HC Deb 07 February 1957 vol 564 cc735-60

Considered in Committee under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]

[Sir CHARLES MACANDREW in the Chair]

Motion made, and Question proposed, That, for the purposes of any Act of the present Session relating to rating and valuation, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act in the sums payable out of such moneys for the year 1957–58 or subsequent years under Part I of the Local Government Act, 1948, or the Local Government (Financial Provisions) (Scotland) Act, 1954, as amended by the Valuation and Rating (Scotland) Act. 1956, being provisions—

  1. (a) reducing the rateable value of any hereditament;
  2. (b) increasing the rateable value of any hereditament which a Gas Board is treated as occupying under section six of the Rating and Valuation (Miscellaneous Provisions) Act, 1955; or
  3. (c) reducing for the purposes of Part I of the Local Government Act, 1948, the rateable value for an area by reference to the reduction in the amount of rates chargeable in respect of hereditaments to which section eight of the said Act of 1955 applies.—[Mr. H. Brooke.]

10.11 p.m.

Mr. G. R. Mitchison (Kettering)

This appears to me—though I stand to be corrected, without sitting down for the purpose—to be a very limiting Money Resolution indeed. I cannot, of course, ask the Minister for any more than his intentions in the Money Resolution; he cannot rule upon it. But I want, first, to raise one very broad question with him. A few minutes ago, the whole House heard an extremely interesting statement from him, that before we come to the Committee stage of the Bill, when the Money Resolution will fetter our discussions, he proposes to announce his intentions about local government finance at large.

That will, no doubt, include the matter of Exchequer grants, upon which he is bound to make investigations in the year ending 31st March; and the Statute, as he will remember, says "make" them, not "begin" them. Since the right hon. Gentleman is, no doubt, accomplishing his statutory duty, it appears that one of the subjects upon which he will lay his proposals very shortly, before we get to the Committee stage, is the whole matter of Exchequer grants, and, presumably, financial relations generally between the central Government and the local authorities.

These matters will, no doubt, affect considerably the question that has been raised during the Second Reading debate once or twice, namely, whether the central Government are prepared to make contributions similar to those made when industry was derated in 1929, when they took the form of a block grant, towards the additional burden which will be put on the local authorities by Clause 1 of the Bill.

The first question I should like to ask the Minister is whether, if I have stated the position more or less correctly, he really wishes to proceed with this limiting Money Resolution, and the Committee proceedings which will no doubt follow after it, so soon as next week? In the circumstances, would he not be better advised, so far as money matters are concerned, to take the two things together and see whether, in the light of the proposals he is to table, he could not make a contribution towards local government expenditure?

The next question I wish to put to him, still arising out of this Money Resolution, is this. It seems to me that it will be open, on this Resolution, to introduce Amendments reducing the rateable value of any hereditament, but, unless I am quite wrong, increasing the rateable value of any hereditament is confined only to the somewhat limited category of cases of hereditaments which a gas board is treated as occupying. Interesting though that particular category of hereditaments no doubt is, would it be admissible, under this Money Resolution, to deal with the question of rerating of industry, upon which, no doubt, he will lay his proposals, I think he said, in two or three days? If not, would he not be prepared to reconsider the possibility of that question being raised during the Committee stage of this Money Resolution?

10.15 p.m.

There is still another question. This relates to the, if I may so call them, university counties, the three of them—the three C's. I do not want to go into it on the Money Resolution—I doubt whether I should be in order in doing so—but the fact is that the university counties feel that they have been rather badly treated because of the operation of Section 8 of the 1955 Act and the lack of retrospection in the provisions of this Bill. The Minister, in a moment when he was feeling, I think, a little bit harsh, rather turned that aside, but it is a question that one would like to have raised in Committee and it is a question which is, after all, very much a Committee point. I may be wrong, but it looks to me as if this Money Resolution might preclude even that matter being raised.

Lastly—and this is the last point, the right hon. Gentleman will be glad to hear—about the hereditaments which a gas board is treated as occupying, may I enlarge the subject a little bit? About gas generally, there is the question of the treatment of gas in Wales. I do not want to go into it in detail; I mentioned it on Second Reading and it was discussed at some length on the 1955 Bill. What it really turns on is the question of what is manufacturing gas and whether certain processes in dealing with gas ought not to be treated as manufacture; and if they are treated as manufacture, it has a considerable effect in favour of some authorities under the rather complicated formula which is to be amended by the Bill. Is it intended that that question, too, should be open to us?

Generally, while one recognises that, on a Bill that raises money questions a Money Resolution may, perhaps, be tight, I trust that the right hon. Gentleman will agree with me when I say that that does not apply with nearly the same force to Money Resolutions which are primarily concerned with local authority expenditure and where a Money Resolution is needed only because of the provisions of the Local Government Act and the corresponding Scottish legislation.

Is it not drawing a Money Resolution very tight indeed, when local authority expenditure is the primary matter, if the questions which I have been putting to the right hon. Gentleman are all, or the majority of them, incapable of being dealt with by reason of this Money Resolution? I have had occasion to raise questions about the tightness of Money Resolutions before and on that occasion, as on this, the Leader of the House was present.

