no extravagance, but I fully agree with the hon. and learned Member for Kettering that we can hardly accuse local authorities today of personal extravagance. They have to undertake expenditure at the direction of Parliament, and much of it comes under the heading of education alone. Nevertheless, the local authorities themselves are having to meet increasing commitments. I notice that no reference has been made in this debate to the wage demands which represent a very large amount of additional expenditure.

Mr. Lindgren

Because of increased prices.

Mr. Harris

All this additional expenditure will be included in the financial rate burden of the local authorities next year. Obviously, there will be considerable confusion in the country, and these increases of rates will be all attributed to this Bill. Whereas part of the increases will be attributable to the Bill—10d. in Croydon—another part, which will be at least another 10d. or 1s. in Croydon, will be attributable to increased expenditure by the local authorities.

Mr. W. R. Williams (Manchester, Openshaw)

How would the hon. Member feel if the total increase were 4s. in the £, as it will be in Manchester?

Mr. Harris

I agree that that is very disturbing, but I do not represent Manchester. I concentrate on Croydon, part of which I have the privilege to represent.

Mr. D. Jones

The hon. Member will recognise that for every gallon of petrol put in its vehicles, Croydon Corporation will now have to pay 1s. 5½d. more, directly as a result of the Government's actions.

Mr. Harris

Yes, but, unfortunately, Croydon Corporation cannot use its vehicles as much as it would wish to do at present, and that is also part of the whole argument.

We must recognise that there will be considerable confusion throughout the country and all the trouble will be blamed on this Bill. Will the Ministry, in this case, really wake up and make sure that it is made clear to all concerned, when it takes place, that the general increase is not entirely due to this one, little effect? I sincerely hope that the Borough Treasurer of Croydon will make it abundantly clear that this Bill is not the reason for the total rate increase.

Whatever we may feel, however, the Bill had to come into being in sheer fairness to the small traders, so we cannot dodge the fact that it is only right that we should be faced with it now. Against that, time and time again I have personally pressed the point—sometimes I think that I am a lone wolf on this side of the House—that there is no justification for industrial derating under present conditions. It is fatuous for business houses to have a derating allowance of 5 per cent.—and I speak as one with business interests and who, would, therefore, be affected.

The hon. Member for Acton (Mr. Sparks) will agree that I was the only Conservative Member who supported his Private Bill to abolish industrial derating—[An HON. MEMBER: "In the Lobby?"] Yes, I supported it so well that we won the first main Division.

Mr. Sparks

The hon. Gentleman is right in saying that he supported the Second Reading of my Bill, but he was absent when it came up for Third Reading.

Mr. Harris

The hon. Member must be fair to me. At that time I was not in England. It was unfortunate, but it was not deliberate. I supported his Bill fully and I have left my colleagues in no doubt of my views on the cancellation of industrial derating. As a matter of fact, the Croydon Council has known them for some time, and the Surrey County Council knew them years ago, when I had the privilege of being there.

The Croydon Borough Treasurer, in response to my request, has told me that if industrial derating were cancelled in Croydon the immediate effect would be a saving of 1s. 2d. in the £. Therefore, on the one hand, the rate poundage would be up by 10d. and, on the other, it would be down by 1s. 2d., so if the Government could have gone the full way there would have been virtually a balance and the disturbance which will be created by this Bill would not have been necessary.

Even if derating cannot be completely abolished, the derating concession could at least be eased down to the extent of 25 per cent. Of course, I would prefer to see it go completely, because that is the right way to tackle it; but if that is not possible, why cannot it be done in part?

The Minister has already said that industrial derating has to be, and will be, considered with the Government's new proposals for reform of local government finance, details of which will be given to us shortly. [An HON. MEMBER: "Why not wait for them?"] What a pity that those two steps could not have coincided with each other. If that could have been done, it would have avoided all the annoyance that will arise in people's minds, all of which will be blamed on this Bill. It will be claimed that in another way it will increase the cost of living once more, and, once more, that will be blamed on this Bill. I try to look at this matter from a purely business point of view, and I can say that if I had been faced with that problem in my business I would have made sure of the two things balancing.

I do not doubt that it will be the view of the Government that the 75 per cent. concession on derating is out of date and that, if they cannot cancel it altogether, they must go a long way towards it. The Croydon Borough Treasurer tells me that it could easily have been done in this Bill and that that would have prevented many avoidable worries. I sometimes feel that Governments do not take into account all the additional problems they create for their back benchers and supporters which, with a little thought on the part of their advisers, could be avoided. I say that with great respect for the Civil Service.

When derating is cancelled, as I am sure it will be, there will be no reason for manufacturers to say that they must put up their prices as a result. I say that because normally there is plenty of room in business margins to absorb the cancellation of derating. I know what I am talking aout, because it will affect my own business interests. I am disappointed that the Government have not seen their way to ease our problems a little by doing something for which I have been hoping for many years.

6.6 p.m.

Mr. Percy Holman (Bethnal Green)

It gives me great pleasure to follow the hon. Gentleman the Member for Croydon, North-West (Mr. F. Harris), since I agree whole-heartedly with much of what he has said. I have a close association with the Co-operative movement and that movement, with its 25,000 shops, was among those traders who made representations to the Government against the full 1956 assessments which were inflicted on their shop premises.

The commercial section felt, rightly I think, that they were being unfairly treated as compared with industry. The commercial section is a wide section, which includes not only shops and offices but hotels, boarding houses, cinemas, public houses, schools, hospitals and a group of non-industrial establishments. Although industry came under the full 1956 assessment, in my view it was more fully assessed on current values than many in the commercial section, while domestic property was left on the 1939 basis.

The Co-operative movement made representations to the Government, and at the Annual Congress held at Whitsun last year it passed unanimously a resolution which had considerable bearing on the present situation, and which read as follows: That this Congress confirms the action taken by the Central Executive in pressing the Government to appoint a Committee of Inquiry to go into the whole question of rating in the domestic, commercial, industrial, agricultural, public utility, entertainment and educational aspects. At the present time occupiers of shops, offices and other commercial premises alone pay rates on the basis of current letting values, creating a situation which in the view of Congress is anomalous and requires investigation with a view to greater equity being secured in responsibility for the payment of rates. That resolution emphasised what the Government were considering already, the inequitable position of the rating system, and it implied that this unfairness would persist until a degree of equity was attained. In the Amendment moved by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) emphasis is placed on the necessity for re-rating industrial premises as part, and an early part, of the move towards greater equity.

Like the hon. Member for Croydon, North-West, having some experience of the rating of premises and so on, I should welcome the rerating of industry today. It would have been a very much sounder policy if the Government had rerated industry in order to equate the reduction of 20 per cent. in rate payments by commercial property at the full assessment. This would have left the domestic, non-industrial and non-commercial sector in much the same position as it is now. That sector will have to face modifications in April, 1961, when assessments are brought fully into a position of equity for rating purposes. I trust that prior to that there will have been a further movement towards the broadening of the basis of local authority incomes from the present rather limited basis.

The Co-operative demand, in the name of all its societies and members, was for a rapid attainment of equity in the rating system. I feel that most of us anticipated that a Government statement would have been made before any further legislation of a temporary or permanent character was introduced. There was absolutely no reason why this should not have taken place. While we appreciate that there has been a change of Minister, the promise was "in the autumn", then "early in the New Year", and now "very shortly".

I do not know whether Ministers have found extraordinarily complicated problems arising or that the various municipal organisations are not as amenable as had been hoped, but it is essential that grievances should be rectified as soon as possible. It was impossible to get the residential assessments on a current basis in the first post-war revaluation, but singling out the commercial group as being the only one in the country to be rated on the full net assessment—not touching any other group other than the lifting of the basis for the industrial group, but leaving it at the full 75 per cent. Deduction—gave a sense of injustice to others, including the small shopkeepers. The small shopkeepers benefit in respect of only a small part of the amount which is being given away. In most areas, the other sectors on the commercial side represent much bigger rateable values than the small shopkeepers. Yet, as with the widow and orphan argument, the small shopkeeper is the one whose contribution is raised in order to reduce the rate payments of the very big sector in municipal economy.

While the Co-operative movement was taking a leading part in asking that the inequity should be removed, at the same time, its resolution demanding greater equity took into consideration other factors. That enables me to say that the Co-operative movement as a whole will support the Opposition in its antagonism to this bit of piecemeal legislation.

I want now to say a word on behalf of a very large sector of the ratepayers of the country, the 11½ million members of the Co-operative movement, for whom perhaps, the societies, even in the resolution which I quoted, spoke somewhat inadequately. I believe that the overwhelming majority of those people—they represent half our community—would condemn the present Bill. As a result of the Bill alone, rates in my constituency, the poorest municipal area in the County of London, will increase by more than 2s. in the £. I do not hide the fact that there are other factors which will lead to a further increase in rates. These include the increased interest rates which have had to be faced during the last twelve months, and the increases in wages and salaries and cost of materials arising out of the inflationary situation. Rates in such areas are likely to rise by at least 3s. in the £. Small shopkeepers in such areas will find that they will not be saving 20 per cent. of what they have been paying in rates. They will be lucky if they save one-third of that amount in the light of the present economic situation.

It is no exaggeration to say that the effect of the Bill plus the general inflationary situation will mean in the County of London an increase in rents from April of from 1s. to 2s. 6d. a week for the average working-class home according to its rateable value. This will be a prelude to further increases that we expect in the autumn arising out of other legislation. This will intensify feeling and lead to demands for still higher wages, a situation which many of us frankly admit is bringing us near the danger point, especially in conditions when productivity is not rising but is even tending to fall.

If the Government cannot withdraw the Bill, they should do the only fair thing. I urge the Minister to promise tonight to amend the Money Resolution in such a way that the Government will be able to stabilise the situation in respect of the rates which will be brought about by the Bill, especially as it is only a temporary Measure, for by amending the Money Resolution they will make it possible for the Bill to be amended in Committee.

6.19 p.m.

Sir Spencer Summers (Aylesbury)

If I may refer, first, to the comment of the hon. Member for Bethnal Green (Mr. Holman), and to what was said by the hon. Lady the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) about recompensing local authorities for the losses which they will suffer as a result of the Bill, I hope that no one will imagine that the instrument of the Exchequer equalisation grant is a means by which the Government can achieve that end. There are very large sections of the country, including my constituency, which derive no benefit whatever from the operations of the Exchequer equalisation grant. If that means is not open to the Government, I hope that no fresh instrument will be devised, but that we shall instead hasten the financial survey which has been promised so that we may settle the problem as quickly as possible.

There are two main points to which I want very briefly to refer, but before doing so I want to make two observations. I cannot see the justice of the argument of the Opposition who assert that although the Bill does justice to the small shopkeeper, undertakings which are much larger should not receive the same justice. Rates have never been assessed on the basis of capacity to pay. Where there are large and small enterprises, it cannot be fair to remove an unfair burden from the small and deny removal of the burden to the large.

Mr. Lindgren

The hon. Member says that rates have never been assessed on capacity to pay. That is true, but they have been based on value, and the value arises from the business's ability to provide profit. If the ability to provide profit is larger in the big shop, the rateable value is there and surely rates should be paid on that.

Sir S. Summers

The hon. Member knows that the Bill applies to far more than shops. Commercial undertakings are charged rates whether they have a good or bad year. It is unfair that the large enterprises should be singled out and put in a position different from that of the smaller ones. If they are in the same way of business, they should be treated on all fours with the small concern.

I am one of those who believe that it is no longer tenable to continue with the 75 per cent. reduction in industrial rating. However, I believe that there is a strong case for saying that something less than 100 per cent. payment is justified for industrial undertakings, on the ground that they do not derive the same benefit from available local services that many other ratepayers do.

I am not sure whether I followed the Parliamentary Secretary's explanation of the Clauses affecting nationalised industries. As I understand it, the British Transport Commission will be treated more favourably than others because it has not been doing so well. That treatment can hardly be described otherwise than as a subsidy. I am sorry that this means of assisting the Commission should have been taken and that on those grounds it should have been treated differently from other undertakings.

The formula to be applied to electricity undertakings will ensure that next year they pay the same amount of money as they paid this year If I have missed something I will no doubt be corrected later, but that seems to me to freeze the burden of rates on electricity authorities, a position not open to other people who are in no way assured of not having an increased rate burden in the future. That is a slightly favourable discrimination which requires more justification than we have yet had.

The main topic to which I want to refer concerns those undertakings which are not to derive the benefit of Clause 1, because they are assessed on net and not on gross values. As I understand it, the justification for leaving them out is that the increased burden of maintenance is already taken care of in the net value and therefore it is not proper again to give them relief in the form of this 20 per cent.

It is very hard to see in some cases how this increase in maintenance costs arises. Some of these undertakings are fishing rights, advertising rights, sports grounds and so on, in which maintenance costs play little or no part and yet they will not benefit from the 20 per cent. If the Bill goes through Committee unamended in this respect, we shall have the remarkable situation in Aylesbury that one of the few undertakings which will be fully valued on current values without relief will be the football ground, which has the utmost difficulty carrying on as it is precluded, because a charge is made for admittance, from some of the advantages of Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955.

Other undertakings which will be given no relief from paying current values in full will include car parks, cattle markets, swimming baths, sewage disposal works and so on, while others similarly placed will derive the 20 per cent. advantage resulting from Clause I. I hope that the Government will look at the Clause again and study the examples of the anomalies which arise from assessments on gross values and net values and that all will be treated on the same basis.

6.26 p.m.

Mr. Donald Wade (Huddersfield, West)

It is very unfortunate that we should have reached February, 1957, without having achieved a radical reform of our rating system, without even having the long-promised review of local government finance. Although some parts of the Bill have merits, to which I will refer later, it adds to the complexities of our rating system and I can quite understand the protests which have been made by local authorities.

The Parliamentary Secretary referred to swings and roundabouts. We have had so many swings and roundabouts in our rating law in the last ten years that we are becoming a little dizzy. Local councillors are becoming extremely worried. Legislation since 1948, has made our rating law, especially as it affects the distribution of the rate burden, almost as complicated as the Rent Restrictions Acts.

The anomaly with which Clause 1 deals is not something which has just arisen. As a result of the Valuation for Rating Act, 1953, four categories of properties are dealt with differently in rating—that is quite apart from properties used for charitable purposes. First, there are dwelling houses; secondly, agricultural land and premises; thirdly, industrial premises and, fourthly, shops and offices. This distinction is quite illogical. My view which I have expressed ever since 1953, is that shopkeepers have had a raw deal.

In the Second Reading debate on the Valuation and Rating Measure of 1953, I said: I know that there are many small shopkeepers throughout the country who find the rates a very heavy burden, and there is no doubt about it when this revaluation takes place as a result of these provisions, the increase of rates upon the shopkeepers will be very heavy indeed."—[OFFICIAL REPORT, 21st May, 1953; Vol. 515, c. 2348.] The Government are not asking for a subsidy for shopkeepers and it would be unfair to talk in terms of a subsidy. The Government are asking for rectification of injustices created by earlier legislation.

There was a clear injustice in basing the rating of shops and offices upon 1955 values and dwellinghouses upon 1939 values. I have always said that that was anomalous. There is, at any rate, a case for remedying that anomaly, and in a few moments I shall indicate how I think that it should be dealt with.

Mr. Lindgren

How can it be an anomaly if, in 1956, when the valuation operated, the house was at the 1939 value? We have had rent restrictions ever since 1920. Therefore, it would have the same value in 1956 as it had in 1939.

Mr. Wade

I do not think that the hon. Member has followed my point.

Mr. Lindgren

If the rentable value of a house was £50 in 1939 and is still £50 in 1955, that is its value for rateable purposes. If a shop was rated at £200 a year in 1935, and is paying £400 in 1955, surely the value has changed.

Mr. Wade

I do not think that there can really be any dispute about this matter. What I am saying is that since 1st April dwellinghouses have been rated upon the basis of 1939 values, whereas shops and offices have been rated upon 1955 values. It is difficult to justify that position. There will continue to be anomalies until we have a complete overhaul of our rating system. That is an urgent requirement.

I want to see a different division of financial responsibility as between local authorities and the Exchequer. Certain expenditure should be borne by the country as a whole rather than by local authorities. That point will presumably be considered in the review of local government finance. As for the burden which falls upon local authorities, and which is carried by the rates, I would preferto see the assessment based primarily upon site values rather than as at present. If that were done it would help to remedy some of the anomalies that exist today and which have existed for many years.

