LOCAL GOVERNMENT

HC Deb 30 July 1957 vol 574 cc1077-203

Order read for resuming adjourned debate on Amendment to Question [29th July]: That this House takes note of the White Papers relating to the Areas, Status. Functions and Finance of Local Authorities in England and Wales (Command Papers Nos. 9831, 161 and 209), and to Local Government Finance in Scotland (Command Paper No. 208).

Which Amendment was to leave out from "House" to the end of the Question and to add instead thereof: cannot accept the statement of policy contained in the White Papers Command Papers No. 9831, No. 161, and No. 209, relating to Local Government in England and Wales and the White Paper, Command Paper No. 208, relating to Local Government in Scotland, which fails to meet the increasing financial difficulties of local authorities, does not fully re-rate industry or give local authorities the full benefit of partial re-rating and which, by the substitution of a general grant for existing grants, hampers the development of essential social services, particularly those of education and health."—[Mr. Mitchison.]

Question again proposed, That the words proposed to be left out stand part of the Question.

3.55 p.m.

The Secretary of State for Scotland (Mr. John Maclay)

The purpose of this part of the debate is to obtain Parliament's reaction to the underlying principles set out in the White Paper on Local Government Finance in Scotland. The general arguments which have led the Government to make these proposals were very fully explained by the Minister of Housing and Local Government in his opening speech yesterday. It will probably be for the convenience of the House, therefore, if I confine myself in the main to their effect in Scottish terms.

It is rather tempting to make a long speech, but I think it would be much preferable, and more in accordance with the wishes of the House, that I should keep my remarks as brief as possible and leave the maximum amount of time for individual hon. Members to make their comments on these proposals.

It will be noted, in the first place, that no proposals have been made for the reform of local government structure in Scotland. This is because we have received no evidence of any general demand for structural change. The setup of Scottish local authorities is. of course, quite different from that in England and Wales. We are, naturally, watching the position closely, but the Government are of the view that the major reforms in the valuation and rating systems enacted last year and those now proposed in local government finance should be carried through on the basis of the local government structure as it now stands.

Perhaps I can refer briefly to two other proposals contained in the English White Paper which will not apply to Scotland. First, we do not intend meanwhile to alter the pool payments made by the nationalised industries for the benefit of local authorities. All rateable values in Scotland are frozen until 1961, and this question will be looked at in the light of the changes made on revaluation.

Secondly, there are proposals in England and Wales for amendment of the equalisation grant arrangements. Changes which correspond to some of these proposals were made in the Scottish Act of 1954. and the grant arrangements in Scotland were again the subject of legislation as recently as last year. We do not, therefore, propose any further change for the time being. We are, of course, already committed to a review before 1963.

Before I turn to the financial proposals discussed in the White Paper, I should say a word about the future of the new towns. This is one of the matters discussed by the Minister of Housing and Local Government in his speech yesterday. None of the three new towns in Scotland is yet approaching the stage when development will be substantially complete, nor will this happen for another seven years at least. The reasons given by my right hon. Friend why new town assets should not then pass to the local authorities, as envisaged by the New Towns Act, are, of course, applicable in Scotland as well as in England and Wales, but it would be premature at the present time to set about evolving an alternative system of management adapted to Scottish conditions.

Accordingly, we propose that the method to be adopted for managing the Scottish new towns on completion should be left over for future consideration when the time is ripe, and that amendment of the New Towns Act in its application to Scotland should in consequence be deferred.

As to finance, the principles underlying the Government's proposals are identical in Scotland and in England and Wales, and it is on these principles that the Government are anxious for attention to be concentrated in this debate. The two main proposals are to rerate industry at 50 per cent. and to replace a number of specific grants by one general grant.

The arguments against rerating have been fairly put forward by the deputations which Ministers have received. It is perfectly understandable that industry should not want to increase its rate burden. On the other hand, derating was introduced in 1929 at a time of severe industrial depression, and it would not really be possible in today's entirely different economic circumstances to maintain that the same percentage of derating which was thought necessary in 1929 is still justified. I appreciate that the additional burden will bear most hardly on marginal or small firms, and it is for this among other reasons that the Government have decided that rerating should be confined to 50 per cent. of net annual value.

The second main proposal is the replacement of a series of ad hoc grants—of which the biggest is the education grant—by a new general grant, the amount of which will be determined periodically in the light of prevailing and foreseeable circumstances. The grant will be distributed by reference to objective factors designed to measure the needs of different localities, but not capable of being influenced by the decisions of individual local authorities.

Although the principles are the same, the Scottish distribution formula is different from the English one. The formula which we propose to use in Scotland was worked out by a joint committee of officers of the local authorities, appointed by the local authority associations, and officers of my Department: and I am satisfied that it is the best which can be devised in Scottish circumstances. Like the English one, it is based on the use of objective factors, and it is intended to ensure that no part of the grant will be regarded as earmarked for any one purpose.

The elements in the formula can briefly be described as follows. The main influence on costs common to all authorities is the size of the population which a particular service caters for; the major element in the formula is, therefore, population. The next most important factor is the relative number of children under school-leaving age and a weighting to take account of this—similar to that used in the distribution of the Exchequer equalisation grant—is, therefore, added. Two further weightings are added: the first is designed to take account of the fact that educational and other services cost more to provide in landward areas than in compact urban units. The second recognises that educational costs are specially high in sparsely populated areas.

This formula will inevitably produce gains and losses in different areas, but every attempt has been made to avoid as far as possible any undue disturbance in the income of individual authorities. Moreover, as will be seen from the White Paper, we propose, in any event, to arrange for losses to be made good in full in the first year of the new system and as to 90 per cent. in the second year out of the gains which accrue to other authorities. At that stage, the new system of valuation for which provision was made in the Act of last Session will come into force and the whole position in Scotland will have to be reassessed.

The Minister of State and I have had three meetings with representatives of the three main associations at which we have discussed the principles involved, and there have, of course, been a considerable number of meetings between officials on both sides. The Minister of State also saw representatives of the District Councils' Association on Friday last.

Hon. Members will have seen the letter circulated by the Association of County Councils. Apart from making several points in relation to specific grants which will be included in the general grant, and which can be more conveniently discussed in detail at a later stage,—that is, after this debate—the Association has said that it is opposed to the proposal to substitute a general grant for a number of percentage grants. No reasons are given. I infer, however—and it is not an unreasonable inference that the counties are apprehensive that the general grant will not keep pace with rising costs and that for periods at a time it will impose a ceiling above which the local authority must meet any additional expenditure from the rates.

As indicated in paragraph 7 of the White Paper, in fixing the total amount of the general grant the kind of factors which the Government will bear in mind are: how much local authorities have been spending on the services in question; any factors beyond their control which are common to the country as a whole and which may affect demands on them in respect of these services; the general need for development in the services; and the overall state of the country's economy.

The grant will normally be fixed for periods of two or three years in advance, and it is contemplated that there should be separate discussions with the local authorities in Scotland and in England and Wales before the grant is fixed for any period. It is surely fair to claim on the basis of these arrangements, that the local authorities will have ample opportunity to bring to the Government's notice any factors which, in their view, should affect the total amount of the general grant. We also appreciate that there may be unforeseen increases during a grant period of such magnitude that they cannot reasonably be carried in full by the local authorities and in this event there may be an interim revision of the grant within the grant period. Paragraph 9 deals with that. It is clear from the explicit way in which these arrangements have been set out that there is no intention of saying to the local authorities, "Here is the general grant. Any increases in your expenditure are a matter of no concern to the Government."

The county councils have also represented that local authorities should receive the whole product of rerating and there should be no deduction on this account from the general grant. We appreciate that local authorities cannot be expected to welcome out of hand a proposal which gives them only a third of the product of rerating. On the other hand, the arguments for making a reduction in Exchequer grants at this stage are fully set out in paragraph 17 of the White Paper, and have been fully explained in the general debate yesterday by the Minister. The effect of our proposals will be to give Scottish local authorities on the basis of 1956–57 figures a net gain of about £750,000 a year.

As in England and Wales, it is proposed to accompany the abolition of certain specific grants and the merger of others in the general grant, by a review of the administrative arrangements which have necessarily accompanied these grants, and wherever this seems desirable to leave local authorities to transact their business without reference to the central department. This review has already begun. It is too early to forecast its outcome. All I can say is that our aim is to give local authorities the greatest freedom we can without divesting ourselves of our responsibility to maintain national standards where these have been laid down. I am sure that local authorities themselves will be as willing to comply with these standards as they have been in the past.

In particular, I am aware of the views strongly held in some quarters by those concerned with education, and the Minister of State met representatives of the Educational Institute of Scotland earlier this month. The review to which I have just referred will extend to the effects of the new grant system on the administrative relationship between education authorities and the Scottish Education Department. I must repeat that—as the Minister told the Educational Institute—the Government regard education as an expanding service and the general grant will provide for its development.

The Act of 1946 imposes definite duties on education authorities and it gives me powers to see that these duties are carried out. It is certainly my intention to see that this is done and to maintain the standards of education. How the existing codes and regulations can best be applied to secure this object under the general grant arrangements will require to be discussed with the local authorities. I feel sure that they will agree that it is desirable, and not inconsistent with the freedom we wish them to enjoy, that our educational system should continue to be based on certain national standards.

At present, the Secretary of State has certain powers, such as the power under Section 66 of the Education (Scotland)Act, 1946, to make Orders requiring an education authority to discharge any duty. But these powers have always remained in the background—held in reserve should exceptional circumstances arise. Educational administration has been based on a partnership between the Secretary of State and education authorities, and I am sure that this will continue to be so under the general grant.

A change in the financial relationship in that partnership need not affect its essential feature of co-operation. We are anxious that all the changes to which I have referred should be looked at as a single, integrated operation. Their effect, we genuinely believe, will be to give local authorities not only greater freedom but, I hope, an even greater sense of responsibility, and in that way to create a fresh interest in local government services.

4.10 p.m.

Mr. Thomas Fraser (Hamilton)

The Secretary of State ended his speech by asking that these changes should be regarded as a single, integrated operation. I hope that he will accept from us that we have seen a great many changes which have been made in the law in relation to Scotland as part of a single integrated operation, and the whole has been directed against the ordinary ratepayers of Scotland.

The right hon. Gentleman said that there has been no great demand for structural change in local government in Scotland and, therefore, none is proposed. I have many times asked the right hon. Gentleman and his predecessor, as well as the Joint Under-Secretaries, to look at what all the local authority associations in Scotland said, as reported in the minutes of evidence of the Royal Commission on Scottish Affairs.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

And since.

Mr. Fraser

It has been said since, but the evidence is in the minutes.

It was very largely originated at that time by the district councils demanding additional powers. All the associations in turn, as well as great bodies like the Chamber of Commerce and many others which I need not mention, said that the changes asked for by the district councils in Scotland ought not to be made without a full review, and each of the local authority associations in turn expressed a willingness that there should be a full review of the structure of local government in Scotland. Some of those who have given evidence were as interested in the financial aspect of the problem as in the structure.

Mr. Maclay

To keep the record straight, I have taken the precaution of checking very carefully what was said at that time and what was in the written evidence of the County Councils' Association. Perhaps I may quote: It is desired to put on record the emphatic opinion of the Association that the existing general set-up should be left undisturbed. I put that in for the record, because that is what the County Councils' Association said.

Mr. Fraser

I called attention to the minutes, because in them there is a record of the replies of even the representatives of the County Councils' Association to the questions which were put to them by the chairman. I know that the county councils are unwilling that there should be a review of local government structure in Scotland because they fear that if there were any such review the district councils, which were so highly praised by the Minister of Housing and Local Government yesterday, much to the embarrassment of the Secretary of State, might be given some statutory powers; and they could be given these powers in Scotland only at the expense of the county councils.

The county councils, of course, are not willing to get rid of those powers which they possess at present nor are they willing to delegate powers to district councils, as they were authorised to do when the district councils were established under the 1929 Act. I do not want to dwell on this at length; I merely want to make it clear that there has been a demand for a review of the structure, that it has been widely supported and that it will not do to suggest that this is not so.

The right hon. Gentleman should bear one or two points in mind. The cities in Scotland will not be asking for any review of the structure, because no one has suggested that the structure of local government ought to be altered in the cities. The large burghs are not very much interested in any alteration of structure, because they do not think that they would be affected. The authorities in Scotland who would be affected by any alteration of the structure are the county councils and the district councils. The county councils have everything now, and they do not want to lose anything. The district councils want something. It is the district councils, therefore, who are making a fuss about it and are demanding a review and it is the county councils who are doing their utmost to stave off any review to We best of their ability.

The right hon. Gentleman went on to call attention to the extent of industrial re-rating. I need not repeat what was argued so forcibly and well by my hon. Friends yesterday. We very much regret that the Government have not seen fit to grant full re-rating of industry.

The Secretary of State said that the debate was to obtain reactions to the Government's proposals. He has had the reactions of the local authorities to the proposals. I wonder whether he was asking us to debate these proposals with an open mind in circumstances in which we might be able to convince him that he should withdraw the proposals for a general grant and should retain the percentage grants which we have at present. Was that what he had in mind, or had he in mind that we might look at the details of his new financial proposals, while accepting the principle, which, in fact, we reject? Did he mean that he would pay attention to what we said about the details? Is his mind open? Is he willing to be convinced even now that the general grant is unacceptable and that instead we should retain the percentage grant?

Mr. Maclay

The purpose of the debate is to take note of the White Papers and to obtain the opinion of the House. We believe that these proposals are good. They are our proposals. But we want to hear the opinion of the House on them.

Mr. Fraser

The right hon. Gentleman complained that in rejecting the principle of the general grant the county councils gave no reasons. He did not tell us what they said when they met him, although there have been several meetings and, presumably, they added something to what had been said in their letter. In any event, the right hon. Gentleman, it seemed to me, did not give very adequate reasons for departing from the percentage grant and adopting a general grant. It is for the person who proposes to make the change to make the case for it rather than for the county councils, in a single letter, to make a case for retaining a system which we have had for a very long time.

There has been a demand for a review of local government finance in Scotland for some time. It has been gaining currency. Why has there been this demand? It has been expressd by many people who are political supporters of the Government. The reason is the burden on the ratepayers, That is why there has been this demand for a review of local government finance.

I concede at once that over the same years the central Government have been meeting an increasing percentage of the cost of services provided by the local authorities—not necessarily purely local services, but services provided by the local authorities. Why has there been this demand for a review? Why has the burden seemed to be too heavy for the ratepayers to bear? Why has there been this increasing percentage of the cost of services provided locally being met by the Government? As has so often been suggested, is it because of the increase in the statutory obligations on local authorities and the extent of Government control and supervision over what they do?

No doubt to some extent this is responsible, but there is another consideration which I hope the right hon. Gentleman will take into account, and it is that most people regard national taxation as more equitable than local taxation. There is a growing realisation that rating, our system of local taxation, has become a tax on living accommodation. If we are now seeking, as both sides of the House are, to provide housing accommodation according to need, a tax on living accommodation is the most regressive form of taxation possible. It is in those circumstances that people demand a review of local government finance.

The Government have shown a great unwillingness to examine new possible sources of local revenue. Those who have asked for a review of local government finance have urged a review of the sources from which local authorities now derive their income and that some consideration should be given to alternative sources. The right hon. Gentleman complained that the county councils had not given very good reasons, but had merely made an assertion. However, the right hon. Gentleman the Minister of Housing and Local Government, when referring to alternative sources of revenue yesterday, said: I wish we could propose a new source of revenue which would enable local authorities to finance their services with substantially less reliance on Exchequer aid. No doubt my right hon. Friend the Chancellor of the Exchequer wishes it even more than I do. But most hon. Members will not be surprised when I say that it is simply not practicable."—[OFFICIAL REPORT. 29th July, 1957; Vol. 574, c. 927.] That is not an argument, but an assertion.

Far from the Chancellor being disappointed that new sources of revenue for local taxation cannot be found, he is the one who stands in the way of their being found, because he does not want local authorities to have access to any of the sources of revenue available to him. We all know that it is exceedingly difficult, if not impossible, for local authorities to find new sources of revenue not already tapped by the Chancellor. The Chancellor is not weeping because they cannot find new sources, but is determined that local authorities will not have those new sources.

I do not want to deal with all the proposals of which the Minister spoke yesterday, nor do I want to suggest new sources of local revenue, but I put it to the Government that the existing system of local taxation, this tax on living accommodation, is becoming more regressive each year. A man who is the victim of tuberculosis, and unable to work, or one who is badly disabled and employed in a job with a very low wage, £6 or £7 a week, may, because of the size of his family, have to have a three-bedroom house, while a man earning £2,000 or £3,000 may also be living in a three-bedroom house. Both will be asked to contribute an exactly similar amount in local taxation.

That is not defensible. No account is taken of the ability of taxpayers to pay. The yardstick of the value of the living accommodation is a yardstick which cannot be applied today. No doubt there was a time when the value of living accommodation broadly reflected the ability of the occupier of the house to make a contribution to taxation, but that is no longer the case. I beg the Secretary of State to keep an open mind towards the possibility of examining new sources of local revenue.

When I picked up what the Secretary of State said in his closing sentences—about regarding these changes as a single integrated operation—I reminded him of recent legislation in Scotland. I now want to consider some of that recent legislation. We had the Valuation and Rating (Scotland)Act, 1956. Its purpose was the abolition of owners' rates and the narrowing of the tax basis. Occupiers of houses were to pay increased rates, but we were assured that rents would be reduced by the amount of the owners' rates so that everybody would pay exactly the same as before.

We sought the reason for the urgency of that Measure. There was to be revaluation every five years. We now know that the reason for the urgency was that the Rent Bill, now the Rent Act, 1957, was to be introduced. Before tenants had gained the benefit of the change in the rating law which was to leave them precisely where they were, the Government brought forward a proposal greatly to increase rents. The increases were based on rents as they were before owners' rates were deducted from them.

Tenants of those houses never gained the benefit, if there was any benefit, from the provisions of the Valuation and Rating (Scotland)Act, 1956. The Rent Act of this year was followed by the Housing and Town Development (Scotland)Act, which can only result in higher rates and rents for council tenants. Its purpose was to put still more of the burden of housing on local authorities and on the occupiers of houses built by local authorities. Following those three Acts of Parliament, we have these proposals. We can see that it is one single integrated operation—all directed at the ratepayers of Scotland.

The Secretary of State said, as did his right hon. Friend yesterday and as the White Papers say, that the purpose of the general grant is to give local authorities more power. However, the Secretary of State conveniently omitted to give examples. He told us that there is to be a review—that the review had already started—to see whether central control over what local authorities did could be eased. There is no point in offering local authorities this change in the financial relationship between central Government and local government, accompanied by a promise that local authorities will have greater freedom in spending the money they raise, if not one example is given.

Mr. Maclay

The hon. Member should realise that to try to save the time of the House I did not go over much of the broad argument of my right hon. Friend yesterday. The principal freedom to be given to local authorities is a range of choice within the general grant subjects. It is a very big change.

Mr. Fraser

That is not freedom. I listened in vain to the two Ministerial speeches yesterday for examples of the freedom to be given to local authorities under the proposals. The Secretary of State's colleagues omitted to give examples. They went out of their way to assure us that they would not permit standards to fall, and so did the Secretary of State in a rather general phrase today. They said that they would maintain standards.

Of course, the local authorities, in spending not only the taxpayers' money, the Exchequer money, but the money they raise locally, are spending the money not on services that they provide because of some power which they are given by Parliament. The local authorities are not now given powers by Statute. They are given duties. That is what happens.

I would say that he who wills the end must will the means. If we will the end, if it is we who lay down the duties on the local authorities, it is we who must provide the means whereby the local authorities will execute those duties.

Only a few weeks ago we had quite a controversial discussion on the Housing and Town Development (Scotland)Bill about the default powers which the Secretary of State was claiming for himself. Is the Secretary of State proposing to give up his default powers, to give the local authorities freedom? He argued strongly enough for default powers only a few weeks ago, and we conceded that there were many services in respect of which it was right that he should have default powers, but there were some in respect of which he need not have default powers at all. Is he now going to give up his default powers, to give freedom to the local authorities? I do not think that he is.

The objectionable feature of the general grant is that under those proposals the laggard local authorities will benefit financially and the progressive ones will suffer. Take education, for example. Suppose the overall grant from Government funds towards education in Scotland is about 60 per cent. of the total cost of providing public education in Scotland and the average is maintained at about 60 per cent. Surely those who are progressive and who get ahead of their fellows will get less than 60 per cent., but those who are laggard and who fail to carry out effectively the duties laid upon them by Parliament will get more than 60 per cent. Inevitably, that is bound to happen. What kind of way is that in which to spend the taxpayers' money?

Mr. G. Lindgren (Wellingborough)

The less you do the more you get.

Mr. Fraser

As my hon. Friend says, the less you do the more you get, and that is exactly what is provided for in the proposals which we are debating this afternoon.

Which authorities in Scotland are to benefit immediately?—the laggards, those who have not got on with the building of new schools. Which will suffer immediately and have to get the advantage of the new cushioning proposal referred to by the Secretary of State towards the end of his speech? They are the authorities who have got on with the building of new schools since 1945, who have made progress in providing for the educational needs of their communities. They are to suffer, and those who have not made provision are to gain.

One has to think of communities like Edinburgh—and I am not attacking Edinburgh here. Edinburgh is a community which has had a good bit of its educational provision made available to it by public benefactors. There are other communities, equally big, which have not had those benefits. But now, in the general grant, there is an assumption that the ratepayers of Edinburgh are paying the same for their educational provision as the ratepayers elswhere, because all that the Secretary of State is to do is to count heads and take no account of who provides the educational services, whether it is done by public benefactors, by trusts and the like, or whether it is done by the local authority.

This does not seem very clever and it does not seem to me to be any comfort to Dundee, or Glasgow, or anywhere else in Scotland, to know that the average is 60 per cent. and that they are getting less than 60 per cent. because Edinburgh gets a good bit more than 60 per cent. I should have thought that these proposals, taken together, are a plain inducement to local authorities not to carry out their duties imposed by Statute, because if the average is 60 per cent. of the cost of providing education services, and if one wants to get more than 60 per cent., the thing to do is not to give effect to the statutory duties, not to build schools and not to make provision for the young people.

I think that all of us know that block grants in place of percentage grants have always been introduced and considered as an economy measure, as a measure to save the Exchequer. May I quote what the Geddes Committee said in its Report in 1922: We are of opinion that the cost of teaching must be brought down by the local authorities and that the only way to effect this is to tell each local authority how much money it can have, and leave it to the local authority to reap thereafter the full benefit of any economies it may make Is the Secretary of State suggesting now that the local authorities might pay the teachers less than the scales laid down, and thereby get the benefit of this block grant instead of the percentage grant which they enjoy at present?

This purpose recommended by the Geddes Committee in 1922 is the purpose of the proposals before us. Does anyone deny that? Would the Secretary of State deny that? I do not think he can, because he has given the game away much more openly in his White Paper than it is given away in the White Paper pub lished by the Minister of Housing and Local Government. I quote from paragraph 17 itself: The Government's view is that this opportunity should be taken to make some reduction in the level of Exchequer grants. The English Minister said "if it is possible", but the Secretary of State for Scotland has no doubt about its possibility. I repeat: The Government's view is that this opportunity should be taken to make some reduction in the level of Exchequer grants. That is either true or untrue. Since it is in the White Paper published by the Secretary of State, it is, he who has said it. If he withdraws it, let him withdraw it, but one would not have gathered from his speech this afternoon that the purpose was to effect some reduction in the level of Exchequer grants.

I rather got the impression that he was convincing us that this was a good deal for the local authorities. We were to get £750,000 more out of the Exchequer as a result of the proposals. But it seems to me that the promises which he was then making are inconsistent with this bold statement of purpose as set out in his own White Paper.

Turning to this question of freedom, the local authorities do not decide and will not be permitted to decide the level of teachers' salaries. They do not decide how many children they will have in school or for how long they will have them. The local authorities do not decide the amount of building required. They do not decide whether or not they will supply books, etc. Indeed, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison)pointed out yesterday, they do not even decide the number of pegs in the cloakroom or the distance between the pegs. These things which I have mentioned are all laid down by Statute or by regulation. The local education authorities do not have powers. They have duties.

They have hardly more freedom in the decisions which they may make about any of the other services proposed to be merged in the general grant. Take, for instance, the health service and the fire service. Is the local authority to decide whether to have a fire engine or or not? Is it to be free? Of course, it is not to be free. Is the local authority to be free to decide whether or not it will make any provision for child care? Of course, it is not to be free. Then there are weights and measures, provisions, town planning, road safety, and so on. All these things are the subject of statutory regulation, and as long as that is so there cannot be this freedom which is so vaguely promised by the Secretary of State.

Mr. Maclay

It is necessary to remember that the system of percentage grants has not produced complete uniformity all over the country.

Mr. Fraser

I do not think that I suggested that it introduced complete uniformity all over the country. What I have brought out is that, to take the provision for education, which accounts for most of the money in this change of method in assisting local authorities, there is not uniformity, of course it but the laggard education authorities will get a substantial benefit from the change in the financial provision. That in itself is evidence that there is not uniformity. Of course, there is not. It really is a had thing today if we are to penalise authorities which take their duties seriously, but that is exactly what is happening now.

I have no hesitation in saying that the percentage grants, with any faults that they have, are certainly preferable to a general grant, unless some new sources of local taxation can be devised. It is only by providing new sources of local taxation that greater freedom can be granted. Failing that, I regard the whole scheme as a fraud and a deception. If the Secretary of State does not heed the reactions to these proposals that he will get and has already got from local authorities, I hope that, when the Bill is presented—if it ever is—it will be rejected.

4.41 p.m.

Mr. James McInnes (Glasgow, Central)

It is a somewhat surprising illustration of the kind of interest taken by hon. Gentlemen opposite that not a single Tory Member on the benches opposite has risen to follow my hon. Friend the Member for Hamilton (Mr. T. Fraser). I welcome the opportunity to intervene in the debate, even for a very few minutes.

According to the English White Paper, this review of local government finance is the most thorough review which has taken place since 1929. I do not know whether that reference in the White Paper relates exclusively to England and Wales, or whether it incorporates Scotland, also. If it incorporates Scotland, I believe that this is the most thorough review which has taken place since 1929, because it is the only one which has taken place since 1929. It does not have to be a very good review to be the most thorough. I wish to consider this thorough examination: and review as disclosed in the White Paper from one or two aspects of it which relate to Scotland.