That happened to be a case about slum clearance compensation coming from the same Ministry. In that case, the Money Resolution was so very tight that the Government got hung by their own rope and had to come back for a second Resolution.

As the present Minister was Financial Secretary to the Treasury at the time and has had to initial all these things, I am sure that he remembers it very well indeed. In the light of that, could he not make certain that the noose is a little looser this time so that he will not hang us and will not run any risk of strangling himself when he comes to deal with the questions which his hon. Friends want to raise?

Mr. Glenvil Hall (Colne Valley)

I wish to support my hon. and learned Friend the Member for Kettering (Mr. Mitchison). This Financial Resolution is, of course, the part of the procedure which has exercised the minds of local authorities perhaps even more than has the Bill, for the simple reason that unless we are quite certain what we are doing when we pass the Resolution, and see, as a Committee, that it is drawn in the widest terms, the Committee stage of the Bill will be largely annulled.

We have all the evening before us; indeed, the night has scarcely begun. It is fortunately possible in Committee for Ministers, as well as hon. Members, to speak as often as they catch your eye, Sir Charles. I wonder, therefore, whether at this stage, in addition to replying to the questions put to him by my hon. and learned Friend the Member for Kettering, the Minister will be good enough to tell us exactly what Amendments are possible under this Financial Resolution. Just how far can we go in improving the Bill and helping householders and local authorities under the Resolution?

If we shall not be able to do anything more than appears to some of us to be possible at present, it is time that the Committee did something about it, because every one of us represents an area where the local authority dislikes the Bill, and especially Clause 1, extremely. Therefore, if we want to serve our constituents to the best of our ability and do our duty as Members of Parliament, we ought to see, before accepting it, that the Resolution leaves us room to make improvements in the Bill on the lines desired by our local authorities and our constituents.

I suggest to the Minister, therefore, that it would lessen the time that we may spend on the Financial Resolution if he indicated to us, first, what is possible under the Resolution and, second, if very little is possible, how far he is willing to go in taking the Resolution back and bringing in another to meet what is obviously desired in all quarters of the Committee.

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

I hope that the Committee will address itself to the Money Resolution in the light of the statement that I made to the House at the conclusion of my Second Reading speech, a few minutes ago. I indicated then not only that this was an ad hoc, limited Bill, which we would have to consider in Committee, but, also, that early next week I intended to make to the House a comprehensive statement about local government finance.

I must advise, or warn, the Committee that a great deal of work is to follow from that for all of us who are interested in local government finance and the proper relationship between central and local government. These are matters which cannot be cleared up in a day or a week. They will need very thorough consideration.

Mr. Glenvil Hall

We are not concerned with that tonight. All we are concerned with at the moment is a Money Resolution and what is possible under it. Any statement which the right hon. Gentleman may make next week—and we shall be very interested in it—is in the future. We want to know now whether he will be good enough to tell us what we are entitled to do under this Resolution.

Mr. Brooke

I will, of course, answer the questions which the right hon. Gentleman has asked. All that I was doing in my preamble was to ask the Committee to consider the Resolution in the light of the rather important statement which I made to the House a little while ago.

The hon. and learned Member for Kettering (Mr. Mitchison) asked, in the circumstances, whether I wished to proceed with the Resolution. He hinted that I might be better advised to seek to combine this Bill with anything that might come out of my general statement. I have explained why I could not do that. It is quite unthinkable that a statement of any importance on local government finance, given to the House in mid-February, can be translated into law in time for local authorities to base their budgets upon it for the financial year beginning April, 1957. The reason why we are taking this Bill of a limited character is to remove certain injustices in time for the local authorities' next financial year.

Mr. F. Blackburn (Stalybridge and Hyde)

Since this is an interim Measure, it would not affect a proposal that the Minister intends to put forward next week if he altered the Financial Resolution so that Amendments could be moved by the Government to make up the losses to local authorities. It would not affect the general principle.

Mr. Brooke

It is better to do these things one by one. Now the hon. Gentleman has raised a new point. I was trying to go through, one by one, the questions put to me by the hon. and learned Member for Kettering.

I have explained why, if we are to correct these anomalies, it is not possible to hold this over and combine it with any larger Measure.

The second question which the hon. and learned Gentleman put to me was whether it would be practicable, within this Money Resolution, to bring in Amendments that would have the effect of rerating industry generally. The answer is, no. That is part of the much larger set of questions which we have to consider, and I am sure consider at length, when the time comes.

Mr. Eric Fletcher (Islington, East)

On a point of order, Sir Charles. Is it really right for the Minister to usurp your functions and tell us what Amendments will be in order and what will not be in order in Committee?

The Chairman

It does not matter. My word will be law in the end.

Mr. Brooke

Sir Charles, you know that I would not wish to question or dispute anything you said, but these inquiries had been addressed by the hon. and learned Gentleman to me and not to you, and I was, therefore, seeking to perform an act of courtesy by replying. If I go wrong, I feel sure you will correct me.

Mr. Mitchison

It was the right hon. Gentleman's intentions about which I was asking questions, Sir Charles. It is often advisable to do so.