When shall we get this review, and when will the recommendations be put into effect? I was very disturbed by one remark of the Parliamentary Secretary, and I hope that I was misled by what he said. I understood him to say that the Bill would apply only until the end of the present quinquennial period. It would seem to follow from that that the major reform would not take place until the end in the period of five years commencing n April last year. That is disturbing. I assumed that the major reform would take place very much sooner than that.

Mr. Bevins

Perhaps the hon. Member did misunderstand what I said. I said that my right hon. Friend will announce to the House at a very early date his major proposals for the reform of local government finance. I can assure the House that it will be at an early date. I said that, meanwhile, this Measure would be an interim Measure, but that the 20 per cent. adjustment of rateable values upon commercial premises, the law being what it was, would be temporary, until the time of the next revaluation.

Mr. Wade

I am still a little disturbed by that reply. It seems to indicate that the major reform will not take place until the next revaluation.

Mr. Bevins indicated dissent.

Mr. Wade

If the proposal contained in Clause 1 had been introduced a year ago, although it would have provided very rough justice, there would have been something to be said for it. Today, some shopkeepers may say that it is too little and too late. I know of a number of shops which have already gone out of business as a result of the increase in rates which followed the new assessments and the new rates which came into effect last April.

Clause 1 may go some way towards meeting the injustice to which I have already referred. The question we have to bear in mind is whether, in remedying one hardship we are not creating other hardships which are just as serious. As I understand, the Opposition's view is that we should throw out the Bill altogether for that reason. I have not come to quite the same conclusion. I should be sorry to see Clause 4 dropped. That makes a very necessary though minor amendment. I would not go so far as to say that rejecting the Bill would be tantamount to throwing out the baby with the bath water, but there are some minor changes made by the Bill which I should like to retain, and I would prefer to see the Bill given a Second Reading and then very drastically amended.

That does not alter the fact that we have here a choice of evils, and there are some very serious evils, as has been brought to light already by other speakers. But before I pass to those I want to say a word about Clause 4. As I understand, that will remedy the somewhat anomalous position which arose particularly in places like Cambridge and Aberystwyth. Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, had the effect of depriving certain county and borough associations of compensation from the Exchequer equalisation fund, which they would otherwise have received. I have some doubt whether they will be fully compensated even if the Clause is passed, and I should like some assurance that their case will be fully met

Even if it is, there is another legitimate criticism about the Clause which I hope the Parliamentary Secretary will consider. It occurs to me that it will freeze the position in regard to premises which are treated as charitable at the discretion of local authorities. On 27th December last year, The Times printed an article which contained a reference to that point, and which said: … the Bill provides that an authority's rateable resources for the purposes of the Exchequer grant are to be measured as though the proportionate method of charitable relief were the only method. This is bound to have the effect of fettering local authorities' discretion to allow lesser or greater relief as they judge fit. I should like to know what the Parliamentary Secretary has to say about that.

On the more serious aspects of the Bill, there is a clear need for major amendments arising from three serious flaws. The first is the fact the Bill may come into effect before the rerating of industrial premises. I have endeavoured to draft a new Clause which, if it is in order and is accepted, will have the effect of making Clause 1 coincide with the repeal of the derating of industrial premises. I appeal to the Minister to adopt that proposal. If it is practical to tinker with this complicated rating system at all, if there is a case for dealing with an anomaly as a temporary measure, there is just as strong a case for repealing the de-rating of industry as there is for introducing Clause 1 of this Bill. If that is not done, it will undoubtedly be unfair to householders.

The second point is one which has already been raised by the local authorities. In the letter of 5th February sent out by the Association of Municipal Corporations and other local authority associations it is pointed that local authorities are deprived of a large proportion of their rate income which can only be regained by levying increased rates. The organisations express their opposition to this in principle, and ask for some compensation. I realise that that would involve additional sums being granted by the Exchequer. I appreciate that it could not be dealt with by the Exchequer equalisation fund as it is at present. But, as the associations point out: if any precedent is needed for payment of such compensation, it can be found in the provisions of the Local Government Act of 1929. The only sensible way to deal with the matter is to make a special grant. Otherwise, local authorities will be put in a very difficult position. I am not suggesting that my own local authority will be the hardest hit. Cases of greater hardship than that of Huddersfield have been quoted. But the Town Clerk writes: The position in Huddersfield is that the reduction by 20 per cent. in the rateable value of shops, etc., will result in a reduction of the rateable value of the borough of £107,000, i.e., approximately 8 per cent. of the toal valuation. He goes on: It is not possible at this stage to say exactly what would be the rate increase resulting from this reduction in the rateable value, but it has been roughly estimated as between 1s. 3d. and 1s. 6d. in the £. For a long-term policy I see objections to meeting those difficulties by a further grant of funds by the Exchequer. But if this is only a temporary Measure, if we are dealing only with an interim period until we get a major reform in the rating system, I think that the fair and proper way to deal with this problem would be by a special Exchequer grant; in other words, to put the burden on the country as a whole until we have a reformed rating system. It is not the fault of the householder, or other ratepayers, that a major reform of the rating system has been delayed for so long.

My last point relates to the Financial Resolution. The letter from the Association of Municipal Corporations and other associations points out—I think rightly—that the Bill contains no provision for the payment of compensation and that any Amendment in Committee would be out of order unless the proposed payment were covered by the terms of the Financial Resolution. That provides an interesting and rather serious example of a Financial Resolution being worded so tightly that not only is the House prevented from amending it, but, as I see it, the House would be prevented from discussing a very important point which hon. Members might wish to raise and would be unable to do so because of the way in which the Resolution has been worded.

Hon. Members may think that, in view of those criticisms, it is difficult to support the Bill at all. But in these days of strict whipping I do not suppose that it will make much difference whether I say that I propose to support the Motion for Second Reading or not.

Mr. Ede (South Shields)

The hon. Gentleman is a Whip and should know.

Mr. Wade

I live in hope that we may be able to obtain some major Amendments to this Bill during the Committee stage. We may be able—and I think it would be right—to do something for the shopkeepers who have suffered a genuine injustice. But what we do will be only rough justice—the Parliamentary Secretary talked about rough justice, and it will be only rough justice—if, at the same time, we do something to ensure that an additional hardship is not placed on the householders.

6.45 p.m.

Lieut.-Colonel J. K. Cordeaux (Nottingham, Central)

The hon. Member for Holborn and St. Pancras South (Mrs. L. Jeger) said that something had to be done for the small shopkeepers, but that she did not think that the Bill provided a way to help them. She also did not say, unless I missed it, what was the right way. I strongly support Clause 1, because I feel that it provides the only practical means which may be used in sufficient time to protect small shopkeepers, who are a most deserving class.

I know, as many hon. Members have said, that the small shopkeepers are by no means the only beneficiaries. The hon. Member for Bethnal Green (Mr. Holman) was right in suggesting that they form only a small proportion of the beneficiaries, or perhaps it is more correct to say that they would get only a small proportion of the benefit. I think I am right in saying that of the rateable value resources of about £289 million the commercial and shop rates are the largest item.

Mr. Mitchison

Which shops?

Lieut.-Colonel Cordeaux

At the moment I am referring to shops as a whole. I will come to that point later.

Of course, there are very many large shops, but there are many more small shops, and, therefore, there are many more small shopkeepers. Besides being a deserving class they are a long-suffering class. In recent years they have suffered a good deal in silence, but they are not prepared to suffer the latest revaluation in silence and I do not wonder at it. Hon. Members on both sides of the House, and even the four local government associations who have written to all hon. Members, would agree that in the last revaluation the small shopkeepers were treated—perhaps they would not agree unfairly—but certainly unkindly, and I feel that the figures support that contention.

After all, in the old valuation the proportion of the total rateable resources of this country as represented by the shops was 10.74 per cent. In the new valuation that figure has risen to 14.79 per cent., an increase of about one-third, which is a big increase. In my own city, Nottingham, the increase in the new valuation for shops was actually six times as great as in the case of dwellinghouses; and for dwellinghouses with shop accommodation it was as much as three times. That seemed to many of the small shopkeepers to be the last straw. I believe that Clause 1 will remove that straw from their backs. I do not agree with the hon. Member for Huddersfield, West (Mr. Wade) that it is too late. I believe that it will remove the straw in time to prevent a number of them from going out of business.

Mr. Wade

For the sake of greater accuracy, may I say that I referred to some shopkeepers who will say that it is too little and too late?

Lieut.-Colonel Cordeaux

I am happy to say that so far as I know the majority of small shopkeepers in Nottingham, anyway, are still hanging on.

The new valuation of many of the small shops in Nottingham was considerably more than double what it was in the previous valuation. In the city a small shopkeeper, in order not to have to pay more rates and to break even, had to have an increase of not more than 72 per cent. in the new valuation. This shows what a burden these people have to put up with.

I should like to quote from a letter which one of them wrote to me not long ago. He said: I am serious when I say that it will be very difficult to get that extra money out of one-man shops. The large concerns could stop one or two of their workpeople and meet it that way. But we shall shopkeepers are a sitting bird for this new valuation stunt. As for appeals, well, I have had some. We won't have a cat in hell's chance. That is the only polite and repeatable part that I can quote from a three-page letter. I sympathise with nearly all that the letter contains. It was from one of my more voluble shopkeepers. There are many elderly ladies in my constituency who keep dress shops and baby linen shops, and there are other small shopkeepers, who do not write to their Member of Parliament and shout about their troubles. Many of them do not have a very big turnover and this savage increase in rates was a disaster for them.

It is no good going to these small shopkeepers and giving them an official explanation by saying, The old valuation lists were made twenty-two years ago; we had to have some new ones it was absolutely essential", or to say, "There has not been a free market in houses since 1939 because of the housing shortage and continuing rent control" or, "We have had to assess these houses on the 1939 basis, but, of course, that does not apply to you." Particularly was it no good saying to them, "Don't you think that the Conservative Party has done a very brave thing? It was necessary. The Labour Party shirked doing it."

That, perhaps, went down worst of all. They were not interested in all that. All that they were interested in was the hard fact that the increase in their rateable value had gone up six times more than in the case of the ordinary dwelling-house, and that they would have to pay appreciably more in rates whereas their neighbours in ordinary dwellinghouses were, in many cases, going to enjoy a decrease. It was no good saying to them, "Industry is badly off and it has had just as big an increase as you, or even bigger."

One of the chief sources of grievance of the small shopkeeper is the fact that he can look out of his shop window and see a managing director driving his Rolls-Bentley to his factory, which is 75 per cent. derated and from which he is very likely running a shop himself in direct competition with the small shopkeeper, and which is 75 per cent. derated as well. The small shopkeeper is not a bit interested in these explanations. He thinks that it is damned unfair and, personally. I could not agree more.

The small shopkeeper did not deserve the treatment which he got by the new valuation. He deserves well of the community. He has built up his business mostly by sheer hard work, often a 14-hour day, for years, because he does not stop working when he locks the door any more than the bank clerk does. There are all the accounts to be done, the stock taking, the window dressing for the next day, the rearranging of goods, the correspondence to be answered. The small shopkeeper, by hard work and real service, and by considering the convenience of his customers, can still. I think, compete with the big chain stores and other big shops if he gets a fair crack of the whip and reasonable justice. I think that that is what Clause 1 of the Bill will give him.

Mr. Mitchison

Does not the hon. and gallant Gentleman realise that Clause 1 will help the large chain stores, the Prudential, the joint stock banks, and other similar institutions just as much as, and at a great deal more expense, the small shopkeepers? Further, if it is a brave thing to do to introduce the Bill, would it not have been even wiser and braver to rerate industry at the same time?

Lieut.-Colonel Cordeaux

I fully realise the first point that the hon. and learned Gentleman made. I can only go back to what I was saying earlier, namely, that despite that, Clause 1 was really the only practical way in which to give help to the small shopkeeper in time.

That, of course, does lead to the second question which the hon. and learned Gentleman asked me—would it not have been much better to have carried out re-rating at the same time? I do not know whether it would have been practical to have done so, but I myself would have thought that it would have been much better.

I agree with what was said earlier on this subject by a colleague on these benches. The Bill provides a certain amount of rough justice because it reduces the shopkeepers' share of the total rate resources to about 12 per cent. from 14.29 per cent. to which it had gone up. But, even so, it will be 1.2 per cent. above what was being paid of the total proportion on the old valuation.

There has been strong criticism of the Bill both inside and outside the House. It is being said today that it is piecemeal legislation. That was the criticism made by the hon. Lady the Member for Holborn and St. Pancras, South, and it was said by the hon. and learned Member for Kettering (Mr. Mitchison) that it was a retrograde step to take before a final decision could be reached on local government finance generally, including, perhaps, derating. In fact, it was said that the whole Bill was thoroughly untidy. Maybe it is, but I would prefer untidiness to injustice, and for that reason I very strongly support Clause 1.

6.58 p.m.

Mr. Glenvil Hall (Colne Valley)

The hon. and gallant Member for Nottingham, Central (Lieut.-Colonel Cordeaux) is the first speaker, apart from the Parliamentary Secretary who opened the debate, to announce that he is in favour of the Bill.

The hon. Member for Huddersfield, West (Mr. Wade) indicated that he will probably not vote against the Second Reading, although I found his reasons rather obscure. He dislikes the Bill, apart from parts of Clause 4 and was certain that the Financial Resolution was so tight that even if we agreed to the Second Reading there was very little we could do with the Bill. Nevertheless, he would let the Bill go through now in order to try to amend it in Committee.

I would like to feel that it was possible to amend the Bill in Committee because there is not the slightest doubt that the Government will get the Second Reading because they have a sufficient majority to do so. But we can only do so if the Financial Resolution is amended. The Minister knows how difficult it is to do anything in Committee when the Resolution is too tightly drawn to permit reasonable Amendments to be moved. That is one of the procedural difficulties of the House. We certainly have to protect the Exchequer, but in doing so the Financial Resolution should not be so drawn as to stifle discussion and prevent fair Amendments being made.

It is difficult to say anything new about a Bill of this kind, particularly when the issue is so narrow and when my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and other hon. Members have so completely covered the ground. In any case, a number of my hon. Friends wish to speak and, therefore, I shall not detain the House for very long.

I have been asked by all the local authorities in my constituency to do all I can to oppose Clause 1 of the Bill. I represent a very scattered area on the roof of the Pennines, where there are five urban district councils by no means all Socialistic in outlook. I have had representations from them asking me to oppose the Bill. The West Riding County Council has also written to me, as well as to others, asking us to do what we can to prevent the Measure from going through. The West Riding is at present a Conservative county council.

This Bill will increase rate burdens on local authorities and householders from one end of my constituency to the other. Much has been said by Government supporters about the Bill being primarily designed to help the small shopkeeper. We too wish to help the small shopkeeper. Government supporters appear to assume there is only one way of doing this, by passing Clause 1, but we believe that the best way of helping, not only the small shopkeeper, but also the small householder, is by carrying through the review of local government finance, as the Government promised to do a long while ago, to a satisfactory conclusion. The Bill would not be before us if that review had taken place or were likely to come to a conclusion soon, so the assumption must be that the Government have no intention of dealing with local government finance for many months, and possibly years, ahead.

I agree with much that was said by the hon. Member for Croydon, North-West (Mr. F. Harris). I, too, cannot for the life of me see why, if we can give a 20 per cent. relief to certain ratepayers by Clause 1, we cannot deal with the rerating of industry in much the same way. It is not as though the Government did not know the rateable value of industrial hereditaments. They know it quite definitely. We are all aware that rates are levied on them to the extent of 25 per cent.; it would be simple, surely, to enact, for example, that the 25 per cent. should be doubled. That would be one way of helping to relieve the small shopkeeper, if that is what we want to do.

We all know that in addition to helping the small shopkeeper, for whom an excellent case can be made, the Bill will give relief to some very much larger fish. It is unfair that the Bill should give such relief at the expense of householders and by adding to the financial troubles of local authorities.

I have here a communication from one of the urban district councils I mentioned, reminding me that other burdens have been put upon local authorities by the actions of the Government during the past few years. There has been the increase in interest rates and-the changes in housing subsidies, not, to mention the additional costs due to 'petrol rationing and other things. The burdens, on local authorities increase yearly. It will be a great pity if the Government add to them by the Bill.

I therefore hope that some Government supporters, at least, who have also had representations made to them by their local authorities, will join with us tonight in our opposition to the Second Reading of the Bill.

7.6 p.m.

Mr. A. E. Cooper (Ilford, South)

I am very sorry that, for the second time in a few months, I find myself at odds with my right hon. Friends. For about three years I have been President of the Ilford Chamber of Trade and Commerce and, naturally, I would very much like to do all I can to help the Chamber to get such relief from rates as might be possible to them.