First, I wish to take up a point made t)the Parliamentary Secretary to the Ministry of Education, which I thought to be the highlight of yesterday's debate on this subject. The hon. Gentleman said: I know that in this context some concern has been expressed about paragraph 26 of the White Paper on Finance, and I particularly wanted to bring this in, because it has been widely noted. The paragraph says: 'It is most important to reduce this dependence of local government on Exchequer grants if it can possibly be done'. I ask hon. Members to note the context of that paragraph. I can assure the House that those words are used in reference not to the general grant, but to the rerating of industry…"—[OFFICIAL REPORT, 29th July, 1957; Vol. 574, c. 1023.] There is no doubt in the Scottish White Paper as to the purpose of this dependence of local authorities on Government grants, because the Scottish White Paper is very clear and emphatic: The Government's view is that this opportunity should be taken to make some reduction in the level of Exchequer grants. The reasons for this proposal, as explained in paragraphs 26 to 29 of the English White Paper, are briefly that local authorities now receive more from Government grants than from the rates…. I doubt the accuracy of that statement. From figures supplied to me in respect of my own City of Glasgow, I understand that Government grants represent 44 per cent. and that the rate collections represent 56 per cent. I believe that the disparity is not so noticeable throughout the whole of Scotland, but that is due to the fact that Glasgow does not get a single penny in respect of Exchequer equalisation grants.

Paragraph 17 of the Scottish White Paper goes on to indicate that while rates have doubled since before the last war incomes (net of income tax and surtax)have on averages nearly trebled". I do not doubt that rates have doubled, but I think that it would be more accurate to say that the amount of rates collected by local authorities from ratepayers in Scotland has trebled. In 1939, the total collected in rates was £22 million. Twelve years later, in 1950, the total collected was £30 million, an increase of 36 per cent. in the twelve years. From 1951 until 1957, the total of rates collected has jumped from £30 million to £63 million, an increase of 110 per cent. during the years of power of this Government.

I hope that the Joint Under-Secretary of State, when he replies and tells us all about this thorough examination, will say why the White Paper makes no reference to the fact that, in the last six years, the rates collected in Scotland have increased by 110 per cent., as compared with an increase of 36 per cent over the previous twelve years. These figures reveal the repercussions of Tory Government policy on local government finance.

Paragraph 18 of the White Paper says: The estimated product of rerating in Scotland is approximately £2.3 million. The logical calculation is that if, instead of rerating industry by another 25 per cent. we rerate industry to the full extent, that would yield £6.9 million.

I hope that the Joint Under-Secretary is following me, because there is some money gone a-missing, and, as a Scotsman, I am concerned about it. I will repeat it, so that he may know what is the question I am asking. In paragraph 18, he estimates that the rerating of industry to the extent of another 25 per cent. would yield £2.3 million. On that calculation, if we were to rerate it to the full extent, we should get an additional £6.9 million. On 26th March this year, in reply to a Question, the Joint Under-Secretary of State said that if industry were rerated to the full extent it would yield £5.9 million. That is to be found in his answer in column 947 of the OFFICIAL REPORT.

We have lost £1 million between 26th March and the presentation of the White Paper. What is the answer? I understand from inquiries which I have made that £5.9 million is more correct than the figure of £6.9 million after the rerating of industry as a whole. I hope that the Joint Under-Secretary will tell us where the £1 million has gone.

Like my hon. Friend the Member for Hamilton, I, too, am seriously disturbed as to why industry was not rerated in full. I do not know the Government's answer against it. Is it because it would mean an increase in production costs, in wages or in overheads of any kind? I refer the Parliamentary Secretary to the Report of the Balfour Committee on Trade and Industry. That Committee indicated that the average proportion which rates formed to the total cost of production was less than one-half of 1 per cent. If that is the total reflection on industry of rerating it to the full 100 per cent., surely we are justified in demanding that industry should be rerated to that extent.

I am not too sure how the review was carried out in Scotland. We know that according to the White Paper certain reviews were undertaken by municipal treasurers' associations and other bodies independently of the review carried out by the Minister of Housing and Local Government, but I am not too sure of the modus operandi in Scotland. Indeed, the Parliamentary Secretary himself, a week ago today, in answer to a Question of mine, told my hon. Friend the Member for Hamilton that he could not say whether it was a responsible committee. When asked what was meant by "a responsible committee" and whether it was a committee of local officials, the hon. Gentleman said that it was his right hon. Friend and his officials. I take it, therefore, that it was not a committee comprising local government representatives or officials or a committee of an independent nature.

Until the hon. Gentleman clarifies the position, I assume that the review in Scotland was carried out not by the Secretary of State, but by the Minister of State for Scotland and the officials at St. Andrew's House. If I am wrong, I hope the hon. Gentleman will correct me, but that is my information. It is only after the Government have made up their mind on the formula and the proposals that they are introducing in the White Paper that the Scottish local authorities have been brought in.

The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne)

I am not clear to which review the hon. Member is referring. What does he mean when he says "a review"?

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

It is the hon. Gentleman's Government who have produced the White Paper.

Mr. McInnes

What I am referring to is the subject that we are discussing: a review of local government finance. I am sorry if the hon. Gentleman has not yet wakened up.

What I want to know is who carried out that review? I do not want to go over the whole ground again, but it is not clear in Scotland who was responsible for carrying out this very thorough examination of local government finance. All that has emerged from the review is that we must rest dependent entirely upon the rating system and a new formula of Government grant as the main source of revenue for local government.

I hold the view that the rating system is inelastic in that it is unresponsive to changes in the general price level. Indeed, as my hon. Friend the Member for Hamilton very forcibly pointed out, it bears little or no relation to a person's income. In fact, Great Britain is the odd man out in the whole world of local government in that we rely entirely on the rating system for our local finances.

We all recognise that local authority expenditure is hound to go on rising. We also recognise that there is little that local authorities can do to arrest such continual rises. After all, there are important costs which have to be met and which are completely outwith the control of local authorities. One need consider only the subject that has loomed on the horizon more often in this debate than in any other: the question of education. What control has a local authority over, say, the question of teachers' salaries? How can local authorities control such a vast and continually rising expenditure? Teachers' increments year by year, the building of schools, and so on, must of necessity mean that local authority expenditure will go on increasing.

If the proposal for a new general grant, which, I believe, is to be largely of a fixed nature, is put into operation, local authorities must either drastically reduce the social services that they are providing or, alternatively, place a still further intolerable burden on the ratepayers. The proposed general grant is, I understand, to be of a fixed amount in advance, as it were, in the first instance covering a period of two years and thereafter for three-yearly periods.

I know that I shall be told that provision is made for the Government to consider an interim review. Such provision is contained in paragraph 20 of the English White Paper and, presumably, it will apply to Scotland. The significant point about the interim review, however, is that it is only the Government who can determine whether there is an established case for an interim review.

One might logically ask, as my hon. Friend the Member for Wellingborough (Mr. Lindgren)yesterday so pointedly asked, how much prices are to rise before an interim review can take place. What is to happen in the case of local authorities whose actual expenditure, as frequently happens, exceeds the estimates? Would such considerations as these warrant the Government making an interim review of the grants that they propose to give?

To me, the whole purpose of the Government's proposals is to effect economy and nothing else. If the block grant is not to be intended as an economy axe, what other purpose can it serve? What is the admitted effect of it so far as Scotland is concerned? We are told that in place of the specific grants given at present which cover not only education but other services, such as child welfare, the fire service and many others, there is now to be this single grant of £37 million. That is precisely the figure for education alone, so, in essence, we are getting no grant for all the other services.

My experience in local government of general grants is that they always become vulnerable to raids by the Chancellor of the Exchequer. I believe that these proposals are totally inadequate to meet the problem that confronts local government today and, therefore, they must be rejected in their entirety.

5.1 p.m.

Mr. J. C. George (Glasgow, Pollok)

I should like, in the first place, to deal with paragraph 17 of the Scottish White Paper, which was referred to by the hon. Member for Glasgow, Central (Mr. McInnes)and also by the hon. Member for Hamilton (Mr. T. Fraser), who said that my right hon. Friend had been more forthcoming about the purpose of the general grant than was the case in the English White Paper. The hon. Member quoted paragraph 17, and I will also quote it. The Government's view is that this opportunity should be taken to make some reduction in the level of Exchequer grants. The reasons for this proposal, as explained in paragraphs 26 to 29 of the English White Paper,… Obviously, the two White Papers are completely at one. They are tied up in paragraphs 26 to 29, and when the Parliamentary Secretary to the Ministry of Education dealt with this matter last evening he was quite clear and proved that quite conclusively. He quoted the that quite conclusively. He quoted paragraph 26 of the English White Paper— It is most important to reduce this dependence of local government on Exchequer grants if it can possibly be done". And paragraph 28 states: While re-rating increases the product of rates it has the direct effect of reducing the product of income tax, profits tax and surtax. Here is the crux of the whole question. It is plain, therefore, that some reduction of grants must accompany the re-rating. It is clear to anyone who looks at this with an unbiased mind that these references to reductions in grant to local authorities are tied up with the question of re-rating, are taking account of the fact that the level of grant has now gone beyond the level of collected rates, and this opportunity of increased income from re-rating is taken as a means of reducing the dependence on grants by the local authorities. I think that the charge made by the two hon. Members is not a true charge, and is repudiated quite clearly by what is said in these paragraphs in the respective White Papers.

Mr. McInnes

If the hon. Member will look at the first four lines in paragraph 17 of the Scottish White Paper, he will get greater clarification for his own point of view.

Mr. George

I do not need any clarification. I am sorry if the hon. Gentleman is in difficulty. I am quite clear as to the purpose. The question of reducing grants to local authorities is definitely tied up in both White Papers with the question of re-rating.

Mr. McInnes

Read it.

Mr. George

I have read the relevant paragraphs in the two White Papers.

Mr. McInnes

Read them again.

Mr. George

I will not be induced to go beyond that.

Mr. Willis

If the hon. Gentleman would read them, he would find the reasons in the second sentence for the Government's view that some reduction in the level of the Exchequer grant was necessary. The reasons are three, and only one of them has to do with the re-rating of industry. The first has to do with the fact that local authorities are losing their financial independence, and the second is that rates have not increased as much as Income Tax and other things.

Mr. George

The reason that rates have not increased is because grants have increased and an opportunity is being taken to reduce the grants by taking the benefit of some of the products of re-rating, which is a new payment into the authority pool. It is quite clear to me.

The hon. Member for Hamilton also painted rather a doleful picture about the pathetic position of local authority taxation. He believes that national taxation is always fairer than local taxation, and he drew a picture of the T.B. tenant with an income of £6 or £7 a week as opposed to the £3,000 or £4,000 a year tenant who occupies a similar house. We have given the answer to that many times. It is like the young man who shoots his parents and then applies to the court for sympathy because he is an orphan. He created the position and now he is complaining about it.

Mr. T. Fraser

I did not suggest that either the poor tenant with £6 or £7 a week or the £3,000 a year man were council tenants. If they are council tenants they can have differential rents.

Mr. George

The hon. Gentleman talked about a three-apartment house.

Mr. Fraser

Neither was it a three-apartment house.

Mr. George

If the hon. Gentleman will read HANSARD tomorrow he may find that what I have said is correct.

Mr. Fraser

It had three bedrooms.

Mr. George

I will leave that and turn to the general position before us today in Scotland. I have a certain amount of sympathy with what the hon. Member for Hamilton said at the outset. I have a feeling that in Scotland in the last two years we have done too much too quickly. I feel that we have, in fact, moved too far ahead in local government finance and that we have puzzled, mystified and bemused the councillors and officials and the tenants in Scotland. I agree with all the measures undertaken which are sound measures and part of a sound plan to put local government finances on a sound footing, but I think that we have done too much too quickly and mystified both councillors and their officials and the tenants of the houses.

Various Acts have been enumerated today, the Valuation and Rating Acts, the Housing Subsidies Acts, the Rent Act, and now the general grant. When I have to speak to some of my constituents, I find it almost impossible to get them to understand what lies behind all of that in the field of rents. I feel that we are moving too fast and that we ought not to be surprised if people are not following exactly what we are doing and why we are doing it, and not to be surprised if, in fact, we create an open field for propaganda. I have thought over this picture very seriously, and I wonder whether it would not have been better to delay this for Scotland for some time yet in order to get the picture clear to some extent.

Mr. McInnes

For half a century at least.

Mr. George

The Daily Herald this morning said: Children, the sick, and the old who depend partly on what their local councils spend, were last night thrown to the Tory wolves… Of course, that is using the Acts for one thing only, and that is propaganda. Right through the consideration of those Acts every opportunity has been used to bemuse and confuse the people of Scotland as to the meaning and purposes of the Acts that have been passed. This is another clear example of using in an unfortunate way, an unfair and dishonest way, the facts before the House. I believe that we are to blame in part for bringing that propaganda on our own head by moving too fast.

Nevertheless, let us examine the proposals before us. I cannot share the anxiety about the future of education which has been evidenced in so many speeches yesterday and today in the debate. I share the view expressed by my right hon. Friend today that there is no suitable alternative way of raising local revenue. Investigations have been made over the years to try to find a suitable alternative way, and none has been found, and none has been found today.

Mr. Willis

That is not true.

Mr. George

None acceptable to the Government. There may be one acceptable to hon. Gentlemen opposite, but none has been found acceptable to us, and I personally do not believe there is one.

We have to find means of reducing the dependence of local authorities on grants from the central Government. I have had the good fortune to work on local authorities, but that has meant I have had the unhappy experience of seeing some of the denuding of the finances by the outgoings accompanied by the increasing dependence of local authorities upon grants year by year from central Government. I have seen that dependence undermining the moral character of local government.

There is no doubt that the effectiveness of local government has declined in recent years. There is no doubt that people are apathetic about local government because local government has lost much of its local character, due to rising grants. We see this every time there is a local government election.

Mr. Cyril Bence (Dunbartonshire, East)

We do not.

Mr. George

People do not even bother to go to the polls, because local government is no longer considered a serious matter in their lives. Hon. Gentlemen opposite are or have been in local government, too, and they know these things. We know the dangers inherent in the situation. We have seen in recent years a decline in the numbers of those from whom we can select candidates for membership of local councils. It is with very great difficulty that we can get candidates, because local government work has been declining in interest for people as voters or as prospective candidates.

I think we shall all agree that what we want now in Scotland is vigorous local government which will attract personalities to the council chambers and a stirring of the electors' interest in local government. There is the problem of how to bring this about. It is a big problem. It will not be easy to solve.

We have passed various legislation recently affecting local government finance, and the hon. Member for Hamilton has described it, and we are now proposing to have a general grant. It will give greater freedom to the local authorities. It will create a greater interest in their work. I believe that that legislation, and this proposal in particular, whether we agree with it or not, will at least have the effect of stirring up interest in local authority work as the rates go up and the rents go up, and because this block grant will force local budgets to be drawn up carefully, and a careful watch to be kept month by month on expenditure. Thus the interest of the electors will be stirred in the work of the councils and the work of the councils will become infinitely more interesting. So I believe, whether we agree with this proposal or not, that by it we can look forward to a quickening interest in local government on the part of the electors, and a keener interest altogether in the work done by the councils.

Mr. Emrys Hughes (South Ayrshire)

What will be the end of it?

Mr. George

In recent years we have seen the finance committees of county councils acting more or less as rubber stamps upon the decisions of the other local committees. That is what a local finance committee in Scotland is—a rubber stamp.

Mr. Willis

No.

Mr. George

It is a rubber stamp for the other committees. Now the finance committee will have to be ablaze with life. It will have to watch month by month what is being expended so that the council will not run out of money before the end of the year. That is what will happen through the replacing of the percentage grant by the general grant.

Mr. T. Fraser

In what possible way will this affect the authority of the finance committee in local government?

Mr. George

The finance committee has always had authority, but in my opinion it has not exercised authority. I have seen finance committee meetings last only about half an hour while the finance committee acted as a rubber stamp on the decisions of the other committees. I believe that that now will be altered and that the finance committees will exercise their authority because they will have to work to a budget or run out of money. The percentage grant has meant no discipline at all. The more a council spent the more it got. Now the councils will have to work within limits and see they keep within them to make their money last for each financial year. That is why I say we shall have a quickened interest in the work done by the councils—because of the need to watch spending month by month.

Those of us who have been on local authorities have seen the working of the percentage grant, and we have also seen and all know examples of how it has not been conducive to economy. I have seen examples of extravagance, and so has everyone else who has worked on a local authority. We have seen this sort of question asked and debated at local authority meetings—"Does this proposal attract grant or does it not attract grant?" That has often been the chief question to be debated and decided. Decisions have been taken upon proposals simply in the light of the answer to that question.

Nevertheless, the extravagance has been marginal, and generally it has not made a tremendous impact on the expenditure on education in Scotland. Indeed, the marginal extravagance which we have seen in education is seen in every business. No business man could say, "There is no extravagance whatever in my business." I do not consider that, if the percentage grant is replaced by the general grant, it will cause a great reduction in expenditure on education. Indeed, public-spirited people who undertake local government work sometimes allow their hearts to rule their heads. We must expect that sometimes—and, indeed, we are glad of it.

Nevertheless, I believe there is room for some economy engendered by the fact that the new proposals will mean that local authorities will have to watch their expenditure. They will have to ask, "How much have we to spend? We shall have to watch how we spend it."

Fears have been expressed by authorities about being short of money in future years, but through the method by which the grant is to be drawn up there are guarantees which can bring comfort to the local authorities. These guarantees were enumerated by my right hon. Friend, and I shall not trouble the House with them in detail again. It is sufficient to say that the items which will be brought into consideration will be, first, expenditure within the control and incurred by local authorities; secondly, factors without their control; and thirdly, the national economic position. Moreover, paragraph 9 of the White Paper, "Local Government Finance in Scotland," states: The amount of the grant in each period will take into account the levels of remuneration and prices current at the time it is determined … It seems to me that all this takes into consideration all the items which could affect or worry the local authorities during the period for which grant is paid. Unless we say we do not believe that the Exchequer will consider those factors, we must feel that the local authorities have every good reason to go on expecting to be catered for in the future more or less as they have been in the past.

I do not believe that this Government, having done all that they have already, will turn their back on education and say, "We are going to stop education from expanding." The progress of education in this country cannot stop. Education in this country must expand. No Government with any commonsense would say that the cost of an expanding educational system, with its great benefits to the nation, must fall exclusively upon local government. It is ridiculous for anybody even to think that we say anything of the sort.

Everything laid down in this policy, unless we just do not believe what is stated in the White Paper, ensures that the local authorities will in future get every consideration and every encouragement from the Government to go on providing an educational system equal to that which we have at the present day. If there are laggard local authorities, if even a progressive authority should feel unhappy about the new proposals, then we can still rely upon the new public opinion which is swelling in this nation, the public opinion about education. There is no doubt that public opinion is focusing on the nation's future, and its future prosperity, and the part which education will play in contributing to that prosperity. The public interest in this is increasing every year. In recent months, for instance, we have seen how the teachers will not let the system within which they operate decline without making themselves heard and making us aware of their opinions. There are plenty of safeguards to ensure that the educational system will not decline, for the Government mean to expand it.

We have heard about variations in standards and equipment and about progressive and lazy authorities. We must always distinguish between, and not confuse, progress with profligacy in expenditure or reasonable economy with reaction. Because an authority spends a lot of money it does not mean that it is progressive, nor does it mean that because another authority is very careful it is reactionary. It is not what is spent that gets results, but how it is spent.

I have not the slightest doubt that the new system of general grants will be of great benefit to the country and will form part of a pattern that will restore to local authorities a great deal of their dignity and of their interest.

5.20 p.m.

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

I am bound to say that I think the hon. Member for Pollok (Mr. George)was very easily satisfied about the guarantees for the local authorities. I have read paragraph 9 of the White Paper several times, and I am bound to say that, as far as I can see, there is no guarantee that a local authority is going to get anything at all with which to meet additional expenditure in exceptional circumstances. The guarantee of the Government is hedged around with so many provisos that it is difficult to see that the local authorities will, in fact, get anything at all.

In the first place, paragraph 9 says: … unforeseen increases during the grant period of such magnitude… What does that mean? The right hon. Gentleman himself used exactly the same phrase. Does it mean the equivalent of ld., 2d., 3d., 4d. or 5d. in the £ on the rates? Nobody knows, and it is quite obvious that if the Government are carrying out a very vigorous economy campaign they will on each occasion adjudge the amount at a higher rate in accordance with their national policy. Even assuming that the Government agree that the expenditure is of a fairly high magnitude, they will only be prepared to give the extra money by way of exception. In other words, no local authority can expect to get this assistance except in very exceptional circumstances.

The White Paper is supposed to deal with local government finance, but all the arguments so far in defence of the White Paper have had nothing to do with finance. They have been related to the ability of local authorities to control their own affairs. The great defence put up by the hon. Member for Pollok and by other hon. Members opposite of the White Paper has had nothing to do with the financial provisions. It has been related to the ability of a local authority to run its own affairs.

My hon. Friend the Member for Hamilton (Mr. T. Fraser)made an exceedingly good point when he pointed out that the extra power being given to local authorities to run their own affairs and the additional freedom that would result from the financial proposals were, to a large extent, mythical. It is important to remember, of course, that this is the only ground on which these provisions have been welcomed in Scotland. The treasurer of the City of Edinburgh, who was the only individual to welcome the proposals, did so on the ground that they would give local authorities greater freedom.

Let us look at the general services embodied in the grant. I understand that education will represent about 85 per cent. of the general grant. The right hon. Gentleman went out of his way to tell us of the things that he was going to do to see that the level of education was maintained, that the intentions of the Government were carried out, and all the rest of it. In other words, by the time the right hon. Gentleman has finished interfering with the local authorities there will not be much elbow room for them to do very much on their own.

Among the other services is the registration of electors. No one can economise on that. One has to do it whether one thinks it wise or unwise. As to traffic controls, surely local authorities are not going to be encouraged to reduce them when traffic is increasing year by year. Again, local authorities are surely not expected to cut down on road safety at a time when traffic is increasing. Then we come to residential and temporary accommodation under the National Assistance Act. Is it now proposed that the people who obtain accommodation under the Act should sleep in Prince's Street Gardens or alongside Loch Lomond?

How can we cut down expenses? If they cannot be cut down, then we have very little freedom to move around within the ambit of this general grant. I ask the right hon. Gentleman, as did my hon. Friend very pertinently—we really did not get a satisfactory reply—in what direction he expects a local authority will get any freedom as the result of these proposals. I think that we ought to be given some indication of that. It really is not good enough for the Minister to say that he has set up a committee. I cannot help feeling that possibly it is a committee which will in any case accept what the English Committee says. That is what has been happening throughout this whole business.

The whole manner in which the Scottish Office has dealt with the matter has been ridiculous. In the first place, the announcement that local government finance was being inquired into was made by an English Minister, and it was not until afterwards that we elicited from the Secretary of State for Scotland that he also intended to look into the question. My hon. Friend the Member for Glasgow, Central (Mr. McInnes)tried to find out who was, in fact, looking into the matter in Scotland, but he did not get a very satisfactory answer. Who are the people who comprised this committee? What evidence did they take and consider, and why did they come to the conclusions which they did? We do not know.

In my view, this document with which the Scottish Members have been presented on local government finance is an insult to them. We are asked to discuss conclusions reached by the Government without being given a single reason why they reached them. All it says is: As the Parliamentary statement explained, the Government, after a thorough investigation, do not consider it practicable to devise a satisfactory new source of local revenue. Is that really the way to treat the House of Commons? How can we discuss, not the question of the freedom of local authorities but of local government finance, unless we have something to discuss? At the moment we have nothing to discuss. As far I can see, the Scottish Committee was a little committee which shuffled along behind the English Committee and that the final decision was made by the Treasury.

I think that the attitude of the Scottish Office on this matter—one which, I am sorry to say, has characterised it during recent months—has been an attitude of spineless ineptitude. The Joint Under-Secretary of State smiles, but I think that what I say is unfortunately true. In my view, it has been more characteristic of the Government recently than at any time during my political lifetime.

We ought to have some information on the matter, and we ought not to be dragged along at the heels of England. When the Secretary of State opened the Scottish section of this debate he said that Scotland had come to the same conclusions as England. They were not his exact words, but that was the purport of them. The right hon. Gentleman gave no reasons at the beginning of his speech. I made a note of what he said, and, as I say, that was the purport of it that Scotland had come to the same conclusions as England.

Mr. Maclay

I said at the beginning of my speech that I did not propose to go over the full arguments because I wanted to save as much of the time of the House as possible, and because the general arguments are the Government's conclusions for the United Kingdom as a whole. I then described in detail where the Scottish matters were different from the others.

Mr. William Ross (Kilmarnock)

But does the right hon. Gentleman not realise that it is rather impertinent of him and unfair to Scottish people to publish this White Paper, "Local Government Finance in Scotland," when in page 6, for example, there are such expressions as— As indicated in Annex D to the English White Paper… and— As also explained in the English White Paper (paragraph 31)… and— … as explained in paragraphs 26 to 29 of the English White Paper …"? In order to make the Scottish White Paper understandable, and in fairness to the people who buy it in Scotland, the Scottish Office should supply with a free copy of the English White Paper.

Mr. Willis

What were the reasons that led to this agreement of view? We are discussing a different set-up in Scotland. Therefore, we are entitled to know why the conclusions were the same as those for England? I should have thought that they might be different. If the English wish to be stupid in dealing with their local affairs, there is no reason why we in Scotland should follow them. I am quite confident that if it were allowed to deal with this problem by itself, Scotland could find a far better solution than anything that is to be found in the White Paper. In any case, Scotsmen are far better administrators than Englishmen, and I am quite sure that they could deal with this matter competently. An hon. Friend of the Secretary of State has implied that he is the lackey of the Treasury, and that is quite correct. It is the Treasury, of course, that gives the answer that there is no alternative source of income and not the Committee that inquired into this subject. Most of the arguments against the principles contained in the White Paper have been pointed out. Therefore, I will not go over them again.

Mr. Ross

The "Whitewash Paper."

Mr. Willis

My hon. Friend calls it the "Whitewash Paper". That is the best description of it. Nobody will take it seriously.