Mr. Brooke

The third question I was asked was whether it would be practicable to move Amendments that would give the benefit of increased equalisation grant retrospectively to what we may call the university counties. Sir Charles, I must not usurp your functions in any way, but in my judgment it would not be possible under this Money Resolution either to do that or to make a number of other changes that it may be well worth while discussing at the appropriate moment about the Exchequer equalisation grant.

The Committee will remember that I did not seek to suggest that the grant was perfect in all respects except this one. I certainly would not sustain that argument. But here is one glaring anomaly which we must put right straight away. The correct thing, I submit, is to do this, and to do this as from 1st April, 1957, and then in due course extend our review to all the questions on that complicated grant that may arise in our minds.

The fourth question the hon. and learned Gentleman put to me was whether certain technical problems that are in his mind about processes of gas manufacture could be discussed under this Money Resolution. That, Sir Charles, is a question I feel very much inclined to leave to you. I do not think that either you or I would care to answer it until we saw the Amendments on the Order Paper.

I think that I have answered the major part of the question raised by the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall). I must make it clear that this Money Resolution—for which I have some responsibility, as the Committee has perceived, in two different places or capacities—is certainly not intended to be a restrictive Resolution which does not allow one to discuss anything in Committee. It is drafted, and I say that frankly, with the idea that it applies to an ad hoc Bill which, I should say, by common consent, now that it has received a Second Reading, the Committee would agree should have its final form settled as rapidly as possible for the benefit of local authorities. I am not seeking to cut out debate on the larger questions altogether. I am saying only that we should deal first with this and then proceed to the larger matters afterwards.

10.30 p.m.

As far as I can judge, this Money Resolution would allow Amendments to be moved to alter the amount of the reduction in rateable values provided for in Clause 1 of the Bill; Amendments could be moved to alter the classes of property which should be entitled to the Resolution. There are wide issues which can be discussed. I can assure the Committee that the Money Resolution is not designed to put all Amendments out of order, but only to draw the distinction between the limited intention of the Bill and the larger questions which we shall have to debate later.

Mr. Mitchison

The right hon Gentleman said Amendments could be moved to alter the rateable value of any hereditament. The word used in paragraphs (a) and (c) of the Money Resolution is "reduce." Am I right in thinking that one is allowed to suggest any Amendments which would take more money away from the local authorities but not any Amendments which would give more to the local authorities except in respect of hereditaments which a gas board is treated as occupying?

Mr. Glenvil Hall

I would put one further question on the same theme. I think that my hon. and learned Friend the Member for Kettering (Mr. Mitchison) put to the right hon. Gentleman the question that I am about to put afresh. The right hon. Gentleman said it would be possible to move Amendments dealing with classes of property. That, I suppose, would include also Amendments dealing with, say, the reduction in the limits of rateable value to which the percentage applies. Would it? In other words, the shops which are higher rated hereditaments could be taken out of the Bill by Amendments if so desired?

Mr. Brooke

You, Sir Charles, are a much better guide to the Committee in these matters than I, but in reply to the hon. and learned Gentleman the Member for Kettering I would say that I do not think that I said that Amendments could be moved to alter the rateable value. I certainly intended to say that Amendments could be moved to alter the amount of the reduction in the rateable values specified in Clause 1 of the Bill, and also to alter the classes of property which should be entitled to that reduction.

Mr. Blackburn

While recognising, Sir Charles, that the ultimate decision rests with you, I would ask the right hon. Gentleman whether it will be possible to move an Amendment to Clause 4 so that Exchequer equalisation grants can be paid direct to the district councils and not to the county councils. I do not see that that would increase the cost to the Government.

Mr. E. Fletcher

We have had a most unfortunate speech from the Minister, and I am not surprised that the Leader of the House went out in disgust while the Minister was speaking. I gather that he has gone out to consult the Chancellor of the Duchy of Lancaster, who stayed here for the first part of the Minister's speech and then also left the Chamber.

This is a most serious situation. What did the Minister say? He attempted to justify a very tightly drawn Money Resolution which will, as he admits, circumscribe very seriously the ambit of debate in Committee on the Bill and the nature of the Amendments which we can table. He seeks to justify that on the ground that the Bill is, as he says, an "ad hoc, limited Bill." The Bill, however, affects every ratepayer and every local authority. Every Member of Parliament has received letters of protest from every local authority, including his own, and from the associations which represent the local authorities.

Those letters, in terms, have asked me and my hon. Friends to protest about the unnecessarily restricted nature of this Financial Resolution. It cannot be justified on the ground that the Bill is an ad hoc, limited Bill. We may have a statement by the Minister next week. I am very glad to hear that we are, but that has no relevance whatever to the function of this Committee in debating the provisions of the Money Resolution.

The Minister must be aware of the feeling from the criticism that he has heard during the Second Reading, not only from these benches but in speech after speech from hon. Members opposite. Many hon. Members opposite abstained from voting, and that is why the Government's majority was so small. We shall not know the exact number of hon. Members who abstained until tomorrow, but I hope that it is enough to shake the Government and, certainly, to shake their apparent complacency about the terms of the Financial Resolution.

I am glad that the Government have suspended the Standing Order so that this matter can be fully ventilated tonight. It will be a serious matter if the Financial Resolution is not redrawn and resubmitted, or else very substantially amended.