The Bill, particularly Clause 1, seems to be thoroughly bad. I do not profess to be an authority on rating and valuation, but I believe that Clause 1 offends against every known principle of rating. Previous Rating and Valuation Acts have laid it down that the valuation which took place last year related, so far as shops were concerned, to current values, and to 1939 values for house property. Now the Government seek to alter that position by Clause 1.

The proposals make nonsense of those previous Acts. We have got to the position where house property is rated on 1939 values plus x and shop property is rated on 1955 values minus x, with nobody knowing anything about what x really means in either case, except that the Government have now decided that it shall be 20 per cent. of current values.

I recognise the force of the arguments put forward by the hon. and learned Member for Kettering (Mr. Mitchison) and the right hon. Member for Colne Valley (Mr. Glenvil Hall), to whom I would observe that my constituency is also on a roof-top. They pointed out that the Bill will enable insurance companies and banks also to benefit materially, but I would remind them that that benefit will be shown in their balance sheets and will be taxed by the Inland Revenue. Therefore, the benefit which they will get on the one hand the Chancellor of the Exchequer will take away on the other hand. But that does not help the individual ratepayer in the small house.

During the last Session of this Parliament the hon. Member for Acton (Mr. Sparks) introduced a Private Member's Bill—to which reference has already been made—concerning the rerating of industry. We on this side of the House, who had great sympathy with the objects of that Bill and have spoken in favour of them in the country for many years, were advised by the Minister to oppose it on the grounds that rating and valuation should not be dealt with piecemeal. If we (are quite dispassionate in our approach to this problem we should not deal with rating and valuation piecemeal.

I do not think the hon. Member for Acton will accuse me of any discourtesy when I say that he did not expect to get very far with that Bill, but that it was a fair bit of political window dressing. Good luck to him for having got so far.

Mr. Mitchison

He got it through Second Reading and Committee

Mr. Cooper

The hon. Member got further than that. He nearly got it through Third Reading, but if he had got it through Third Reading he would have been the most surprised man in the country.

I am sure that hon. Members on both sides of the House will agree that we should not deal with this problem piecemeal, but the Bill deals with the problem piecemeal. It certainly gives justice to The shopkeepers, whom we wish to help, but, in helping them, we place an unfair burden on another very deserving section of the community who need help at present and leave untouched a vast reservoir of rateable value.

In moving the Second Reading I do not think my hon. Friend made very much of a case for the Bill. I was very surprised to hear that the Ministry of Housing and Local Government did not know what the precise effects of this Measure will be in the country. All I can say to my right hon. Friend is that there is probably no hon. Member who has not already been advised by his local authority of the effects of this Measure on its local finances. I have before me a letter from the town clerk of Ilford, dated 6th February. Apart from drawing attention to the way in which the Financial Resolution is drawn—to which reference has been made—it shows that the officials in Ilford know perfectly well that the effect of this proposal will be to reduce the value of a 1d. rate from £12,190 to £11,500 and to increase the rates by at least 1s. in the £. Those effects are known precisely in the Borough of Ilford. I believe that they are known precisely in every borough.

Mr. Ede

And by county boroughs.

Mr. Cooper

I want to say to my right hon. Friend, in as courteous a manner as I can, that it really is not good enough to continue to hold up the reform of local government finance. We have been pressing for that on both sides of this House for many years; ever since I have been in Parliament, more than seven years.

When we were in opposition we pressed the Labour Government to do this very thing. The right hon. Member for Ebbw Vale (Mr. Bevan), when he was Minister of Health, made promise after promise that this subject would be looked into. Since we have been in power we have made similar promises, but we seem to be as far off any proposals on this vital subject as we ever were.

This Bill would not have been necessary if we had got those proposals before us, not even in legislative form but as a White Paper. If the country could see what the overall proposals were for the reorganisation of local government and rating and valuation, the Bill would not be necessary. Therefore, I say to my right hon. Friend that some of us on this side of the House require a very specific pledge from the Government tonight as to what their proposals are for reforming local government finance. Unless we receive a satisfactory answer to that question it might be necessary for some of us to abstain from voting on this Bill.

7.15 p.m.

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

It was certainly interesting for hon. Members on this side of the House to listen to the speech of the hon. Member for Ilford, South (Mr. Cooper). I am quite sure that most of us would subscribe most heartily to many of the sentiments which he expressed, and I hope he will come into the Lobby with us against this Bill.

Mr. Cooper

I was very careful not to say that I was going into the Lobby with the Opposition. I merely said that I might not go into the Lobby, which is a very different thing.

Mr. Wheeldon

Knowing the hon. Member, we might have been sure that there was an escape clause.

The most significant part of the speech of the Parliamentary Secretary in opening this debate was the fact that he paid so little attention to the most important Clause in the Bill, Clause 1. Only a small proportion of the time at his disposal was spent in dealing with that Clause. I think he was wise in that in view of the very weak and poor case which the Government have. It is interesting to contrast the speech of the Parliamentary Secretary with the speeches made only twelve months ago by the hon. Gentleman who is now Financial Secretary to the Treasury. Those speeches are in marked contrast. Less than twelve months ago we were told by the then Parliamentary Secretary that it was impossible to deal with the rerating Bill proposed by my hon. Friend the Member for Acton (Mr. Sparks) "because," the Government said," we must first have a complete review of local government finance." So far as I remember, they offered no single argument against that Bill except on that particular ground.

They supported their argument in one or two ways of which I should like to remind the House tonight. They said, speaking through the mouth of the then Parliamentary Secretary, "If we went ahead and the House adopted the Private Member's rerating Bill, that would leave local authorities in a state of complete uncertainty as to their future." Is that not precisely what this Bill, if passed, will do to local authorities? Of course it is. It was emphasised by Government spokesmen that valuation lists would have to be amended piecemeal; there would be proposals for alterations of the lists, revision of valuations would result from rerating and so on. Therefore, the hon. Gentleman said, valuation lists would be in a state of complete uncertainty. Those are almost, but not quite, the exact words the hon. Gentleman used.

It seems to me that the passing of this Bill will present local authorities with almost exactly similar conditions. If we have the derating of commercial premises, in the main those premises will attract higher rents and higher rental values and local authorities will lodge objections or proposals for the amendment of valuation lists. Then we shall have the complete uncertainty against which the Minister so eloquently protested when the question was rerating instead of, as in this Bill, derating.

The hon. Gentleman went even further and spoke about applications which would arise in connection with equalisation grants and the education grants. He asked, "Why put local authorities in a state of uncertainty?" Some local authorities would get an extra equalisation grant and some would lose it. In some instances the education grant would be altered—indeed, in all cases. It was completely unfair, so the Government said, to chop and change in that manner with the finances of local authorities. "Wait until we get this complete review of local government finance," they said. That was the consistent argument of Government spokesmen, and indeed of those who spoke against the Bill of that day.

It is the same surely today, in regard to this Bill. The Government are quite prepared, it seems to me, to do this chopping and changing when it suits their purpose, and when it is in the interests of those people to whom the Conservative Party usually looks for support—the commercial interests—and they are prepared to give rate relief to people who do not deserve it. I am not now speaking particularly of the small shopkeepers, to whom reference was made by the hon. and gallant Member for Nottingham, Central (Lieut.-Colonel Cordeaux) and indeed by the hon. Member for Ilford, South.

We claim with perfect sincerity, I believe, to represent the interests of the small shopkeeper just as much as do hon. Members on the other side of the House, and we are aware that some small shopkeepers are or will be in a difficult position. We acknowledge that, but we say at the same time that this way of dealing with it is not the right way, and that we shall not improve their position by allowing these anomalies to continue.

On that point, I should like to mention a matter which has not been mentioned so far. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) mentioned that the Minister had informed him that approximately three-eighths of this relief would go to shopkeepers, and that five-eighths was included in what is called "miscellaneous." I should like to point out—and if I am wrong I hope that the Minister will correct me immediately—that the three-eighths mentioned by my hon. and learned Friend is really far bigger than that actual proportion, because shops, in the terms of the White Paper which has been referred to include bank branches. Of course, bank premises carry comparatively high rateable values, so that the actual relief going to shopkeepers is very much smaller even than that suggested by the Written Answer of the Minister to my hon. and learned Friend.

Mr. J. T. Price

And public houses.

Mr. Wheeldon

I do not think myself that public houses are included in the Government's classification of shops, but on that point I speak subject to correction.

I have said that that proportion of three-eighths includes banks, and I am wondering if anyone on either side of the House—certainly, I do not think anyone on this side—would attempt to justify this derating relief for banks. I have looked up today the figures in the various issues of The Times during last month, and it seems to me that here is a real scandal. Let us take the "Big Five" banks. I take them in alphabetical order in order to give the figures that I want to use to support my argument.

Barclays Bank, with an increase in net profit of 10 per cent., paid a dividend of 12 per cent.; Lloyds Bank, with an increase in net profit of 9 per cent., paid a dividend of 13 per cent.; the Midland Bank, with an increase in net profit of 81 per cent., paid a dividend of 18 per cent.; the National Provincial Bank, with an increase in net profit of 8 per cent., paid a dividend of 18 per cent.; and the Westminster Bank, with an increase in net profit for last year, as compared with the previous year, of 9 per cent., paid a dividend of 16 per cent. It is to these people that the Government are now proposing in this Bill to give relief which will be almost wholly at the expense of domestic householders, tenants and owner-occupiers.

Mention has been made of the brewers. For thirty years we have given the brewers of this country 75 per cent. relief in rating for filling barrels, and now we are to give them another 20 per cent. for emptying barrels. It has been said that the brewers have always been the best friends of the Tory Party, and when they receive treatment of this kind it is not hard to understand the reason.

The industrialist, too, is going to do quite well. He has had derating relief for nearly thirty years on his productive establishment, and now he will get 20 per cent. on his offices. He is really doing quite well, far better than most other sections of the community today. I emphasise that most of this relief will be at the expense of tenants and owner-occupiers.

I do not want to weary the House will illustrations that are local in character, but I should like to give one which has come to me by way of personal experience in my own constituency. Not only are small tenants who live in rented houses affected, but there is a class of owner-occupier some of whom, because of the Government's policy of high interest rates, have been having a hard time. I have quite a number of people in my own constituency who, during the post-war years, when their wages in the motor industry have been comparatively high because of full-time working and bonus earnings, have ventured to undertake the purchase of houses of their own.

They have done it primarily for, the simple reason that, with 60,000 people on the waiting list in Birmingham, they knew very well that there was very little chance for many years of getting a rented house. They saved, put their money down, got their mortgages, and found that slowly the interest rates rose and slowly their burdens were increased. Now, as a result of the proposals in this Measure, their burdens will be even greater, and that again is something which I think is completely unfair. What they will lose will go to the bankers, brewers and industrialists, and there is no justification for it.

Finally, I turn to the position of the local authorities. Quite a lot has been said already, but I want to emphasise one or two points which I think are of importance. The Government are doing what they said they would never do, namely, interfere with the basis of rating prior to their long-promised review of local government finance. I made up my mind in listening to the Parliamentary Secretary that we shall not get any change in the local government financial system before the next revaluation. I hope I am wrong, but that was the impression I gained, and if there is a doubt in my mind or in the minds of any of my hon. Friends on this side of the House, there is one person who can clear that doubt, and that is the Minister himself.

I hope that when the Minister replies to the debate he will make it perfectly clear that it is the intention of the Government, not only to introduce by means of a White Paper or by some other means the proposals which they make and give them publicity, but also that they intend at an early date in this Session to introduce their legislative proposals for local government finance reform.

Mr. Ede

And apply them.

Mr. Wheeldon

My own local authority will be hit very severely, as will other local authorities. As a result of derating, that authority was losing £3.8 million in rateable value every year, and no compensation at all was offered for that. Now, on top of that loss, the authority is to lose another £1.3 million in rateable value per year as a result of the Bill. That means an additional rate of 1s. 7d. in the £, when our rates have been going up steadily, despite revaluation. It is true we had a drop, but now they have started to rise again, and that additional burden will in the main be placed on the shoulders of the poorest members of the community. My own city council at its meeting this week sent a very vigorously worded resolution to the Government, protesting very strongly indeed against the proposals in the Bill.

The Government are always ready to pay lip-service to local government, but the proposals in this Bill, in my opinion, strike another blow against the vitality and healthy well-being of local government. As everybody knows, the Bill is strongly opposed by every local government association. It gives relief to those who do not need it, at the expense of those who can ill afford to pay. For those reasons, I consider that the House ought to reject the Bill.

7.31 p.m.

Mr. Cyril Black (Wimbledon)

While I find myself in a considerable measure of agreement with hon. Members on both sides who have criticised the Bill, I propose to support it on Second Reading, although I confess that I do so with a singular lack of enthusiasm.

Mr. J. T. Price

On a point of order, Mr. Speaker. May I ask whether the hon. Gentleman will declare his interest in property before he addresses the House?

Mr. Speaker

The hon. Member has hardly been given a chance to do so.

Mr. Black

I do not think that I have any interest to declare, Mr. Speaker.

I propose to vote for the Second Reading of the Bill but, as I say, with a complete absence of enthusiasm. On the whole, and so far as I understand them, Clauses 2 to 6 seem to be generally sound and Clause 1, which is far and away the most important Clause in the Bill, seems to me to do rough and ready justice to the retail traders. I am bound to say, however, that I agree with all the criticism which has been offered against dealing with the matter in this piecemeal fashion.

The situation as it affects retail traders is not something which could not have been foreseen. It is not something which is unexpected. It is not something which, as it were, has come upon us suddenly without anyone realising that such a situation would develop. Many people realised, when the basis of the present revaluation was made clear, that this very situation in which we find ourselves now would, in fact, arise. Therefore, I can see no justification for regarding this as a matter of emergency for which drastic and piecemeal legislation is required.

I do not altogether agree with the phrases which have been used about helping the small trader. It seems to me that what this House ought to do is to concentrate upon doing justice to the general body of occupiers of business premises rather tan, endeavour to give a subsidy or help only one section of retail traders. Perhaps the most important point on which I differ from many hon. Members in this debate is this. Many of them seem to think that the retail traders were not really the victims of any serious injustice in the present situation, whereas I myself believe quite conscientiously that they were unjustly treated and that something ought to be done for them.

Under the old valuation lists, the burden of rates on domestic premises was about 60 per cent. Under the new list, it fell to about 49 per cent. If the proposals under the Bill are carried into effect, the burden of rates on domestic premises, so I am advised, will be increased to about 53 per cent. Thus, even if the Bill is passed into law, domestic premises will be relatively much better off than under the old lists. Those figures confirm me in the view I have expressed, that occupiers of retail premises are at present subject to an injustice which this House ought to rectify.

Mr. Mitchison

I have listened to the hon. Gentleman with great interest. I wonder whether he would tell me this. Would he or would he not be in favour of excluding public houses from this advantage?

Mr. Black

I would certainly be in favour of the matter which the hon. and learned Gentleman has raised being carefully considered. Perhaps we may have an opportunity of considering it in detail when we come to the Committee stage of the Bill.

I feel some sympathy for the Minister and for the Parliamentary Secretary, because they are very much in the position of having inherited at short notice a Bill and a situation which they might very well wish to be without; but any sympathy I may feel for them in the unfortunate circumstances in which they are placed must not be allowed to deflect me from my duty of criticising what seem to me to be the general defects of Government policy in this particular matter.

Up to 1929, the practice of rating was relatively clear and simple. It was, I suggest, a system which was intelligible and was understood and respected by the great majority of citizens. That statement could not be made of the position today. Prior to 1929, premises were valued on the basis of current rental values and the rates were levied on the assessments thus arrived at. In 1929, the first step down the wrong road, as I believe it to have been, was taken in the derating provisions which were passed by Parliament at that time, giving 100 per cent. relief for agricultural land and 75 per cent. relief for manufacturing premises.

A further complication has recently been introduced into the matter, in that the recent revaluation is, for domestic premises, on the basis of 1939 rental values and, for retail business premises, on current rental values. That involves the injustice to occupiers of retail business premises to which I have already referred.

Mr. Douglas Houghton (Sowerby)

Would the hon. Gentleman explain where the injustice comes in, when business premises were in a free letting market and dwellinghouses were not? If the fundamental principle of rating is to be annual value, the letting value, what is unjust in applying that, as the law says, literally to both types of property?

Mr. Black

My answer is that the annual value is, surely, the value that the property would command in a free market and not the artificial, controlled rent based on 1939 values. If I may say so to hon. Members opposite, the injustice is made clear by the fact that the rate burden on domestic premises, as a result of the recent revaluation, has fallen so heavily on to the occupiers of business premises and away from the occupiers of domestic premises.