As far as I can see, the White Paper means that in relation to education we shall depart from the Goschen formula. Is that so? We ought to be told. My understanding of paragraph 8 of the White Paper is that we are now departing front that formula altogether. Therefore, there will be no guarantee in future that grants in Scotland will be made on the basis of eleven-tenths of the amount given to England: Do the Scottish Ministers believe that this will be to the advantage of Scotland? I remember that last year we had the benefit of a sum of money above that which we expected. There was a surplus from which we benefited as a result of the Goschen formula. We ought to be told the Government's views about that and whether we are to depart from the Goschen formula.

After the debate we had in the Scottish Grand Committee on roads in Scotland, why is it now proposed to abolish the grant for highway engineers and surveyors? Surely, the whole burden of that debate was that these people were more than ever needed and that there were not enough of them. Precisely at the time when that has been agreed in Committee, it is now proposed to abolish the grant.

Those are two small points on which I should like some answer but, to recapitulate, the main reason against the White Paper is that it does not do anything to solve the real problem of Scottish local government finance, namely, its burden. The argument in paragraph 18 of the White Paper—that it is expected to reduce the general grant because rates have not gone up as much as Income Tax—is really a most dangerous argument. Income Tax, at least, is based on people's ability to pay, but rates are not.

Therefore, the Government are arguing that they want to reduce the amount of money that the Government pay towards local expenditure—money based on people's ability to pay—in order to increase the amount paid locally, which is not based on people's ability to pay. Surely that is not justified. I challenge the Secretary of State to produce an argument in favour of it. We are to reduce the amount raised equitably in order to increase the amount raised inequitably. That is what paragraph 18 means, and my hon. Friend the Member for Hamilton and my hon. Friend the Member for Glasgow, Central have put the argument very well.

The real trouble about the burden of rating is that as rates increase the inequities become more and more obvious and unfair. If there is a street of houses all rated at roughly £30 and at one end of the street there lives a man who has an income of £20 a week whilst next door to him there is someone living on old-age pension, the more the rate poundage is increased the more the difference and the hardship on the old-age pensioner is accentuated, compared with the position of the man who earns £20 a week. I should have thought that was obvious to the Joint Under-Secretary of State. It is obvious to everybody else to whom I have spoken. What is wrong with our system is that it becomes increasingly unfair the higher the rates go. It ought to be supplemented, at least, by some other source of revenue. As it fails to deal with this, which is the real problem of local government finance in Scotland, the White Paper ought to be rejected.

5.37 p.m.

Mr. I. J. Pitman (Bath)

The hon. Member for Edinburgh, East (Mr. Willis)asked some questions, one of which I think I may answer. He asked how it is that the Minister can claim, and the Treasurer at Edinburgh can agree with him, that this scheme will give the local authority greater freedom in its expenditure. It is perfectly clear that, in so far as it raises rates for itself, the local authority will have 100 per cent. control over the expenditure of that which it raises. It can say, "It is our money and we can do what we like with it." [An HON. MEMBER: "Not true."] Equally, it can say, "The grant is given to us without any strings at all, except for general directions on given points. We can do with that as we like."

Mr. Willis

It is like the freedom of the unemployed man to dine at the Ritz. Everybody can dine at the Ritz if he has the money.

Mr. Pitman

If the hon. Member will pay me the compliment of listening to the rest of the argument, he will appreciate that at present, when revenue is, say, 56 per cent. from national and 44 per cent. from local government sources, the local authority in Edinburgh is at present fully controlled in effect by the central Government. Moreover, it is controlled not only at the stage of grant but at the stage of checking everything that is spent. I think that the hon. Member for Kidderminster (Mr. Nabarro)was wrong in his argument yesterday. He quoted Dr. Lees's book in claiming that this scheme would not give greater freedom.

Mr. Lindgren

The hon. Member for Kidderminster (Mr. Nabarro)gets enough bricks thrown at him as it is. I do not think that he ought to get some which he has not deserved.

Mr. Pitman

I meant the hon. and learned Member for Kettering (Mr. Mitchison). I always seem to confuse the two constituencies.

Mr. Lindgren

There is a difference.

Mr. Pitman

The hon. and learned Gentleman referred to Dr. Lees's book and gave the figures of detailed central control in respect of claims for grants. He apparently does not recognise, as some of us do, the amount of control and checking involved, the number of civil servants who have to be employed after the grant has been passed because of central control. The cases which are examined whether the claim is granted or not involve work at the centre. The moment this White Paper is accepted that necessity for central control and for checking vanishes. [HON. MEMBERS: "Nonsense."] That is undoubtedly the reason why the Minister is justified in claiming this, and the reason why treasurers of local authorities support it and look forward to an ability to do what they like free of the fetters of central control——

Mr. Lindgren

May I ask the hon. Gentleman a question, because this is the crux of the matter. It is argued that in order to maintain a rate of 15s. in the £ a county committee must keep its rate at 9s. in the £. In order to keep its rate at 9s. in the £, because teachers cost 50 per cent. of that, it can employ only 2,000 teachers, which means classes of sixty pupils. Is the hon. Gentleman going to say that the local authority will have freedom to do that and that the Ministry of Education will not intervene?

Mr. Pitman

The hon. Gentleman is dealing with the other issue with which I was about to deal, which is the question of whether there will be more money for local authorities in future or less. That argument has nothing whatever to do with the freedom of the local authority over its rates and its grant and the responsibility of the local authority to spend those rates which it raises itself, and the grant which it receives from the central Government, as it thinks best, subject only to the key directions.

It was the hon. Member for Wellingborough (Mr. Lindgren)yesterday who said himself that it is the desire of the local authority to serve its people, that it wants to give a good service in education, in road safety and in all the other matters raised by the hon. Member for Edinburgh, East who, I am sorry to see has left his place. He asked questions on the register of electors, the question of traffic control, of road safety and residential accommodation under National Assistance. Of course the local authority wishes to carry out a good service, and does not resent the oversight of the Minister in the key point that such services should be adequate for the local population but, subject to that, it will have full freedom to spend the sum of money which it will have in its treasury.

That leads me to the main point as to whether or not this is a fraud and a deception, as the hon. Member for Hamilton (Mr. T. Fraser)said, or a Geddes axe, as I think the hon. Member for Kidderminster said—I have it right this time—[Laughter.] I mean the hon. and learned Member for Kettering. I see the hon. Member for Kidderminster coming in, and I apologise.

The main point is really that hon. Gentlemen opposite do not accept the assurances of the Government that they intend that the total global sum shall be such as to carry out an adequate and progressive local service. After all, if there were a clear indication, and if it was accepted by everybody that there would be such a progressive local service, including education, the N.U.T. and everybody opposite in this House would say, "Yes, the block grant is a jolly good system because there will be more money."

Therefore the argument is entirely on the issue of how much money is to be available and not on the means of how the money is to be raised. If I may liken it to the argument of gardening, if the main issue is that one wants to have a better dug garden, then it is wrong, and misleading, to argue about the quite different issue whether one should dig that garden with a spade or with a fork. Similarly, it is misleading the country and the House to argue whether it should be a block grant or a percentage grant, when the real issue is the question of whether it will mean more money or less money.

Hon. Gentlemen opposite think it will mean less money although the Minister has given us clear assurances that it will mean more money. [HON. MEMBERS: "Not at all."] The Minister of Education's statement has been quoted before in this House and I will condense it, fairly, as follows: …I will never surrender the duties of promoting education … put upon me by Parliament. It must be my duty … to minimise … differences … in the quality of educational opportunity between locality and locality."—[OFFICIAL REPORT, 29th July, 1957; Vol. 574, c. 976.] If hon. Gentlemen opposite do not accept the assurance of the Minister, will they please say that they do not accept it? They ought not to start a smokescreen about the irrelevant issue of how the money is provided, because there is nothing sacrosanct about a percentage grant.

I sit sometimes as chairman of a finance committee of a college of London University, the Institute of Education, where we do not have a percentage grant. We have a quinquennial block grant instead of the biennial block grant proposed here. There are differences, but this proves that it is not true to say that a percentage grant is the only way in which money can be raised for promoting education and for evening out differences. From many years' experience of a block grant operating in university education I can say that it not only promotes education but that it evens up the standards between, shall we say, the new red brick universities and the old traditional and well-endowed universities, Oxford and Cambridge.

Mr. Lindgren

But is there not a difference between university and local authority provision for education? A university does not have to raise rates to get its part of the contribution, whereas a local authority can only raise its contribution from the ratepayer, and if its contribution goes up, rates must be increased.

Mr. Pitman

The university is even worse off than the local authority, because it has no statutory powers to precept money from anyone. It has to raise its own money by seeking charitable donations and, as far as it can, it must justify to the University Grants Committee that it is doing its best to match that which the State is providing in a block grant.

That brings me, then, to the main issue and purpose of this White Paper, the question of dependence or independence. The hon. Gentleman the Member for Wellingborough was trying to have it both ways. It struck me that he wanted central responsibility but with local administration. In other words, he wants a spending "out-station" of the central Government with no true responsibilities. If I had to define independence I would say that a man reaches independence when within his breast is the knowledge that he has to earn and acquire the money to match his expenditure. When somebody is living on an allowance and not raising the money which he spends, he is no better than a dependant, somebody to whom a delegated spending department's job has been given, with no responsibility for that which matters, which is raising money to match that which purports to be the responsibility of himself.

Mr. Lindgren

The hon. Gentleman is giving a definition of a university.

Mr. Pitman

A definition of a university?

Mr. T. Fraser

According to that definition a university is a "dependent body".

Mr. Pitman

So far as a dependent body is concerned, I would agree that universities are becoming more and more dependent on central Government, but that is no argument why local authorities should become more and more dependent on central Government, as they are rapidly becoming more and more dependent at present. That is the issue. As we get nearer and nearer 100 per cent. being provided by the central Government, so we get greater and greater dependence. One's independence is undermined, one's control is undermined. Hordes of civil servants have to check every item of expenditure because we in this House, for the sake of the taxpayer, rightly insist that no expenditure shall take place which is not vouched for competently, not by the local authority, but by the central authority.

We are all taxpayers and we are all ratepayers. I cannot understand why the electors of an advanced local authority, which has a good education system, should have any objection to paying for the service which it provides for their own children. I cannot understand why such electors should prefer to pay as taxpayers and in a larger sum. The money still comes out of their pocket; it may be a different pocket, but they still, as the same electors, have to pay for the service. I cannot understand why they should prefer to pay not only for their own children but for an evening-up in the case of other authorities which have in the past been less progressive. I cannot understand why people should prefer to pay through us in the House of Commons in national taxation rather than through their local councillors by means of their local taxation, seeing that the latter costs them less and gives them a better and closer connection in regard to their own children with their local councillors and also a closer oversight of local expenditure and the value which they get from it.

I am afraid that the only reason why the astonishing state of affairs should have come about—that people prefer to pay more money in taxes rather than less in rates while in the latter case they also have better control over the money—is that there has grown up a gradual contempt of local authority because of a growing recognition on the part of electors of a failure in responsibility. Local councillors recently have tended to shrug off their responsibilities by saying, "Look what is wished upon us by the central Government. The rates are high. It is not our fault. Look at the Acts passed by the gentlemen in Westminster." In that atmosphere of irresponsibility, it is hardly to be wondered at that they do not get the respect for themselves, for the rates and for local government which is essential for them to justify the collection of money from local people for the education of the children of local people.

It is undoubtedly true that rates are unpopular, and yet they are very easy to collect. Every treasurer will tell one that he has less and less difficulty in collecting rates. I know one other reason why taxation is deceptively acceptable and rates glaringly unpopular. It has been mentioned several times. But let us take the two houses, assessed at £30 a year, adjoining each other, which were instanced earlier. Let us say that one is occupied by a man earning £1,000 a year. He may have a son and a daughter also earning, and a very decent income may be coming into the house. We were told that next door there was an old-age pensioner, presumably living on National Assistance. Why is it not right that the man earning £1,000 a year should pay more in rates? Why is it wrong that he should not pay his fair share for the education of his children? After all, is it not clear that if the rates are to be raised for the house of the man who is already on National Assistance, they will be borne, quite properly—all hon. Members will be proud of it—by the National Assistance Board.

This proposal being debated today is a great challenge to those engaged in local government. I believe they are capable of accepting the challenge and of raising the money to match the grant and to keep step with the services which they wish to give. It is hon. Members opposite who are impugning them, in effect saying that local government is so weak, gutless and poor that it cannot give a decent local service to its inhabitants and cannot raise the money that service requires although it is to be most generously supplemented, more generously supplemented by a block grant from the taxpayers than it has been in the past.

5.55 p.m.

Mr. William Hamilton (Fife, West)

The hon. Member for Bath (Mr. Pitman)is, I believe, a sponsored Member for the National Union of Teachers. I wonder whether he agrees with the document which the N.U.T. sent out?

Mr. Pitman

As this is a personal matter, perhaps I might interrupt the hon. Gentleman. When he says "sponsored," I hope he does not in any way assume any financial sponsorship, because I can assure him that that is not so. I have done what the National Union of Teachers have asked me to do, and done it without any remuneration to myself or my associates.

Mr. Hamilton

I appreciate that, and understood it, but the hon. Member is wrong when he says that he is doing exactly what the N.U.T. wants him to do.

Mr. Pitman

It was at the General Election.

Mr. Hamilton

That is rather different. The hon. Gentleman seems to see no difference between whether the services are paid for by ratepayers or whether they are paid for by taxpayers. That is the whole point of our argument, that the rate payment is a regressive local tax and that taxes imposed by a progressive Government are, generally speaking, progressive taxes.

It is significant that in a debate which was to have been devoted to the Scottish side of the business until 7 p.m. we have had a speech from only one Tory back bencher. At times during the debate only one Tory back bencher has been present. It is significant that the hon. Member for Fife, East (Sir J. Henderson-Stewart), who was formerly responsible for education, and is by far the most capable representative of the Tory Party on that subject in the House, has not been present during the debate. The right hon. Member for Kelvingrove (Mr. Walter Elliot), who is also vitally interested in education, rather significantly——

Mr. Walter Elliot (Glasgow, Kelvingrove) rose——

Mr. Hamilton

The right hon. Gentleman has come in and out. He has just walked into the Chamber and has heard me refer to him, and——

Mr. Elliot rose——

Mr. Hamilton

I will give way in a moment. Until I make my point I shall remain on my feet. We acknowledge that the right hon. Gentleman takes a vital interest in education, and I was about to say that it is rather significant that he has made no attempt to take part in the debate and to defend the proposals in the White Paper.

Mr. Elliot

My hon. Friend the Member for Fife, East (Sir J. Henderson-Stewart)asked me to say that he is fulfilling a long-standing engagement and that it is impossible for him to be here. He greatly regrets not being able to be here. He is fulfilling an engagement outside the House in connection with education, and he could not break it. As for myself, at 6 p.m. I have to attend a meeting of the Committee of Privileges of the House, and, consequently, I thought it would be discourteous to enter into the debate when I should thereafter have to desert the Chamber. It is only because of that that I have not sought to speak.

Mr. Hamilton

I certainly accept that, but I presume the right hon. Gentleman does not have thirty-six apologies from other hon. Friends of his who have not chosen even to attend the debate.

An even more significant fact is that the only Government back bencher representing Scottish Conservative interests who has spoken is the hon. Member for Pollok (Mr. George). This afternoon a Question was asked about local councillors voting or not voting in matters in which they have a vested financial interest. The hon. Member for Pollok is the chairman or managing director of no fewer than five companies which are vitally concerned in the derating proposals in the White Paper. The companies with which he is concerned will pay only half their rates. I should have thought that it would have been the decent thing for him to have declared his interest in the matter.

The Government say in the White Paper that they have found no acceptable basis for broadening the basis of local government finance. We on this side, have a method of broadening the basis—by completely rerating industry. I presume that the hon. Member for Pollok would support us. Presumably, he wants to pay the fair price for the service that these companies get. The Labour Party is committed, of course, to the full rerating of industry, and I hope that we who belong to that party will carry it out expeditiously in the very near future when we get back after the next election.

I would agree with the hon. Member for Pollok to this extent, that I question the advisability of introducing this White Paper at all at a time when we are revolutionising the rating system in Scotland. The timing of it leaves a great deal to be desired. The same hon. Member accused us of pernicious propaganda in just explaining what the Government are doing. He said that his constituents do not know what is in it for them. I hope that they do before the next election—the hon. Gentleman will not return here if they do.

The rather curious argument produced by the hon. Gentleman and by the Government Front Bench in justification of these measures is that it is part of the plan to awaken interest in local authority work and to destroy apathy. The hon. Member for Pollok said, "Raise the rents and raise the rates—that will destroy local apathy." Presumably, we will get 100 per cent. of the electorate going to the polls next time if the rates are put up high enough. That is the argument, and, of course, we are working that way. The Private Bill which was introduced this afternoon was another plan to destroy apathy in the trade unions; part of the same little story.

This debate and this White Paper make a mockery of democracy. Not only have we had complete indifference displayed by all Conservative back benchers—with the exception of two or three—but we have had a mass of responsible opinion up and down the country, and a mass of responsible educational opinion, local authority associations, educational associations—not all, by any means, of the political persuasion of this side—all condemning these proposals.

The hon. Member for Bath contended that these proposals meant more money. It is a rather curious reading of the situation. At a time when the Government are being pressed by their own supporters to cut expenditure, they are actually going out of their way to introduce complicated proposals to increase expenditure. In point of fact, the Chancellor of the Exchequer made it quite clear in February. He said that this Measure …should introduce a stabilising influence in the central Government's contribution to local expenditure."—[OFFICIAL REPORT, 19th February, 1957; Vol. 565, c. 210.] A week earlier, on 12th February, the Minister of Housing and Local Education admitted that under the present system …there is no certainty from year to year what the Exchequer may be called upon to contribute."—[OFFICIAL REPORT, 12th February, 1957; Vol. 564, c. 1078.] The White Paper reinforced that by saying: It is most important to reduce this dependence of local government on Exchequer grants if it can possibly be done. The hon. Member for Bath referred to the present Minister of Education, and past Ministers of Education have repeatedly referred to rising educational costs. The Scottish Office made a boast of the rising costs of education, and I think that this proposal might well be a measure of the Government's decision to withdraw from the unpopular responsibility of incurring these increasing charges: because education, although the public are becoming more and more aware of its importance, has still a long way to go before it is a popular thing on which to spend money.

It is not an election winner to say that one intends to spend a lot more on education. The Government realise that and are contracting out of it. They are saying, "Let the local politicians fight it out amongst themselves"—and that is precisely what will happen. We shall have local authority committees fighting one against the other, and we well know that the committee that will come in for the biggest measure of attack will be the education committee. That, undoubtedly, is true.

I think the right hon. Gentleman is right when he says that there has not been uniformity of development in education—nor would one wish it—but there will be a much greater unevenness of development as a result of these proposals, because it is the green light to the reactionary authorities. In the Fife County Council, where, at the moment, we have a very tenuous Labour majority, the Tory members are continually nagging at the education committee and the finance committee to cut out some of the fol-de-rols—to use the expression of the hon. Member for Fife, East—in the educational system. I do not think that it will happen, but if, subsequently, we got Tory control of the Fife authority we should see just what would happen.

I should like to refer to another aspect of the situation. I have here an extract from a speech made by Lord Aberdare. I do not think that Lord Aberdare is a member of the Labour Party. This is an extract entitled The Youth Service is in Grave Danger. I have reason to believe that the Treasury want to see the youth service, if not abolished, certainly very much reduced, and if the reactionary local authorities see the opportunity they will get rid of the youth service with the actual connivance and consent of the Treasury——

Mr. Willis

And of the Secretary of State.

Mr. Hamilton

Yes, and of the Secretary of State.

I think that the right hon. Gentleman must admit that the obvious intention of the White Paper is to cut Government expenditure. The local authorities will be faced with the three choices enunciated by Lord Aberdare: (a)to increase rates; (b)to cut services, or (c)to compromise between the two. That statement of purposes is brutally clear. My hon. Friend the Member for Hamilton (Mr. T. Fraser)quoted the Geddes Committee, and the May Committee made exactly the same recommendation. Whenever the percentage grant has been abandoned, or its abandonment has been advised, it has been only in times of real national crisis or when the Government have been determined to cut down expenditure. Both the Geddes and May Committees were notorious with their recommendations of severe educational cuts.

Despite the speech of the hon. Member for Pollok, and despite the assurances of the Scottish Office Ministers, I am not at all optimistic about the prospects of the educational service in Scotland. Why should I believe what the Scottish Ministers tell us? I have no reason for believing them, because we know what the record of Scottish education was between the wars and in the last thirty or forty years. Why should we believe in their good intentions in these matters? They are being prodded along all the time by public opinion. These proposals have been produced at the very time when the birth rate bulge will be having its maximum effect in the schools, in the early 1960's. These proposals are being produced at such a time, and I have great doubts as to the Government's good intentions.

There is no doubt that the reactionary local authorities are being given the green light by these proposals, and I believe that the Government will live to regret that they have produced them without mandate and without the support of the country.

6.11 p.m.

The Joint Under-Secretary of State for Scotland (Mr. J. Nixon Browne)

As the House knows, it was not originally intended that I should intervene, but in view of the way in which the debate has gone and the exploratory speeches which have been made, I think that hon. Members opposite would like answers to certain specific questions, and would wish me to speak shortly.

The hon. Member for Hamilton (Mr. T. Fraser)started by being somewhat coy about saying what he really thought. He asked my right hon. Friend if it was all right to say what he really thought about the Government's proposals. I want to make it quite clear that what the Government want are opinions—whether hon. Members are opposing the policy as a whole or are suggesting amendments to the Government White Paper—and I was glad that the hon. Member tended to lose his shyness towards the end of his speech.

He said that most people regarded national taxation as more equitable than local rates. He called them a tax upon living accommodation. I think that we should be a little careful about the generalisations which are being thrown around today. I would reply that we all live in houses, and that in some way or another what it costs us is reflected in the rates. Where does his line of thought take us? It takes us to locally elected councillors spending nearly all taxpayers' money. This is something that neither he nor we would want. We have to stop somewhere, and that is the challenge.

He talked of local taxation as capable of expansion. I do not blame him; it is a fascinating subject, upon which I have read very voluminous books and papers. I agree with my hon. Friend the Member for Pollok (Mr. George), that it has not been practicable to fine a new source. It has not been for want of trying. Other countries, with different conditions, have various types of local taxation and I, personally, am satisfied that we should like to find a new source. It would cheer things up for local authorities and for all concerned.

Mr. Willis

If that is really true, would not it at least have been proper for the Government to have given the House their reasons for rejecting all these schemes?

Mr. Browne

The hon. Member has made that point before. I shall come to it in its more logical sequence in my speech. The hon. Member for Hamilton also suggested the transfer of various types of national taxation to local taxation. He knows that that is not too easy, for many reasons—primarily because of the cost of collection. But this matter has not gone by default.

The hon. Member then went on to enumerate the Government's housing legislation. I thought that he made a very good speech at this point. It was clear to him that the Government had a policy. They were really getting on with the job. He might have said that the 1956 Act gave Scottish local authorities an additional £2 million in Exchequer Equalisation Grant. I hope that what happens over the matter that we are now discussing will not be the same as that which happened in regard to the rest of the Government's Scottish housing legislation, in that it was subjected to a great deal of misinterpretation. I can assure the hon. Member that he will not fool the Scottish people if he attempts to do so.

I do not agree with my hon. Friend the Member for Pollok that we have tried to do too much too quickly. What we did is what the constituencies sent the Government into Parliament and power to do. The country wanted action and not words. We can leave the words to the party opposite.

The hon. Member for Hamilton asked whether my right hon. Friend was proposing to give up his default powers. I think that I should answer that point at once. In his speech my right hon. Friend made it clear that Section 66 of the Education (Scotland)Act, 1946, which enables him to require an education authority to discharge its duty, will be retained, although he hoped that this power would not be exercised. The hon. Member for Glasgow, Central (Mr. McInnes)and the hon. Member for Edinburgh, East (Mr. Willis)asked, "Who carried out this review for Scotland? Who produced this White Paper?"

Mr. McInnes

Does the hon. Member know himself?

Mr. Browne

Hon. Members opposite always knew. The review was carried out by the Ministers and Departments concerned with local government. My right hon. Friend has presented and is responsible for the White Paper.

Mr. T. Fraser

So it was not done by a responsible body at all.

Mr. Browne

The hon. Member for Edinburgh. East seemed to resent this opportunity being afforded by the Government for Parliamentary discussion at the initial stage of a very important issue. I hope that I am wrong, but that was what he seemed to be saying.

Mr. Willis

I did not resent our discussing it. What I resented was the Government asking us to discuss it without providing us with any of the evidence, arguments or reasons for reaching their conclusions.

Mr. Browne

That is the first time I have heard the hon. Member short of arguments or reasons in connection with any matter in this House. He went on to make fun of my right hon. Friend for following the example of England. That is just not true.

Mr. Willis

That is what has been done.

Mr. Browne

The proposal is for a separate Bill for Scotland, and I have no doubt that in Committee—I hope not in the chilly watches of the night—there will be an opportunity to discuss this matter in the greatest possible detail.

Then the hon. Member for Glasgow, Central lost £1 million.

Mr. McInnes

No, I did not.

Mr. Browne

Yes, the hon. Gentleman did. He lost £1 million and was worried about it. The Answer to a Parliamentary Question mentioned £5.9 million, and the White Paper mentioned £6.9 million. I am surprised at him. He, if anyone opposite, knows the difficulties of local government. The reason is that full rerating produces £5.9 million, and the reason rerating to 50 per cent. produces £2.3 million is that, assuming rate-borne expenditure remains constant, the rate poundage will fall as rateable value grows. If industry were fully rerated it would be paying at a lower poundage than if it were partially rerated. That is the answer.

Mr. McInnes

Surely the hon. Member must recognise that the figures given in the White Paper, which totalled £6.9 million, refer to precisely the same period as the figures given in the answer in HANSARD, namely, the year 1956–57. Therefore, there cannot be any rise.

Mr. Browne

If the Answer in HANSARD had been framed in a different way—[HON. MEMBERS: "Oh."]—I must withdraw that. If the Question had been framed in a slightly different way, the Answer would have been the same. The hon. Member for Edinburgh, East said, "Shall we forgo the Goschen formula for education?" That is a very important question. In determining the first amount of general grant one of the factors to be taken into account will be the amount of education grant for the preceding year, which will have been fixed on the eleven-eightieths basis; but the total of the Scottish general grant will not be a fixed proportion of eleven-eightieths of the English general grant. The general grant will include elements which have hitherto not been fixed on the eleven-eightieths basis.