During the Second Reading debate we heard speech after speech pointing out how all local authorities have protested against the loss of revenue they will suffer as a result of the Government's proposals. I recognise that the House has given a Second Reading to the Bill, and that the Minister has sought to justify his proposals in Clause 1 on the ground that some injustice is caused to a certain class of shopkeepers as the law stands. That may be. Let us assume that for a moment. The next question is: how is that loss of revenue to local authorities to be made good?

There are various ways—by Exchequer grants, or by a process of partial re-rating of industrial hereditaments. There is no reason why industrial hereditaments now derated by 75 per cent. should not have their derating benefits reduced to 70 per cent., 65 per cent. or whatever the appropriate figure is to enable local authorities to recoup what they have lost. Although the Bill has been approved on Second Reading, the Committee will desire to consider Amendments directed towards the best method of making good the loss of revenue.

The object of our protests is this. There is no good reason why the Committee should be deprived of the opportunity of considering alternative remedies, but the Minister, as he admits—he appeared to glory in it—has deliberately framed the Financial Resolution, first as Financial Secretary, and then as the Minister, in order to curtail Amendments of the kind the local authorities want. There is no real justification for that.

It seems to me to be treating the Committee with contempt. It represents an unjustifiable stranglehold on discussion. It deprives us of the opportunity of ventilating the very problems which we ought to ventilate in Committee. It seems to me that the mere fact that the Minister will make a statement next week, giving us some outline of his general ideas about the reorganisation of local government finance, is in itself a reason why we should not be fettered in the Committee stage but should have the advantage of tabling and debating Amendments.

There the matters should be discussed and voted upon. If the Government do not like the proposals they will no doubt use their majority to defeat them. But discussion ought not to be stifled. I protest most emphatically against the Minister's proposition that because this is, as he says, an ad hoc, limited Bill—it will affect all local authorities and ratepayers in the country—the Financial Resolution should be drawn in this tight, circumscribed form which will stifle discussion and amendment in Committee.

It is a most undemocratic, unnecessary and reactionary method, and it is deserving of censure. It will be bitterly resented by local authorities throughout the country, and I hope that, in view of the protests which my right hon. and hon. Friends have made, the Minister will think very seriously before pressing the Committee to pass this Financial Resolution this evening.

Mr. Sidney Dye (Norfolk, South-West)

As a representative of the more rural side of England I should like to add a word to the debate, since most of the speeches so far have been made by hon. Members representing large towns and cities. The county councils have wanted a chance of discussing with the Minister items concerning the Bill, and they are very concerned that the Financial Resolution will not enable them to advise their Members of Parliament upon Amendments to the Bill because of the tightness with which the Resolution is drawn.

That is very unfair, because the Minister and the Government have imposed something upon local authorities which it was really for them to consider. All that the Bill does is to alter the incidence of rating as between different sections of the community. That is a matter upon which those authorities who have to levy and collect the rates ought to have been consulted. They were not consulted, and they feel very aggrieved about it. The Minister now says, "Oh, do pass the Bill. Let us get it through quickly, and next week I will tell you a secret"—a secret which local authorities have been asking for information about for such a long time. They have been engaged in negotiations for months and years. They have had promises made to them that the principles upon which local government finance will be settled for many years ahead will be made known to them.

The Minister says, "I will not tell you the whole secret next week, but I will let the House have a glimpse of what lies before it." But with the Bill as it is, with the Financial Resolution drawn as tightly as it is, and bearing in mind the speeches both of the right hon. Gentleman and the Parliamentary Secretary, there is every indication that the Bill will be operative for four years. Because of that fact it will decide how the incidence of rating is affected over that period. There is, on the other hand, the indication that whatever the Minister reveals next week will not become operative for another four years.

The Minister, knowing quite well that the County Council Association were astounded when the Bill was introduced, and that the other associations had never been consulted about the matter, and also realising that he was interfering with rating, which was the province of the local authority associations, really ought to give the House of Commons a chance to examine thoroughly and amend the Bill in a way which would meet the wishes of those associations.

The right hon. Gentleman said, "Let us get it through quickly, for the benefit of the associations." Matters have been hurried in the past and as many anomalies have been caused as have been wiped out. How many anomalies arise under the Bill? We have been informed that one of the anomalies which it seeks to put right relates to Cambridgeshire, where a rate of 2s. 2d. in the £ had to be levied to make good the absence of rates from the universities and the equalisation grant which should have been paid, but was not. We have already heard of local authorities who will be adversely affected by as much as 2s. 1d. in the £ in the current year, on the best estimates which have so far been made. When representatives of local authorities have had a better chance of investigating the consequences of this Bill, there may be just as big or bigger anomalies discovered which should be put right; but which cannot be put right because of the tightness of the Financial Resolution and the speed with which the Minister wants to get the Bill through the House.

10.45 p.m.

The right hon. Gentleman knows that next week the Norfolk County Council must fix the rate for the county. On the best advice received so far the Council will have to raise the rate by 1s. in the £. That is for an agricultural community. So far, the argument has been that under this Bill the residential properties have been under-rated in relation to the shops. That is not so in Norfolk. There the increase in the rateable value of residential properties in many cases was as great as that of the shops.