Mr. Sparks

Is not the hon. Gentleman really misconstruing the trend? It is well known that a wide range of shops were under-assessed at the time of the new valuation list; many of them were based upon 1934 values. On the point the hon. Gentleman referred to, the matter of the assessment of houses on 1939 rents, they were not controlled rents, but were rents obtainable in a free market; they were on a very high basis.

Mr. Black

I am sorry if I cannot make my view on this matter clear to hon. Members opposite, but it seems to me that there is a basic injustice. That basic injustice is demonstrated by an examination of the present valuation lists in assessing the domestic properties on 1939 values and the business premises on current values.

Mr. Herbert Butler (Hackney, Central)

rose—

Mr. Black

I cannot give way again, other hon. Members are waiting to speak. I must pass on to the next point I wanted to make.

My principal criticism of these proposals is the criticism, which has been made by nearly every speaker, on both sides of the House, that the Bill tinkers with only one small aspect of a large and important problem that ought to be dealt with comprehensively and without any further delay. It seems to me quite intolerable for this much-needed question of the reorganisation of local government finance to go on month after month and year after year with promises that the Government are about to make an announcement and about to do something about it when, in fact, after years of waiting, nothing has so far emerged and the need for this temporary and piecemeal Measure has, therefore, been brought about.

If this Bill becomes an Act, we shall have come to the situation that the comparative simplicity of rating in pre-1929 days will have reached a point that, I suggest, cannot possibly be justified on any system of logic or reason. There will be at least five distinct and separate principal categories of property for local rating purposes. There will be the agricultural properties, 100 per cent. Derated; manufacturing premises, rated at current values with 75 per cent. derating; domestic properties, rated on 1939 values; retail shops, rated on current values with one-fifth deduction; and mixed properties, consisting partly of retail premises and partly of domestic premises, rated on current values with one-seventh deduction. This is the mess, the muddle and the tangle which results from passing from expedient to expedient and from dealing with this matter by means of piecemeal legislation and never tackling the whole problem in a comprehensive, sensible and equitable way.

Mr. F. P. Bishop (Harrow, Central)

Is there not another class that should be added to my hon. Friend's list—that is, those miscellaneous properties which are assessed at full 1956 value but get no allowance at all?

Mr. Black

I said that there were five principal categories and there are, I think, other categories, although perhaps not of equal importance. To save time, I was merely concentrating on what seemed to me to be the principal categories that would exist if the Bill becomes law.

The local authorities are fully justified, I submit, in thinking that they have been most unjustly treated for a long time past. In 1929, they were, at least, compensated by the Government at that time by the block grant for what they lost in rates when the derating of agricultural land and industrial premises was brought into existence.

Mr. David Griffiths (Rother Valley)

That was not sufficient then.

Mr. Black

That may be so, but they were given a measure of compensation which, I think, was generally acceptable at the time to the local authorities.

In 1948, however, we come to the position that the block grant was done away with and the Exchequer equalisation grant took its place, and we have now more than one-third of the total population of the country that does not benefit in any way from the grant. That is a matter about which the non-receiving authorities feel intensely and bitterly.

In his speech, the hon. and learned Member for Kettering (Mr. Mitchison) asked the rhetorical question: "Who is to get the money out of Clause 1 of the Bill?" He proceeded, with complete accuracy, as I understand the position, to answer his own question by saying that the Exchequer would profit largely from this concession in rates which it is proposed to grant to the occupiers of retail premises: and, of course, that must be the case.

I think it would be correct to say that business and industrial profits are being taxed today to the tune of possibly two-thirds, or very nearly two-thirds, of such profits. Therefore, the many millions of pounds by which retail traders will benefit by reason of the operation of Clause 1 of the Bill will benefit the retail traders to the tune of about one-third of the relief in rates which they obtain and the Exchequer to the tune of about two-thirds of the relief in rates which they obtain.

I should have thought that as a very fair minimum measure of justice the Government would have proposed to give back to the local authorities the two-thirds of the remission of the rates to the retail premises occupiers by which the Exchequer will benefit as a result of the rates of such premises being reduced under the Bill. I see no possible reason whatever why that assistance should not be forthcoming here and now and not dependent upon the general review of the future of local government finance by way of relief to the local authorities who will suffer so severely if this Bill passes into law.

I want to put three specific questions to my right hon. Friend the Minister, to which, I hope, he may be able to give us clear and definite answers when he replies. First, is the present tangled basis of assessment for different classes of property to continue? I have referred to the five principal categories and there are other less important categories. If it is not to continue, how soon is it proposed to be brought to an end and some measure of order and reason restored to the whole methods of valuation?

Secondly, I hope that my right hon. Friend may be inclined to tell us whether the Government have yet made up their minds about the abolition of derating. I agree with everything that has been said as to the need for derating being abolished without further delay. I believe that an overwhelming case exists and that it is a reform which is long overdue. I am quite certain that abolition is supported by a large majority of the people of the country and I see no reason why the Government should not now have made up their minds on this matter and be in a position to tell us what are their intentions.

Thirdly, can my right hon. Friend say whether an announcement about the future of the Exchequer equalisation grant will be made in time for this to be taken into consideration in the local authority budgets for 1957–58?

I know that my right hon. Friend has a very wide experience of local government, the problems of the local authorities and the difficulties which they have to face. I assure him that a Bill such as the one we are debating today, brought up at this late hour, when the local authorities are at this very time preparing their budgets for 1957.58. and a Bill which, furthermore, cannot pass into law, presumably, until quite a number of weeks have passed, is a very grave embarrassment indeed to the finance committees of the local authorities in the task which they have to undertake. In present conditions their task is difficult enough without an added uncertainty and difficulty of this kind.

I have served upon my borough council for fifteen years and on my county council for fourteen years, and I have been chairman of the finance committee on both authorities for quite considerable periods. I know at first hand some of these problems, and I know, particularly, how keenly and strongly the local authorities are feeling the injustice of the Bill, especially the proposal in Clause 1, unaccompanied as it is by any suggestion of compensation by a grant from the Government to the local authorities to make up the rate income which they will lose.

I have already said that I believe that Clause 1 proposes a measure of rough and ready justice to the occupiers of retail premises, but we can do justice to the local authorities only by making up to them substantially what they will lose in rate income by means of a suitable subvention from the Government. I hope that some encouragement on this matter will be forthcoming when my right hon. Friend winds up the debate.

7.52 p.m.

Mr. W. R. Williams (Manchester, Openshaw)

Never having served on any local authorities, although I have been a ratepayer and have paid rent during nearly all my lifetime, I very seldom venture into a debate where there are so many experts on both sides of the House. [An HON. MEMBER: "Thanks"] I notice that someone has bitten already. I would not have intervened today but for the fact that there is a tremendous upsurge of protest in my constituency in Manchester, which includes the urban district council of Failsworth, against what all say quite openly is an iniquitous Bill.

I should have liked to have dealt with a large number of points raised in the debate and to comment in some detail on the speeches of the hon. Members for Ilford, South (Mr. Cooper) and Wimbledon (Mr. Black). The question that posed itself to my mind after hearing both hon. Members speak was how they could vote for the Bill. The hon. Member for Ilford, South seemed to me to be reasonable about his attitude. He said that although he could not give a guarantee that he would vote against the Bill, he would at least have the decency to think about abstaining from voting if he did not receive certain assurances in the Minister's winding-up speech. I should have thought a little more of the speech of the hon. Member for Wimbledon if he had gone that distance because, taking 95 per cent. of his speech into consideration, I thought that it was a very rational and reasonable attack upon the Bill in respect of its introduction at this time and in this form.

Mr. Black

I endeavoured to make clear that I agree with Clauses 2 to 6 and that I thought that Clause 1, much the most important, did rough-and-ready justice to the occupiers of retail premises. But I went on to say that I thought that the Bill could be made satisfactory only by the Government making up to local authorities the rate income which they would lose by reason of Clause 1, and I hoped that we might have some assurance from the Minister on that point.

Mr. Ede

Does the hon. Member notice that the Money Resolution is so drawn that the Government could not do that in Committee even if they wished to do it?

Mr. Black

It is always possible for a Government to find means of doing something if they can be convinced that it should be done.

Mr. Williams

I must not continue to give way to the hon. Member for Wimbledon. He took long enough to deliver his original speech without my giving him opportunities to intervene and add to it.

I want to make comments which have emanated from ordinary people in my constituency who are keenly interested in the net effect of this Measure if it is made law. These ordinary people are wondering when they will come to the end of the additional commitments which are being forced upon them while the present Government are in office. They see the cost of living going up every week. Most of them will be facing the possibility of substantial increases in their rent when the Rent Bill is passed, and now, on top of all that, they are being asked to pay a substantial amount of money to bring relief to people who are infinitely better off than they are, and whose profits are increasing almost every year. That is what the ordinary fellow in the street tells me.

I have consulted a number of local councillors in Openshaw and in Fails-worth. This is their reaction. They are asking when the House of Commons, no matter what party is in office, is going to give local government a fair and square deal. They say that the Government are for ever vacillating and alternating between one policy and another and between one form of valuation for rating and another, with the result that they are undermining the stability of local government finances and undermining the confidence of local government authorities in the stability of this House itself. We must be very careful in the House, because unless we have good relationships between central and local government it will be quite impossible for us to impose our wishes on the people in the country. This Bill is further evidence of the Government's playing ducks and drakes with local authorities.

First, the Government told them that they would review all rating. That review has taken place and certain conclusions have been reached. I am quite sure that my hon. Friend the Member for Sowerby (Mr. Houghton) will say that those conclusions have been reached on very good evidence, examined by the Inland Revenue authorities. Yet, as soon as that evidence is taken and conclusions are reached, we have a fiddling Bill like this which interferes with the whole continuity of thought and legislative action that was proposed by those people. The local authorities are just beginning to wonder how much longer they can stand these vacillations on the part of the central Government.

I will not make other points which will be purely repetitive, but I want to protest on behalf of associations representing all the local government authorities at the way in which the Bill has been introduced and at the Minister's conduct in connection with its introduction. Responsible authorities, representing the whole of local government in England and Wales, protest in particular against the way in which the Minister has refused to consult them in time for the consultation to be effective in building up the Bill and in presenting it to the House. I think it is scandalous.

As a trade union officer of many years standing, I thought that the days had passed forever when authorities would refuse to consult their subordinates or those dependent on them. I remember that in my early days of trade union negotiations recognition was an indifferent affair and there was little consultation. I thought those days had passed, and that now no responsible Government, no responsible employer, would ever refuse to consult people so directly and keenly affected by legislation as the local authorities are in this case.

Not only have the Government refused point-blank to meet them and to discuss the terms of this Bill with them, but the Money Resolution has been drawn so tightly that any future consultation between the Minister and the local authorities will be nothing but futile talk. Moreover, we shall not be in the position to hear from the Minister tonight what were the views of those people and his reaction to them. I think that the local authorities have cause for strong protests against the manner in which the Minister has been dealing with them. Indeed, I do not know how we shall get the relationship to continue on a friendly basis, if this is the way in which Ministers and Government Departments are to deal with responsible local authorities, elected by men and women all over the country to look after their interests. That is my second point.

My third point is this. If the Government want to bring forward fancy schemes of this kind after pressure of a political nature has been applied, they must think again. Nobody will be convinced by the argument of the Parliamentary Secretary in introducing this Bill that this is a method of assisting the little shopkeeper. As one of my hon. Friends said, the little shopkeeper has only been introduced into this argument in the same way as the little widow was introduced into the argument about railway stocks when we were talking about compensation.

So far as I can see, no thought has been given to compensation for the local authorities. We have heard from the Parliamentary Secretary that this Measure is a little act of mercy. I have always associated mercy with some form of hardship, with some form of suffering. If anybody tells me here tonight that I.C.I., the Prudential and the big multiple stores are suffering hardship in any form, I should like to hear the evidence in support of it.

No, this Bill must have been a backdoor method of repaying some sections of the community for their association with, and their support of, the Tory Party. There is an obligation upon the Minister, when he winds up the debate, to try to prove to the contrary, because the little shopkeepers of Manchester will get infinitesimal assistance from the Bill —only a matter of a few shillings. On the other hand, I feel sure that the big stores and the big commercial interests, of which Manchester is full, will do very well indeed under the terms of the Bill.

Now a few words about the situation in Manchester. I thought that the Parliamentary Secretary's speech was very weak, having regard to his long association with local government. If I may say so without being presumptuous, I thought his association with local government in Liverpool over many years was a distinguished one, and I thought he knew as much about local government as most people in Liverpool in his day.

Mr. Houghton

Which side did he sit on?

Mr. Williams

I had better not introduce that, it is well known. I am talking now about the hon. Gentleman's experience of local government. When the hon. Gentleman said in his speech today that the effect upon Liverpool was not £8 million, as had been suggested, but £800,000, he seemed to think that that was a mere trifle. I challenge the hon. Gentleman to visit some of the streets in Liverpool that he and I know, and to find out the effect of that upon the households there, where he was born, where he was brought up, and whose people he represented on the Liverpool Council in his early days upon it.

Leaving Liverpool, the effect on Manchester is that 2s. extra will be added to the rates there. The present rateable value will be reduced from £1,265,881 to about £10,090,066, a reduction of £1¼ million. [HON. MEMBERS: "Oh."] I seem to have given the wrong figures. I had better give them again. [An HON. MEMBER: "No, give us the right ones] Yes, I want the people who are recording this to be quite clear and precise in what they are putting down. The present rateable value is £11,336,557. As estimated by capable people who have been used to estimating over many years, and whose estimates are never very far wrong, no matter how many unknown factors are introduced into them, there will be a reduction in rateable value in Manchester of about 11.15 per cent.

The net cost to the householder in Manchester will be 2s. extra in the £, and it will be almost the same in Fails-worth. That is a big amount in itself, but it is only half what he will have to pay in the next financial year, when he will have to pay another 2s. The increase in the rate for Manchester will therefore be 4s. in the £, and that 4s. will be paid for nothing extra in the way of expanded services but because, owing to Tory policy, owing to Tory action, the cost of living is rising, the cost of materials is rising, the cost of labour is rising. I am assured by people in Manchester who ought to know that what we shall be getting there for the 4s. extra will be less in value than before the increase.

What about the expansion of services required in a progressive city such as Manchester? What about the development of some of the projects that we have had in mind in Manchester for many years? How are we ever to get to grips with those developments and that expansion if we have this form of legislation?

I know that there are many other Members who want to discuss their own local aspects of the matter, and also perhaps the main principles concerned. I have no hesitation in saying that this Bill is untimely, it is unnecessary, it is not in the general overall welfare of the ordinary people of this country. It will not make any material contribution even to the small shopkeepers. The main, exclusive, deliberate intention of the Measure is to assist big business and commercial interests.

8.10 p.m.

Mr. Eric Johnson (Manchester, Blackley)

I am very glad to have the opportunity of following the hon. Member for Openshaw (Mr. W. R. Williams) because our constituencies are neighbouring ones. It also gives me the chance to clear up the little bit of confusion about the figures relating to Manchester.

Unlike the hon. Member, I have no experience of local government, and I am somewhat diffident about speaking on a subject of this kind, which is very vast and complex. However, it has always seemed to me, rightly or wrongly, that this greatly needed reform of local government was too large to be achieved in one Measure. My hon. Friend said that the Bill was an interim Measure. If that is so, and if, as we are told, it must be a gradual process, then it is inevitable that there will he "ins" and "outs", that a change will bring benefits to one section of the community and disadvantages to another and that these may well be reversed when the next change occurs. There are obvious advantages in taking the cherry in one bite, if that can be done. It is, perhaps, not so easy to do that with an orange, but if it were possible in this matter, that ought to be done.

I want to add a little to what has been said by the hon. Member for Openshaw about the effect on Manchester. I entirely agree that it will be very serious. He correctly stated that the rateable value of the whole city is £11,356,557, and the amount which Manchester will lose in rateable value is £1,265,861. The hon. Member became a little confused over it. I am not arguing with him about it; I am merely trying to get things straight for the record, as I am sure he would wish me to do.

I also agree with the hon. Member that the effect will be an increase, for that reason alone, without considering any other expenses, of 2s. in the £. However. I feel that we must take a broader view of this matter, and I should like to ask the House to consider some figures in relation to Manchester. These figures are somewhat similar to those given by my hon. Friend the Member for Wimbledone (Mr. Black), but his figures, I suspect, were national figures while mine are purely Manchester figures.