Mr. Willis

That is a pretty smart answer, but it does not really answer the question.

Mr. Woodburn

The point is, would it be less favourable or more favourable in the future than in the past?

Mr. Browne

I have no reason to suppose that any division between England and Scotland will be less favourable to Scotland in the future than in the past. One of the duties which my right hon. Friend puts first among his duties to Scotland is to see that we get a square deal, and sometimes we should be grateful to the English that we get a square deal.

Mr. Ross

Is it envisaged that coming legislation will remove the Goschen formula?

Mr. Browne

No, since the very fact of a general grant will mean that the Goschen formula will remain as the initial factor in the initial calculation which will carry through in subsequent calculations.

Mr. Ross

That is no answer to my question. Surely the hon. Gentleman knows that as each year passes the general education grant in Scotland is based on what is spent in England and not on Scottish needs at all. Of whatever has been spent in England, we get eleven-eightieths.

Mr. Browne

I do not want to dodge this issue, but if the hon. Member will read my reply, he will see that it is impracticable to retain eleven-eightieths of an indeterminate figure which is indeterminate in England as well as in Scotland. One must remember that as it will be in the initial calculation, and as my right hon. Friend is there to look after Scotland's interests, there is no reason to suppose that Scotland will lose.

The hon. Member for Edinburgh, East asked about the abolition of the grant for highway engineers and surveyors. This grant was originally introduced in 1919 to give the Minister of Transport a means of inducing local highway authorities to employ properly qualified men as road surveyors. The need for that inducement has now passed. The grant is paid only on the salary of the county surveyor himself; and thus in most cases it is a small proportion of the expenses of staffing the county surveyor's department.

The hon. Member for Edinburgh, East raised yet another point—the points he raises are always good—about paragraph 9 of the White Paper. He was worried about that paragraph and the assurances that the grant would be related to current circumstances. The hon. Member asked what were the unforeseen increases of such magnitude as would justify an interim increase. I do not wish to dodge the answer to his question, but he should have no fear. As in the case of the elephant, I am not able to describe it, but I am quite sure that when I see an unforeseen increase of the requisite magnitude, I shall recognise it.

The hon. Member for Fife, West (Mr. Hamilton)and the hon. Member for Hamilton, as well as the hon. Member for Glasgow, Central and the Association of County Councils, made two important points. They do not agree with re-rating to only 50 per cent. That was dealt with at length by my right hon. Friend yesterday and to some extent again today and I do not propose to refer to it. It is a matter of judgment. We are an exporting country. There is nothing sacrosanct about 50 per cent. Hon. Members may, quite properly, hold different views.

They do not agree to not receiving the whole product of re-rating whatever it may be. It is asked, even if it be 50 per cent. why should not local authorities have the lot? This is a proper conflict of interest between the taxpayer and the ratepayer—between one of my pockets and the other. If industry is to be re-rated why should the taxpayer lose, as he will, in Income Tax, Surtax and Profits Tax to the extent of 50 per cent. of the amount of increased revenue? There is no reason at all, and no one thinks that he should. That leaves a balance of 50 per cent. of new revenue and is it so inequitable that the taxpayer, who now contributes more on average to local authority services than the ratepayer, should retain only one-third of the surplus new revenue obtained from rerating and the local authorities should get two-thirds? I think it an eminently fair deal all round from the point of view of Scotland—and any proposal to give Scotland an extra £750,000 is not to be lightly set aside.

As was said by my hon. Friend the Member for Pollok, the proposals for a general grant contain adequate safeguards for the protection not only of the system of education, but for our system of local government. Increasingly local authorities have been in danger of becoming no more than local offices of central Government. The cry, "The man in St. Andrew's House knows best", has been echoing more and more loudly down the corridors of the city chambers and the town houses. This has been going on for many years and was accelerated by the party opposite during its term of office. As I have told the hon. Member for Hamilton so many times before, we trust local authorities a little more than hon. Gentlemen opposite do.

Mr. T. Fraser

The hon. Gentleman gave me a different answer last night when I was asking him to trust them.

Mr. Browne

That is a very minor matter. We are here to reverse the trend. I applaud the courage and foresight of the Government in proposing these measures. The hon. Member for Fife, West said that these proposals were making a mockery of democracy but if nothing is done soon it is local democracy that will be a mockery.

Mr. Woodburn

Apart altogether from the question about how far we are extending the powers of local authorities to manage the money, does not this mean that the Government will make sure that local authorities have less money to manage?

Mr. Browne

As a result of these proposals local authorities in Scotland will get £750,000 more.

6.27 p.m.

Mr. Herbert Morrison (Lewisham, South)

I hope that by speaking now I am not cutting short the debate on the Scottish aspects of these White Papers. I understand that there is a certain unwillingness to speak among Conservative Members opposite who represent Scottish constituencies. That surprises me in view of the importance of the subject. But as the Joint Under-Secretary of State for Scotland has now spoken I think it right to resume the debate on the English aspects of the matter.

There is no doubt that the subject we are debating is one of great importance. Not only is local government a part of our democracy, but it is a vitally important part. If we add up the functions, activities and powers of all the various authorities in our country, and particularly if we relate them to the daily lives of the people, there can be no question that the work of local government is just as important as the work of Her Majesty's Government and this House.

Our democracy owes a lot to local government. It grew up side by side with the slowly developing Parliamentary institutions. Indeed, it grew up before them, if we take into account the justices of the peace and the various commissions which were appointed. There have been changes, because it is now true that local authorities act substantially under Parliamentary authority, and roughly, if not wholly, within the limit of statutory enactment. Therefore, in a sense, they are subject to more Parliamentary authority than they were in those early days, although they were then subject to arbitrary interference from absolute monarchs.

There have been tendencies in the twentieth century to confer all the new powers in local government upon counties and county boroughs rather than upon county districts or metropolitan boroughs. The White Papers are in conflict with these tendencies, but I am not saying that they are wrong. That has been true outside London with maternity and child welfare, which went to the counties, although in London it originally went to the metropolitan boroughs. It was true of town planning and public assistance and it became true of the fire services when they were returned to local government after the war.

There is a reason for this. Communications, tele-communications and road services have made county government more practicable than it was. Moreover, Governments have felt that they got a more efficient system of administration in counties and county boroughs than otherwise. On the other hand, it can be argued that the smaller authorities have a closer contact with the people and are nearer to their domestic life. It may be that, in some respects, this change is to be regretted.

As a war-time Home Secretary and Minister of Home Security I owed a debt of gratitude to the counties and county boroughs, who did a great job. I also owed a debt of gratitude to the county districts and the metropolitan boroughs, who were close to the people in trouble and were of great value. Their general level of efficiency was pretty high in Civil Defence administration.

The question that the House of Commons is partly discussing is whether the general structure of local government is wrong. We have to face the fact that behind the counties and county boroughs is a long history. It is no good scorning the great counties of England, Wales and Scotland; they are real things, and in any system of local administrations account must be taken of them.

The same is true of county boroughs. Nobody could ignore or set aside the autonomous existence of great cities like Birmingham, Manchester, Liverpool, Leeds, Bradford, Glasgow, Edinburgh, Aberdeen, Dundee—I had better put in all four of the great cities of Scotland to avoid trouble—Stoke-on-Trent, Gateshead, Newcastle, and Canterbury which has just received county-borough status. These are real things, part of our history, whether county boroughs or counties. The reformer is sometimes inclined to be a bit rough with them, their integrity, their boundaries and their functions, but, believe me, when it comes to doing the things that some reformers want to do we find that the reformers had better think again.

It is a good thing that these historical traditions should be a political and administrative reality in our country. The county districts are relatively modern; that is to say, they did not start until about 1894. The metropolitan boroughs are relatively modern; they did not start until the Act of 1899. They have discharged important functions and have done good work.

There is too wide an assumption, cutting across political parties, that there is something basically wrong with the structure of British local government. I do not accept that. The illusion largely starts from the point at which people become enthusiastic about a particular service and then want to find a local government structure which will fit that particular service. We cannot do it. Nobody can find a local government structure that will fit every conceivable locally administered service.

Take town planning. We can make arguments either way, according to the side of policy we are on, for the ideal administration of town planning control and regulation. We can argue that it ought to be with the county districts on the ground that the people near the area to be planned or regulated know more about it than the people at the county hall some way away. On the other hand, we can take the view that we need a wider horizon in order to settle these things, and that it is not only town planning but is town and country planning. One of the great purposes of town and country planning is not merely to regulate and encourage building, but is to stop building in a good many places so as to preserve the green areas of our country. It is one of the dangers of some local authority administration.

I remember that I came to the conclusion years ago that some of the great boroughs of our country wanted nothing more than to spread and increase their populations. They had two great boasts, one that they had the biggest population in their county, or at any rate bigger than somewhere else, and the other that they paid their town clerk a higher salary than any other borough in the county, or even in the whole country.

The ideal of spreading to make the population greater was not a thing to be proud of, but to be ashamed of. We ought to have preserved a reasonable size of urban development and to have insisted upon a green belt around these towns in order that the countryside should be available within a reasonable distance to their people.

Whatever area we take for town planning there will be fringe arguments. Any area must meet the town planning authority of some other area, whatever is the nature of the authority. Then there has to be reconciliation between the two areas and the system has to be operated. My hon. Friend the Member for Norfolk, South-West (Mr. Dye)mentioned a joint committee and the need to create a third-tier local authority for town planning. I do not think there is, particularly if it is an undemocratic authority. It is no good complaining in Parliament about the complication of local government and then trying to introduce a third element into local government structure.

My submission is that the appropriate man to settle these borderline troubles and to keep an eye on the comprehensive planning of the country as a whole, as well as on regional planning, is the Minister of Housing and Local Government, either by himself or through his regional planning officer. I believe this is very largely done. I remember that the late Sir Kingsley Wood, when Minister of Health, sent for me as leader of the London County Council. He wanted to set up, as he eventually did, a regional, consultative planning authority for greater London and he wanted me to help. I said that I would, but I added, "This is really your job. If London puts in a plan, Middlesex puts in a plan and West Ham puts in a plan, it is for you to say that they want tidying up and to ask the authorities to make this or that adjustment."

The argument that we need a special authority for town planning breaks down because the problems and the tasks of co-ordination are the business of the Minister of Housing and Local Government. To some extent, it is similarly the case with sewerage and drainage, although there the county can be useful. There can be voluntary or Ministerially-directed co-operation between local authorities, or there may be joint committees of local authorities. I make no secret of the fact that I am not in love with joint committees. I think that if we can avoid them, we should do so. London is afflicted with a whole mass of ad hoc specialist authorities, and I have used the most violent language against them in the course of my life. I do not like them, but sometimes they cannot be avoided, and then we must put up with them.

It was this problem which we met in connection with hospitals when the Labour Government were considering the National Health Service Act, a subject upon which my hon. Friend the Member for Tottenham (Sir F. Messer)knows such a great deal. There was the argument that some of the counties, and certainly son-le of the county boroughs, had not got enough hospitals to make a job of it, and in the end the hospitals were nationalised. I will be quite frank with the House and say that I was sorry about it I did not want the local authorities to lose their hospitals. I thought that the local authorities were bound to suffer enough in losing gas, electricity, and so on, and from the possibility of losing some more of their economic services, but I was sorry about them losing their hospitals.

I give this tip to the Minister. I would like them to go back to local government. I think the Government might keep the teaching hospitals, the scientific and research laboratories, and, possibly, the function of supplies, which they could do economically. I should have thought, however, apart from this sort of thing, that the ordinary day-to-day management of the hospitals could be the function of the appropriate organs of local government.

I shall never forget Sir Miles Mitchell, a veteran Liberal of the City of Manchester, who used to be prominent in the Association of Municipal Corporations and used to come to see me, whatever Ministry I held at the time, considering that he had a sort of right of entry as a local government man. He used to say to me, "Morrison, all Governments are killing local government by a thousand cuts." There is something in it, in view of the transfers of functions which under all Governments have tended to take place from local government to the State. Howevcer, I had better leave that point, or I shall be getting into trouble with the Chair.

Now it is proposed that we should have a third tier—another authority—in order to meet the point of view of the enthusiasts and the specialists who say that the county district is no good for certain functions in which they are interested, that the county council is not big enough, and that even the county borough is not big enough. So we should have another authority. The Minister is already flirting with that idea, I gather from the White Paper. The Labour Party has done some flirting with it, but it is not yet committed to it. It put it out as a sort of debating measure for people to take note of, in the famous Parliamentary phrase, which is a very useful one.

This idea is to set up a third, somewhat bigger area local authority, if the word "local" is the right word, which I doubt, which will take on planning, technical education, sewerage, drainage and, I think, possibly a few other subjects. This would mean an invasion of the functions of local authorities like the great corporations of Edinburgh, Glasgow, Dundee and Aberdeen, Leeds, Liverpool, Manchester, Birmingham, and so on. I doubt whether, when it comes to the point, these boys are going to put up with it. I do not think so, nor do I think it is desirable. We must solve it in another way, by Ministerial co-ordination, or in the exceptional case we must try to build up co-ordination through joint committees.

Now we have invented a new language of local government. We hear about "mass conurbations." The Minister called it something else, and I would call it an urban sprawl, which is what it is. Why cannot the Government call it that? I give them the idea. We have a new language in the discussion about local authorities. Some are to be "most purposes," some are to be "all purposes" and some are to be "some purposes."

Mr. Percy Wells (Faversham)

Or no purpose?

Mr. Morrison

My hon. Friend the Member for Faversham (Mr. P. Wells)says "no purpose." Can we understand anybody dying in the last ditch in the name of civic patriotism for a "most purposes" authority? One can understand people dying in the last ditch for a great city like Birmingham, as I myself would be prepared to die in the last ditch for the London County Council and for London to exist. I can understand some urban districts dying in the last ditch, and I know at least half-a-dozen metropolitan boroughs for which people would die in the last ditch, but for an "all purposes" authority, much less a "most purposes" authority, and, even less still, a "some purposes" authority, no.

I hope that we can get rid of this nomenclature, which is foreign to British traditions and is foreign to the highest traditions of local government. Whether they are to be elected or not, I do not know, and nobody else does. Everybody is complaining that there are so many local government elections that we cannot get people to go to the poll, and I do not see the point of inventing another one in which elections may take place. This means taking away substantial powers from local authorities which they will not like, which they will resist and which they will be right to resist. I hope to be here to help them to resist.

I doubt whether the assumption which everybody—perhaps not everybody, but a lot of people—are making that there is something wrong in a big way with local government structure and administration is correct. If we are to have this Commission which the Minister is thinking about, it may be right for it to examine the county boroughs or even the creation of county boroughs, but we need to be very careful. There must be adequate Parliamentary checks on all this. I am not saying that I would object to the creation of each and every county borough, but we have to consider the effect on the administrative county when it is done. If we started on a county like Middlesex, we would not know where we should stop, and there might be no county of Middlesex left at all.

I agree that the boundaries of county districts and of the Metropolitan boroughs can be the subject of useful and fruitful examination by a Commission. I think that this can be done, with even minor adjustments of county borough boundaries. Boundaries cannot be ideal for every purpose, and I agree that they ought to be capable of adjustment. I think the Minister's idea of a local government Commission is a good one. He has changed the name, perhaps for fun. It used to be called the Boundary Commission, but I will not quarrel about a name. I think it might do useful work.

However, looking back on it, I feel sorry that the Boundary Commission under Sir Trustram Eve was abolished, because it was doing the job in a nice way. It consulted the local authorities and got their good will. I think that the country was indebted to Sir Malcolm Trustram Eve and his colleagues for the work they were doing. I do not understand why the Commission was abolished, but I may find out. That work will be resumed, and I think good work will be done.

The Prime Minister proposes, and Her Majesty has assented to the appointment of, a Royal Commission on London government. It will consider greater London, which comprises the whole of the administrative County of London, the whole of the administrative County of Middlesex and a number of other districts and a cut through the territories of other county councils in the Home Counties. I do not want to comment upon it or to prejudice the findings of the Commission. That probably might be wrong although it is a free country and I could do so. There was a Royal Commission once before. It was set up on a petition of the then Conservative London County Council. It sat for quite a time. I gave evidence. I do not recommend hon. Members to look up the evidence because it was very extreme. I wanted to gobble up Margate, Ramsgate and Southend and make them all one authority, partly in order that we could run the transport system as a municipal enterprise. I do not promise to adhere to the point of view which I put before the Royal Commission.

The Royal Commission reported, but it was not much use because nearly all the Commissioners disagreed with each other. I hope that the Minister will have better luck with this one. I also hope that these Commissioners will be wise and will report sensibly and rationally, but they might find that there is not so much that can be done about Greater London. If they try to have one great authority they may find the problem, as I found it, that then it would not be Greater London any more; it would be regional and, so to speak, a Parliament. In local government elections I used to run a poster campaign for a Parliament for London. I do not think we are ever likely to get that. If we were, what should we do with the Scots and the Welsh in their claims for separate Parliaments? The Commission might recommend changes or it might not.

I think that one of the sad things is that the Corporation of the City of London never wanted to grow. It was so happy as it was. It was having a nice time, and it does have a nice time. It is about the only local authority in the country that has never tried to collar anybody else's territory. That might be counted to its credit or thought to be due to the fact that it was so busy with hospitality, dining and wining, that it did not want to be disturbed. I have had a vision that there should be a merger between the London County Council and the Corporation of the City of London—I will put that the other way about and make it more attractive to the City. That would give London a dignity.

What a dreadful thing it is that the chairman of the London County Council, or the chairman of any county council, is "Mr. Chairman". It is a miserable title. I tried to get more than one Government to allow the chairman of the London County Council to be the Lord Lieutenant of the County for the time being. Then, when he lost his office as chairman, he would lose his office as Lord Lieutenant. He would be addressed as "My Lord Lieutenant", which is nearly as good as "My Lord Mayor".

County Councils are treated in a way which is not dignified. If we could get a merger between the Corporation and the County Council the chairman would be the Lord Mayor. If the Council were to do all the hospitality that the Corporation of the City of London does it would become altogether inefficient, but I have a scheme. My proposal is that the function of entertaining—which is considerable in the City and very useful to all sorts of people, including Governments from time to time—should be left to the aldermen. The councillors should be cut clean out so that they could get on with the work.

There is London with its Metropolitan boroughs and there is Middlesex with its county districts, which are not materially dissimilar from Metropolitan boroughs. Their functions are not quite the same, but they are much the same. I wish the Minister luck with his Royal Corn-mission and shall look forward with great interest to its Report when it comes out. I will leave the argument between counties and county districts to others who are more directly familiar with that aspect of the problem. I would only say that probably there are arguments both ways.

I now come to local government finance. The argument of the Government is an attractive, nice, local government, emotional argument. It is that what they are really aiming at and the great thing with which they are really concerned is to bring greater freedom and independence to local government. With great respect, although that may be so a little here and there, fundamentally that argument is bosh. The argument varies and the present relationship between the State and local government varies enormously. The State has powers to deal with a local authority if it does not behave itself. I think it rightly has those powers. If a local authority does not behave itself, abuses its powers, is corrupt, utterly irregular and inefficient, I think it is still the case that the State can appoint commissions to deal with it. It did so in the case of West Ham and Poplar—not quite for those reasons, I had better hurry to say.

Mr. C. W. Key (Poplar)

It did not do so in the case of Poplar.

Mr. Morrison

That was another charge, which I have every reason to remember. That got me into trouble as well. My right hon. Friend the Member for Poplar (Mr. Key)is quite right. Poplar Council did not have commissioners; those concerned only went to prison. There is an extreme power to put a local authority out of business altogether. That power will remain because in these White Papers I do not see any proposals to get rid of such powers.

The power to put in commissioners, or a commissioner, has been exercised in Coventry and in the Metropolitan Borough of St. Pancras in relation to Civil Defence. As the House is concerned with national defence, and so on, it is for this House to decide what provision should be made for Civil Defence. That is not a thing which a local authority is in a position to decide. Therefore, I think that Coventry and St. Pancras were in error, although I am sure they meant well, in deciding to disband their Civil Defence organisations. As a good neighbour and a Socialist, I think that it is a good thing to be ready to help those who are in trouble.

It is no good the Minister looking innocent as an emancipator from State control when he and his colleagues have all the power to control. What are they doing about the police? They are keeping the percentage grant. The Parliamentary Secretary to the Ministry of Education—why that Ministry has changed its name I do not know—had a curious argument last night. I believe the argument is utterly untrue. I do not know where the hon. Gentleman got it, but if he got it from the Home Office he can tell the Home Office that it ought to be ashamed of itself for fastening such a silly argument on to him.

I will tell the hon. Gentleman why the police grant is a percentage grant. It is in order that the Secretary of State and the Home Office officials can keep a firm hand on local police forces in the country. I am not grumbling about that. I have been Home Secretary and I know how desirable it is for the Home Office to have a firm hand on chief constables, watch committees and standing joint committees. The police is essentially a service which must be national in its functioning, but, nevertheless, is rightly under local control, London always excepted; for in London, although we pay the same rates towards the police service as does anybody else, we have no control over it at all and we shall not get control. That is the position, although London is the seat of Government. I held views about this before I became Home Secretary.

The purpose of the retention of the 50 per cent. grant for the police is essentially to keep firm Home Office control over the police services of the country. The Parliamentary Secretary to the Ministry of Education ought to be the apostle of knowledge, ought always to be right and ought never to be wrong. Why did he swallow the nonsense which was served up to him either by an inspector of schools at the Ministry of Education or by the Home Office, in which case it ought not to have been offered?

Moreover, in many local authority functions there is a right of appeal to the Minister against the local authorities, and the Minister is free to turn down the authority. I think that the independence of local authorities is desirable and that it should be as great as we can make it, but it cannot be 100 per cent., because the nation has an interest in many of these services. While we ought to make local authorities more independent than they are, there are limits.

Let us consider the proposals in respect of education. This is a funny Government. They must always get into trouble about something. They have just passed the Rent Act, which will land them into a lot of trouble—for the same Minister—in a few months time and some more trouble pretty near the next election. I do not know whether they have planned that it will arise just after the next election, but they had better think about it. In any event, they have landed themselves in that trouble, and now they have walked into the trouble of abolishing the percentage grant for education, thereby antagonising the whole of the teaching profession.

I do not say that one should not upset the teachers in a good cause, but it is not a good thing to run after upsetting the teachers, because they are a very influential part of the community, just as influential as and possibly even more influential than the doctors under the National Health Service. Yet the Government have walked into trouble, not of malice aforethought but of pure incompetence and ignorance, and have launched a policy which anybody should have known was calculated to upset the whole of the teaching profession of the country.

The Government argue that this is in order to give local education authorities more freedom. The teachers answer, "Freedom for what? Freedom to expand? Or freedom to contract?" The freedom to contract is liable to frighten them.

In any event, it is just silliness. The local authorities will lose money over it, but the Ministry of Education will still control capital expenditure even, as my hon. and learned Friend the Member for Kettering (Mr. Mitchison)said yesterday, on coat hooks and the space between them and on the quality of schools. If there is extravagance or undue economy, the Government will step in. Moreover, they must control the three-year education programmes which will be submitted to the Ministry of Education. I do not blame them for doing so. It should be understood that a number of more propressive local authorities are engaging in experiments in education, at considerable financial cost to themselves, which are useful to all the other education authori ties in the country. This is true of the London County Council and I have no doubt that it is true of other counties.

The tragedy for the Government is that the noble Lord, the Minister of Education, the Parliamentary Secretary's master, has been floating around the country making speeches about education as if he were a Socialist Minister of the Crown. They have been very good speeches.

The Parliamentary Secretary to the Ministry of Education (Sir Edward Boyle)

Hear, hear.

Mr. Morrison

I know, but what is the good of making good speeches when we have proposals such as these which undo the speeches?

Despite the statement of the Minister of Housing and Local Government that he wanted to give more freedom to local authorities, the Parliamentary Secretary himself made it perfectly clear last night that they are to do nothing of the kind. As reported in col. 1022 of the OFFICIAL REPORT, he said: The second point is that the powers of my noble Friend to supervise and encourage authorities in these matters will certainly be no weaker under the conditions of a general grant than they are today under the conditions of a percentage grant. My noble Friend will still have his powers of inspection, which are of the highest importance. A little later he said: My noble Friend will still have powers of persuasion, inspection and supervision under the new system."—[OFFICIAL REPORT, 29th July, 1957; Vol. 574, c. 1022.] The Parliamentary Secretary has blown the White Paper and the Minister of Housing and Local Government out of the water, and I hope that they will settle this matter between them in the future.

In education, therefore, the State takes a hand. We also see that in respect of the police there is predominant Home Office control, as I think, on the whole, there ought to be. In respect of the more innocent services, such as public libraries, I imagine that the Government can safely leave the local authorities to carry on the services without interference by the State. The system will therefore vary.

What is the purpose of the State grant in aid? Sidney and Beatrice Webb were great advocates of the State grant in aid. That was part of the policy of the national minimum. Those were the days of reactionary local government, which is one of the differences from the present situation, because we are now dealing with local authorities, a large proportion of which are under Labour control. In those days they were, in the main, reactionary local authorities, and the Webbs argued that the grant in aid was a means of lifting the minimum standards of local government administration. It was a weapon by which the Minister could raise local government administration to a higher level.

It can, of course, also be a means of enforcing economy. There is no reason why the percentage grant cannot enforce economy if we want it to do so. We can say, "Unless you economise we will cut the grant." It can also be used against irregularities in public administration. It is useful in appropriate, but perhaps not all, cases. Of course, we do not want to make the grant universal.

The real purpose of this change, I submit, is the purpose which Geddes had in mind and which May had in mind.

Mr. C. W. Gibson (Clapham)

And Ray.

Mr. Morrison

Yes, Sir William Ray also had it in mind.

Sir Harold Webbe (Cities of London and Westminster)

And Lord Latham.

Mr. Morrison

I do not recall that he barged into this. The hon. Member should stick to his own side and should not start taking liberties with ours.

These gentlemen wanted the block grant instead of the percentage grant as a means of diminishing public expenditure. I do not say that it is always a crime to diminish public expenditure. I believe in economical public administration, but I know what economical public administration means in the mouths of the Tories. It means going backwards.