The more the country has the chance of examining this Bill, the more anomalies may be found. If the Financial Resolution is broad enough, it may be possible to put some of them right. The County Councils Association and individual county councils feel aggrieved that after only one year of the operation of the new valuation the Government throw this at them and say, "You are making your rates for the next financial year. This will cause you to place a bigger burden upon a section of the community which never expected it."

Mr. E. Partridge (Battersea, South)

They did expect it.

Mr. Dye

No, with respect, they did not. What they expected was that if the Government proposed to alter the law with regard to valuation, they would provide the money to make good the deficit, as had been done on previous occasions.

We ask for a chance to move an Amendment to Clause 1 to enable Her Majesty's Government to find money from the Exchequer so that local authorities do not have to find this additional money from that section of the community which not merely have to pay higher rates, but shortly will be confronted with higher rents as well. Surely the Minister will listen to reason and will consider the effect of the Bill and the Financial Resolution on the country as a whole. Surely he will take back this Resolution, redraft it, and give the Committee a chance to consider it again so that it may be fairer in its effect upon the ratepayers.

Mr. Douglas Houghton (Sowerby)

The Minister has very heavy burdens just now, almost all inherited from his predecessor. I am sure that the Committee wishes to show him due consideration; but we feel that we are being rushed.

The Bill was published before Christmas, but only today have we been able to come to grips with it. The unusual thing that happened today in the announcement of the business for next week was that the Committee stage of the Bill was announced before the Second Reading had begun. That is almost presumptuous in a Government so lacking in public confidence.

Mr. E. Fletcher

It is even worse than that. It was announced even before the House had decided to take the Committee stage on the Floor.

Mr. Houghton

I am sure it was worse than I thought.

The Chairman

However bad, it does not come under the Financial Resolution.

Mr. Houghton

We should postpone further discussion of this Resolution until we have heard the promised announcement about the future of local government finance. The Minister has plainly stated his intentions, but the Resolution was drafted so as to be extremely narrow, to prohibit widening the scope of the Bill, extending the relief to local authorities, or providing any means whereby compensation should be given to them for the loss of revenue on account of the reduction in rating assessments upon shops and miscellaneous properties. It gives us very little room to manoeuvre in Committee.

We might be more tolerant if we knew what the Minister was going to say about local government finance. He would find us more agreeable in regard to the Money Resolution if we knew more about his intentions on the wider aspects of local government finance; for example, if the rerating of industrial properties formed part of the statement. That would alter our attitude. We might also know more of the Minister's mind about equalisation grants and other provision by the central Government for local government finance. In other words, if the Financial Resolution could be put against the background of our knowledge of the Minister's intentions on the wider issues, that would be of great advantage.

The Minister rather suggested that there was a glaring anomaly which must be put right at once, and the Financial Resolution was the instrument, leading us to the Committee stage, which the Minister wants brought on next week. I have sat here all day waiting to hear more about the glaring anomaly. I heard something about anomalies, but they did not seem to be very glaring. If I had had an opportunity, I might have examined that proposition carefully, but we shall have two hours to do so in the Committee next week.

We are not prepared to accept the note of emergency which the Minister has struck. Will the Minister tell us when he proposes to make his promised statement? Will it be before or after the Committee stage of the Bill? I presume, and hope, that it will be before, since the Committee stage is fixed for next Thursday. Will the right hon. Gentleman postpone further consideration of the Money Resolution until he has made his statement? He may find that it will take only a short time to do as we suggest, without it being necessary to postpone the Committee stage of the Bill; and if it left the Committee and the House in a happier frame of mind that would be a a very good thing.

The Minister has enjoyed astonishingly little support the whole day from his own back benchers. For a long time there was the Parliamentary Secretary, the Parliamentary Private Secretary to the Minister and an inconsequential Whip—they were the only Members on the opposite benches for a long time this afternoon. In fact, the benches there were so bare that one of my substantial hon. Friends from this side, my hon. Friend the Member for West Ham, North (Mr. Lewis), went across and sat there.

Mr. E. Partridge

He wanted to be in good company. That was the reason.

Mr. Houghton

I have said my piece and I am sticking to it.

The Minister cannot feel reassured after his experience today. More speeches from hon. Members opposite have opposed the Bill than have supported it. I plead not only on behalf of my hon. and right hon. Friends, but on behalf of hon. Members opposite who expressed disquiet about the Bill. I sincerely hope that my plea will meet with some response.

Mr. F. Blackburn (Stalybridge and Hyde)

It is important that the Minister should get to bed early, because he has a very heavy programme. He has to deal with the Rent Bill, the Committee stage of the Rating and Valuation Bill, the statement he is to make on a general review of local government finance, and he will have a heavy day on Monday as Minister for Welsh Affairs. Of course, he could shorten the proceedings by saying that he will take back this Resolution. The more one examines it the more restricted it would appear our debates next Thursday will be.