My figures relate to the percentage of the total rateable value which is applicable to domestic and commercial property respectively. In April, 1955, the percentage applicable to domestic property was 45.81 per cent., and to commercial property 33.86 per cent. In April, 1956, there was a complete reversal, the figures being 33.41 per cent. for domestic property and 45.29 per cent. for commercial property. The estimated figures, coming from the same source as those quoted by the hon. Member for Openshaw, are 37.58 per cent. for domestic property and 41.11 per cent. for commercial property.

I would draw the attention of the House to the fact that, although the rateable value of Manchester will decrease this year, if the Bill becomes law, by some £1,250,000, there was an increase in the rateable value between 1955 and 1956 of no less than £4,500,000. If a comparison is made between 1955 and 1957 instead of just between 1956 and 1957, it will be found that domestic property has on balance benefited fairly considerably as opposed to commercial property.

I do not think that the Bill ought really to have come as any surprise to local authorities. It was as long ago as 6th December, 1954, that my right hon. Friend the present Minister of Defence, then Minister of Housing and Local Government, said in a Written Answer: I can … give an assurance that, as soon as the effects of the forthcoming revaluation can be fully measured, the Government will review the position and will consider whether any changes are necessary."—[OFFICIAL REPORT, 6th December, 1954; Vol. 535, c. 22.] The Bill seems to me to be a fulfilment of that pledge.

Mr. Lindgren

The hon. Gentleman says that was in 1954. Surely he means 1955.

Mr. Johnson

It was 6th December, 1954.

Mr. Lindgren

Then it was before the 1955 Bill?

Mr. Johnson

Yes, my right hon. Friend was, I think, considering it at that time. Like hon. Members in all parts of the House, I am naturally very anxious that there should be a reduction in the rates, but I suggest that the local authorities were a little over-optimistic in reducing them to the large extent which they did last year. In view of my right hon. Friend's statement, it would have been more prudent of them if they had provided for such a thing happening.

Mr. H. Butler

The hon. Gentleman said that he had never served on a local authority. Will he take it from me that it is illegal for local authorities to levy a rate which produces a sum of money in excess of their requirements? Unlike some businesses, local authorities cannot build up reserves for their activities.

Mr. Johnson

I am prepared to accept the hon. Gentleman's correction. As I said, I have no experience, or very little, in these matters.

Nonetheless, as a result of the Bill, Manchester's total rateable value will be reduced by 11.15 per cent., and that is very serious. The position is to some extent aggravated—this is a matter to which no reference has so far been made—by the provisions of Section 1 (7) of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, which deals with appeals. At present there are about 4,500 rating appeals outstanding in Manchester, and some £600,000 is being withheld from the corporation under the provisions of that Act. That is a very serious matter, especially as the outstanding appeals may take a number of years to determine. One need not enlarge upon the effect that that will have on the corporation's finances. I hope that my right hon. Friend will indicate that he is trying to find some means of overcoming that difficulty, which I believe to be a very serious one.

There are two other matters to which I want to draw attention which concern Manchester very much. First, in the view of those who represent Manchester, the Bill emphasises the unfairness of the present method of using rateable value per head of population as the sole means of deciding entitlement to the Exchequer equalisation grant. If Manchester ranked for the grant, which it does not, the effect of the Bill would probably be that, the total rateable value being reduced, the city's Exchequer equalisation grant would be increased, and that would give the other ratepayers, at any rate, some measure of relief. But Manchester does not qualify for the grant. This means, as has rightly been said with reference to other places, that the burden of the relief given to shops and other commercial premises will fall upon householders.

The other matter to which I want to refer is the rerating of industry, a very vexed matter indeed for a city like Manchester. It would be much fairer to the general body of ratepayers if industry were rerated. It would provide a substantial relief to the occupiers of shops and commercial premises, etc., without putting an extra burden on householders. Our criticism of this Measure is that it puts the extra burden on the householders. I hope that when my hon. Friend replies he will be abe to give some indication of the Government's intentions about both the Exchequer equalisation grant and rerating. Whether we take one bite at the cherry or three, all are essential and inescapable parts of the whole scheme of reforming local government finance.

Despite what has been said, I welcome the fact that the Bill does do justice to small shops, which were very hard hit by the last revaluation. There are a large number of small shops in my constituency and I know what I was told about revaluation last year and I know that the shopkeepers are very pleased with what has been done this year.

I hold no brief for large commercial premises. I have none in my constituency, and I freely admit that the great financial gainers from the Bill will be large concerns and not small shops. I think that that is inevitable. If there could be a differentiation between the two—the hon. and learned Member for Kettering (Mr. Mitchison) suggested that it might be possible—I should not object. It would be a good thing, but I do not know whether it can be done. I agree that although the Bill helps small shopkeepers, it is possibly unduly kind to commercial premises which are getting on quite well.

There is no doubt that local authorities are very concerned about the Bill's effects. Like other hon. Members, I wonder whether it is possible for the Government to have another look at the Money Resolution, as has been suggested in several quarters, to see whether something can be done to amend it to some extent. I agree that considered by itself—and we are wrong if we do that tonight—the Bill will put an extra burden on householders, although they will still have fared over the three years much better than occupiers of commercial premises.

It is because I think that we must look at the picture as a whole—and I am not trying to run away from what I have said—that I believe we should support the Bill, and I shall support it. However, in doing so, I again express the hope that no time will be lost in pressing on with rerating and consideration of the Exchequer equalisation grant, which are absolutely essential for the reform of local government finance which we all want to see.

8.23 p.m.

Mr. Percy Morris (Swansea, West)

The hon. Member for Blackley (Mr. E. Johnson), the hon. Member for Wimbledon (Mr. Black) and the hon. Member for Ilford, South (Mr. Cooper), in company with a number of other hon. Members who usually support the Government, have today had the unusual experience of criticising the Bill, emphasising that it is absolutely wrong in its fundamentals and suggesting that the Government are very unwise to try to solve a problem of this kind in piecemeal fashion.

Mr. E. Johnson

I said that I should support the Government and I did not say that the Bill was fundamentally wrong. I made certain criticisms, but I said that we must look at the picture as a whole.

Mr. Morris

I agree, but the inference of the hon. Member's observations is that he is willing to wound but afraid to kill. He should go into the Division Lobby and help to persuade the Government to withdraw the Bill, which is not only inequitable but iniquitous.

It is frequently said that local government is the last bastion of democratic government, the handmaid of democracy. The refusal of the last Minister of Housing and Local Government to receive a deputation, representing the municipal corporations, the urban and rural district councils, and the county councils, is an affront to a large body of people who give devoted service to the public year in year out. They are entitled to be heard upon such an important subject as rating and valuation.

Even if the Government had reached an irrevocable decision, it would not have hurt them to have received a deputation, if only to try to secure good will and co-operation in this matter. Unless the Government amend the Bill, I am afraid that the dangers pointed out by my hon. Friend the Member for Openshaw (Mr. W. R. Williams) will mature, namely, they will destroy the relationship between local authorities and the Government, thus making our work infinitely more difficult in future.

I want briefly to put in a word for the blitzed towns. The task of reconstruction is not only difficult, but very expensive. Swansea has almost literally pulled itself up by its own shoe laces. We are not ashamed of what has been achieved, although a great deal more remains to be done. However, we are not the masters in our own house. The district valuer has to approve figures agreed to between the borough estate agent and the other parties concerned. The assessment of shops, offices and other commercial property was fixed by the Inland Revenue Department. Owing to these properties having to be completely reconstructed, war damage compensation proved inadequate. New areas having to be found, the difficulties of these people were greatly intensified.

I am not averse to affording a measure of relief to the shopkeeper, or even to theatres and to other parts of the entertainments industry, but it should not be given in this way. Our whole objection is to the manner suggested by the Government. We regard it as totally inequitable. Indeed, it has a measure of iniquity about it. Unless the Government do the sensible thing, the Bill will involve an increase in rates for practically every local authority in the country.

I was surprised to hear the Parliamentary Secretary say that nobody is yet in a position to estimate what the figure will be. From his own experience of local government the Minister must know that this is the time of budget-making. The treasurers of the county and borough councils are now in a position to estimate what the new rate is likely to be, and they will be lacking in their duty if they do not warn their authorities that if the Bill is not amended it is bound to involve them in a substantial increase in rates. In Swansea, it will mean at least 1s. 4d. in the £.

In view of these difficulties we ask the Government to have second thoughts about the Bill. Surely the Minister will not lose sight of the fact that practically every hon. Member who has spoken in the debate—

Mr. Arthur Lewis (West Ham, North)

Is not my hon. Friend aware that the Tories are not a bit interested in this matter? During the last hour or so there have been only three or four back benchers on the Conservative side.

Mr. Morris

That is true. I thought that there were no differences between the criticisms that we were offering and the criticisms that they were offering, and that the Government should withdraw the Bill. I thought the Government and Opposition supporters had reached the same conclusion, namely, that the Bill was not worth pursuing and should be withdrawn immediately.

The Minister should appreciate the fact that many of the hon. Members who usually support him are in a very critical mood towards the Bill—and not upon a mere detail, but upon fundamental principles. We beg of him to do something substantial in Committee to meet our objections. It would help him materially if he withdrew the Bill altogether. This week we have been told that he is putting his head in the sand in connection with the Rent Bill and that he is immersed in the details of rating and valuation. I think it was last Thursday that the Leader of the House said that he is now spending his time steeping himself in the affairs of Wales. He will be in a terrible stew before long—or perhaps it would be more accurate to call it a minestrone rather than a stew. If he is to do justice to the fundamental principles of the matter he should not be content with the trifling Measure now before the House.

I suggest that the right hon. Gentleman will not reply to the three questions put by the hon. Member for Wimbledon. I do not believe that he will reply to a single question put to him about the wrongness of the Measure and the urgent need to fulfil the promise made over and over again by the Government to bring forward a Bill with a new look in matters of local government finance. Such a Measure is very much overdue in the interests of local authorities and the whole country, and it would be far more to the credit of the Government if they fulfilled that promise instead of tinkering with this great problem in this shocking manner.

Mr. Percy Daines (East Ham, North)

On a point of order. There are only five Government supporters in the Chamber. It is unreasonable for an hon. Member who intends to support the Government to make his speech to such a thin House.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

8.34 p.m.

Mr. F. P. Bishop (Harrow, Central)

am extremely grateful to hon. Members opposite for their efforts to ensure an adequate audience for me. The hon. Member for Swansea, West (Mr. P. Morris) will forgive me if I do not follow his argument too closely.

Mr. Lewis

There are now only five hon. Members opposite present.

Mr. Bishop

The hon. Member for West Ham, North (Mr. Lewis) is still here.

What I wanted to do was to refer very briefly to a very important matter concerning Clause 1 which has hardly been touched upon. It has been suggested that the Government have very few supporters on their own side of the House, but I want to point out that, unlike hon. Members opposite and some hon. Members on this side, I accept the Bill as a necessary temporary and interim Measure. That does not mean that I do not share with nearly all hon. Members the view that a general review of local government finance should be undertaken at the earliest possible moment, and, also, that when it is dealt with it should include the question of the rerating of industry. It is not industry which is standing in the way of that re-examination which is now overdue.

Like so many hon. Members, I received a document setting out the views of the local authority associations. I read it with great care, because it merits careful reading. It is an important expression of the views of highly responsible and important people. But there was one thing which I noticed was completely missing from this document and that surprised me. It was any reference at all to very recent history in this matter of revaluation. There is a schedule which sets out figures of a number of representative local authorities indicating the expected increase in their rates which will have to follow as a result of this Bill, if it becomes law.

In that list I saw a number of figures for the County of Middlesex. I do not know whether I detected in those figures a reference to the Borough of Harrow, part of which I have the honour to represent. But I think it is probably true of Harrow. I have been in touch with officials of that borough to ascertain how this will affect it. As I understand, the borough will suffer a reduction of about £190,000 as a result of the provisions contained in this Bill.

Mr. H. Hynd (Accrington)

Is that rates or rateable value?

Mr. Bishop

In rateable value.

The effect of that may be, although I cannot be so exact as some hon. Members have been, an increase in the rates of probably—over 1s. Although these facts are serious for a borough council to have to face, they must be taken in association with what has gone before, and so recently, in the revaluation which took place last year. As a result of that revaluation the rates in Harrow came down from 19s. to 12s. 10d.; so that the increase which will now be necessary as the result of this Bill is only a very partial increase towards the figure that existed before last year's revaluation took place.

Mr. Sparks

The hon. Gentleman gave us the figures of the rate for Harrow before the revaluation last year and what it is now. Surely he is aware that the rateable values, or the assessments, have increased considerably and that very likely the ratepayer is paying more than he paid under the old figure.

Mr. Bishop

That is what I was about to say. The difference in the actual rate poundage is the reduction, of course, of the valuation, the reassessment that took place as the result of last year's Act.

What I believe to be true—it is certainly true in Harrow—is that the great burden of that reassessment fell upon the small shopkeepers and the small businesses. It has been suggested that the large businesses are the main beneficiaries. That may be so in some areas; I do not know. But judging from all I have heard from the Harrow Chamber of Commerce, it is not true in Harrow. Until a complete review takes place—I join with other hon. Members in hoping that it will be soon—I think that this Measure is necessary to correct the results of last year's revaluation.

I desire to refer not to those who are included, and will receive the benefits under Clause 1 of the Bill, but to those who are left out and who will get no benefit at all. When my hon. Friend the Member for Wimbledon (Mr. Black) gave a list of the various classes affected, I intervened to remind him that there was an additional class. There is a class which, under this Bill, seems to me to get the worst of all possible worlds. It was included in last year's Act and brought up to the full 1956 basis of valuation. It did not get the 20 per cent. reduction which Clause 1 provides for the shops and those other hereditaments which are valued by reference to the figure of gross valuation, and as it had the burden of last year's Act and will not get the benefit of this Act it will also, of course, have to pay its share of the increased rates in order to make a contribution to many of those who are probably better able to bear the burden.

Hon. Members

Who are they?

Mr. Bishop

Some of them were mentioned earlier in the debate very briefly—the commercial sports grounds, playing fields, seaside piers, rubbish tips and sewerage works, and there may be others, but I want particularly to mention the case of advertising stations, poster sites, and hoardings.

Mr. Arthur Lewis

Will the hon. Member also advertise the absence of hon. Members on that side of the House?

Mr. Bishop

I have no interest whatever in this branch of industry, any more than I have in the rubbish tips or sewerage works, but it is a subject on which I have been given some information and one which I should like my hon. Friend to consider before we come to the Committee stage. I understood him to say that the reason those hereditaments which are assessed on the direct net value had been excluded from Clause 1 was that they already had the benefit of the allowance for repairs. I could not altogether follow that, because it seemed to me that whether one was rated on gross valuation and got an allowance for repairs, or whether one was rated on a direct net valuation after repairs had been excluded, it amounted to the same thing. Ultimately, one came to a net valuation on which the rates had to be paid.

I believe that another reason has been given for excluding this miscellaneous group of people from the benefit of the Bill. It is that in many cases the actual rateable assessment has been the result of discussion and agreement and that some of them, at any rate, have not suffered so much in the increase of their burden as the shopkeepers and others who are getting the 20 per cent. reduction under Clause 1. This may be so in some cases. I am told that it is definitely not so in the case, for example, of the advertising stations.

My hon. Friend mentioned, I think, the figure of 125 per cent. as the increase in the assessment on shops. I am told that in the case of the two largest poster advertising firms the probable increase as a result of last year's Act was 167 per cent., and I am also told that if my hon. Friend inquires at the Ministry he will find that the Ministry itself has an increase of 149 per cent., based upon a sample including many of the smaller firms in the trade. This may well be a Committee point and I do not want to argue too long at this stage the case of a particular industry. I mention it because I know a little more about it than about the other groups which are also included in the miscellaneous class.

I ask my hon. Friend to give the House an assurance that the Government will be prepared to consider Amendments in Committee to do justice to these people. My hon. Friend the Member for Wimbledon suggested that this group is not very important, but the fact that one is small does not mean that one should Cot have justice. They have not got it in the Bill, so I should be glad to have an assurance that the Government will look at the matter again when the Bill is in Committee.

8.46 p.m.

Mr. G. A. Pargiter (Southall)

I would first deal with other aspects of the Bill than Clause 1, which is the iniquitous part of it. One or two other parts are useful but do not go far enough. I want to deal particularly with the Amendment which it is proposed to make to Section 8 of the Act of 1955 to remove the injustices under which local authorities suffer because of the relief from full rate payments of certain types of property mentioned in Section 8. These have hitherto been taken at their full value for the purposes of calculating the Exchequer equalisation grant.