The purpose of these proposals is to put the brakes on local government and the authors of this scheme are not the Minister of Housing and Local Government or the Minister of Education; the authors are in the Treasury. These boys have been knocking about for a long time in the Treasury and at last they have a Government capable of giving them their own way. I do not blame the Treasury chaps; this is their business. But if they are the authors of this scheme, as I believe they are, why are the Treasury Ministers so studiously keeping away from the Front Bench? When they have forced the scheme down the throat of the Minister of Housing and Local Government, it is a bit rough that they should keep away from the Front Bench and say to him, "It is your baby, not ours."

There it is, but the claims will come. The Treasury need not think that it has solved its problems, because as local government services expand and costs go up—and they probably will as long as the party opposite is in power—there will be claims for more money and he Government will have to do something about them.

I want local authorities to have new independent sources of revenue of their own. There have been suggestions about Income Tax. I once advocated the use of Income Tax, abolishing rates and having a London Income Tax. It did not happen and Poplar warned me that it did not have enough people and wealth to provide a sufficient income. However, I am not convinced that rating of land values is impossible. The London County Council once drafted a Bill about it which I introduced to Parliament. It was ruled out of order as a Private Bill, and was rejected when I brought it in under the Ten Minutes Rule as a Public Bill. If we could get a revenue of their own for local authorities, we should contribute to their freedom and independence. That is the best remedy, if it is possible.

We owe a great debt to British local government. We ought not to treat lightly the services of members of local authorities. They do great things, often at considerable personal sacrifice. They serve their fellow citizens and, like us, have their share of abuse. British local government is a great institution and as a whole, with rare exceptions. it is honest, upright and clean. There is a shortage of good candidates. Potential candidates give more than one excuse for not seeking election. Some say that there is too much to do, and others that there is not enough to do. That is a pity, because we want good quality local government. The political parties ought to do all they can to get good quality local government candidates.

The quality of our local government is better than that of France, more genuine than anything like local government in the Union of Soviet Socialist Republics, or in any other Communist State. It is closer to the people than is the local government of Germany, bureaucratically as efficient as that may be, and it is more democratic and real than the so-called local government of the United States of America. We can be proud of local government. Let us treat it with respect. Let us nurture it and let us pay honour to the countless men and women who are engaged in the service of our country through civic administration.

7.13 p.m.

Mr. Peter Smithers (Winchester)

The whole House will wish me to say how much we have appreciated the speech of the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison). I hope that he will not think it an impertinence for me to say that it was so full of the wisdom of years and experience that he seemed to cast away pearls with almost careless liberality. That he enjoyed doing so added to our enjoyment, though I must say it was sometimes difficult for us on these benches to tell whether his tongue was in his left cheek or his right cheek.

As a reformer in these matters, I was appalled by his conservatism. I can see that his faith in our local government, and his admiration for the work which is done by all who take part in it, is so great that he does not in his heart believe that very much reform is required—a little adjustment here and there would be salutory no doubt, but the grand lines, he believes, are right. I am not sure that I agree with that diagnosis. It may be that in London and in what the right hon. Gentleman called the industrial sprawls that is correct but in the system of government in the countryside a measure of reform is urgently necessary.

The trouble is that when one starts devising schemes of reform one knows that one is inviting disappointments. In this debate the Minister is in as difficult a position as any Minister has ever been in the House of Commons. We have looked forward to the day when we could once again debate the general overhaul of the structure of local government. I have always tried to imagine what the position of the Minister would be, and in doing so over the years—and this is a matter of years for most of us—my mind has constantly returned to the wise words of one of the greatest of Englishmen, Lord Halifax. He said that English people were such individualists that every Englishman had his own scheme of politics and that the best that any Government could hope was that the Englishman would agree that, next to his own scheme, that of the Government was best. The question which all of us who want to reform the system of local government must ask ourselves is, next to our own pet ideas, are the ideas outlined in the White Papers the best?

I want to begin by saying how far I am in agreement with those ideas. Broadly speaking, I find myself in agreement with the financial proposals. Yesterday, we had a most interesting and enjoyable duel between the hon. and learned Member for Kettering (Mr. Mitchison)and my hon. Friend the Member for Weston-superMare (Sir I. Orr-Ewing)about the effects of the financial proposals on education. The right hon. Member for Lewisham, South also referred to that subject. He dealt with in a more skilful manner than any Member on the opposite side of the House, but even he could not escape the dilemma. It was the same dilemma as that of the representatives of the National Union of Teachers who came to see me in Winchester on Saturday and who put their views with obviously great sincerity.

They feared, as did the right hon. Gentleman, that our education services would suffer from the proposals in the financial White Paper. My hon. Friend the Member for Weston-super-Mare, on being cross-examined, retorted to the hon. and learned Member for Kettering that one always got the same reply—that the proposals would drag education on to the floor of the council, that they would lead to debates and quarrels between committees and groups. But that is precisely what local democracy is for.

The dilemma of hon. Members opposite on this point is one from which there is no escape. Either we trust local authorities to allocate their funds wisely and well, or we do not. If they do not allocate them wisely and well, they are responsible to their electors. It is not the business of this House to prescribe to them. In that detail and in their broad principles I approve the financial proposals.

I refer now to the structure of government in the countryside. We have too many layers of elections. The elector, in the country village, if it has an active community life, is called upon to elect a parish councillor, as well as a rural district councillor, a county councillor, and a Member of Parliament. That is altogether too much election. Parish councils are certainly local and certainly democratic, but they have very little to do and very little money with which to do it.

The rural district councils are certainly local and certainly democratic, and I think on the whole they are very efficient, and the same may be said of the non-county boroughs. I believe they are the best element in local government today. The county councils are the enigma of local government. Judging by our own county council, the Hampshire County Council, which is a very large one, I believe they have the best personnel for their councillors. They really are distinguished and able people, and the official level of ability is also extremely high. We have, for example, the clerk of our county council to whose ability I would pay tribute any day.

Yet the result in terms of local democracy is relatively modest; for the truth is that the area is so large that it is not really local government, and councillors cannot really know all of the subject matter with which they are dealing. At the same time, the extent of the work is so great that I do not believe they are fully able to master it all on a part-time unpaid basis. Therefore, so much of it is inevitably left to officials.

I have not heard reference in this debate to the leading article in The Times yesterday, with every word of which I am in agreement. There was in that leading article a phrase about county councils which I think is worth bringing to the attention of the House, and it is this: County councils are not local authorities so much as a device for extra-local administration. There is great truth in that, and I think it is very germane to this debate.

The second trouble about our local government in the countryside is that the relations between the county councils and the county districts and boroughs are far from satisfactory. They are complicated, and I do not want to go into them in great detail, except to say that they are full of distrust. That is a thoroughly unsound situation and it is one of which these White Papers ought to take account. I believe that part of the trouble is due to the sharing of functions. It causes endless frustration. Part of the trouble is due to powers of delegation which are often not carried out or, if they are carried out, give rise to further friction. Whatever is our ultimate analysis, few people who are closely connected with any local authority not a county council would disagree with me that the present relationship of the two tiers is unsatisfactory.

Now let us look at the scheme of the White Papers so far as county councils are concerned. Undoubtedly, it carries out the Minister's first point made both at the beginning and at the end of his speech yesterday, that he is aiming at stronger local authorities. We shall certainly have stronger county authorities. Their powers will be considerably increased. I am bound to say to him that he is placing this great increase in powers with the authorities which, however venerable, are the least local, the least democratic and the least popular. Therefore, I say that the weight of emphasis in these White Papers is to that extent in the wrong place.

Now I turn to the county districts and boroughs, and here we see a very different picture. Four important sets of powers are taken away from those under the 60,000 figure. Take food and drugs, for example. The transfer of food and drugs from the City of Winchester, for instance, to the Hampshire County Council is in effect a transfer from administration by councillors, who know every inch of what they are dealing with, to administration by county council officials. No county councillor can possibly follow such a matter in detail throughout the county.

The removal of roads from these authorities is another serious matter. I thought I understood my right hon. Friend to say yesterday that he was reconsidering that. I hope that is right, Winchester City has administered its high street well for over a thousand years. I do not really believe that the county council, efficient though it is, can do it any better, and I do not really see any reason for a change.

The Minister went on to say something which was applauded on both sides of the House, namely, how anxious we all are that our local authorities should preserve their individuality and dignity. I am sure we all heartily agree, but I should like to impress this upon him. This is not a matter of the mayor, aldermen and councillors sporting round with the maces, going to the assize service on Sunday and receiving distinguished foreign visitors. We in Britain are proud of our traditions of local government, not because they are traditions, not because they worked well in the past, but because they still work well today. No amount of civic pomp or local identity will compensate for lack of real powers and real responsibilities.

There are two authorities in my constituency, the City of Winchester and the Borough of Romsey, both of which are threatened under any conceivable reorganisation with some kind of amalgamation. I find that the councils or both those authorities, and I believe their electors, are perfectly prepared to face that fact. They do not mind, I am sure. They do, I believe, accept the necessity for reorganisation and, if necessary, amalgamation. [HON. MEMBERS: "Oh."] Hon. Members say "Oh", but I have found people extremely broad minded. If any hon. Member opposite is less fortunate, that is his affair.

What people will expect is that the new situation shall be one in which they will really have important powers to exercise, and, quite frankly, the proposals in these White Papers gravely weaken the structure of local government in this type of authority in any circumstances which I myself can foresee.

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

I am sorry to interrupt my hon. Friend, but it would be of great interest to me if he would specify some of these general remarks that he is making. He is suggesting that the Government proposed a considerable shift of powers from the district councils to the county councils. In fact, the health and welfare service, one of the most important functions of all, is now to be taken from the county councils and given to the larger urban authorities.

I said in my speech yesterday that the Government were inclined to leave things broadly as they were so far as food and drugs and classified roads are concerned, and though I am most interested in the point of view that my hon. Friend is putting, it would help the House if he would indicate what are the powers and responsibilities which, on his reading of the White Paper and of my speech, these minor authorities are to lose. I do not recognise them.

Mr. Smithers

My right hon. Friend knows the four categories of powers which are to be transferred to the county councils and which are in the White Paper. As to two of them, he has indicated that he may be moving in the right direction. I am very glad of that. It is for that kind of purpose that we are having this debate. If my right hon. Friend will have patience with me, perhaps I shall satisfy him on what I mean by this lessening of powers. I believe that the real trouble with these proposals is the delegation of power which is proposed in the White Paper, rather than direct conferment. Delegation really does not work well. What I am asking the Minister to do is to go through his proposals very carefully and see whether he can, in fact, arrange to confer directly some of the powers which are at present to be delegated by the county council if it thinks fit. The fact is that county councils very often do not delegate powers.

I was a member of a rural district planning committee when the new planning arrangements were introduced, in 1947, I think it was. The county council has never to this day delegated planning, and I well remember the painful change which took place when a joint system of planning came about. I ask the Minister seriously to reconsider that matter. We had a recent case of a locally made planning decision being taken through the existing machinery. There were nine committee meetings over a period of eight months, and the result was to confirm the original sensible decision of the local committee. I really believe that, in 99 per cent. of cases, the local people are right. I hope that, wherever the word "delegation" occurs in the White Papers, the Minister will look at it again and consider whether delegation instead of conferment is really necessary.

The most serious trouble here, in my view, is the underlying one, the provision that county district boundaries shall be reviewed by the county council itself. It is very necessary that those in the county districts and non-county boroughs shall be able to feel confidence in the future development of their institutions. How can they feel that the county council will be willing to promote the formation of larger local authorities, whose tendency will ultimately be to escape, first of all beyond the 60,000 limit, and ultimately, perhaps, into county borough status? It seems contrary to all human nature to expect that kind of situation to arise. The Boundary Commission is already to review practically all the boundaries in looking at counties and county boroughs; it will have to do at least half the work. I believe that it would be much better for it to go on and complete the work. The result would be fewer appeals and much less bitterness between county councils and the lower tier authorities.

Finally, a word to the Minister about our approach to this matter. I read the White Papers as a very valuable contribution to the study and advancement of this subject. We all want to see steps taken in the direction of the White Papers generally, although we all have our particular objections, but, as I listened to the Minister's speech, I could not help having in mind the comment in The Times the day before about the manner in which these proposals had been arrived at. It read: The plan is weak because it is based on the highest common factor of agreement between councillors interested in different types of authority, and that highest common factor is naturally low. This Chamber is full of councillors, and we all know how great is the wisdom accumulated in them; but the vested interests are very strong, and what we here ought to look at is something far beyond the empires which have grown up around different forms of local government. We should look to the actual nature of the country we have to administer, in the interests of the people in it. I am sure that, if our electors were asked to vote for the abolition of this or that tier of local government in favour of some scheme of reform which they would like, they would do so without hesitation or compunction.

I believe that we ought not to regard this as a diplomatic exercise in which we seek to get agreement by negotiation between county councils, rural district councils, parish councils and the rest. We ought to look at the nature of our country. Every good man is fond of pis parish, his village, or the town in which he lives. He knows what it means. He needs, and ought to have, a good parish council. Today, with modern transport making it so easy to travel by bus, by car or Vespa, the district, the neighbourhood, is the next conception. I believe that something to correspond with it is needed, a large all-purpose authority, not as large as a county council. Beyond that, everybody sees the nation, and that means Parliament.

My plea to the Minister is that he should look at some of the criticisms which we have made during this debate, standing back from the negotiations he has been conducting, and see whether, before this White Paper system is put into a Bill, he cannot meet a large number of the objections, forgetting the various "associations" and looking only at the populace which he has to serve.

7.36 p.m.

Mr. Sidney Dye (Norfolk, South-West)

The hon. Member for Winchester (Mr. Smithers)has given me the impression that he represents a somewhat unhappy community having very charming but rather incompetent councillors, men who have not given the time to know their job and carry it out. He has a perverted view of county councillors and the work they undertake. When he criticises the Minister for having, through his officials, gone very closely into consultation with representatives of all the local government associations, he is, I feel, on very strange and difficult ground.

Surely, if any Minister were attempting to reorganise or improve local government in this country, the very first thing he ought to do would be to consult its leading representatives, the people who come together from time to time to discuss the problems confronting their respective councils.

Mr. Smithers

I am sure the hon. Member does not wish to misrepresent me. I did not, of course, say anything of the sort. It is obviously wise to consult all these associations, and I paid tribute to the wisdom which their members had. What I say is that to have got them to agree on a minimum, after consultation is not necessarily to have the right solution.

Mr. Dye

With respect, I do not say that the Minister has arrived at a solution yet. Having discussed the problems with representatives of all the associations, he puts his views into a White Paper, places them before Parliament and the public, and then he asks Parliament to discuss them.

I agree with the aims and purpose of the Minister in wishing to see British local government improved and brought up to date, and in wanting councillors to have greater confidence in carrying out their duties. Parliament should fully concur in that. On the other hand, I think that the Minister has gone radically wrong in his approach to the financial provisions. He has given the impression to those whom he has consulted, and in public statements, that the chief purpose of the new general grant is to reduce the proportion of the Exchequer's contribution to the annual expenses of all local government authorities. The Minister has given that view in more than one way, particularly, of course, in the White Paper on Local Government Finance.

In the White Paper he spoke of the need to reduce Exchequer grants because they had outgrown the contributions from the rates. Thus, all his good intentions for improving the structure and aiding the functions of local government have been blurred over. Local authorities, teachers, and others, fear that there will be brought about, within comparatively few years, reductions in the Exchequer grants, and that, with the rising costs of local government as a whole, the ratepayers must bear a very much bigger share. It was a pity that this national discussion on improving local government should have been begun in an atmosphere that was to be dominated by the Exchequer. That is where the Minister has gone wrong.

The representatives of the County Councils Association were worried in their discussions because of the haste with which they had to try to see their way through the various proposals from the Ministry, particularly for altering the system of grants. The committee of the Association which met the Minister and his officials came to the conclusion that, in the light of what it had seen, the Government's proposals should be opposed unless and until satisfactory undertakings are given about the amounts of the general grant and the inclusion of the amounts in respect of services now inadequately assisted. In the course of yesterday's debate, the Minister indicated that the amount of grants on which the new system would start would not be less than the amount of grants received in recent years. The Parliamentary Secretary to the Ministry of Education went further and said that rises in the costs of local authorities would, of course, be met in subsequent reviews. If now the representatives of the local authorities can take it that it is the Government's intention to meet the costs of local government by a different method but equal to past contributions, and to take into account the rising costs of the future, it seems to me that there is not much doubt about the amount of the grant. It will, however, have a different name, the main grant being a general grant, with a rate deficiency grant to make up in the case of authorities with lower rateable values.

If, then, the general outcome of all the discussions is to be that the Exchequer will in future meet roughly the same proportion of local government expenditure as it has done in the past, it seems to me that all the fuss about the discussions concerning the block grant and so on which have taken place in past years are not relevant to the situation at which we have now arrived.

If that is so, the Government themselves are to blame for having shunted the discussions on local government along the wrong lines. At least, the outcome of the various discussions was to move the Minister step by step along the road to meeting fairly a just proportion of the expenditure of local government. It seems to me that the Minister and the Parliamentary Secretary to the Ministry of Education have now just about committed the Government to giving an equivalent grant in the future on the same basis as in the past, but calling it by a different name.

I want to say a word or two on another aspect of local government problems. The hon. Member for Winchester spoke of the desire for the Winchester City Council still to be responsible for the maintenance of the High Street at Winchester. We hope that it will remain responsible. Millions of other people, however, who want to travel that way by car will, of course, take the by-pass, which was constructed by the county council around the City of Winchester, leaving the city council with the High Street and its other classified roads to maintain.

When dealing with highways, we are clearly dealing with something which is not only of local but also of national significance. Although we have the trunk road system, the other classified roads are used nearly as much by traffic of national importance as many of the trunk roads. Nationally, therefore, we are concerned with the condition of other classified roads throughout the country.

The question then arises of how these roads can be most economically administered and maintained up to a standard that the nation expects. Can this be done by transferring responsibility for many of the roads from the county councils to the district councils? Speaking from many years' experience as a county councillor, I may say that we are finding the greatest difficulty on the county councils to obtain the qualified technicians to maintain our roads and to work out schemes for improving our roads and bridges. Indeed, that is now the greatest difficulty.

These trained men are being attracted by much higher salaries to consultant firms here in London, who then offer to undertake by contract the tasks of road improvement, bridge building schemes and the rest. Would it be a good thing if we saw the disintegration of the county councils' administration and officers either to firms in London or to the smaller local authorities—the district councils and the small boroughs? Would our roads then be maintained and improved more cheaply than they are being managed under the county council? That is the question we must face.

In considering who should be the authority for highways in administrative counties and to what extent district councils should have delegated responsibility for county roads, it is not out of place to begin by considering the present position. There are approximately 105,000 miles of classified and unclassified public roads in England and Wales. Of those, only 15,000 miles are in county boroughs and 20,000 miles in boroughs and urban districts. County councils, therefore, are responsible already for about 115,000 out of 150,000 miles of roads.

About 105,000 of that 115,000 miles is in rural districts and we are not, therefore, concerned with them in the question of delegation of functions to boroughs and urban districts. What we are concerned with are the 2,400 miles of Class I roads, the 1,600 miles of Class II roads and the 3,600. miles of Class III roads which are either claimed by or delegated to urban and borough councils. These 7,600 miles of road are distributed among some hundreds of borough and urban councils. Fifty-two claiming authorities are responsible for less than 10 miles of road apiece. It should therefore not have come as a surprise to anyone to read paragraph 14 of the White Paper, that a borough or urban district council should not undertake the responsibilities for classified roads…unless it can employ the highly qualified staff and the expensive equipment essential for modern efficient highway administration. The proposal, therefore, that henceforth there should he automatic delegation where the population exceeds 60,000 rather than as at present when it only exceeds 20,000 seemed only right and proper, especially as it was accompanied by a provision for delegation in appropriate cases where the population is below 60,000.

The problem of delegation needs also to be considered against the background of the big expansion in the road programme which was debated in the House only a few days ago. We were then told that we were spending less than most European countries and that there was still an antiquated approach to the whole problem and that new road making had not had its proper priority.

The Minister of Transport himself said that at this moment there was a 20-year backlog when no major road building had been done, and the Parliamentary Secretary said that the Ministry was aware of the need to offer large contracts to attract the larger contractors. It seems extraordinary that against a background of this kind it should still be contemplated that there should be a very considerable number of small highway authorities concerned with the classified roads of the country.

We can make progress only by having larger and more efficient authorities capable of employing the skilled technicians and the modern machines to provide the roads that we need. Therefore, I feel sure that the hon. Member for Winchester and other hon. Members who have advocated that the district councils should take over from the county councils and the smaller borough councils responsibility for the maintenance and improvement of classified roads are advocating a retrograde step.

Mr. Smithers

I should like the hon. Gentleman to know what I am advocating. I should like to see larger all-purpose authorities, roughly the size of a Parliamentary constituency, endowed with a considerable range of powers, including roads, but I am not saying that the powers over roads and other matters should be handed over indiscriminately to existing smaller authorities.

Mr. Dye

If we take the hon. Gentleman's argument, as now stated, that he wants to see all-purpose authorities——

Mr. Smithers

One tier.

Mr. Dye

—one-tier authorities, of which there would be five, six, seven or maybe eight in Hampshire alone, and that they could then have the qualified staff to be able to manage the highways of Hampshire sectionally in that way on an economic basis, then I think he had better think again or consult someone who knows something about it. I am sure that his hon. Friend the Member for Twickenham (Mr. Gresham Cooke), who is sitting next to him, would give him wiser advice.

The hon. Gentleman has been consulting people before he made his speech in the House, but the trouble is that he has consulted the wrong ones, the people who are dissatisfied. There is the problem which we have to face in regard to the roads of this country. Apart from the building of new roads, we want to see the existing ones maintained for faster traffic, both passenger and transport vehicles. The roads are vital to the country. We have in our county councils a nucleus of the right kind and size and the equipment for dealing with the roads. To try to disband or fragment that organisation must mean delay in carrying out the work which now needs to be done and would certainly make it more costly.

We want efficiency with economy. We want good roads, but year by year we are finding that good roads cost more money than they did in the past; so, if we are to have local government kept too local, it seems to me that the local authorities would lose control of the roads altogether. Therefore, I hope that the Minister will consult the Minister of Transport and urge on him the necessity not for maintaining the present position of authorities with a population of 20,000, or even moving to the position of authorities with a population of 30,000, but of going all the way, or at least to 60,000, before he agrees to delegate powers in relation to the highways to those authorities.

The county councils have been criticised, in many cases unjustifiably. Members of county councils give their time and their knowledge and acquire a great skill in administration. Admittedly, county administration is not local. It was never intended to be, but in the administration of education and many of the other services, such as the welfare services, they have done a tremendous amount of work during the past ten or twelve years which will redound to their credit for many years to come.

7.58 p.m.

Mr. John Barter (Ealing, North)

It was with some degree of relief that I heard the hon. Member for Norfolk, South-West (Mr. Dye)leap with some alacrity to the defence of county councillors. I realised later on his interest in this regard, and I should like to explain to the House that I am a member of the Middlesex County Council. It is particularly in connection with that body that I should like to make reference.

I listened with great care and interest to the remarks of my right hon. Friend when he announced the appointment of a Royal Commission to consider the affairs of this area. I was not however clear from my reading or listening—and I should be grateful for my right hon. Friend's help on this point—whether it was his intention that, with the formation of the Royal Commission, the financial aspect as it affected, say, the County of Middlesex was to be deferred or whether it was his intention to pursue the financial aspect contained in the recent White Paper quite regardless of the formation of the Royal Commission.

I assumed, in consultation with some of my colleagues, that it was his intention to continue with the financial aspect proposed in the White Paper quite regardless of the formation of the Royal Commission. I think that it would be fair to explain at this stage, and no doubt my right hon. Friend is aware, that Middlesex is geographically one of the smallest counties in the country with one exception and yet it has the second largest population, a population of some 2 million people. In spite of certain 'aspects of the financial proposals, I think that it would be fair also to say that, according to the best of my information, the majority of my colleagues on the Middlesex County Council are inclined to give support to the principle of the block grant as opposed to specific percentage grants for certain services.

If they do give this support, and they will I am sure in due course do so, they will give it with two important reservations. One of the reservations, which has been referred to at some length already in this debate, is the reservation that the main purpose of the introduction of the block grant should be to impart a considerable measure of freedom to local government. I am quite sure that with the removal of some of the detailed controls which have so far fettered local administration considerable benefits will derive to both ratepayers and taxpayers.

The second reservation is regarded as of considerable importance. It does not, I think, affect our approval of the principle of the block grant, but it does affect our approval of the formula which has been devised. I should like to congratulate my right hon. Friend on the ingenuity he has shown in devising this formula, but it has imparted to Middlesex, already a county of considerable distinction, a further distinction which is not one for which it feels it can take great credit. The distinction made by the formula, which applies to population densities, is that Middlesex is left as the only county in the country which receives neither a grant for a high density population nor a grant for a low density population. That is a distinction which, I am informed, would well cost the county, the estimate being based on the 1956 to 1957 figures, about £2,920,000 per annum.

Mr. Lindgren

The hon. Gentleman is one of the few on the opposite side of the House to have spoken with present-day responsibility for local government administration. He said that Middlesex approved the proposals subject to the amount of decontrol it can get. Will he tell us quite frankly in what spheres the county for which he is responsible requires decontrol from the central Administration?

Mr. Barter

The hon. Gentleman has been kind enough to say that I am responsible for the County of Middlesex——

Mr. Lindgren

Partly.

Mr. Barter

—but it is a responsibility I should hesitate to accept. However, I suggest that there are certain key points where the removal of control will be very beneficial—for instance, some removal of the constant checking by the central authority.

Mr. Lindgren

Everyone is being so airy-fairy rather than specific. I asked the hon. Gentleman to mention one service. Would it be education, for instance? Is it in education that Middlesex County Council finds the Ministry's control irksome and would like it removed?

Mr. Barter

I was not dealing with services but with aspects of control. I think it would be fair to say that the sort of freedom desired would be in the acceptance of certain tenders.

Mr. Lindgren

Freedom in finance?

Mr. Barter

That has to do with expenditure, but I do not wish to pursue this matter in detail.

Mr. Lindgren

The hon. Gentleman will agree that the greatest expenditure in local government is on maintenance. There is capital expenditure, of course, and there is the repayment of loans and interest charges, but that takes only about 5 per cent, of local government expenditure, while 95 per cent. of local government expenditure goes on local government administration. Where does the hon. Gentleman want control lightened?