I should like an answer to the question I put to the Minister about Clause 4 of the Bill and amendments of the Exchequer equalisation grant. The Minister knows that the grants are paid to the county councils. That means that the highly-rated industrial areas are, in effect, subsidising the more prosperous residential areas of the counties. I do not see that the cost to the Government would be increased if they paid out direct to the district councils. I should like to hear the right hon. Gentleman's view upon that.

On the subject of Clause 1, I would say to the Minister that, if the Government think it important to make some contribution to the shopkeepers and the business establishments, then it is the Government's job to meet any grant they make. They should not throw the burden on the local authorities. As the Money Resolution stands, the Committee will be precluded next Thursday from doing anything about that. The Bill does not even have the merits of the Local Government Act, 1929, which made provision for a block grant from the Government to meet the deficiencies of the local authorities. Surely, the same sort of principle should have been applied here. The Money Resolution is drawn in such a way that that would not be possible. I ask the Minister to take it back.

The Minister said he would make his statement early next week, and I take that to mean that he will do so fairly early next week so that we may be able to study those suggestions which he is to put forward for the reform of local government finance. We should have that opportunity, because they could possibly have an effect upon the Amendments which would be moved next Thursday. Since the Money Resolution is so restrictive, I ask the Minister to take it back and have second thoughts about it in order to give the Committee a chance to deal with the problem before it.

11.0 p.m.

Mr. Ede (South Shields)

Sir Charles, I do not want to act on the assumption that you will, of necessity rule out of order any particular Amendment which may be moved. I am quite sure that, when the time comes, you will consider every Amendment which is submitted to you on its merits, and that statements made this evening, by one side or the other, that this or that cannot be discussed, will not influence you if you think it is in order under the Standing Orders.

I wish to deal with the point which was made by the right hon. Gentleman, that this is an ad hoc temporary Bill. I wonder exactly how temporary it is going to be. I agree with what my hon. Friend the Member for Norfolk, South-West (Mr. Dye) said. On what the right hon. Gentleman told us today, I cannot see that it will be possible for the Bill to be brought to an end by his larger amendments in under the four years. I think that this Bill will remain the law of the land until the second valuation under the new Act.

I put this to the Minister. When he says, as he seems to do, that any effort to pay compensation to the county councils and the other local authorities for their loss of revenue would be out of order, is that on the assumption that it will be for longer than until the year 1957–58 that they will have to bear this burden? He has had considerable local government experience. I dare say that he has noticed, as all other people who have been associated with local government know very well, that one gets no thanks for putting down the rates, but if one puts them up, even if one does not put them up as high as they were before, one gets a considerable amount of grumbling. It is, therefore, the desire of every local authority that it should be able to budget for some years ahead and that it will be able to run, as we used to say, on an even keel without having to go either up or down.

The effect of the Bill, unless compensation is paid to the local authorities, must inevitably be that they will have to increase the rates as a result of Clause 1. I do not think there is a single local authority in the country which thinks that, as a result of all the machinery of the Bill, it will have a higher rateable value next year than it had this. Therefore, there will be, all the time that the Bill lasts, the certainty that rates will be higher than they would have been if the Bill had not been introduced.

The four local authority associations have asked the Minister that the precedent of 1929 should be followed. They are going to lose rateable value owing to the action of the Government on an issue on which they have not been consulted. This is the Government's action, for which the local authorities have no responsibility at all. I would have thought, therefore, that it was the duty of the Government to see that their action shall not put the local authorities in the difficulty of having to raise rates because of their action.

It all depends on whether we can move an Amendment to Clause 1 whether this point can be raised in Committee. The right hon. Gentleman himself is proceeding on the assumption that we shall not be able to do so. I want to make it quite clear, Sir Charles, that I am not of necessity accepting that argument as final and that what you say will be the law with regard to the conduct of the Committee. Therefore, Sir Charles, I hope you will not think that anything I am now saying to the Committee will preclude me from arguing to you next Thursday afternoon that such an Amendment is in order. What decision you will come to, of course, will be a matter for your ripe and considered judgment.

I am the President of the County Councils Association, a post which I do not owe to my political convictions. I must tell the Minister that the opinion of the county councils, most of whom have very large majorities from his own political party, is unanimously against this proposal. The cost of Clause 1 to the county borough which I represent will be £75,000; that is to say, on the assumption that everything else remains the same as it is in the current financial year, next year's produce of the rates will be £75,000 less than this year. That amount must be raised, because no one imagines that any local authority will be able to reduce its total net expenditure next year. With the increases in salaries that we know have already been granted, that is quite impossible for anyone to contemplate.

This must mean that there will have to be very considerable increases in rates, and the Government themselves ought to shoulder the amount that is due to their own deliberate action in this Bill. If they will not do that, they ought at least to give us the possibility of raising the issue and voting on it, so that the local authorities shall be able to hear from the Minister a detailed justification on this point and hon. Members, in all parts of the House, shall have the opportunity of giving a considered vote on this issue.

I hope that the right hon. Gentleman's prognostication that this will be out of order when we get into Committee will be proved to be wrong, but I am quite sure that he has been well advised. After all, he is the sole author of this Financial Resolution. I imagine that nobody was more surprised than he was when he found that, having drafted the Resolution, he had provided all these safeguards to uncomfortable positions for himself when the House reassembled.