I would draw attention to what has happened in three counties. In Cambridgeshire the effect of the non-payment of the Exchequer grant on the effective rateable value means that the county has lost £230,000 in equalisation grant, a rate equivalent exceeding 26d. Caernarvonshire's losses are less, but are equal to a 5d. rate. In Cardiganshire the losses are equal to a rate of 19d. Those losses were created by Section 8. In future the calculation will be on the reduced rateable value and not on the full rateable value and the reduction may remain effective for five years. For the future that position will be righted.

I wrote to the Minister and asked him to be kind enough to look at the Money Resolution and see that it was so drawn that Amendments could be moved in Committee to remove these injustices for the past year. I did not get any change out of that because I heard nothing with regard to it. When I saw the Money Resolution I appreciated that no such relief would be forthcoming. I should like to move an Amendment in Committee to make that relief retrospective so that local authorities affected by the 1955 Act will be justly treated in regard to the Exchequer equalisation grant, if they were in receipt of it. I should be interested to hear whether the Minister has anything to say now which will give those counties, and to a lesser extent some other local authorities, some hope that they will get that to which they are justly entitled.

I do not know whether the figure has been quoted of the extent of the shift of burden as a result of Clause 1. According to figures which I have—this is a rough calculation based on the present rate poundage—the transfer of burden as a result of that Clause will be about £30 million. It means that £30 million is to be transferred very largely on to the shoulders of domestic householders, to some extent on to industrial premises, and the not effect will be that the Exchequer will gain because, instead of paying that amount in rates, the shops and offices which gain by the transfer will be paying more in Income Tax. That seems to be what the Treasury is looking for—to get a little more directly out of would-be ratepayers for the benefit of the Exchequer. It seems to be a particularly mean piece of work on the part of the Minister concerned and also of the Treasury.

It is not unfair to remember, also, that in the case both of derated premises and shops, offices, etc.—they have in effect a good advantage through what might be termed derating in another form. Rates rank as expenses for the purpose of the calculation of profits and, therefore, in the large majority of cases they benefit to the tune of 8s. 6d. in the £, whereas the householder has to pay his rates out of his taxed income. The domestic householder is the only person who pays rates out of his taxed income. It is rather important to remember that. The Minister should remember it when considering transferring this additional burden.

Something has been said about the householder and the transfer of the burden and what that means. I can quote figures for Middlesex, which are rather different from the figures which have been quoted. The net effect in Middlesex, having regard to the increased rate which will be charged, will be, for shops and offices, not a reduction of 20 per cent., but in effect a reduction of 15 per cent. Practically the whole main increase will fall on the householder. I have not the figure for industrial premises but an increase of 6 per cent. on the rates will fall on the householder, whatever the rate poundage may be. I will put that another way to show what the 15 per cent. reduction really means. These figures will be applicable in other parts of the country.

For shop premises and offices the average reduction—we must remember that this is an average figure—will be about 6s. 9d. a week. That is the advantage they have. Is all this upset worth while for 6s. 9d. a week? The small shopkeeper will probably benefit only to the tune of 2s. or 3s. a week, but big industrial premises, blocks of offices and multiple stores will benefit to the tune of pounds per week as against the 2s. or 3s. a week for the small shopkeeper.

One must assume that the Government are doing this deliberately because they are not interested in the small shopkeeper but are interested in the people who are their main support, the bankers, owners of large blocks of office property, insurance companies, etc. I have come to the conclusion that about the only way to do justice, following the failure of the Government to deal with derating in any way, is to have a little more de-rating. If it were in order, I would hope that someone on our Front Bench would look at the possibility of putting something in the Bill which would derate private house property so that the householder could also have an advantage. That would be a measure, not only of rough justice, but very real justice which would put the householder into a position of something like parity with all the other beneficiaries to whom apparently the Government love to dole out benefits.

I want to make it quite clear that the effect on the small shopkeeper will be that he, at any rate, will only benefit by the Bill to such a small extent that it is hardly worth while. The householder will be penalised, because he has to pay his rates out of his taxed income. The increase will be at least 6 per cent. in Middlesex, and we shall have on top of increased rates the increased cost of other services, because this trend runs right through the whole machine.

Instead of the Bill being anything in the nature of a deflationary Measure, it will in fact be inflationary, because it will merely start further demands for wage increases. That is almost inevitable, in view of this Bill, the Rent Bill and other things, and we have to face up to that fact.

Here we have a Government who have a dear money policy and claim to be pursuing a deflationary policy when the total effect of the majority of the things which they do are inflationary, because the only people who benefit from the deflationary things which they do are the bankers and the moneylenders, while others have to pay more money. Therefore, we have inflation in any case.

We have in this Measure nothing of real value to the people of this country. It is a panic Measure, something which has been done against the advice of all the local authorities, because I am advised that, when they were communicated with on this matter before the Bill was introduced, they unanimously decided against anything of this nature being done at this stage. Yet the Minister at that time chose to flout the opinions of the local authorities and their associations, and that has done more harm to the relations between the Government and local authorities, as a result of this deliberate policy, and the panic way in which it has been rushed, than, anything else that could have been done.

I am rather alarmed, because the net effect of what is now before us is undoubtedly that we are going to whistle for a long time before we get any real reorganisation of local government finance. I was optimistic enough to think that the reason why the Minister was not bringing forward a debate on the White Paper on local government reorganisation was because he was about to tell us about the Government intentions on functions and finance. An hon. Friend of mine shakes his head.

I have given up my optimistic approach to this matter, and I think that the Government have the deliberate intention of doing nothing at all. If they do nothing about local government finance and functions, the House will not be willing to do very much in regard to local government reorganisation, so that the Government get out of undertaking it by doing nothing at all, which is what we expect of them; but they have done it in a very clever sort of way.

Another aspect of this Bill involves bad faith. In the Rating and Valuation (Miscellaneous Provisions) Act, 1955, it was proposed that the new valuation lists should be brought into force as they were, without appeals being heard. The appeals will be heard afterwards. What was intended was that when people, householders in particular, got their new rate demands, a great many of them when they found that the increase was not very large, would not appeal, in spite of the increased rateable value. Now, having got that part settled, we find that the Minister begins to whittle away the result then reached so that the householder will pay an increased burden, in the meantime being left without much chance to appeal or, at any rate, getting into the list very late in the day, and having to pay increased rates in the meantime, because he did not get his appeal in at the proper time.

We can see in that a pattern running entirely through the machine, so far as the Government are concerned. It is the usual pattern—transferring burdens from those who have to those who have less, and it goes on. We have seen it happening in the past, and this is just another piece of it. This Bill is meant to be a little vote catching, because it seeks to help those whom the Minister fondly thinks he can look to for support—the business interests, and, to some extent, misguided small shopkeepers. In my opinion, it will not have that effect. What effect it will have will be to make more of the Government's own supporters more disgruntled than they are at present, and we can only hope that we shall have the opportunity of proving it in the very near future.

9.0 p.m.

Mr. G. Lindgren (Wellingborough)

So that those who are associated with local government may really understand the interest of the Tory Party in the subject, we ought to place on record the fact that during the whole of the debate there have never been more than six Tory Members on the benches opposite, excluding, of course, the Minister and his Parliamentary Secretary, who have been most attentive to the debate, as one would expect.

Mr. Lewis

To be fair, ought not my hon. Friend to point out that half an hour ago there was a count? Forty Members came to the Bar of the House and immediately withdrew. My hon. Friend ought to point out that they did get as far as the Bar.

Mr. Lindgren

From bar to Bar is not very far, is it?

Those hon. Members opposite who spoke left the Chamber soon after they finished speaking. One by one the attendance of hon. Members opposite has dwindled and at times there have been only two present. At the moment, there are three.

Captain Richard Pilkington (Poole)

We agree with the Government.

Mr. Lindgren

There is a saying about some people rushing in where others fear to tread. Had the hon. and gallant Gentleman been here the whole time, instead of having crossed the Bar of the House only a few seconds ago, he would have known that every hon. Member from the Tory side has criticised the Bill, disagreed with it, and said that but for the Whips they would not have voted for it.

Because local authority associations desire the interest of this House in local government they usually have a few hon. Members from each side of the House as vice-presidents. I am Vice-President of the Urban District Councils' Association, in the distinguished company of my hon. and learned Friend the Member for Kettering (Mr. Mitchison). The county councils, the A.M.C., the urban and the district councils, all have their various vice-presidents. During the debate I have looked for the attendance of those vice-presidents who are members of the party opposite. Not one has been here. Is that the interest that the Tory Party takes in local government and the future services to be rendered to the people?

It is usual in a debate such as this to say that we have had a good debate. From my point of view, I think that we have had a good debate. But I hardly think that it was a good debate from the Minister's point of view. It has been my privilege to be a Member of the House of Commons for a number of years and I have sat through many debates, but I have never sat through a debate on a Bill during which not one hon. Member on the Government side supported it. Every hon. Member opposite who has spoken has criticised the Bill—criticised it fundamentally. In fact, the hon. Member for Wimbledon (Mr. Black), who has now returned to his place, almost said that if it had not been for Clauses 2, 3, 4, etc., he would not have voted for the Bill.

As those who have taken part in the debate are, for the most part, knowledgeable in local government, anything I say now must of necessity be almost in the nature of repetition. Therefore, what I propose to do is to try to ram home what I feel have been the most effective points which have been made, sometimes from this side of the House and sometimes from the other.

The Government's case has been that the Bill is designed to correct what has been wrong in valuation as between domestic properties and shops, offices and other properties. That is really a hollow statement, so hollow that I even interjected during the speech of the hon. Member for Blackley (Mr. E. Johnson)—and I ought to apologise to him; I would do if he were here now—because he suggested on 6th December, 1954, as shown in column 22 of HANSARD, the then Minister of Housing and Local Government had promised to look at the question of shop rating. I interjected and said, "Surely the hon. Gentleman means 1955." I thought that it was after the 1955 Act had been introduced and the pledges the Minister gave then. But the hon. Member for Blackley was quite right; the promise to look at the matter was given in December, 1954.

What have the Government done since? Although there have been a few changes of faces and shifts round of Ministers—not quite so many shifts in the Ministry of Housing and Local Government as there have been in the Ministry of Defence, but very nearly as many—this Government have been in power since 1951. They brought in a Valuation for Rating Bill, in 1953. I took part in those debates. We then called attention to what was likely to happen in the matter of the basis of valuation as between shops and domestic properties. The Government did not correct it.

Mr. Ronald Bell (Buckinghamshire, South)

Surely the hon. Gentleman must remember that he and his colleagues did this in 1948.

Mr. Lindgren

The hon. Gentleman is completely wrong. The 1948 Local Government Act gave a basis for domestic valuation and it gave a basis of current value; of course, it gave a different one, because there were different considerations as between shops and offices. Under the 1955 Act to which we now come, the Government changed that basis for domestic properties and made it the 1939 valuation.

Mr. Bell

I am sorry to interrupt the hon. Gentleman again, but it is a matter of fact. What he says is not correct, as I think he knows. The current rental value for shops was introduced in the 1948 Act, and the 1939 value for domestice hereditaments was introduced in the 1948 Act. All that the 1955 Act did was to substitute a notional tenant for the notional cost of building.

Mr. Lindgren

If we are to have it right, let me say that ever since the Rating and Valuation Act, 1925, it has been current value for shops. Under the 1948 Act, for domestic properties, we then made, I will agree, a complicated formula, taking into consideration cost of construction and all the rest. The Government then changed that basis in the 1955 Act and brought it to 1939 values, and that is where it came in.

Mr. Bell

That is not so.

Mr. Lindgren

Whether it is true or not, it is a matter of fact. [Laughter.] I make that crack to the hon. Gentleman because he is a lawyer, and there is a lot of difference between law and fact; but let us forget that for a moment.

We had the Rating and Valuation (Miscellaneous Provisions) Bill, 1955, just before the General Election. There was the same criticism. I took part in it and I said that it would be very difficult for a valuer to go round and assess 1939 values, taking into account the then methods of transport and all the rest of it, and bring out a figure. The Government did nothing with it. We had a General Election, and the Government came back and brought in the same Bill, almost immediately afterwards. In fact, it is the only time that I have ever taken part in a Second Reading debate on one Bill in two different Parliaments.

The Government have had ample opportunity, if they really wanted to do so, to deal with the question of the difference between the 1939 valuation basis for domestic properties and the current value basis for shops, business premises, and the rest.

I mentioned earlier the absence of hon. Gentlemen opposite from today's debate. I would say this, too, so far as the Tory Party as a party is concerned, and not referring to certain members of the party who have taken part in local government outside, that the party generally, its Central Office, the present Government and previous Tory Governments, have never had any love for local government as such. They have never desired to see it prosper. They have given lip service to a strong local government system, but they have not at any time been prepared to help it to work in a satisfactory manner. At all times, Tory Governments have done everything possible to hinder the satisfactory development of local government.

I say quite bluntly that since 1951, for local government officers and for members of local authorities, local government has been a nightmare. A local authority has not known from day to day how it would continue. Twelve times—thirteen, including today—interest rates have changed. As everyone knows, a considerable amount of the rate levy which a local authority has to make has to be collected to meet interest charges on loans for works which an authority has undertaken from time to time.

During the whole time since 1951, the Government have been urging local authorities to go forward on this or that proposition and this or that type of activity, but hardly has a local authority made a start before it has been cut off, whether in housing, education, highways, or any other activity. Local authorities simply have not known from day to day where they were going, or how they would be able to operate on a satisfactory and efficient basis.

Those in local government know that the desire of every authority is stability. A local authority can only go ahead if it can programme its work, if it can make plans with certainty a year or two years ahead and if it has some certainty that the conditions operating at the completion of a project will be something like the conditions ruling at the start of the project. In the last few years, local authorities have decided to build schools, undertake housing activities—

Mr. Archer Baldwin (Leominster)

And they have done it.

Mr. Lindgren

"And they have done it," the hon. Member interjects, but under the worst handicaps which local authorities have ever had to contend with. When they have contemplated a project, the interest rate was at a certain figure. When they decided to go to tender, it had changed. When the tenders came in, it was different again. When work started, it had changed once more, and before the contract had finished there was yet another change. Under the Tory Government, a local authority has not finished a contract under the same conditions as those under which it was started.

As my hon. Friend the Member for Hackney, Central (Mr. H. Butler) said earlier, local authorities are pledged, quite rightly, to budget from year to year for their expenditure. They have only to collect from ratepayers within the year the money that they will spend during the year. They accumulate a working balance, it is true, but they do not have vast reserves. They have simply not known what to do or how to do it.

Contrast that with the opportunities for local government during the time of the Labour Administration. For councillors and local government officials, it was a paradise of stability. [Laughter.] The hon. Member for Wimbledon laughs, but will he ask the treasurer of the Surrey County Council when he had any sleepless nights under a Labour Government? The treasurer knows that during the whole time from 1945 to 1951, in spite of all the difficulties of the postwar period, his rates of interest never fluctuated from 2½ or 3 per cent. The Government told local authorities before they started what their programme of work would be.

Mr. Black

If the rates in the period which the hon. Member mentioned were 2½ per cent. to 3 per cent. then they did fluctuate.

Mr. Lindgren

The hon. Gentleman for Wimbledon is the great financial wizard and property owner. Really, I wonder how such people ever get there. [An HON. MEMBER: "They inherit it."] Would the hon. Member tell the House whether his period of office as chairman of the finance committee or as chairman of the county council were easier under a Labour Government, with rates of interest at 2½ per cent. to 3 per cent., or under a Tory Government since 1951, when interest rates, including today's fluctuation, have changed thirteen times? If he says that he has been easier in mind under a Tory Government, he is the only local government administrator who would say it. As I have said, the programme of works under a Labour Government was on such a basis that local authorities knew where they were going and what they would be able to do.

I come now to the serious question of relationships between local authority associations, the Minister, and Government Departments. I have been in direct association with local government for 30 years. Certainly, that is not as long as the association of my right hon. Friend the Member for South Shields (Mr. Ede), but for me thirty years is a very long time. I should have had to be in local government at a very early age to have been associated with it for very much more than thirty years. However, thirty years gives the opportunity to become acquainted with the general relationship between Government Departments, local authorities and local authority associations. I say without any pleasure at all that local authority associations have never been so universally and completely opposed to a Government as they have been to the present and the previous Tory Government.

Local government is a partnership. It is for the central authority to make the possibilities and for the local administration to take advantage of the possibilities and do the work in the field on behalf of the central authority. There cannot be good work when that partnership is on one side a very unhappy one. The local authorities have the hardest task of all. All would agree that it is far easier to make an Act of Parliament than to set out to do the practical work on the ground within the local authority areas, and if we are to have effective work there must be a harmonious relationship between the central and the local authority. It is no credit to a Government or a Minister that these relationships are now in at least a state of discord.