Mr. Barter

The hon. Gentleman will know as well as I do that there are tenders in dealing with which the control lies, to a certain extent, with the central Government. There are other controls exercised by the central Government of which the county council should be relieved——

Mr. Lindgren

What are they?

Mr. Barter

—just as the county council could well lighten some of the controls it exercises over the county districts.

Mr. Lindgren

What are they?

Mr. Barter

Some relate to land. There are others, too. I think I have been extremely patient in allowing the hon. Gentleman to interrupt me. I hope he will show the same patience with me in allowing me to continue.

I was explaining that the ratepayers of Middlesex approve and will, I am sure, support the general principle of the block grant providing there are those two reservations. I was explaining the difficulty of the second reservation, which affects the level of payment which would go to the County of Middlesex, based on the 1956 to 1957 figures, and I was explaining that the amount which the county estimates it would lose on that basis is approximately £2,920,000, which, I am advised, would be equivalent to a rate of 9d. in the £. I feel that there is a strong case for some alleviation for the one county in the country which is so adversely affected. This county is the only one which receives the benefit of neither the high density nor the low density grant, and consequently the effect of the reduction is very considerable indeed. I am sure my colleagues will confirm the opinion that the loss to the county should be alleviated to some extent and that Middlesex should not be the only one to bear this burden.

I would express a welcome, in which, I am sure, all my colleagues will join me, to the appointment of the Royal Commission which is to undertake a comprehensive review of the structure of local government in the Greater London area. I am sure from consultations I have had about this matter that it will be generally acceptable both to the county council and to the county districts. There are special circumstances operating within the County of Middlesex because many of the county districts, as my right hon. Friend said yesterday, are very large districts indeed.

My right hon. Friend yesterday, in concluding his speech, referred to three general principles for local government. He referred in the first place to the aim to have stronger local authorities and in the second place to the discharge of local government functions at the point at which it can most efficiently and conveniently be done."—[OFFICIAL REPORT. 29th July. 1957; Vol. 574, c. 937.] I hope that when he said that he meant that he was prepared to consider each service on its merits and prepared to ask the Royal Commission to do the same. It is important because many of the services which a local authority administers through one committee, or even through a sub-committee, can be split up and dealt with better by being dealt with partly at county level and partly at district level.

The criterion must be the discharge of local government functions at the point at which it can most efficiently and conveniently be done as my right hon. Friend said, and having regard always to the aspirations of district local authorities and the desire to make local government … as far as possible … truly local "—[OFFICIAL REPORT. 29th July, 1957; Vol. 574, c. 913.] as my right hon. Friend also said. This is of importance for the benefit of both ratepayers and taxpayers. It is important that each function should be regarded separately and dealt with at the point at which it can be most economically administered.

My right hon. Friend's third principle and aim as stated in the conclusion of his speech was about equitable financial assistance and greater local responsibility within national minimum standards. I have dealt with the question of equitable financial assistance as it affects the County of Middlesex. On the other matter, I join with other hon. Members who have advocated the principle of conferment on local authorities, as opposed to the principle of delegation. Many hon. Members who are business men have on many occasions in business adopted the principle of delegation. There is, however, a difference between delegation in business and delegation in local authority work. If one delegates in business, then the person to whom the delegation is given is answerable to the person who imparts it. In local authority work, the person who receives the delegation is answerable to both the person who imparts it and to the local electors. Therefore, I would like to join with those hon. Members who have entered a plea to my right hon. Friend on this occasion for conferment, as far as possible, as opposed to delegation.

8.10 p.m.

Mr. Clement Davies (Montgomery)

In passing, I must say that I cannot shed any tears with regard to any difficulties in which the great County of Middlesex may find itself. Its incidence of rates is about the lowest, if not the very lowest, in the whole country. It is less per pound than almost in any other county and, what is more, I believe that the product of a ld. rate will produce as much as £100,000. I can tell the hon. Member for Ealing, North (Mr. Barter)that the whole of the thirteen counties of Wales, including Montgomery, can produce only £68,000 between them. I only wish that we were in the same position as Middlesex.

I now turn to the Minister's speech. First, I should like not only to congratulate him but to thank him for the admirable way in which he presented his case yesterday. We all know of his long experience and his devotion to local authority work. We know that his desire is to get as much improvement as he possibly can in local administration. I have not had his great experience of local government, but I have had the privilege and duty—a rather onerous duty—of presiding over three inquiries into local government. I therefore have to say at once that I am bitterly disappointed with the proposals contained in the three White Papers.

I had hoped for a much bolder policy than is outlined in them. I know that the Minister is feeling his way and is anxious to get as much assistance as he possibly can both from the House and from local authorities, but what has happened so far is the same as has happened all along in regard to local authorities. They are brought together in order to see how far they can agree. The case was very well put by The Times in its leading article of yesterday. It described the plan contained in the three White Papers as follows: The plan is weak because it is based on the highest common factor of agreement between councillors interested in different types of authority, and that highest common factor is naturally low. The trouble is that each of us is very proud of his own authority and thinks that it is really the best and will do most to benefit the people for whom it is responsible. He is very chary of its giving up any part of its responsibility or duty to any other authority.

I had hoped that, well ere this, there would have been a much fuller inquiry into what is needed. We are dealing with the most important matter that has come before the House for many a long day. We have inquiries into health services, for example, or into a particular undertaking, such as the coal or electricity industry, but this matter deals with the every-day life of the people and its importance far transcends anything else. I should have thought that the right way to tackle this—I apologise to the House for saying so, but this is something that I have advocated ever since I came here—was to appoint the strongest possible Royal Commission. Such a Commission should have been appointed years ago. We should not have waited to see how far we can get agreement amongst the various associations of local authorities, but we should have brought them before the Royal Commission as witnesses, with each one giving evidence and the Commission reporting back to the Ministry and so to the House.

One is struck by the first sentence in the first White Paper. Very rightly it calls attention to the pattern of local government today, and says: The pattern … was established by the Local Government Acts of 1888 and 1894. It might have gone on to say that this pattern was drawn by that extraordinarily able man, Sir Charles Dilke, in the 'seventies. His proposals were ultimately debated by Parliament in the 'eighties and 'nineties. That was the pattern and it was excellent in those days. It could not have been improved upon. It would have been excellent if it had been brought forward in the days of the Tudors. There had been practically no change since the days of the Tudors, up to that time. The only change was in the establishment of railways, but those which had been established did not help very much in the direction of better administration through improved transport.

The extraordinary thing is that those forms of government were established in 1888 and 1894—county councils in 1888 and the other councils by 1894—and immediately afterwards there came a tremendous revolution in the whole position of the country. Within two years, in 1896, Parliament removed the restriction which had existed upon the motor car. The whole notion of transport and movement was altered, together with the whole idea of what we were capable of administering from one given centre, almost overnight—certainly within a few years—as the motor car developed and the roads improved.

Not only that; the pattern was set down when the telephone was practically unknown, and the only way of communicating from a central office to distant parts of the area to be administered was by sending a messenger. Now all that one has to do is to pick up a telephone. The whole situation was changed, and the extraordinary thing is that, having started on this pattern, it has never occurred to Parliament to inquire further into it. All that Parliament has done is to continue to add to the burdens placed on local authorities. That is why I should have preferred a much more radical inquiry into these matters. Is this a suitable pattern for modern days, considering all the changes that have taken place?

I would remind the House of one other matter. In those days local authorities were not responsible for the provision of water, still less of houses. What has happened since, with the nationalised electricity and gas undertakings? The pattern has been maintained, and these proposals seek still to maintain it, to a very large degree. I have listened very carefully to what the Minister had to say about these Commissions. So far as I can understand the position at the moment, the first duty of the Commission for England and Wales will be the readjustment of boundaries. That is very necessary. It is something which should have been done ages ago; but that will not alter the pattern. The Commission will not inquire deeply into the question whether the present system is really the best.

The Commission will then go on to consider the position of county boroughs and what can be done in those congested areas which might be linked together in what are now known as conurbations. When that task is finished the Commission may apparently turn its attention to the more rural areas, especially to counties such as mine. What is to happen about them?

May I remind the House again of the extraordinary position of some of our rural counties—mine in particular—for the reason that there is no industry there except agriculture, and consequently one obtains a better view of it as an agricultural area because it is a complete unit in itself. Unfortunately, although this county is one of the best agricultural counties, watered as it is by the Severn and its tributaries, the population is going down year by year. It has been going down at the rate of 500 a year. This is the only county south of the Grampians where the population is as low today not only as in 1901 but as in 1801, when the population of the country was only 11 million.

In that little county a 1d. rate produces only £1,200, with all the changes which have taken place. When I made an inquiry into the conditions of local authorities in Wales in 1937, 1938, and 1939, I found that the product of a 1d. rate in Montgomery, Merioneth and Anglesey was the same; £630 was all that was being produced. Today in Montgomery it has gone up to, I think, £1,230. The purchasing value of that £1,230 is less than the purchasing value of the £630 in 1937, and what have we got? There are eleven councils looking after the interests of 43,000 people. There is a county council, and six local councils of which four are boroughs with mayors and two are urban district councils. There are eleven offices with eleven sets of officials to look after 42,000 people. We are following the pattern laid down by Sir Charles Dilke in 1870 which was excellent in those days when all that could be administered was the distance a man could walk or ride. and generally he could walk further than he could ride.

Mr. H. Brooke

I have been listening with interest to the right hon. and learned Gentleman and I hope that he is coming to his practical proposals. The local government Commissions will have far-reaching powers to recommend amalgamations and for the transfer of territory from one county to another. Each county council will be able to recommend far-reaching changes in county districts, and I cannot see that a Royal Commission examining the whole matter nationally would get on with the job nearly as quickly as the machinery which the Government propose to set up.

Mr. Davies

I am obliged to the right hon. Gentleman. I was coming to that. I quite agree with him, but will the Commissions inquire into what powers shall be given after each authority has been set up? How is the distribution of power to be undertaken when all the changes have taken place? I am glad to hear what the right hon. Gentleman says about whether the eleven councils to which I have referred should continue to exist, or whether there should be fewer; but I should have thought the question of the distribution of powers was something which merited a far deeper inquiry.

As the right hon. Gentleman knows, I had the privilege and duty of inquiring into the possibility of the 148 local authorities within a 30-mile radius of this House accepting the Abercrombie Plan. That took some time, but it was one of my proudest moments when, unanimously, the 148 local authorities agreed upon that plan. Subsequently I presided over another Commission which again reported unanimously. It reported that the plan would be kicked to bits unless there was a regional authority in control of it. Unfortunately, nothing has been done about that.

I understand that now the right hon. Gentleman is to set up a separate Commission for London. What is the area to be? If it is to be limited merely to the Metropolitan Police area, that will cut right across what all the 148 local authorities agreed should be the position within that big 30-mile circle. In the meantime new towns have been created outside the actual Metropolitan Police area, and they are all within what was considered to be the right and proper plan for this tremendous area, the most congested area in the world.

There is a quarter of the population within 30 miles of us and tremendous problems of transport, water supply and sewerage and the most difficult problem of all—that presented by people travelling morning and night to and from their work. I hope that when the right hon. Gentleman sets up this Commission the whole of that area will be covered and that the Commission will have full powers to inquire not only into some changes of territory, but into who shall have responsibility and who is best capable of carrying out the administration.

I am sorry that both in the White Papers and in the speech of the right hon. Gentleman yesterday the idea of accepting or considering some other method of ending income for local authorities was so airily swept to one side. How much longer is the country to suffer from the absurd anachronism of rating? We in this country are unique in that respect. I do not think any other country in the world has such a system. It was created hurriedly in 1601 to provide a poor rate. At that time it was a fair way of assessing what was the annual income of people; but the moment we had the great changes in population, and the Industrial Revolution, it was made nonsense. That nonsense has been continued by Government after Government until this day.

What an absurdity it is. The more a man improves his property and thereby increases the amenities, not only for himself and his family but for the whole neighbourhood, the more he is punished. On the other hand, if he neglects his property, he gets a premium on it; and that is to be the basis on which the Government are to see that local administration is carried on. We may say that we will not trouble about a local income tax, but other countries have found that that is the best way of raising income. Surely instead of being based upon the assessable rateable value of a house the tax should depend upon a man's income. In that way we should get nearer to what is fair for us all.

Incidentally, a far better way than choosing the rateable value of property would be to consider again what this House at one time accepted, namely, that the rate should be levied upon the site value and not upon the improved, built-up property. I should like to see that principle applied. I am sorry, Mr. Deputy-Speaker, but I am hurrying with my speech because I do not want to detain the House for very much longer.

My main objection in the proposals made by the right hon. Gentleman is to the block grant. He must know what was recommended in 1901. A Conservative Government were then in power and only a minority recommended—and did it for the sole purpose of enforcing a sort of economy upon local government—that Exchequer assistance should be in the form of a block grant. The reason given was that it would achieve economy and that the Government would not have to spend so much upon the local authorities.

The right hon. Gentleman has followed certain precedents. I would remind him of one that has such a bad reputation in this country that the mere mention of it sends a shiver through those who remember it. That was the Geddes Axe. Tremendous harm followed from it, as was the case also after the Report of the May Committee. Is that the way in which this reform is to be undertaken?

What will be the position? How is a county such as mine to fare? I was very glad to hear the hon. Member for Norfolk, South-West (Mr. Dye)speak about roads. The cost of roads for a rural county is fantastic. We certainly get a grant for classes A, B and C, but we get not a penny piece for the unclassified roads, although in our hill districts they are the most important of the lot. It is down those roads that the produce goes to feed the people in the populous areas. It is down those roads that the milk lorry goes every morning, knocking the road to bits, so that it is almost impossible for the farmer to use it. That is the kind of thing which destroys what the Minister of Agriculture is proposing to do for hill farming.

An hon. Member referred to Middlesex and its grievances. I do not know the latest figures but I know that the old figure for the road rate for the whole of Middlesex was 9d. in the £. The road rate for Montgomery was 28s. 3d., and that was for roads alone.

Mr. Barter

The right hon. and learned Gentleman made a kindly reference to Middlesex. I am sure that he will be glad to know that an increase in the rate poundage is just as unpleasant to the people of Middlesex as to people anywhere else.

Mr. Davies

I am pointing out the tremendous burden that will fall upon the people who are in a position nothing like as strong as that of Middlesex. How are they to meet the tremendous expense? Look at the position in which they are to be placed. Pressure is being brought upon them to attend to the unclassified roads and to education. They will have freedom to decide. Where is the freedom when they are in this extraordinary position?

It will be said that the Minister of Education will look after them if they fail in their duty. I wish I could be certain about that. One of the matters that I had to inquire into for nearly two years was the condition of the schools and the effect upon the health of the children. Do not think that I am blaming our councils. They were not able to do what they wanted because of the lowness of the product of a ld. rate. I will give the House an example of the degree of care that was being taken.

In 1927, the Conservative Government in power decided that things were in such a state that they ought to have a report given by their own officers. Reports made by their own H. M. I.'s condemned, if my memory is right, eighty-seven schools as being not only unfit but dangerous to the health of the children. I held my inquiry in 1938 and I found that not a single school had been touched, not one. If we are to put local authorities in the predicament of choosing what they will do we shall punish people who have contributed much towards the wealth of these now densely populated places.

One other word on education and about the percentage system. This was brought in by the greatest Education Minister we have had up to the present, H. A. L. Fisher. He introduced the percentage system as the only way in which proper schools and proper teaching could be provided for the children. Why go back upon it? He was the first man appointed to that Ministry who really knew about education.

I had the honour of taking quite a considerable part in the debates on the 1944 Education Act, which was brought in by the present Leader of the House, assisted by the right hon. Member for South Shields (Mr. Ede). I well remember at that time saying that there was one phrase which was used then which ought not to be used in describing such a Measure. It was described as a national Education Bill, and I said, "No, it is not; it is only partly national and largely local." Education is most important, because all our children have to fight the same battle and pass the same tests and examinations. Therefore, it is absolutely wrong to handicap some children while giving benefits to others. If we are putting the cost of our Welfare State on the nation as a whole, then the cost of education should be considered as the responsibility of the nation as a whole. It should not be limited to what a 1d. rate can produce in a particular local authority area.

The same applies to roads. I have seen roads which were the concern of some of the smaller local authorities, and have seen how bad they were, because, as one hon. Member has pointed out, those authorities did not receive the advice which they ought to have had. Roads are greatly improved when county councils take them over; but can anybody say now that any road is local? I am perfectly sure that people from other counties, from the Midlands and from London, make far more use of the roads in Montgomeryshire than do the local people. Yet part of the cost of those roads has to fall upon the local people.

I am glad for one good thing which Lord Hore-Belisha did in 1932, when he started his movement for considering roads, and especially main roads, as a national charge and not a local one. I only wish that the local authorities could be still further relieved and that further help could be given to them, instead of their being cramped and narrowed, as in the present proposals.

8.39 p.m.

Sir Hamilton Kerr (Cambridge)

So many hon. Members wish to intervene in this debate that I will confine my remarks within the space of sixty seconds. I want to make four points.

The first two concern themselves with the first White Paper. I think that I can say with accuracy that all my constituents in the City of Cambridge welcome unreservedly the first White Paper, which affords some hope, a hope long deferred of attaining county borough status. The first White Paper likewise advocates a review of the area and status of local authorities. My constituents would feel more reassured if the review of county districts was carried out by an impartial body, rather than by the county council. Thirdly, the second White Paper concerns the functions of local authorities, and I advocate, as other hon. Members have advocated, that conferment rather than delegation should be the principle. People have found from experience in the past that delegation does not give freedom.

Lastly, I want to say a word about the block grant. I know that a great many hon. Members feel disturbed about the effects of the block grant on education. I would say that little danger exists in the County of Cambridgeshire, as the county council is well known as a pioneer in education. But, in order to allay some of these fears, I suggest that it might be possible for the Minister to consider a quinquennial review, somewhat on the lines of the university grants, so that a vital part of our national life functions such as education should not suffer over a term of years.

8.40 p.m.

Mr. Arthur Skeffington (Hayes and Harlington)

There is so much material contained in the three White Papers before the House that, like the hon. Member for Cambridge (Sir H. Kerr), I think it essential to concentrate on some of the main features if one is not to make an inordinately long speech, although I am afraid I cannot promise to be as brief as he was.

Before making my criticisms, I think it fair to recognise that any Government which is contemplating changes in the structure of local government to bring it more into line with contemporary conditions must face enormous difficulties, some of which arise from the extraordinary devotion which men and women who serve on our local authorities show to them. I do not think that anywhere else in the world it is possible to see a voluntary service carried out with so much loyalty and enthusiasm as we see performed by the army of unpaid councillors in our country.

The last thing any Government want to do, the last thing any hon. Member wants to do, in advocating changes is to dampen this enthusiasm and that loyalty to civic service which is such a characteristic of our society. Nevertheless, I think the time has come when some changes have to be made. They have to be faced frankly and, as the hon. Member for Winchester (Mr. Smithers)said, provided the authorities feel they are being fairly treated and taken fully into confidence there may be much more agreement than is sometimes supposed when one listens merely to the arguments of the respective local authority associations.

The time has arrived when we must acknowledge that many of the smaller authorities, particularly in the rural areas—great as has been their record and, certainly, valuable as has been the service given by the councillors who serve on them—nevertheless we must recognise that they are not financially strong enough nor large enough to provide the service which the modern society requires today. We have to get rid of the concept that every medieval city, which years ago was a large, thriving centre, is still adequate, still financially strong enough, to provide the services which are required.

I am thinking particularly of education. We have all been impressed by what was said on this by the right hon. and learned Member for Montgomery (Mr. C. Davies). If greater equality of service is to be one of our objectives, it is quite wrong when we cross the boundary from a great urban authority to find the poverty of service which exists for the citizens who reside outside and which may affect them all their lives—for example, because of lack of university scholarships.

I think that some changes are called for where smaller authorities are concerned. If we look at the three White Papers together they present a rather confused picture. The impression I have is that there is really to be very little change of responsibility among the authorities. I gathered that from the Minister's insistence that where powers were to be given to first-tier authorities on matters more nearly affecting the people they were to be delegated and not conferred.

The second piece of evidence for that belief is that, although the new Commissions are to be free to adjust boundaries, it appears that they will have to adjust them to a preconceived pattern of functions as proposed in the second White Paper. It seems to me that they cannot alter boundaries effectively and adequately on that basis. I should have thought, as the right hon. and learned Member for Montgomery said, that one ought to have allowed some powers to the commissioners to recommend changes in relation to functions as well as to areas. Otherwise, the results we may get may be very peculiar. After all the consultation which has taken place and the fact that people are ready for change it is a pity the Government have not gone a great deal further than appears to be the case.

It seems only fair, when making criticisms, also to put forward the principles which one believes ought to be the basis of any future organisation of local government. First of all, if local government is to be truly local, then I think that as many services as can be effectively discharged should be placed upon the authority which is nearest to the people, in other words the authority which is on the doorstep. As I have said, I believe that those services should be conferred upon the local authority and not merely delegated to it. In my opinion that is so whether it is a borough council, an urban district council or a rural district council.

I have already made the plea, however, that many of those authorities in rural areas must be enlarged in order to do that job effectively. I see no difficulty in that. It is the only way in which we can make local government truly local, by conferring as many services which can be carried out by the enlarged local authorities.

The second principle is that, in my opinion, there are some functions today which are wider than any unit of local government we have in existence. I am as sure as I can be that this is true about overspill and I think that it is true about water catchment areas and town and country planning. Certainly it is true of the broad conceptions of any planning, although much smaller authorities can be the agents for the implementation of the plan. The general design of the plan must be done by an authority often wider than the county council. I think also this is obviously the case with main drainage and sewerage, too.

If I may take the example of overspill, I know of no problem which is more difficult, more complicated and more frustrating to an authority than that of trying to resettle citizens in new estates outside the boundaries of the exporting authority. The machinery for this today is unsatisfactory, frustrating and time wasting. The negotiations which have to be conducted with various authorities and with the Minister mean that often it is years before effective decisions can be taken. I am sure that is not good for local government. It means that the new communities which ought to be built up and the health, education and other services which ought to be provided for them are delayed quite unnecessarily with consequent harm to those in need of new homes. It means, in my view, that certainly in the great conurbations there ought to be an authority which is larger than the county councils.

Whether that means that it should be an elected authority or an authority composed of representatives of various smaller authorities, I am not absolutely sure. I think there is a lot to be said for having a special elected authority to undertake these responsibilities. It would be limited to the kind of functions which ought to be carried out over a wide area. If this is not done the lower tier authorities will not be able to carry out their own services.

I realise that if we are to transfer many of the services to the first tier authority and to have a larger authority for some functions which I have mentioned it may mean that we depress or debase the standard of the county. That is something which we must face. This is no criticism of the county councils but merely poses the question, are they the right size to undertake the functions which modern society demands? They may be in a county which is compact and largely urbanised, for instance in London, where the county council has a compact and urbanised area with a number of first-tier authorities in the boroughs. There we may have a reasonable set up.

Turning to the financial proposals. I think that all of my hon. Friends who have spoken realise that here we are faced with the greatest of all our disappointments, and see the Government at its worst. I do not want to speak merely about the block grant, because many of my hon. Friends have dealt with that at great length and, no doubt, the closing speeches will refer to it. I want to carry the argument a little further. The whole device being envisaged in the limited and modest proposals of the Government will be endangered on the present financial foundation, not only because of the block grant and what, I believe, will be its crippling effect on services, but because the basis of local government finance is chaotic.

The most eloquent commentary on that is that since the war there have been no fewer than four legislative attempts to patch up the system. In many respects, each further legislative attempt has made the confusion even more confounded. It is an also eloquent commentary on the system on which we raise our local revenue that not one category of ratepayer is paying rates the formula as originally devised. Industry is paying only 25 per cent. and will pay only 50 per cent.; shops are paying 80 per cent.—we had to have a special Measure to readjust their valuations; the Crown is paying by a special method of grace and favour and the domestic ratepayer is paying on 1939 values.

What an extraordinary system. Not one class of ratepayer is paying on the formula as originally designed. Surely, in that case, there is a very strong argument for getting rid of the formula altogether. One of the most depressing features of the present proposals is that the Government have not shown any spirit of adventure nor originality and have still left us with the 1601 system in the hope that we shall manage to blunder through.

If local government must be reformed—the sort of reform which I and everyone else have been advocating—it must be on a sound, simple financial basis. It is disquieting and discouraging that the Government have not brought forward alternative rating proposals. I agree with the right hon. and learned Gentleman the Member for Montgomery and with the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison)that at any rate one ought to examine as an alternative or additional source of income the rating of site values.

That system, as the right hon. Member said, at any rate does not have the feature of our present rating system of penalising the thrifty and encouraging the profligate. If a man adds a garage or small room to his house, the valuation of the house is increased, but if he allows it to deteriorate as, in extreme cases, a slum landlord does, the valuation goes down. That system is crazy. I had hoped that if the Government really intended to make local administration more independent, they would have found a new source of independent revenue, and the rating of site values is at least worthy of examination.

The other thing which shocked me about the Minister's speech on finance was the suggestion that local industry could afford to pay only 50 per cent. of its rates and not more. That that suggestion should be made in the light of our knowledge about the growth of industrial profits and the tiny proportion which industry contributes to the rates is astonishing. The hon. Member for Stretford seemed to think that one could be proud that industry was bearing only 6 per cent. of the total rate burden. That is not something of which to be proud when domestic ratepayers contribute nearly 50 per cent. of the rate burden. It is indefensible, especially when we know that even if industry paid its full rates its rates would be a proper expense to be taken into account in calculating tax liability.

These are the facts. The growth of industrial profits from 1955–56 of all industry has been 9 per cent.—according to the Financial Times Register—from £1,921 million to £2,095 million. Engineering and electrical goods profits rose from £343 million in 1955 to £393 million in 1956, an increase of 15 per cent. The Economist reports that industrial profits in the first quarter of this year were up by about 4½ per cent. It is fantastic that a Minister of the Crown should say at this time that industry cannot afford to pay its proper rate burden.