The right hon. Gentleman has been concerned in the Bill from the first. Some people have expressed their sympathy with him for having had it foisted on him, but his is one of the three names on the back of the Bill. He was prepared to assent to it when he thought he would still be Financial Secretary to the Treasury, or if promotion was to come to him it would be in some more exalted office than the one he now has. He might even have thought that he would become Chancellor of the Exchequer. I ask him to be certain that we shall have the opportunity next Thursday of being able to deal with this particular matter that arises on Clause 1.

Mr. Herbert Butler (Hackney, Central)

We ought to reinforce the plea that has been made, particularly in view of what the Parliamentary Secretary said when he introduced the Bill. The hon. Gentleman apparently was under the impression that local authorities were not in a position to know the implications of the Bill. The situation at the moment, as far as I can judge it, is that all the local authorities are against the Bill. After the Minister has made his statement early next week on the financial arrangements for local authorities, it will be impossible for those authorities to draft the necessary Amendments to the Bill which they may desire as a result of the Minister's statement.

Therefore, without any knowledge of what the Minister will say, the Bill has been foisted upon them. They have never been consulted. The local authority associations have gone on record against the Bill and, at a meeting on 4th February, all the Metropolitan boroughs, through the Metropolitan Standing Committee, were against it. Now the local authorities are hamstrung by the Financial Resolution and prevented from stating their point of view in the House. The partnership which hitherto existed between the local authorities and the Minister has been broken by the Minister's every action.

I hope, therefore, that the Minister will reconsider this matter. No hon. Member opposite has said that he is in favour of the Bill. Every hon. Member who has graced the Chamber with his presence during the debate and has spoken has said that even if the Bill is passed it should include something else, and every something else to which hon. Members opposite have referred is barred by the Financial Resolution. Seventy per cent. of local authorities happen to be Conservative in outlook and representation, and I hope that the Minister will realise that he cannot continue to over-ride local authorities which play such a big part in the life of the country. I appeal to the right hon. Gentleman to withdraw the Resolution and give local authorities the opportunity to consider these matters and express their views in the House. If that happened, the Government would be doing something constructive instead of destroying the country's democratic institutions.

11.15 p.m.

Mr. H. Brooke

This is really not so sinister as it has been made to sound. The hon. Member for Sowerby (Mr. Houghton) asked me when I was going to make my statement. The Leader of the House announced that the Committee stage of the Bill would be taken on Thursday. If I remember my words correctly, I said that I intended to make a statement early next week. I would certainly count "early next week" to mean before Thursday.

A number of hon. Members have asked whether the Amendments in mind will or will not be in order. I will certainly not go down that dangerous path any further. I leave the rest to you, Sir Charles. I would say, in passing, only that one or two topics that have been mentioned seemed to me not only outside the Money Resolution but remote even from the Long Title of the Bill.

The President of the County Councils Association, a body for which I have a great respect, which I also hold for the right hon. Gentleman the Member for South Shields (Mr. Ede), has asked me whether this Bill will become, so to speak, "permanent unawares". I think he will appreciate that Clause 1 cannot last beyond the next valuation in any case, and I cannot plan the future business of the House to specify on what date legislation arising out of my statement next Tuesday might be carried through the House, or when it might come into effect. But I can say that I am not seeking to throw dust in the eyes of the House when I tell them that I am to make a comprehensive statement, and that I think it will give both Parliament and the local authorities a great deal to discuss, examine and eventually to decide.

I am not seeking to run away from any of these questions. If I were, I should try to put off this statement for as long as possible. But I am concerned about the position in which local authorities find themselves at this moment. They have to make their rates. There may be differences of opinion on this Bill, but now that I have undertaken to make a general statement raising wider issues, I trust that the Committee will agree that the direct obligation on us all is to try to deal with this Bill in an expeditious manner.

The right hon. Gentleman the Member for South Shields said that there would be widespread increases in rates. One must, of course, beware of the fallacy of confusing an increase in the rate poundage, with an increase in rate revenue. There is nothing in the Bill which takes one penny of Exchequer grant or other income away from local authorities. All it will involve for them is a shift of the sources within their own area from which their rates will be drawn.

Mr. Mitchison

If that is so, why does the right hon. Gentleman want a Money Resolution at all?

Mr. Brooke

Because there are certain other matters that arise under the later Clauses of the Bill. I am speaking of Clause 1. I have been so generous in my framing of this Resolution in a dual capacity so as to leave wide open to amendments in Committee, both the amount of the reduction which we should make by Clause 1 and the categories of property which will qualify for relief. This is not a tight Money Resolution in any sense. We are being quite honest and straightforward in bringing this forward. All I am seeking to do is to establish a distinction between this short-term action, which it is essential to take in the interests of justice, and the longer-term review of local government finance which we all are well aware lies immediately ahead.

Mr. Mitchison

I am sorry to press the right hon. Gentleman. He made a statement just now of which I hope he has realised the implications. He explained that Clause 1 would make no difference whatever to the Exchequer equalisation grant one way or the other. If so, it appears to me that so far as Clause 1 is concerned no Money Resolution would be necessary, and that if a Money Resolution is introduced relating to anything in Clause 1 it is solely for the purpose of limiting discussion and not for any purpose of a proper Money Resolution.