The Bill is opposed by every local authority association. I have never before had such a postbag from individual local authorities. There is not a right hon. or hon. Member opposite who will vote for the Bill tonight who can say that he has been asked to vote for it by a local authority. There is not a single one, not even the hon. Member for Leominster (Mr. Baldwin). If every one of their local authorities has told them they ought not to vote for the Bill, why are hon. Members opposite going into the Lobby tonight to vote for it?

Lieut.-Colonel Cordeaux

Some of us think that by doing so we shall be according some justice to the small shopkeepers in our areas.

Mr. Lindgren

I do not say it with any pride at all, and I hope that the day will change, but at present the vast majority of county councils and of county boroughs in the country are Tory controlled. The majority of urban districts and of municipal boroughs in the country are Tory controlled. The majority of rural districts are Tory controlled. Almost the entire sphere of local government is under the control of members of the party opposite, yet they are all opposed to the Bill.

Mr. Baldwin

The hon. Gentleman has issued a challenge. I have in my possession a letter from one of my urban district councils asking me not to accede to the request of the County Councils' Association.

Mr. Lindgren

The hon. Member often puts the cat among the pigeons. I think that he has been interested in pigeons at various times, if not with cats with guns. Everyone in his area will now want to know who is the blackleg among his local authorities.

Let us consider why the local authority associations are opposed to the Bill. They are opposed to it because it redistributes the rateable value within an area and it increases the rates of the local authority from 1s. 4d. up to 2s. 6d. in the £. I see the noble Lord the Member for Hertford (Lord Balniel) sitting opposite. He has the distinction of representing me in this House, though he is not here with my support. I live in his constituency, in Welwyn Garden City.

I have had a copy of a letter from the Clerk to the Urban District Council which asks the noble Lord to vote against the Bill. Although I am not the Member for the constituency, I shall vote against it. [An HON. MEMBER: "Do you expect your Member to do so?"] Yes. The rates in my town are going up by Is. 7d. in the £. The house in which I live has a rateable value of £39. If I can work it out, thirty-nine times 1s. 7d. is nearly £3 2s. Can the right hon. Gentleman tell me why I should pay £3 2s. more and Woolworth's £3 2s. less? Is the right hon. Gentleman going to the Treasury to assist me and my colleagues on this side of the House, who will pay this extra charge, in getting an increase in salary to meet the additional costs which are arising from the actions of the Government?

It is true that this Bill gives relief to shops, but it gives that relief to offices, banks, business premises, public houses, cinemas, and also to Government offices. A great deal has been said about shops, and the little shopkeeper. I say to the hon. and gallant Member for Nottingham, Central (Lieut.-Colonel Cordeaux)—I do not say it offensively—that it is humbug to talk about the little shopkeeper. If the Government really wanted to help the little shopkeeper, the man who has a shop at the street corner or the old lady with the baby linen shop, to which the hon. and gallant Gentleman referred, why do not the Government bring in a Bill containing Clause 2, 3, 4, etc., but with Clause 1 exempting 20 per cent. of rateable values below £50 or even £100? Those are the shops owned by the little shopkeepers, the £50s the £75s. Very few have a rateable value of £100 even in London, let alone in Nottingham.

Lieut.-Colonel Cordeanx

Perhaps the hon. Gentleman will go down Alfreton Road and Radford Road, in Nottingham, and tell them that the Bill is all humbug.

Mr. Lindgren

I did not say that. I said, and I did not mean it offensively, that the hon. and gallant Gentleman and his hon. Friends are humbugs in saying that the Bill will help little shopkeepers.

The trading profit of Universal Stores last year was £20 million, and after deduction of tax and depreciation £7½ million was left. Is that a little shopkeeper, like the old lady with the baby linen shop? Does it want a subsidy of 20 per cent.? Woolworth's, with 912 shops in the country, had a trading profit last year of £23 million, and, after deduction of tax and depreciation, £10 million remained. Does Woolworth's want a 20 per cent. subsidy? Marks and Spencer had a trading profit of £12 million and a net profit of £5 million. Does it want a subsidy of 20 per cent.?

When we were giving subsidies in respect of food and council houses, the Tory Party said that we should not give subsidies to both old-age pensioners and millionaires. However, when it comes to a subsidy in respect of rates, hon. Gentlemen opposite say. "We will give it to the little old lady in the baby linen shops and also to Woolworth's and Marks and Spencer, although their profits amount to millions."

Lient.-Colonel Cordeaux

The point I was trying to make earlier was that the only way in which we can give rough justice to the small shopkeeper at present is by Clause 1 of the Bill, which gives those advantages to the other people to whom the hon. Gentleman has referred.

Mr. Lindgren

If the hon. and gallant Gentleman and his hon. Friends wanted to help those people, all they needed to do was to bring in a Bill to provide that shop properties of a rateable value below £50 or £100 should be relieved of 20 per cent. of their assessments.

If hon. Gentlemen opposite really believe that this is a method by which they should relieve large-scale shopkeepers while not in any may tackling the problem of rerating and local government finance, what is the urgency for it? If one's profits are £20 million gross, or £10 million or £5 million net, it is not urgent that this should come about in April. The Parliamentary Secretary stated, and we have no reason to disbelieve him, that in a matter of weeks we shall have a comprehensive statement on behalf of the Government on the future of local government finance. If that is true, why not delay this Measure for a year? Why does the Minister not agree to accept an Amendment to the Bill to give relief to the very small shopkeepers about whom hon. Gentlemen opposite are so concerned?

I hope that the House, because it is concerned with the future of local government, will not give the Bill a Second Reading but will vote for the Amendment. Hon. Gentlemen opposite will say that we are going to misrepresent them; but there is no misrepresentation in telling the truth. I shall go out in the town where I live, in the constituency of the hon. Member for Hertford, and say bluntly that, as a result of the Government's action, the rates there will go up by 1s. 7d. in the £ and that this has been done deliberately so that relief can be given to Woolworth's and Marks and Spencer and other big multiple stores. [HON. MEMBERS: "And the breweries."] I shall even go further and say that the Government are giving relief to banks, breweries, cinemas, and dance halls. Why should such relief be given?

If hon. Members opposite do not believe that that relief should be given, they ought to vote for the Amendment. Equally, we shall say with equal truth that this is a further deliberate action by the Government to lower the standard of life of the ordinary people. Having put up the prices of food, having increased rents, they now increase rates on the basis that if the workers have to meet these extra demands out of their wages they will have less for other things.

For the ordinary worker there is only the wage packet. If more of it goes in rent, food and rates there is less for other things and a consequent lowering of his standard of living. Those of us in the trade union movement will not stand idly by and see the standard of living lowered. If the Government keep on raising prices and costs we shall fight for increased wages and the Government will not achieve their plateau of price stabilisation.

9.30 p.m.

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

The hon. Member for Wellingborough (Mr. Lindgren) has painted an unrecognisable picture of the feeling which Socialist local authorities had for the Socialist Government of 1945–50. I was the leader of the opposition in a Socialist local authority at that time. I cannot quite recollect the enthusiasm with which London County Council welcomed the reduction of about £2 million in Exchequer grants imposed upon it by the Local Government Act, 1948, nor will hon. Members on either side of the House easily recollect the keenness with which the local authorities of those days welcomed the manner in which the Socialist Government snatched away from local authorities control of their gas undertakings, control of their electricity undertakings, and control of their hospitals.

This is a highly complicated Bill, on which we have had a most interesting debate. When my hon. Friend the Parliamentary Secretary rose to move the Second Reading, you, Mr. Speaker, adjured hon. Members to "pass out quietly". I felt sure that you were wishing to facilitate, not to discourage the speech of my hon. Friend. He explained this complex Measure to the House with a clarity that was not assisted by many interruptions. The hon. and learned Member for Kettering (Mr. Mitchison) then rose to pour lukewarm water on the Bill. He failed to be able to lay hands on the evidence which he wanted from time to time as it was scattered on the Dispatch Box, and ultimately he even mislaid his own Amendment.

Clause 1, the main Clause of the Bill, arises from an undertaking which my right hon. Friend the present Minister of Defence gave to the House on 6th December, 1954, when he said: … as soon as the effects of the forthcoming revaluation can be fully measured the Government will review the position and will consider whether any changes are necessary."—[OFFICIAL REPORT, 6th December, 1954; Vol. 535, c. 22.] It was impossible to review the position until after 1st April, 1956, because that was when the revaluation became effective.

Many references have been made during the debate to the thoroughgoing review of local government finance which the Government have had in hand over a period. Before that review could be carried very far, it was obviously essential to see how the new valuation lists were going to work out, and that was not possible before December, 1955. It was also obviously necessary to look at the pattern of rates based on the new lists after April, 1956. That is why it was essential to carry on this review over a period. It could not have started years ago, as some hon. Members have suggested. It was necessarily linked in time with this revaluation, which all those concerned with local government regard as a turning point in the history of local government finance.

My right hon. Friend the Minister of Defence, who was my distinguished predecessor in this office, worked extremely hard upon this comprehensive examination of the somewhat abstruse problem of local government finance, and, in the course of his examination, certain facts emerged. First, it was clear that there were at least three grave injustices in the system as it was operating, in the current year, 1956–57.

One of those injustices was that the operation of Section 8 of the 1955 Act was causing quite indefensible anomalies in a limited number of local government areas. The outstanding cases were Cambridgeshire, Cardiganshire, and Caernarvonshire, because of the university and college buildings which provide a substantial part of the total rateable value of those areas.

The second injustice—although perhaps in this case "injustice" is not the right word, and "anomaly" would be better—was that the 1956 reductions in rate poundages were going to result, directly because of a formula in the 1948 Act, in the British Transport Commission and the electricity and gas undertakings contributing considerably less than their fair share towards local government expenditure.

The third injustice was that shops and offices and the like alone were rated at 100 per cent. of the full current value, when no other class of ratepayer was paying on that basis. The householder was paying not upon the current value but upon 1939 values; industry was paying on current value, but only at 25 per cent. of the full rating, and agriculture was not rated at all. Shops and offices had, as it were, been singled out for specially severe treatment.

It is quite undeniable that all these three anomalies need to be corrected immediately—and by "immediately" I mean from the beginning of the next financial year, 1st April, 1957. That is the reason why this short and limited Bill was presented on 21st December, 1956—

Mr. Wade

In his three instances did the right hon. Gentleman include the derating of industry?

Mr. Brooke

—to deal with these three injustices. I was about to say that no hon. Member in his senses could imagine that Parliament could consider comprehensive Government proposals for the reorganisation of local government finance and pass those proposals into law, after discussions with local authority associations, in time for local authorities to frame their budgets in March for the year 1957–58. It was quite out of the question.

Every hon. Member knows very well that the House does not refrain from quick ad hoc action to remedy an obvious injustice at the earliest possible date, even though we may well need later, when there is more time, to examine in full detail the major problem against which these limited injustices may seem to he comparatively small. Nevertheless they are severe indeed for those who suffer from them. I shall have something to say about the longer-term future before the end of my speech, but here and now I should like to deal with the points raised on the Clauses of the Bill. I will leave the major proposal in Clause 1 to the last.

As to Clause 4, which principally concerns the three counties which I have mentioned, I think it was the hon. Member for Caernarvon (Mr. G. Roberts) who raised the question whether the effect was going far enough to make good the loss of Exchequer equalisation grant. The figure of £28,900, mentioned by my hon. Friend the Parliamentary Secretary, is in fact the first estimate of Exchequer equalisation grant for 1957–58. The final figure may be different, I cannot say. The final figure often differs from the original estimate.

The hon. Member for Huddersfield, West (Mr. Wade) asked whether Clause 4 applied to the discretionary remissions which local authorities might grant to charities and the like. No, it does not. It applies only to those reductions of the rate charges which are, as it were, automatically made by Section 8 of the 1955 Act. The point is that Clause 4 restores fairness where there was unintended unfairness, but I cannot hold out any hope of restrospection. I agree that there is a great deal of work to be done in recasting the Exchequer equalisation grant. But I cannot hold out hope to those affected, that this particular and limited alteration can be retrospective.

Mr. Pargiter

The Minister admits injustices and refers to quick action being taken to remedy them. Here we have an injustice which he is prepared to admit, yet he is not prepared to remedy it in respect of the immediate preceding period. Does he consider that fair?

Mr. Brooke

I have some consideration for the local authorities, and it is upsetting if we go backwards in these matters—

Mr. Pargiter

And give them more money?

Mr. Brooke

—and try to alter the arrangements for budgets and estimates already drawn up.

There has been rather less said than I expected on Clauses 2 and 3, which are concerned with the great public utilities. My hon. Friend the Member for Aylesbury (Sir S. Summers) had something to say about that, and I should like to assure him that the new figure for the British Transport Commission does not represent any element of subsidy to the Commission. The deterioration in the financial circumstances of the Commission would in any case have had the effect of reducing the assessment on its undertaking, if the assessment had been made in the normal manner by reference to the undertaking's accounts and its ability to pay. The Government have taken all that into reckoning in securing that it pays only the same amount next year, and neither more nor less than it is paying this year. This is a measure of justice, and there is nothing in the nature of a subsidy in it.

My hon. Friend also suggested that the electricity industry was having its payment for next year frozen at the level of last year's payment. That is not so either; it will be paying as much next year as if there had been no revaluation of its properties. It will bear its share in the increase in the total levy in rates and its payment will also reflect any increase in the amount of electricity sold.

I was asked whether these great industries had been consulted. The nationalised boards were consulted and the associations of local authorities also were consulted. It is not wholly surprising, and it will not startle the House, when I say that the nationalised boards said that the figures in question were too high for them to pay and the associations of local authorities said the figures were too low for them to receive.

I must not go so far as to suggest that there is any chance of agreement between the two bodies. Great effort was made to secure agreement but it has not been successful, and I must not confirm any hope of amicable agreement between the payers and the recipients. I think that it will be understood on both sides of the House that in these circumstances it is the duty of Parliament to impose a settlement, and this is the settlement which we suggest.

Mr. Mitchison

They agreed to disagree with the right hon. Gentleman—both of them.

Mr. Brooke

I am not at all sure that they were not somewhat grateful to the Government for making up their mind and putting a figure in the Bill that went neither as far in one direction or in the other as might have been suggested.

The hon. and learned Member for Kettering raised one or two specific points. He said that Section 14 of the Local Government Act, 1948, required the Minister to cause the investigations to be made in the year of the first revaluation. That is so, but the Act does not say that the investigations are to be completed before the end of that year. I can say that a great deal of investigation of all these matters has been going on. The hon. and learned Gentleman went rather further astray when, if I understood him aright, he suggested that the amount of the relief given by Clause I would be about £219 million.

Mr. Mitchison

If I conveyed that impression it was not what I intended to convey. The point is that £219 million is the rateable value upon which the reduction will be made, and the transfer is the transfer of that amount of rateable value. I agree with the right hon. Gentleman, thinking over it, that I did not make myself quite clear but that is what I intended to say, and I am sure that he understood me.

Mr. Brooke

I understood the hon. and learned Gentleman perfectly. I understood him to say that £219 million was the amount of relief that someone was going to get away with, and I felt that it was only just that I should point out that the correct figure is £44 million, so that when the hon. and learned Gentleman was instructing us he was exactly £175 million wrong.

Even though hon. Members opposite differ in their views as to the way in which the situation should be corrected, I do not think any of them would seriously deny that there was a measure of injustice to shops and offices and the like, in being singled out to be alone fully rated on current values. What the Government have put into Clause 1 is what we believe to be a fair and just remedy which ought to be adopted at once.

Mr. J. T. Price

The right hon. Gentleman has offered a challenge to the House, and I am going to take up his challenge. I say to him, in reply to that challenge, that if in fact the average increase of the rateable value of these properties that are now being given relief is 120 per cent., it is known to his Department and to anyone interested in local government that many of the properties have in fact increased in value over 1938 by 400 per cent. and in some cases 500 per cent. and that in fact they are under-assessed.

Mr. Brooke

I had better address myself to the four or five specific criticisms that have been made against Clause 1. My hon. Friend the Member for Aylesbury and my hon. Friend the Member for Harrow, Central ((Mr. Bishop) suggested that certain other classes of hereditaments ought to have been included in the relief and they asked me to consider that point. I will naturally consider any Amendments that they may think of putting on the Paper, but I cannot give any undertaking that I will accept Amendments. I will certainly examine very carefully -what they have said.