I can put this in a more graphic way. Unfortunately, I have figures only for 1952, but the proportion will be at least the same today. Take, for example, the motor industry—and I am encouraged to mention this because the hon. Member for Twickenham (Mr. Gresham Cooke)is sitting opposite. In 1952 it spent £2½ million on advertisements, and its contribution in rates all over the country was £412,000. To pretend that if the motor industry had been rated as 100 per cent. it could not bear that burden quite easily is sheer nonsense. Take drugs and the manufacturing chemists; they spent over £4 million in 1952 on advertisements and their contribution in rates all over the country was £120,000—that is for water, fire protection, education services for their apprentices and so on. Let us take the brewers. I mention them because of the close connection between their product and the water rate. In 1952 they spent £1,150,000 on advertisements, and in rates all over the country, including Burton-on-Trent, their contribution to the rate burden was £260,000.

I am surprised that the Minister should come to the House and try to mislead us into believing that if industry were re-rated 100 per cent. it would have any disastrous effect upon industry. The proposals of the Government in the first two White Papers are vague. Worst of all is the inability of the Government to face the fact that local government finance is in an appalling condition because of the system by which local revenue is obtained. Any attempt at reform without dealing with finance will prove to be a delusion.

8.57 p.m.

Mr. Michael Stewart (Fulham)

We have been debating four White Papers—a long debate introduced by a long speech, but in that long speech the two most striking things said by the right hon. Gentleman were not in any of the White Papers. I allude to his references to the new towns and to the proposed Royal Commission on the Metropolitan area. I wish first to mention two points in connection with these two ideas.

On the proposal relating to the new towns, that when the corporations cease, their properties shall not become a function of local government but will pass to a new agency, I would say that it is remarkable that a Government which has taken as its main case throughout the debate the suggestion that we ought to restore vitality and vigour to local government should have come so speedily and without apparent consultation to the view that here, where there was an opportunity to widen the functions, duties and interests of local governments, they should refuse to do so.

An important point has been made in this debate by my hon. Friends the Members for Wellingborough (Mr. Lindgren)and for Newcastle-upon-Tyne, East (Mr. Blenkinsop)that what matters above all from the point of view of the vitality of democracy is the actual service that is rendered. Democracy is not endangered merely because machinery is not perfect. The question that people ask of the machinery of government is: What grist is brought into it and what useful product is turned out? All this fidgeting with the machinery of local government will not increase the dignity of democracy if local government is not going to be capable of dealing with important functions. I believe that on this new towns question, the Government have thrown away an opportunity of giving local authorities a real increase in democratic freedom and not an illusory one.

As regards the proposal for a Royal Commission for the Metropolitan area, the Minister was a little disingenuous when he was asked whether the Commission would have power to deal with the City of London. He knows quite well that the Administrative County of London and the Metropolitan Police District are terms which do not include the City of London. I put the question in threefold form to the Parliamentary Secretary who is to reply. First, have the Government definitely decided not to make the City of London part of the field of inquiry of the Commission? Have they definitely decided that it shall be part of its field of inquiry? Or have they still an open mind about it, and, if so, with whom will they consult? If they decide to exclude it from the Commission's inquiry, such a proposal would be very coldly received, certainly by the London County Council and probably in other quarters also. I have put all the possibilities, so that even a Government with, if I may say so, this Government's reputation for evasion will have to give an answer of some kind.

During the debate, hon. Members in all parts of the House who represent local authorities of all types have taken part. I should like to add my congratulations to those already addressed to the hon. Member for Bristol, West (Mr. Robert Cooke), the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott), and my hon. Friend the Member for East Ham, North (Mr. Prentice)who made their maiden speeches in this debate, to our general pleasure and profit.

The remarkable thing is that in a debate such as this, where we have been concerned with Government proposals affecting the structure and functions of local government—I leave finance aside for the moment—one could make a list of speeches from both sides which have amounted to a chronicle of disappointment with the Government's proposal. This has been so because the Government's proposals have been characterised by timidity and lack of clear purpose throughout. Let us look at that for a moment as it affects almost every level of authority.

My hon. and learned Friend the Member for Kettering (Mr. Mitchison)and others, referring to the Government's proposals with regard to the creation of fresh county boroughs and the formation of county boroughs within conurbations, pointed out that the Government have really said very little about one important possible result, namely, that, if there is this increase in county boroughs, some of the counties may be left in considerable difficulty financially, being reduced in financial strength, and in authority in the work they have to do. Moreover, in some counties, proposals about county boroughs may result in the springing up of quite a large number of county boroughs, with a consequent breaking up of certain services, such as education, now being administered by the county as a whole.

I do not say that the resulting difficulties and dislocations present insuperable problems, but I do say that we ought to have heard rather more from the Government about what they have in mind to mitigate both the difficulties occasioned by the possible breaking up of well-run, efficient services and those occasioned by the possible financial results on counties.

With regard to the counties themselves, the hon. Member for Winchester (Mr. Smithers)was perturbed at the Government's proposals for, as they believe, strengthening the functions of county councils. He felt that that would mean an unnecessary and undesirable invasion of the useful functions now performed by smaller authorities, and that complaint was repeated by several hon. Members on both sides of the House.

If we turn to the proposals for county districts, here, too, there has been disappointment, first over the fact that the Government are thinking only in terms of delegation rather than conferment of powers, and, secondly, that they are thinking in terms of a delegation which will, after all, be enjoyed by quite a small proportion of all the present county districts. That was pointed out by my hon. and learned Friend the Member for Kettering. These disappointments were first voiced, again on the Government side of the House, by the hon. Member for Weston-super-Mare (Sir I. Orr-Ewing), but they have been voiced again by Members on both sides.

I hope that when the Government are considering this matter of county districts, they will bear in mind the point, raised first by my hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn)and afterwards by other Members, that when counties have made their review of county districts, that work should be subject to reconsideration by the Commission. There was, I think, a feeling that the counties themselves ought not to be entrusted solely with this work and that if they were, the result would not be entirely fair to county districts.

Consider another type of authority, not one of the usual elected authorities—the divisional executives. I think it true to say that at the very least, no enthusiasm has been expressed in any part of the House for the disappearance of the divisional executives. The reasons given by the Parliamentary Secretary to the Ministry of Education carried very little conviction. He told us that the divisional executives were expensive. Has he put on the other side of the scales what will be the resulting expense when a large number of matters that are now settled quickly and locally have to be referred time and time again to County Hall? That will be one result of the disappearance of the divisional executives, apart from the frustration of many people who have given valuable service in that direction. The rest of the Parliamentary Secretary's answer was a stock answer, typical of the Government's whole approach, that the divisional executives had been sacrificed because it was part of the general agreement that had been reached with the local authorities.

Let me complete the picture by mentioning an authority which has not yet been mentioned and speak for a moment as a representative of a Metropolitan borough. The Metropolitan boroughs, in addition to the dissatisfactions they share with other local authorities about the Government's rerating proposals, in addition to the fact that they remind the Government of what local authorities have already suffered financially in respect of the de-rating of shops and offices, have their own perhaps small but particular regret that the Government have not announced any changes with regard to highway grants, despite the fact that the Minister has often had drawn to his attention the particular difficulties of Metropolitan authorities responsible for the maintenance of classified roads.

Neither should I forget that the contribution of the hon. Member for Clitheroe (Mr. Fort)was to say that the Government's proposals concerning parishes were inadequate. No authority, therefore, has been left out. There is no part of the Government's proposals about which somebody—usually one of the Minister's hon. Friends—has not expressed disappointment or regret.

Why is that? It is really because—the point was admirably made by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), to whose speech, for many reasons, we all listened with delight—there has been no real coherent principle guiding or inspiring the Government. The Minister called it a bold overhaul. It is not an overhaul: it is a fidget. I hope that the Government will study the speech of my right hon. Friend, and, indeed, the speech of my hon. Friend the Member for Hayes and Harlington (Mr. Skeffington), both of whom put forward very clearly certain guiding principles.

If the Government had been bolder, they might have got stronger opposition in certain quarters, but at least they could have relied on having somebody to get up and say that they had done a really good job. So far, they have got nobody—[An HON. MEMBER: "Except on finance."] Yes, except on finance. As far as areas, structure and functions are concerned, we must say to the Government what the writer of the Book of The Revelation said to the Church of Laodicea: … I would thou wert cold or hot. So then because thou art lukewarm …I will spue thee out of my mouth. When we come to finance, then, of course, the Government are not lukewarm. There the wind blows straight from the pole, with no hesitation. What are the general principles on which the Government have based their financial proposals? It is that the measure of re-rating that is to be introduced should be only partial, and the various attempts in the White Paper to persuade the local authorities that they are really getting a jolly good deal out of this have not, I think, convinced any of the various local government associations. That is one.

Secondly, there is to be no new source of revenue for the local authorities, and, thirdly, there are to be block grants. The interesting thing or one of the interesting things about these three proposals is that the Government at the beginning of their White Paper on Local Government Finance refer with admiration and respect to the work of the Royal Institute of Public Administration and the Institute of Municipal Treasurers and Accountants. The remarkable thing is that the valuable studies—"studies of the first quality", I think, is the Government phrase—performed by both these authorities disagree with the Government on all those three main points.

The Royal Institute of Public Administration is perfectly clear as to the general unsoundness of the whole principle of rerating and the desirability of the full restoration of rating. Both studies make interesting and appreciative references to the possibility of developing new sources of revenue and the municipal treasurers quite frankly take all the Government's arguments about block and percentage grants and tear them into small pieces. If we take those three proposals together—only partial rerating, no new source of revenue and block rather than percentage grants—what is the effect? It is this. The Government are claiming to give local authorities greater freedom and greater responsibilities, but they are at the same time making it almost impossibly difficult for them to get the resources with which to discharge those responsibilities.

There may be arguments against local Income Tax or other new sources of revenue, but it cannot be said that the local authorities must suffer these three things together, no new sources of revenue, the end of percentage grant and only partial rerating, and be expected to be in a financial position to do the job expected of them. The Minister drew attention to this. He said that if we are going to shift the responsibility downwards from central to local government we must take account of the present-day needs for substantial financial resources"—[OFFICIAL REPORT, 29th July, 1957; Vol. 574, c. 924.] On the main issue, with regard to the block grant, I want to make this quite clear. Hon. Members opposite have protested that it is almost sacrilegious to suggest that any local authority faced with block grant finance will be neglectful or unpublic spirited in its duties. They cried out against any such suggestion, but almost in the same breath they were accusing all the local authorities of extravagance. We on this side of the House are not saying and have never said that all local authorities are neglectful or unpublic spirited in carrying out their duties. We do say—and every one knows that it is true—that some councils are less public spirited than others, and still more that some councillors are less public spirited than others. Our objection to the block grant is that it makes easy the path of those who are neglectful, parsimonious and unpublic spirited and makes hard the path of those who want to be bold and generous. The reason it does that, among many others, is that rating is a regressive tax, as was well pointed out by my hon. Friend the Member for Hamilton (Mr. T. Fraser).

Of the Scottish debate and the Government's performance therein I dare not speak, quite apart from the fact that it is considered an impertinence for an Englishman to refer to a Scottish debate. I can only say that I listened with horror to the Government's attempted defence of their policy.

I was saying that rating is regressive taxation. There is a study on this made quite recently by the Oxford Institute of Statistics from which we learn, if we did not know it as a matter of common sense already, that a man of moderate income pays in rates proportionately about half as much again of his income as a man with a large income, and among our poorest citizens there are people who pay a proportion of their income in rates more than four times as much as is paid by the richest citizens. That is the dilemma local authorities are in. The Government say to them, "Either you must neglect the public services or you must impose a burden on your citizens which is not only a greater burden in size but becomes a burden of greater injustice the more you have to make use of the rating system."

Why have the Government adopted the block grant? They say, first, in order to curb extravagance when it has been shown over and over again that there is no substance in this charge of extravagance, and that even if there were no relation has been proved between extravagance and the percentage grant system. Several hon. Members have pointed out that the Geddes, Ray and Edwards Committees, all of which wanted to prove there was extravagance, were unable to do so.

But we need not stop there. The Minister of Education has categorically denied that there is extravagance in the local administration of the education service. We were all pleased to hear on this matter the tones of the hon. Member for Bristol, West (Mr. Robert Cooke)who, in his maiden speech, gave us the real, robust views of the Tory Party on education. I think, with regret, that before long he will learn prudence and learn how to attack education without saying he is doing so. The appeal which my hon. and learned Friend the Member for Kettering made, that if this charge of extravagance is made evidence for it should be produced, has passed unnoticed.

Secondly, the Government say—and this is, perhaps, the most significant part of the whole argument: "We must have certainty in our commitments. The Government must know what they are let in for, and with the percentage grant system they cannot and under the block grant system they can." Let us look at that. If that means that the Government must know their commitments in the short term from year to year, then I say they know them already just as well for local government services as for the Armed Forces or any other part of Government expenditure; but if it means that the Government want to know with certainty what their commitments will be for a period of years, and if that is what the Government are claiming, they cannot at the same time claim that they are going to vary and expand this grant to meet increasing costs and the changing and varying needs of the local authorities. The Government are saying first one thing, then the other, and apparently failing to notice that the two contradict each other.

Much turns, of course, on the amount of the block grant, on which I would ask the Government to study particularly the very interesting example presented in his maiden speech by my hon. Friend the Member for East Ham, North. What is worrying many of the local authorities is uncertainty about the amount, and, of course, that uncertainty the Government have shown, in the correspondence with the County Councils' Association which they have made available to hon. Members, they are determined to preserve.

The local authorities, looking at inflation and at the efforts of the Government to deal with it, may be excused if, with a block grant of uncertain amount, with the Government saying in advance, "We are doing this so as to know where we are," and with the consequent negativing of the Government's ideas for a flexible, variable grant, they feel they are going to be faced with ever increasing charges which they have to meet by the use of a regressive form of tax through local rates. Even if the Government come to their aid in the interim period by making an increase in the grant, the trouble about inflation is that such assistance is always going to come too late. The local authority must decide whether to neglect the service or to overburden the ratepayers first and hope that the Government will pull it out of the difficulty later on.

Year after year we shall have a complicated wrangle between the Government and local authorities as to the settling of the block grant. Any arguments that there have been about what ranks for grant under the present percentage system will be quite mild compared with the annual wrangle that there will be about the working out of this formula.

That brings me to the other reason advanced by the Government for the block grant. They say that it will give greater freedom to local authorities and that they will be able to sweep away controls. Both local authorities and the Government themselves have already shown how false is that claim. Some local authorities have done so by saying, "We have no objection to a block grant, but when will the Government tell us what controls they will get rid of?" Apparently, they do not believe that the adoption of the block grant by itself will automatically free them from any niggling control of the kind which has been so often and so vaguely referred to. They still want to know from what controls they will be freed.

The Government, for their part, have said, "We are, going to conduct a thorough review of controls, and not only for the services switched from percentage to block grant but for those that remain on a percentage grant." That means that the Government accept the proposition that while it may be possible to get rid of a number of controls there is really no co-relation between the question, Is there too much or too little control? and the question, Is there a block or a percentage grant? The attempt to suggest that there is has fallen down all through the debate in the course of the arguments put forward.

I want to refer particularly to the effect of this part of the argument upon education, because five-sixths of the proposal is an educational matter. What are some of the main issues in education today? Where will any local authority get any more freedom in regard to them? First, there is the size of classes. All that a local authority can do in that respect depends upon how many teachers it has and how many buildings it can put up. Will control over capital investment be relaxed? Are the present regulations affecting the number of teachers which a local authority may employ going to be altered? Are regulations with regard to the cost per place or the starting dates for schools going to be changed? If so, that could all be done independently of the change from percentage to block grant. If not, local authorities are getting no greater freedom.

Let us consider the form of reorganisation of secondary education. A local authority's freedom in that respect is largely bound up with its power to close or to reorganise schools. Will the Minister amend the Act to give greater freedom in that respect? He can do that without any change in the form of grant. If that is not to be done, local authorities will have no greater freedom in that respect.

Then there are the awards to university students. May I ask whether the pooling proposals for certain forms of further education will relate to what local authorities spend on awards to university students? This is a matter in which the National Union of Students and other bodies are much interested. None of these proposals gives an authority any greater freedom in the policy which it can pursue with regard to awards to university students.

Quite recently the Parliamentary Secretary told me that the recommendations in the recent circular on this matter would cost some £2½ million. I ask him whether he thinks that local authorities are more likely to respond to the Minister's invitation in that respect under a block grant or under a percentage grant system. He said that percentage grants have not created uniformity in the past, but he knows that they have steadily encouraged it. The Minister's efforts to encourage uniformity have had a response because there has been the percentage grant system. The trend of one system of grants is towards uniformity and the other towards variation.

I say, therefore, that the result of this will be to discourage advance and experiment. One local authority I could mention has made a special effort to reduce the size of classes at no inconsiderable cost to its local rates, and not in the gay, irresponsible manner suggested by some hon. Gentlemen. Other local authorities wishing to act in a similar manner will find that the special price they have to pay for doing so, in comparison with more laggard authorities, will be increased by this proposal, and they are bound to look at the matter again.

Advance and experiment will be discouraged. Inevitably there will be greater variation in standards permitted, and the powers of the Minister of Education, for all his speeches upholding the standards, will be reduced. What is one of the weapons of the Minister of Education against laggard local authorities? It is the threat to withhold grants. Under these proposals will he come to his right hon. Friend and say, "Please will you reduce part of the block grant"? We have not been told how that will work. If it works as I suspect, it will reduce the whole status of the Minister of Education to that of a subordinate to the Minister of Housing and Local Government.

I do not think it an exaggeration to say that these proposals have attracted hostility from everyone connected with education; from teachers, education officers, the Association of Education Committees teachers in technical institutes—everyone connected with education, with the solitary exception of the hon. Member for Bath (Mr. Pitman). Nowhere has there been enthusiasm; in many quarters there has been hostility and everywhere disappointment. The Government, naturally taking a dispirited view of their own performance, have not invited the House to do more than take note of this rather dreary process. In view of the coldness towards this manifested everywhere in the House, we shall press our Amendment and ask for a sterner judgment and a more positive verdict.

9.28 p.m.

The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins)

We have had an interesting debate on the burning subject of local government and it is significant that divergent views have been expressed which to some extent have cut across party alignment. I should like to add my tribute to those three hon. Members who have made their maiden speeches in this debate. I am sure that the House enjoyed their contributions, and no doubt we shall hear from them again. If I may say so without appearing to be patronising, we had a delightfully paternal speech from the right hon. Member for Lewisham, South (Mr. H. Morrison). It was a magnificent conservative speech for which I envied the right hon. Gentleman.

I wish to join with those right hon. and hon. Members who have spoken well of our system of local government and to add my tribute to all those who serve local government in our country, either as councillors or officials or, for that matter, as ratepayers. I agree that there are perhaps too many people who are apt to refer to the reform of local government as if local government were some kind of political delinquent in need of punitive action by Parliament.

My right hon. Friend has never taken that view. But we recognise that local government is not, nor ever can be, a static and unchanging thing. If, as the whole House hopes, it is to survive and thrive, it must continually fashion itself to the times in which we live.

As has been aptly said in the course of the debate, changes in transport, communications and our conceptions of town and country planning, overspill and technological education, call for adaptations in our pattern of local government. I know that in some quarters it is fashionable to say that the quality of local government is declining and that the right people—whoever they may be—are nowadays reluctant to come forward for local government. I realise that it is human nature for many hon. Members to look back and to say, "Things are not as good as they were in my day". I do not accept that as a fact for a moment, but even if it were true it would not be surprising, because the whole House recognises that, since 1945, local government has laboured under very many considerable handicaps.

It was deprived—I am not making a political point here—of the hospital services, public assistance, electricity and gas. It has been subject to quite considerable building restrictions off and on since the end of the war, and there have been intermittent curbs on capital expenditure. The local authorities have come to lean more and more heavily on the support of the central Government for their revenues. Some local authorities have been irked, as has been made plain in the debate, and frustrated, by their limited status. On the other hand, others have taken on responsibilities which are manifestly beyond their resources. These are some of the reasons why the House is discussing local government tonight.

What is it, quite shortly, that Her Majesty's Government seek to do in the proposals now before the House? Broadly, our aim is to see that local authorities possess the resources—financial, technical and otherwise—to enable them to carry out their functions efficiently. It is important that local authorities should be efficient, but I entirely agree with hon. Members who have struck the note that efficiency is not everything in local government. Local government is not a machine, it is a living organism. It not only provides services but it helps us to identify those feelings of pride and loyalty which we associate with the towns and villages where we have our roots.

I entirely agree with the right hon. Gentleman who said earlier today that if ever local government were to lose either its local character or its virility that would be a bad day for British democracy, which draws so much of its vigour from local associations. That is why local independence and freedom of judgment seem to my right hon. Friend to be no less important than efficiency itself.

Before I come to the terms of the Amendment in the names of hon. and right hon. Gentlemen opposite perhaps I may answer one or two of the points that have been raised in the debate. To begin with, the hon. Member for Fulham (Mr. M. Stewart)asked whether the Royal Commission on London Government would include consideration of the City of London. I can say quite clearly that it is my right hon. Friend's intention that the Royal Commission should look at all local government functions in Greater London, and that clearly includes functions exercised by the City Corporation as indeed by any other local authority. Of course, there are some "functions" in the City which are not, strictly speaking, local government, and they will not be the concern of the Royal Commission.

Mr. Ellis Smith (Stoke-on-Trent, South)

Such as what?

Mr. H. Morrison

Can the hon. Gentleman give an indication of the class of authority which he last mentioned?

Mr. Bevins

All I was referring to were the obvious ceremonial duties and functions associated with the City, which the right hon. Gentleman knows.

The question was asked by the hon. Member for Swansea, West (Mr. P. Morris), in reference to the local government commission for Wales, whether it would be possible to include a Welsh-speaking member on that commission. The answer is "Yes", provided, of course, that we can find a gentleman who not only can speak Welsh but also understands the nature of these problems.

The hon. and learned Member for Kettering (Mr. Mitchison)asked the Government a series of questions on their attitude to conurbations. He asked, first, whether it was the intention of the Government that the local government commissions should receive any guidance from my right hon. Friend in their review of the conurbation areas. The answer is that the commissions will be given guidance. There will be various possibilities open to them; they would include whether they should recommend, in the case of any one conurbation, a series of county boroughs, whether they should consider a two-tier structure of government, or whether they should leave the position as it is. Naturally, of course, the Commissions will take evidence from all the local authorities and from any other persons or organisations who have views to express.

When the Commissions have made their recommendations, it will rest with my right hon. Friend, and in the last resort, with Parliament, to decide what changes should take place in the separate conurbations. We were also asked how long the Commissions would take to conclude their work. I can say that they will be established immediately the Bill which is to be presented becomes law. They will be established at that point, and they will set to work without delay. There will be no question of waiting for annual reports. On the contrary, the recommendations of the local government Commissions will go to my right hon. Friend directly they are decided, orders will be made and will be presented to Parliament.

I was also asked the rather minor question possible it might be possible to expedite the work of the Commissions if they were to work on the basis of sub-commissioners. My right hon. Friend sees no objection at all to that possibility, and it is most likely that it will happen.

Mr. Gibson

I understand the Minister's definition of the work of these Commissions, but I should like to ask if there is to be any discussion in this House, and with the local authorities, of the reports of the Commissions before the orders are made?

Mr. Bevins

The reports will be made by the local government Commissions to my right hon. Friend and my right hon. Friend will lay the orders before the House.

Mr. H. Morrison

One of the great qualities of the former Boundary Commission was that before it came to conclusions as to recommendations it had fairly exhaustive discussions with the local authorities concerned. The result was that a lot of things were agreed and done by kindness. Will that happen under the local government Commissions? That would be most valuable in addition to the right of Parliamentary discussion.

Mr. Bevins

The right hon. Member may be quite assured that the local government Commissions will have very full discussions on the lines he has indicated with all the local authority interests concerned.

Several hon. Members have evinced an interest in the question whether we are right in saying that the county councils should review county districts outside the conurbations. Varying views have been expressed on that topic. The view of my right hon. Friend is that it is right that the county councils should undertake those reviews. After all, they are familiar with the areas concerned and they know the local problems. Following the recommendations made in the various cases by the county councils, there will be inquiries at which objections will be heard, so that it will be possible for an aggrieved local authority to appeal to my right hon. Friend against any recommendation by a county council.

The Minister—not Parliament—will be the final arbiter in these matters. I should add that if in any particular case my right hon. Friend takes the view that a county council has not carried out its review adequately or properly, in the last resort he may invite one of the local government commissions to carry it out again. On that my hon. Friend the Member for Winchester (Mr. Smithers)raised a point with which I think I ought to deal. I ought to make clear that my right hon. Friend has had discussions with the Urban District Councils Association and the Rural District Councils Association. Both want these reviews to be carried out by the county councils and not by the local government commissions.

The hon. Member for Wellingborough (Mr. Lindgren)and several other hon. Members raised the financial question of how the changes proposed in the White Papers are likely to affect local authorities. The hon. Member for Wellingborough was very highly critical of my right hon. Friend. He went so far as to say that if the effect of our proposals were to be published they would create a riot—I think those were the words he used—and the Bill would never be published.

The effects of rerating, of the abolition of certain minor grants, of changes in equalisation grant, and the substitution of the general grant for the percentage grants, would clearly mean that some local authorities will gain and some will lose, but it is important to remember—in spite of the smiles of the hon. and learned Member for Kettering—that on the basis of our proposal there is a net gain to all the local authorities in the country, represented by the difference between the net product of rerating, which is £30 million, and the £20 million which is being withheld by way of Government grants. It is an incontrovertible fact, which nothing on earth can get over, that the majority of local authorities which are affected by these changes, on a short term view at least, will be the gainers by our proposals. There will be more gaining authorities than there will be losing authorities.

Mr. Mitchison

The hon. Gentleman chose to comment on my smile. Let me give him the reason for it. I wondered how many more platitudes the Government were going to produce.

Mr. Bevins

When I say on the basis of figures—figures which are available to the hon. and learned Member in the White Papers—that there will be more gainers than losers, I do not see what is platitudinous about that.

Next we have been asked, "If it is true that most local authorities are likely to benefit, how is it that the Minister has not published the figures as they apply to the various local authorities?" The answer is fairly clear from what has been said. The transitional scheme ensures that the impact of these changes on local government shall be felt gradually. In the first year of operation, 1959–60, the losses will be made up wholly by the gainers, and this process of cushioning the losses will continue for some years, at a diminishing rate. Before the transitional period has ended we shall have had the new valuation lists, which are due in April, 1961. The only reason why the individual figures are not being published is that they would be deceptive in view of the transitional arrangements and the future of rating in this country.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

Before the hon. Member leaves the questions put to him, would he reply to a question which I put earlier on whether a specific grant will be made available for mental health development?