If that really is the case—I hope the right hon. Gentleman will correct me if I am wrong—I may have to ask you, Sir Charles, whether, on the analogy of the criminal law, under which, when one is charging a person with a crime, one can introduce other charges to prove what, I think, is called system or habit, I should be in order in referring to the numerous closures, Guillotines and other instruments to torture the Opposition to which the Government appear rather suddenly to have resorted with a zest and enthusiasm I should hardly have expected of them. However, I do not feel called upon to do that if the position which I have stated is in any way wrong. If it is wrong, I can be corrected. If not, what is the right hon. Gentleman's excuse for this remarkable proceeding?

In the light of that, I really put this as a very serious question. I know it is late, but I do. In the light of that, I wonder if the right hon. Gentleman would reconsider the system of this Money Resolution tonight. Let me tell him what my reasons are. The statement about the Committee stage of the Bill was made today in the ordinary statement on the course of business next week. None of us knew at the time that the right hon. Gentleman was going to produce out of the bag the cat which has been dormant there for so long. That cat has been sleeping in that bag, growing, no doubt, in size—let us hope in wisdom, too—month after month and year after year. To produce this miserable, temporary little varmint of a Bill just now, just before the great cat itself is coming out, is somewhat inappropriate.

The right hon. Gentleman has his Bill on Second Reading. Could he not be content with that? Could the right hon. Gentleman not give us an opportunity of considering our attitude towards it and give the local authorities, which really have had an extraordinarily raw deal over this, the opportunity of considering their attitude to it and the Financial Resolution by, for the moment, withdrawing the Money Resolution and omitting to hustle us into Committee proceedings on the Bill next week, to which we made no protest today because we did not know about the right hon. Gentleman's intention to make a general announcement on local government finance?

I know that Ministers occasionally become—proud and obstinate are not too strong words. I am sure they are inapplicable to the right hon. Gentleman. However, I do ask the right hon. Gentleman to consider what he is doing about the Bill if he persists with this Money Resolution now, despite the weighty protests he heard from my right hon. Friend the Member for South Shields (Mr. Ede) and the County Councils Association just now, and does that at a time when the attitude of the Opposition towards the Bill is bound to depend to a considerable extent on his statement to be made in a day or two. The back of the Opposition is always up, we know, but is it really worth putting up the backs of the already harrassed, over-burdened and somewhat resentful local authority associations any more for the sake of correcting what the right hon. Gentleman thinks is one anomaly just before he attempts to correct a number of others?

Mr. E. Fletcher

Might I add a word to what my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has said and make an appeal to the Minister? In view of what has been said, will he not allow the Committee to postpone any decision until he has had an opportunity to consult the Leader of the House? The Leader of the House is very sensitive to the convenience of hon. Members. We shall be in a very real difficulty here. The Minister told us in his Second Reading Speech, and has since referred to it again, that he is to make a very important and far-reaching statement next Tuesday, one which all interested in local government will await with great expectations.

This is not a matter which affects merely Members of the Opposition, but Members of the Opposition are in a difficulty. Partly because of the apparent ambiguity about the terms of the Financial Resolution, until we have heard the Minister's statement next Tuesday we shall be in very real difficulty about the nature of the Amendments that we wish to table for the Committee stage.

If it had been known when business was announced this afternoon—no one on the Opposition Front Bench was aware of it—that the Minister was to make his far-reaching pronouncement next Tuesday, I very much doubt whether it would have been thought consonant with the wishes or convenience of the House that we should have to take the Committee stage of the Bill on Thursday. This is peculiarly a matter in which all hon. Members are largely dependent upon the details and information which they get from their local authorities. It is particularly a matter on which the associations of local authorities and each local authority will wish to reflect after learning of the Minister's statement on Tuesday. The Minister knows the feeling almost of indignation with which the local authorities regard the Government's conduct so far.

There is an opportunity here for the Minister to consult the Leader of the House. It is the responsibility of the Leader of the House to guide the House on this matter. I have no doubt the Leader of the House had a very good reason for going away, but it is a little unfortunate that we have not the benefit of his guidance at this moment. In his absence we can only ask the Minister to take the responsibility for a decision which I am sure the Leader of the House would take if he were here.

Question put and agreed to.

Resolved, That, for the purposes of any Act of the present Session relating to rating and valuation, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act in the sums payable out of such moneys for the year 1957–58 or subsequent years under Part I of the Local Government Act, 1948, or the Local Government (Financial Provisions) (Scotland) Act. 1954, as amended by the Valuation and Rating (Scotland) Act. 1956, being provisions—

  1. (a) reducing The rateable value of any hereditament;
  2. (b) increasing the rateable value of any hereditament which a Gas Board is treated as occupying under section six of the Rating and Valuation (Miscellaneous Provisions) Act, 1955; or
  3. 760
  4. (c) reducing for the purposes of Part I of the Local Government Act, 1948, the rateable value for an area by reference to the reduction in the amount of rates chargeable in respect of hereditaments to which section eight of the said Act of 1955 applies

Resolution to be reported upon Monday next.