A number of hon. Members suggested that Clause 1 was of no value to the small people and that the big people were going to get a lot of money out of it. The hon. Member for Wellingborough seemed to be a little out of date in his ideas about the normal assessment of shops now. The average rateable value of shops in the new lists is about £132. That is an average for no fewer than 674,000 shops and makes it quite clear that the vast majority of the money will go to a very large number of people who have small shop properties.

Mr. Lindgren

What the right hon. Gentleman says about the average values is fictitious. The new values of the shops are in Bond Street and the like. The right hon. Gentleman knows that the rateable value of the average backroom shop is between £50 and £100.

Mr. Brooke

In giving these figures I am seeking to give the House all the information that I can.

Other commercial properties affected by the relief have an average rateable value of about £96 and there are no fewer than 883,000 of them. That does not suggest that everybody who is to get the relief is of the stature of a large combine.

A further criticism was that all loss of rateable value should be made good by a compensating Exchequer grant. I have no recollection that the counterpart of that argument was used when we had the tremendous increase in rateable value in 1956 and when the product of a 1d. rate went up by about 70 per cent. I cannot recollect local authorities coming to the Government and suggesting that they would willingly sacrifice Exchequer grants.

Under Clause 1 there is a 7 per cent. reduction in rateable value, but no reduction of Exchequer grant whatsoever. All that is said in Clause 1 is that in future the sources from which local authorities will raise their rate revenue will be somewhat shifted. When hon. Members say that rates will go up by 1s., 1s. 6d. or 2s. 6d. I would remind them that we cannot isolate Clause 1 from all the other causes that affect rateable value. The total rateable value is not going to be 7 per cent. lower but more like 2½ per cent. lower.

Then there were criticisms that the Bill was unfair to householders. I paid special attention to it because we are anxious to be fair to everybody. [Interruption.] Yes, and we are extremely anxious to be fair to householders. In fact, I am very happy that in the last year or so householders have had so large a part of the rate burden lifted off them. [HON. MEMBERS: "Oh."] Two years ago, of the total rateable value 60 per cent. was in the householder section, and about 33 per cent. in the shops and miscellaneous section. If the Bill goes through as it stands, the figures for 1957–58 will be 52 per cent. for the householders and 36 for the shops and miscellaneous properties.

The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) instanced the case of London and suggested that that was a particularly hard one. In London under the old lists two years ago householders provided 42 per cent. of the rateable value. Under the new list for 1957, if this Bill goes through, they will provide 33 per cent.

I come to what I think has been the major issue underlying this debate. Hon. Members have made their local, or, I might almost dare to say, their political, arguments against the provisions of the Bill. They have said that some people are going to suffer. They have perhaps emphasised that and failed to stress sufficiently the great measure of justice that it does in correcting unfairnesses which numbers of people are at present suffering.

I have some knowledge of local government. I would not dream of claiming that this Bill was a solution of the problems of local government finance. In the earlier part of my speech I explained the circumstances which led to the introduction of the Bill. I explained that it was quite impossible within the time set between gaining the experience of the 1956 revaluation and the present to bring forward to Parliament, discuss with the local authorities and pass into law, far-reaching changes in the system of local government finance which could come into force by 1st April, 1957.

That is what has thrown us back, and I think quite rightly thrown us back, on this limited Bill to correct immediately certain undeniable injustices. There has been a sort of undercurrent of insinuation that the Government wish to use this Bill as an excuse for putting off indefinitely to the Greek Kalends, the Ides of March, or whatever other phrase the hon. and learned Member for Kettering cares to use, the real task which we all know lies ahead of Parliament. The hon. Member for Southall (Mr. Pargiter) said he thought he would have to whistle for a long time before anything happened and he thought that it was the intention of the Government to do nothing at all.

This review of local government finance is now completed. It is a subject which I have been trying to study since I was appointed to my present office three and a half weeks ago. I do not think the hon. and learned Member for Kettering demurred when I asked him the other day to give me just two or three weeks

to bring my mind fully to bear on it. What I want to tell the House at the conclusion of this debate is that I shall be ready to make a general statement on the question of local government finance and on the Government's review of it early next week. That will be a general statement, after which we shall be able to discuss with the local authorities in detail many of the major questions which we all have to face. I hope that in the light of what I have said both sides of the House will accept that this limited Bill, this ad hoc Bill, to correct certain injustices, should go through quickly.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 206, Noes 165.

Division No. 56.] AYES [10.0 p.m.
Agnew, Sir Peter Doughty, C. J. A. Jones, Rt. Hon. Aubrey (Hall Green)
Aitken, W. T. du Cann, E. D. L. Kaberry, D.
Allan, R. A. (Paddington, S.) Duncan, Capt. J. A. L. Keegan, D.
Amery, Julian (Preston, N.) Eden, J. B. (Bournemouth, West) Kerby, Capt. H. B.
Amory, Rt. Hn. Heathcoat (Tiverton) Errington, Sir Eric Kerr, H. W.
Arbuthnot, John Farey-Jones, F. W. Kimball, M.
Armstrong, C. W. Fell, A. Kirk, P. M.
Ashton, H. Finlay, Graeme Lambert, Hon. G.
Atkins, H. E. Fisher, Nigel Lambton, Viscount
Baldwin, A. E. Fletcher-Cooke, C. Langford-Holt, J. A.
Balniel, Lord Foster, John Leather, E. H. C.
Barber, Anthony Fraser, Hon. Hugh (Stone) Leavey, J. A.
Barter, John Fraser, Sir Ian (M'cmbe & Lonsdale) Legge-Bourke, Maj. E. A. H.
Baxter, Sir Beverley Freeth, D. K. Legh, Hon. Peter (Petersfield)
Beamish, Maj. Tufton George, J. C. (Pollok) Lindsay, Hon. James (Devon, N.)
Bell, Philip (Bolton, E.) Gibson-Watt, D. Linstead, Sir H. N.
Bell, Ronald (Bucks, S.) Gomme-Duncan, Col. Sir Alan Lloyd, Maj. Sir Guy (Renfrew, E.)
Bennett, F. M. (Torquay) Gough, C. F. H. Lloyd, Rt. Hon. Selwyn (Wirral)
Bevins, J. R. (Toxteth) Gower, H. R. Low, Rt. Hon. A. R. W.
Bidgood, J. C. Graham, Sir Fergus Lucas, P. B. (Brentford & Chiswick)
Biggs-Davison, J. A. Grant, W. (Woodside) Lucas-Tooth, Sir Hugh
Birch, Rt. Hon. Nigel Grant-Ferris, Wg. Cdr. R.(Nantwich) Macdonald, Sir Peter
Bishop, F. P. Green, A. Mackeson, Brig. Sir Harry
Black, C. W. Grimond, J. Mackie, J. H. (Galloway)
Body, R. F. Hall, John (Wycombe) Macmillan, Rt. Hn. Harold(Bromley)
Boothby, Sir Robert Harris, Reader (Heston) Macpherson, Niall (Dumfries)
Bossom, Sir Alfred Harrison, A. B. C. (Maldon) Maddan, Martin
Boyle, Sir Edward Harvey, Air Cdre. A. V. (Macclesfd) Maitland, Cdr. J.F.W.(Horncastle)
Braine, B. R. Harvey, John (Walthamstow, E.) Manningham-Buller, Rt. Hn. Sir R.
Braithwaite, Sir Albert (Harrow,W.) Harvie-Watt, Sir George Marlowe, A. A. H.
Bromley-Davenport, Lt.-Col. W. H. Heald, Rt. Hon. Sir Lionel Marshall, Douglas
Brooke, Rt. Hon. Henry Heath, Rt. Hon. E. R. G. Maude, Angus
Brooman-White, R. C. Hesketh, R. F. Mawby, R. L.
Browne, J. Nixon (Craigton) Hicks-Beach, Maj. W. W. Maydon, Lt.-Comdr. S. L. C.
Bryan, P. Hill, Rt. Hon. Charles (Luton) Mott-Radclyffe, Sir Charles
Butler, Rt. Hn. R. A. (Saffron Walden)
Campbell, Sir David Hill, Mrs. E. (Wythenshawe) Nairn, D. L. S.
Cary, Sir Robert Hill, John (S. Norfolk) Neave, Airey
Channon, Sir Henry Holt, A. F. Nicholson, Godfrey (Farnham)
Clarke, Brig. Terence (Portsmth, W.) Hope, Lord John Nicolson, N. (B'n'm'th, E. & Chr'ch)
Cole, Norman Hornby, R. P. Osborne, C.
Conant, Maj. Sir Roger Hornsby-Smith, Miss M. P. Page, R. G.
Cooper, A. E. Howard, Hon. Greville (St. Ives) Pannell, N. A. (Kirkdale)
Cooper-Key, E. M. Hughes Hallett, Vice-Admiral J. Partridge, E.
Cordeaux, Lt.-Col. J. K. Hughes-Young, M. H. C. Pickthorn, K, W. M.
Craddock, Beresford (Spelthorne) Hulbert, Sir Norman Pilkington, Capt. R. A.
Crosthwaite-Eyre, Col. O. E. Hylton-Foster, Rt. Hon. Sir Harry Pitt, Miss E. M.
Crouch, R. F. Iremonger, T. L. Pott, H. P.
Currie, G. B. H. Irvine, Bryant Godman (Rye) Powell, J. Enoch
Dance, J. C. G. Jenkins, Robert (Dulwich) Price, David (Eastleigh)
D'Avigdor-Goldsmid, Sir Henry Johnson, Dr. Donald (Carlisle) Price, Henry (Lewisham, W.)
Deedes, W. F. Johnson, Eric (Blackley) Prior-Palmer, Brig. O. L.
Profumo, J. D. Stanley, Capt. Hon. Richard Vaughan-Morgan, J. K.
Raikes, Sir Victor Steward, Harold (Stockport, S.) Vickers, Miss J. H.
Ramsden, J. E. Steward, Sir William (Woolwich, W.) Vosper, Rt. Hon. D. F.
Rawlinson, Peter Stoddart-Scott, Col. M. Wade, D. W.
Redmayne, M. Storey, S. Wall, Major Patrick
Rees-Davies, W. R. Stuart, Rt. Hon. James (Moray) Ward, Rt. Hon. G. R. (Worcester)
Renton, D. L. M. Studholme, Sir Henry Ward, Dame Irene (Tynemouth)
Ridsdale, J. E. Summers, Sir Spencer Waterhouse, Capt. Rt. Hon. C.
Robertson, Sir David Taylor, William (Bradford, N.) Webbe, Sir H.
Robinson, Sir Roland (Blackpool, S.) Teeling, W. Whitelaw, W.S.I. (Penrith & Border)
Roper, Sir Harold Temple, J. M. Williams, Paul (Sunderland, S.)
Ropner, Col. Sir Leonard Thomas, Leslie (Canterbury) Williams, R. Dudley (Exeter)
Russell, R. S. Thompson, Lt.-Cdr. R.(Croydon. S.) Wills, G. (Bridgwater)
Scott-Miller, Cmdr. R. Thornton-Kemsley, C. N. Wood, Hon. R.
Sharples, R, C. Tilney, John (Wavertree) Woollam, John Victor
Shepherd, William Turner, H. F. L. Yates, William (The Wrekin)
Simon, J. E. S. (Middlesbrough, W.) Turton, Rt. Hon. R. H.
Speir, R. M. Tweedsmuir, Lady TELLERS FOR THE AYES:
Mr. Oakshott and Mr. E. Wakefield.
NOES
Ainsley, J. W. Grey, C. F. Peart, T. F.
Allen, Arthur (Bosworth) Griffiths, David (Rother Valley) Pentland, N.
Bacon, Miss Alice Griffiths, Rt. Hon. James (Llanelly) Plummer, Sir Leslie
Baird, J. Griffiths, William (Exchange) Popplewell, E.
Bellenger, Rt. Hon. F. J. Hall, Rt. Hn. Glenvil (Colne Valley) Price, J. T. (Westhoughton)
Bence, C. R. (Dunbartonshire, E.) Hamilton, W. W. Proctor, W. T.
Benn, Hn. Wedgwood (Bristol, S.E.) Hayman, F. H. Randall, H. E.
Benson. G. Healey, Denis Rankin, John
Beswick, Frank Hewitson, Capt. M. Redhead, E. C.
Blackburn, F. Holman, P. Reeves, J.
Blenkinsop, A. Holmes, Horace Reid, William
Blyton, W. R. Houghton, Douglas Roberts, Albert (Normanton)
Boardman, H. Hubbard, T. F. Roberts, Goronwy (Caernarvon)
Bowden, H. W. (Leicester, S.W.) Hughes, Cledwyn (Anglesey) Robinson, Kenneth (St. Pancras, N.)
Bowles, F. G. Hughes, Hector (Aberdeen, N.) Rogers, George (Kensington, N.)
Boyd, T. C. Hunter, A. E. Ross, William
Braddock, Mrs. Elizabeth Hynd, H. (Accrington) Royle, C.
Brockway, A. F. Hynd, J. B. (Attercliffe) Shinwell, Rt. Hon. E.
Broughton, Dr. A. D. D. Irving, Sydney (Dartford) Short, E. W.
Brown, Rt. Hon. George (Belper) Isaacs, Rt. Hon. G. A. Shurmer, P. L. E.
Burton, Miss F. E. Janner, B. Silverman, Julius (Aston)
Butler, Herbert (Hackney, C.) Jeger, George (Goole) Silverman, Sydney (Nelson)
Butler, Mrs. Joyce (Wood Green) Jeger, Mrs. Lena(Holbn &St. Pncs. S.) Skeffington, A. M.
Callaghan, L. J. Jones, Rt. Hon. A. Creech(Wakefield) Snow, J. W.
Castle, Mrs. B. A. Jones, David (The Hartlepools) Sorensen, R. W.
Champion, A. J. Jones, Elwyn (W. Ham, S.) Soskice, Rt. Hon. Sir Frank
Chapman, W. D. Key, Rt. Hon. C. W. Sparks, J. A.
Chetwynd, G. R. King, Dr. H. M. Stones, W. (Consett)
Clunie, J. Lawson, G. M. Stross, Dr. Barnett(Stoke-on-Trent, C.)
Collick P. H. (Birkenhead) Lever, Leslie (Ardwick) Summerskill, Rt. Hon. E.
Collins, V. J. (Shoreditch & Finsbury) Lewis, Arthur Sylvester, G. O.
Corbet, Mrs, Freda Lindgren, G. S. Taylor, John (West Lothian)
Cove, W. G. Lipton, Marcus Thomas, George (Cardiff)
Craddock, George (Bradford, S.) Mabon, Dr. J. Dickson Thornton, E.
Daines, P. MacColl, J. E. Tomney, F.
Dalton, Rt. Hon. H. McKay, John (Wallsend) Turner-Samuels, M.
Davies, Harold (Leek) McLeavy, Frank Viant, S. P.
Davies, Stephen (Merthyr) MacPherson, Malcolm (Stirling) Warbey, W. N.
Deer, G. Mahon, Simon Weitzman, D.
de Freitas, Geoffrey Marquand, Rt. Hon. H. A. Wells, Percy (Faversham)
Delargy, H. J. Mason, Roy Wells, William (Walsall, N.)
Dodds, N. N. Mitchison, G. R. Wheeldon, W. E.
Dugdale, Rt. Hn. John (W. Brmwch)
Dye, S. Monslow, W. Wigg, George
Ede, Rt. Hon. J. C. Morris, Percy (Swansea, W.) Wilkins, W. A.
Edwards, Robert (Bilston) Moyle, A. Willey, Frederick
Edwards, W. J. (Stepney) Mulley, F. W. Williams, W. R. (Openshaw)
Evans, Albert (Islington, S.W.) Noel-Baker, Rt. Hon. P. (Derby, S.) Williams, W. T. (Barons Court)
Evans, Edward (Lowestoft) Oliver, G. H. Willis, Eustace (Edinburgh, E.)
Fernyhough, E. Oram, A. E. Woof, R. E.
Fienburgh, W. Orbach, M. Yates, V. (Ladywood)
Finch, H. J. Oswald, T. Younger, Rt. Hon. K.
Fletcher, Eric Owen, W. J. Zilliacus, K.
Fraser, Thomas (Hamilton) Pargiter, G. A.
Gaitskell, Rt. Hon. H. T. N. Parker, J. TELLERS FOR THE NOES:
Gordon Walker, Rt. Hon. P. C. Parkin, B. T. Mr. Pearson and Mr. Simmons.
Grenfell, Rt. Hon. D. R. Paton, John
Bill accordingly read a Second time.
Committed to a Committee of the whole House.—[Mr. R. Thompson.]
Committee upon Monday next.