Mr. Bevins

I am sorry that I cannot give a categorical answer to that question, because it is still under consideration, but I will gladly get in touch with the hon. Member as soon as possible.

Mr. F. Blackburn (Stalybridge and Hyde)

Would the hon. Member comment on what appeared to be an implied threat from the Minister that after the transitional period all money from rerating will be taken by the Government?

Mr. Bevins

I can give the lie to that completely. What the hon. Member for Stalybridge and Hyde (Mr. Blackburn)suggested yesterday is wholly untrue. I think he will be satisfied with that answer.

Mr. Blackburn

I have read the Minister's speech and I am sure that there was an implied threat in it.

Mr. Bevins

With all respect to the hon. Member, I think he has misunderstood what my right hon. Friend said. That was certainly not in my right hon. Friend's mind.

Turning to the terms of the Opposition Amendment, as I read it right hon. and hon. Members opposite are unhappy about the Government's financial proposals on two principal grounds, first, because they are opposed to the general grant and, secondly, because they disagree with the rerating of industry to the extent of only 50 per cent.

Let me deal, first, with the general grant. The object of the financial review of local government which has been undertaken by my right hon. Friend and his predecessor was to make local government more independent. This was our motive, and we believe that it will be the result of what the Government now propose. Right hon. and hon. Members opposite do not believe that, or at least they say they do not believe it. They say that our objective is to starve local authorities of finance.

When my right hon. Friend was looking at this problem he felt obliged, as he has already made clear, to dismiss the possibility of certain alternative sources of revenue for local authorities. The rating of site values, local income tax and other proposals were given serious consideration but were dismissed as impracticable. We were left with rates and grants as the principal sources of local government income.

It is true that a large part of local government moneys must in the nature of things come from the Exchequer, both now and in the future. At present, a high proportion is paid in the form of specific grants which are tied to particular services. The Government decided that there would be great advantage to local government if as much of that money as possible were paid as a general grant. Surely it is beyond dispute that to give local authorities a large proportion of their Exchequer money as a general grant, not tied in any way to any particular service, is bound to carry with it a much greater measure of financial independence, because local authorities will be free to spend as they think fit, subject to their conforming to basic national standards to which my hon. Friend the Parliamentary Secretary to the Ministry of Education referred yesterday.

We have, therefore, put into general grants all those percentage grants which technically we were able to put. Yesterday, the hon. Member for Wellingborough was astonishingly frank. He said that he would like to regard all local authorities as the mere agents of central Government. That was not a view expressed by his right hon. Friend the Member for Lewisham, South this afternoon. Indeed, if the House as a whole were to take a view such as that, local government in this country would now be on its death bed.

Mr. Lindgren

I am sure that the Parliamentary Secretary does not want to misrepresent me. If he reads HANSARD he will see that what I said was that where national services were locally administered, the citizen had a right to expect a basic standard from one end of the country to the other.

Mr. Bevins

I shall read HANSARD again, but I am sure that my impression of what the hon. Gentleman said is correct.

Of course, there is the possibility that under the new system some local authorities will increase their expenditure on certain services. There is always the possibility that some of them may reduce their expenditure on certain services. There is even the possibility that some local authority may take the outrageous course of trying to reduce the rates paid by the people in its locality—but that happens to be what freedom means.

What hon. Members opposite are asserting is that the democratically elected men and women who serve on our local councils, irrespective of their political affiliations, are incapable of judging how public money should be spent. If that is what they mean, they ought to say so, and then the country would know that the party opposite has no confidence in either local government, or our system of democracy.

I turn to the topic of derating, a far more vexed question than I thought it would be in this debate. I remind the House that when the Valuation for Rating Measure was debated in 1953, the right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton)—after all, very knowledgeable and experienced in these matters of local government—spoke of the dangers of fully re-rating industry, and especially of the dangers of 100 per cent. re-rating of industry in the Development Areas. He used these words: … we should examine with great caution any proposal to modify the derating arrangements which the Government of the day might propose."—[OFFICIAL REPORT, 21st May, 1953; Vol. 515, c. 2368.] That is what Her Majesty's Government have done. They have proceeded in this matter with caution. I wish that I could say that of certain hon. and right hon. Gentlemen opposite, who have rushed into this like a bull at a fair. A right hon. Gentleman opposite was good enough to tell the House that £30 million extra which industry is to pay in rates represented a mere row of beans. It was almost reminiscent of "chicken feed" and "meaningless symbols." I beg hon. Members opposite to try to keep this matter of derating in proportion and perspective.

After all, the rateable values on which rates were paid by industry before the revaluation were only £15 million. I am speaking now of rateable values. After the revaluation those rateable values had risen to £39 million, and assuming that the Government's present proposals become law, that figure will rise to £74 million. If the proposal embodied in the Amendment were to take effect, that figure would be almost double.

Therefore, I ask the House to bear in mind that the rateable values upon which industry is now to pay rates have been quadrupled by Her Majesty's Government, and it seems to me to be slightly irresponsible for the Opposition to assume that they could inflict this very considerable burden of additional rerating to the full extent of 100 per cent. without having some effect on costs and on prices. It is interesting to recall that during the whole of the six years that the party opposite enjoyed office in this country, derating was one of the untouchables. Nothing whatever was done about derating by the party opposite.

May I conclude with two very short quotations? The leading article in The Times yesterday opened with these words: Labour in office failed to devise a policy for making local government effective and displayed its inner paralysis by abolishing the Boundary Commission when it ventured to suggest a possible policy. Indeed, the party opposite at that time abolished the Boundary Commission on the undertaking that legislation would be introduced for the reform of local government. That legislation was never introduced. It is perfectly true that the party opposite had only another two years to survive, which was probably just as well.

The other day I was reading part of a speech in a local government debate a few years ago in this House, in which a striking contribution was made by the hon. Member for Oldham, West (Mr. Hale), and he used these words which I think the House would like to hear: When I was trying, in 1946–47, to get the boundaries of Oldham widened in order to take in the great new area which we needed for our housing scheme, my right hon. Friend the Member for Ebbw Vale (Mr. Bevan)said, Take in the bits you need, but wait because we are to consider the question of local government' The hon. Member for Oldham, West made this comment: People have been going to consider that question since 1888, and they will go on considering it."—[OFFICTAL REPORT, 16th March, 1956 Vol. 550, c. 751.] Her Majesty's Government have considered it. They have brought forward constructive proposals which we commend to the House.

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

The House divided: Ayes 308, Noes 249.

Division No. 176.]	AYES	[9.59 p.m.
Agnew, Sir Peter	Farey-Jones, F. W.	Joseph, Sir Keith
Aitken, W. T.	Fisher, Nigel	Joynson-Hicks, Hon. Sir Lancelot
Allan, R. A. (Paddington, S.)	Fletcher-Cooke, C.	Kaberry, D.
Alport, C. J. M.	Fraser, Hon. Hugh (Stone)	Kerby, Capt. H. B.
Amery, Julian (Preston, N.)	Fraser, Sir Ian (M'cmbe & Lonsdale)	Kerr, Sir Hamilton
Amory, Rt. Hn. Heathcoat (Tiverton)	Freeth, Denzil	Kershaw, J. A.
Armstrong, C. W.	Galbraith, Hon. T. G. D.	Kimball, M.
Ashton, H.	Gammans, Lady	Kirk, P. M.
Astor, Hon. J. J.	Garner-Evans, E. H.	Lagden, G. W.
Atkins, H. E.	George, J. C. (Pollok)	Lambert, Hon. G.
Baldock, Lt.-Cmdr. J. M.	Gibson-Watt, D.	Lambton, Viscount
Baldwin, A. E.	Glover, D.	Lancaster, Col. C. G.
Balniel, Lord	Glyn, Col. R.	Langford-Holt, J. A.
Barber, Anthony	Godber, J. B.	Leather, E. H. C.
Barlow, Sir John	Gomme-Duncan, Col. Sir Alan	Leavey, J. A.
Barter, John	Goodhart, Philip	Legge-Bourke, Maj. E. A. H.
Baxter, Sir Beverley	Gough, C. F. H.	Legh, Hon. Peter (Petersfield)
Beamish, Maj. Tufton	Gower, H. R.	Lennox-Boyd, Rt. Hon. A. T.
Bell, Philip (Bolton, E.)	Graham, Sir Fergus	Lindsay, Martin (Solihull)
Bell, Ronald (Bucks, S.)	Grant, W. (Woodside)	Linstead, Sir H. N.
Bennett, Dr. Reginald	Green, A.	Lloyd, Rt. Hon. G. (Sutton Coldfield)
Bevins, J. R. (Toxteth)	Gresham Cooke, R.	Lloyd, Maj. Sir Guy (Renfrew, E.)
Bidgood, J. C.	Grimston, Hon. John (St. Albans)	Lloyd, Rt. Hon. Selwyn (Wirral)
Biggs-Davison, J. A.	Grimston, Sir Robert (Westbury)	Longden, Gilbert
Birch, Rt. Hon. Nigel	Grosvenor, Lt.-Col- R. G.	Low, Rt. Hon. A. R. W.
Bishop, F. P.	Gurden, Harold	Lucas, Sir Jocelyn (Portsmouth, S.)
Black, C. W.	Hall, John (Wycombe)	Lucas, P. B. (Brentford & Chiswick)
Body, R. F.	Hare, Rt. Hon. J. H.	Lucas-Tooth, Sir Hugh
Bossom, Sir Alfred	Harris, Reader (Heston)	McAdden, S. J.
Boyd-Carpenter, Rt. Hon. J. A.	Harrison, A. B. C. (Maldon)	Macdonald, Sir Peter
Boyle, Sir Edward	Harrison, Col. J. H. (Eye)	Mackeson, Brig. Sir Harry
Braine, B. R.	Harvey, Sir Arthur Vere (Macclesfd)	McKibbin, A. J.
Braithwaite, Sir Albert (Harrow, W.)	Harvey, Ian (Harrow, E.)	Mackie, J. H. (Galloway)
Bromley-Davenport, Lt.-Col. W. H.	Harvey, John (Walthamstow, E.)	McLaughlin, Mrs. P.
Brooke, Rt. Hon. Henry	Harvie-Watt, Sir George	Maclay, Rt. Hon. John
Browne, J. Nixon (Craigton)	Hay, John	Maclean, Sir Fitzroy (Lancaster)
Bryan, P.	Head, Rt. Hon. A. H.	McLean, Neil (Inverness)
Bullus, Wing Commander E. E.	Heald, Rt. Hon. Sir Lionel	Macleod, Rt. Hn. Iain (Enfield, W.)
Butcher Sir Herbert	Henderson, John (Cathcart)	MacLeod, John (Ross & Cromarty)
Butler, Rt. Hn. R.A.(Saffron Walden)	Henderson-Stewart, Sir James	Macmillan, Rt. Hn. Harold (Bromley)
Campbell, Sir David	Hicks-Beach, Maj. W. W.	Macmillan, Maurice (Halifax)
Carr, Robert	Hill, Rt. Hon. Charles (Luton)	Macpherson, Niall (Dumfries)
Cary, Sir Robert	Hill, Mrs. E. (Wythenshawe)
Channon, Sir Henry		Maddan, Martin
Chichester-Clark, R.	Hill, John (S. Norfolk)	Maitland, Cdr. J. F. W. (Horncastle)
Churchill, Rt. Hon. Sir Winston	Hinchingbrooke, Viscount	Maitland, Hon. Patrick (Lanark)
Clarke, Brig. Terence (Portsmth, W.)	Hirst, Geoffrey	Markham, Major Sir Frank
Cole, Norman	Hobson, John (Warwick & Leam'gt'n)	Marlowe, A. A. H.
Conant, Maj. Sir Roger	Holland-Martin, C. J.	Marples, Rt. Hon. A. E.
Cooke, Robert	Hope, Lord John	Marshall, Douglas
Cooper, A. E.	Hornby, R. P.	Mathew, R.
Cooper-Key, E. M.	Hornsby-Smith, Miss M. P.	Maude, Angus
Cordeaux, Lt.-Col. J. K.	Horobin, Sir Ian	Maudling, Rt. Hon. R.
Corfield, Capt. F. V.	Horsbrugh, Rt. Hon. Dame Florence	Mawby, R. L.
Craddock, Beresford (Spelthorne)	Howard, Gerald (Cambridgeshire)	Maydon, Lt.-Comdr. S. L. C.
Crowder, Petre (Ruislip—Northwood)	Howard, Hon. Greville (St. Ives)	Medlicott, Sir Frank
Cunningham, Knox	Howard, John (Test)	Milligan, Rt. Hon. W. R.
Currie, G. B. H.	Hudson, W. R. A. (Hull, N.)	Molson, Rt. Hon. Hugh
Dance, J. C. G.	Hughes Hallett, Vice-Admiral J.	Moore, Sir Thomas
Davidson, Viscountess	Hughes-Young, M. H. C.	Morrison, John (Salisbury)
D'Avigdor-Goldsmid, Sir Henry	Hulbert, Sir Norman	Mott-Radclyffe, Sir Charles
Deedes, W. F.	Hurd, A. R.	Nabarro, G. D. N.
Digby, Simon Wlngfield	Hutchison, Michael Clark (E'b'gh, S.)	Nairn, D. L. S.
Dodds-Parker, A. D.	Hutchison, Sir Ian Clark (E'b'gh, W.)	Neave, Airey
Donaldson, Cmdr. C. E. McA.	Hutchison, Sir James (Scotstoun)	Nicholls, Harmar
Doughty, C. J. A.	Hyde, Montgomery	Nicholson, Godfrey (Farnham)
Drayson, G. B.	Hylton-Foster, Rt. Hon. Sir Harry	Nicolson, N. (B'n'm'th, E. & Chr'ch)
du Cann, E. D. L.	Iremonger, T. L.	Noble, Comdr. Rt. Hon. Allan
Duthie, W. S.	Irvine, Bryant Godman (Rye)	Nugent, C. R. H.
Eccles, Rt. Hon. Sir David	Jenkins, Robert (Dulwich)	O'Neill, Hn. Phelim (Co. Antrim, N.)
Eden, J. B. (Bournemouth, West)	Jennings, J. C. (Burton)	Ormsby-Gore, Rt. Hon. W. D.
Elliot, Rt. Hon. W. E. (Kelvingrove)	Jennings, Sir Roland (Hallam)	Orr, Capt. L. P. S.
Elliott, R. W. (N'castle upon Tyne, N)	Johnson, Dr. Donald (Carlisle)	Orr-Ewing, Charles Ian (Hendon, N.)
Emmet, Hon. Mrs. Evelyn	Johnson, Eric (Blackley)	Orr-Ewing, Sir Ian (Weston-S-Mare)
Errington, Sir Eric	Johnson, Howard (Kemptown)	Page, R. G.
Erroll, F. J.	Jones, Rt. Hon. Aubrey (Hall Green)	Panned, N. A. (Kirkdale)
Partridge, E.	Russell, R. S.	Thompson, Kenneth (Walton)
Peyton, J. W. W.	Sandys, Rt. Hon. D.	Thompson, Lt.-Cdr. R.(Croydon, S.)
Pickthorn, K. W. M.	Schofield, Lt.-Col. W.	Thorneycroft, Rt. Hon. P.
Pike, Miss Mervyn	Scott-Miller, Cmdr. R.	Thornton-Kemsley, C. N.
Pilkington, Capt. R. A.	Sharples, R. C.	Tiley, A. (Bradford, W.)
Pitman, I. J.	Shepherd, William	Tilney, John (Wavertree)
Pott, H. P.	Simon, J. E. S. (Middlesbrough, W.)	Turton, Rt. Hon. R. H,
Powell, J. Enoch	Smithers, Peter (Winchester)	Tweedsmuir, Lady
Price, David (Eastleigh)	Smyth, Brig. Sir John (Norwood)	Vane, W. M. F.
Price, Henry (Lewisham, W.)	Soames, Christopher	Vaughan-Morgan, J. K.
Prior-Palmer, Brig. O. L.	Spearman, Sir Alexander	Vickers, Miss Joan
Profumo, J. D.	Speir, R. M.	Wakefield, Edward (Derbyshire, W.)
Raikes, Sir Victor	Spence, H. R. (Aberdeen, W.)	Wakefield, Sir Wavell (St. M'lebone)
Ramsden, J. E.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)	Walker-Smith, Rt. Hon. Derek
Rawlinson, Peter	Stanley, Capt. Hon. Richard	Wall, Major Patriok
Redmayne, M.	Stevens, Geoffrey	Ward, Rt. Hon. G. R. (Worcester)
Rees-Davies, W. R.	Steward, Harold (Stockport, S.)	Ward, Dame Irene (Tynemouth)
Remnant, Hon. P.	Steward, Sir William (Woolwich, W.)	Waterhouse, Capt. Rt. Hon. C.
Renton, D. L. M.	Stoddart-Scott, Col. Sir Malcolm	Watkinson, Rt. Hon. Harold
Ridsdale, J. E.	Storey, S.	Webbe, Sir H.
Rippon, A. G. F.	Studholme, sir Henry	Whitelaw, W. S. I.
Roberts, Sir Peter (Heeley)	Summers, Sir Spencer	Williams, Paul (Sunderland, S.)
Robertson, Sir David	Taylor, Sir Charles (Eastbourne)	Williams, R. Dudley (Exeter)
Robinson, Sir Roland (Blackpool, S.)	Taylor, William (Bradford, N.)	Wins, G. (Bridgwater)
Robson Brown, Sir William	Teeling, W.	Wood, Hon. R.
Rodgers, John (Sevenoaks)	Temple, John M.	Yates, William (The Wrekin)
Roper, Sir Harold	Thomas, Leslie (Canterbury)
Ropner, Col. Sir Leonard	Thomas, P. J. M. (Conway)	TELLERS FOR THE AYES:
		Mr. Heath and Mr. Oakshott.
NOES
Ainsley, J. W.	Delargy, H. J.	Hynd, J. B. (Attercliffe)
Albu, A. H.	Dodds, N.N.	Irvine, A. J. (Edge Hill)
Allaun, Frank (Salford, E.)	Donnelly, D. L.	Irving, Sydney (Dartford)
Allen, Arthur (Bosworth)	Dugdale, Rt. Hn. John (W. Brmwoh)	Janner, B.
Allen, Soholefield (Crewe)	Dye, S.	Jay, Rt. Hon. D. P. T.
Awbery, S. S.	Ede, Rt. Hon. J. C.	Jeger, George (Goole)
Bacon, Miss Alice	Edelman, M.	Jeger, Mrs. Lena(Holbn & St.Pncs, S.)
Baird, J.	Edwards, Rt. Hon. John (Brighouse)	Jenkins, Roy (Steohford)
Bellenger, Rt. Hon. F. J.	Edwards, Rt. Hon. Ness (Caerphilly)	Johnson, James (Rugby)
Bence, C. R. (Dunbartonshire, E.)	Edwards, Robert (Bilston)	Johnston, Douglas (Paisley)
Benn, Hn. Wedgwood (Bristol, S.E.)	Edwards, W. J. (Stepney)	Jones, Rt. Hon. A. Creech (Wakefield)
Benson, G.	Evans, Albert (Islington, S.W.)	Jones, David (The Hartlepools)
Beswick, Frank	Evans, Edward (Lowestoft)	Jones, Jack (Rotherham)
Bevan, Rt. Hon. A. (Ebbw vale)	Fernyhough, E.	Jones, J. Idwal (Wrexham)
Blackburn, F.	Fienburgh, W.	Jones, T. W. (Merioneth)
Blenkinsop, A.	Finch, H. J.	Kenyon, C.
Blyton, W. R.	Fletcher, Eric	Key, Rt. Hon. C. W.
Boardman, H.	Forman, J. C.	King, Dr. H. M.
Bottomley, Rt. Hon. A. G.	Fraser, Thomas (Hamilton)	Lawson, G. M.
Bowden, H. W. (Leicester, S.W.)	Gaitskell, Rt. Hon. H. T. N.	Ledger, R. J.
Bowles, F. G.	George, Lady Megan Lloyd(Car'then)	Lee, Frederick (Newton)
Boyd, T. C.	Gibson, C. W.	Lee, Miss Jennie (Cannock)
Braddook, Mrs. Elizabeth	Gooch, E. G.	Lever, Harold (Cheetham)
Brockway, A. F.	Gordon Walker, Rt. Hon. P. C.	Lever, Leslie (Ardwiok)
Broughton, Dr. A. D. D.	Greenwood, Anthony	Lewis, Arthur
Brown, Thomas (Ince)	Grenfell, Rt. Hon. D. R.
Burke, W. A.	Grey, C. F.	Lindgren, G. S.
Butler, Herbert (Hackney, G.)	Griffiths, David (Rother valley)	Lipton, Marcus
Butler, Mrs. Joyce (Wood Green)	Griffiths, Rt. Hon. James (Llanelly)	Logan, D. G.
Callaghan, L. J.	Griffiths, William (Exchange)	Mabon, Dr. J. Dickson
Carmichael, J.	Grimond, J.	MacDermot, Niall
Castle, Mrs. B. A.	Hale, Leslie	McInnes, J.
Champion, A. J.	Hall, Rt. Hn. Glenvil (Colne Valley)	McKay, John (Wallsend)
Chapman, W. D.	Hamilton, W. W.	MacPherson, Malcolm (Stirling)
Chetwynd, G. R.	Hannan, W.	Mahon, Simon
Clunie, J.	Harrison, J. (Nottingham, N.)	Mallalieu, E. L. (Brigg)
Coldrick, W.	Hayman, F. H.	Mann, Mrs. Jean
Collick, P. H. (Birkenhead)	Healey, Denis	Marquand, Rt. Hon. H. A.
Collins, V. J.(Shoreditch & Finsbury)	Henderson, Rt, Hn. A. (Rwly Regis)	Mason, Roy
Corbet, Mrs. Freda	Herbison, Miss M.	Mayhew, C. P.
Cove, W. G.	Hewitson, Capt. M.	Mellish, R. J.
Craddook, George (Bradford, S.)	Hobson, C. R. (Kelghley)	Messer, Sir F.
Cronin, J. D.	Holman, P.	Mikardo, Ian
Crossman, R. H. S.	Holmes, Horace	Mitchison, G. R.
Cullen, Mrs. A.	Houghton, Douglas	Monslow, W.
Darling, George (Hillsborough)	Howell, Charles (Perry Barr)	Moody, A. S.
Davies, Rt. Hn. Clement (Montgomery)	Hoy, J. H.	Morris, Percy (Swansea, W.)
Davies, Ernest (Enfield, E.)	Hughes, Cledwyn (Anglesey)	Morrison, Rt. Hn. Herbert (Lewis'm, S.)
Davies, Harold (Leek)	Hughes, Emrys (S. Ayrshire)	Mort, D. L.
Davies, Stephen (Merthyr)	Hughes, Hector (Aberdeen, N.)	Moss, R.
Deer, G.	Hunter, A. E.	Moyle, A.
de Freitas, Geoffrey	Hynd, H. (Accrington)	Mulley, F. W.

Noel-Baker, Rt. Hon. P. (Derby, S.)	Roberts, Albert (Normanton)	Thomson, George (Dundee, E.)
O'Brien, Sir Thomas	Roberts, Goronwy (Caernarvon)	Thornton, E.
Oliver, G. H.	Robinson, Kenneth (St. Pancras, N.)	Timmons, J.
Oram, A. E.	Rogers, George (Kensington, N.)	Tomney, F.
Orbach, M.	Ross, William	Osborne, H. C.
Oswald, T.	Royle, C.	Viant, S. P.
Owen, W. J.	Shinwell, Rt. Hon. E.	Wade, D. W.
Padley, W. E.	Short, E. W.	Watkins, T. E.
Paget, R. T.	Shurmer, P. L. E.	Weitzman, D.
Paling, Rt. Hon. W. (Dearne Valley)	Silverman, Julius (Aston)	Wells, Percy (Faversham)
Palmer, A. M. F.	Silverman, Sydney (Nelson)	Wells, William (Walsall, N.)
Pannell, Charles (Leeds, W.)	Simmons, C. J. (Brierley Hill)	West, D. G.
Pargiter, G. A.	Skeffington, A. M.	Wheeldon, W. E.
Parker, J.	Slater, Mrs. H. (Stoke, N.)	White, Henry (Derbyshire, N.E.)
Parkin, B. T.	Slater, J. (Sedgefield)	Wigg, George
Paton, John	Smith, Ellis (Stoke, S.)	Wilcock, Group Capt. C. A. B.
Peart, T. F.	Sorensen, R. W.	Wilkins, W. A.
Pentland, N.	Soskice, Rt. Hon. Sir Frank	Willey, Frederick
Prentice, R. E.	Sparks, J. A.	Williams, David (Neath)
Price, J. T. (Westhoughton)	Steele, T.	Williams, Ronald (Wigan)
Price, Philips (Gloucestershire, W.)	Stewart, Michael (Fulham)	Williams, W. R. (Openshaw)
Probert, A. R.	Stonehouse, John	Williams, W. T. (Barons Court)
Proctor, W. T.	Stones, W. (Consett)	Willis, Eustace (Edinburgh, E.)
Pryde, D. J.	Strachey, Rt. Hon. J.	Wilson, Rt. Hon. Harold (Huyton)
Pursey, Cmdr. H.	Strauss, Rt. Hon. George (Vauxhall)	Winterbottom, Richard
Randall, H. E.	Stross, Dr. Barnett (Stoke-on-Trent, C.)	Woodburn, Rt. Hon. A.
Rankin, John	Summerskill, Rt. Hon. E.	Woof, R. E.
Redhead, E. C.	Swingler, S. T.	Yates, V. (Ladywood)
Reeves, J.	Sylvester, G. O.	Younger, Rt. Hon. K.
Reid, William	Taylor, Bernard (Mansfield)	Zilliacus, K.
Rhodes, H.	Taylor, John (West Lothian)
Robens, Rt. Hon. A.	Thomas, lorwerth (Rhondda, W.)	TELLERS FOR THE NOES:
		Mr. Popplewell and Mr. Pearson.

Main Question put and agreed to.

Resolved, That this House takes note of the White Papers relating to the Areas, Status, Functions and Finance of Local Authorities in England and Wales (Command Papers Nos. 9831, 161 and 209), and to Local Government Finance in Scotland (Command Paper No. 208).