LONDON COUNTY COUNCIL (MONEY) BILL (By Order)

HC Deb 22 May 1957 vol 570 cc1291-345

Order for Second Reading read.

Motion made, and Question proposed, That the Bill be now read a Second time.

7.0 p.m.

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

It is not my intention to delay the Second Reading of the Bill unduly, because I know that hon. Members wish to debate at length the Motion for an Instruction which is to follow. The point which I wish to raise is, however, a specific one and can be discussed only on Second Reading and not on the Instruction.

For some years, hon. Members of this House in whose constituencies the London County Council has set up housing estates have been worried by the policy of the London County Council in refusing to look after the children of existing L.C.C. tenants and throwing the onus of housing the children upon the local authority in whose area the housing estate is established.

We recognise, of course, that the housing problems of the London County Council are exceptional and that they must be one of the Council's major worries. We recognise, also, that over the years the London County Council has done an extraordinarily fine job in housing many hundreds of thousands of people in the area for which it is responsible. Having said that, however, I submit that the L.C.C. has no right to solve its problem, or to attempt to do so, at the expense of other local authorities. That is precisely what happens in the existing situation.

The Borough of Ilford is not as seriously affected as is the adjacent Borough of Dagenham, in which, I believe, 50 or 60 per cent, of the entire houses in the borough are under the control of the London County Council. The problem in Ilford is, however, bad enough. Our land is now all used up and we still have a very long waiting list. So that on the basis of our existing waiting list, plus the accommodation which is available, we have no possibility of solving the housing difficulties of a large number of people already living in difficult conditions within the town.

Within Ilford, we have two London County Council housing estates: the Becontree estate, which comprises 2,610 houses, and the now nearly-built Hainault estate, which at present has 474 houses, making a total of 3,084 houses in the borough where we have, overall, about 44,000 houses. We have on our waiting list about 2,000 applicants for whom no accommodation is available. After having fulfilled our existing commitments for slum clearance, temporary bungalows and requisitioned property, we shall have available only about 330 dwellings to satisfy the 1,879 people on the waiting list.

We have from the London County Council houses alone a waiting list of 153, which grows every month. We have to try to house those 153 and as fast as they are housed the London County Council then puts more people into the accommodation which they have vacated. Therefore, it becomes absolutely impossible for the Borough of Ilford—or, indeed, any other borough in which a London County Council housing estate is established—to look after its own people first.

What we think should happen is something on these lines. First, after a given period, which can be determined by negotiation—say, seven, fourteen or even twenty years after the establishment of a housing estate—provision should be made for the local authority to have the power to acquire that housing estate and to assume all the financial obligations of administration. [An HON. MEMBER: "To take it over?"] I used the word "acquire". That means to buy or in some other way to acquire it by a proper financial arrangement.

Mrs. Freda Corbet (Peckham)

At present-day values?

Mr. Cooper

The value would be determined according to the time when the property was taken over. This would not be something which would be dealt with simply in 1957. I am suggesting something which will go on over many years. I assume that the London County Council will for a long time be seeking to acquire land in various parts of Greater London or in the counties around. Therefore, this problem is a continuing one. I am dealing not only with the estates which now exist, but with those which are to come.

Secondly, I suggest that when a new estate is completed, the local authority should by negotiation with the L.C.C. have the right to control a proportion—I do not at this juncture attempt to give any figure—of the lettings of the estate. It could be possible that in such negotiations a financial adjustment could be made between the two authorities. That seems to me to be an equitable and fair method in the interests of the receiving authority.

I therefore conclude in the way I began. I recognise that the London County Council has very severe housing difficulties, but I submit that the L.C.C. is not entitled to solve these problems at the expense of other local authorities.

7.8 p.m.

Mr. C. W. Gibson (Clapham)

I have no complaint about the way in which the hon. Member for Ilford, South (Mr. Cooper) has raised this matter. No one will dispute that Ilford, like most other large towns, has a tremendous housing problem, but it is somewhat unreasonable to expect that a vigorous and live housing authority like the London County Council, which because of its difficulties is given powers quite deliberately by Parliament to build outside the area of its county, should then be asked to hand over those powers to the local authority in whose area the houses might happen to be. Some estates present additional difficulty because they cover more than one local authority area. How we would solve the political administration difficulties, I do not quite know.

The fact is that it is the London ratepayers who have paid for the building of these houses. They have spent many millions of pounds on them. To my knowledge, some forty or fifty years have been spent in building up these housing estates in and around London. In spite of that work, however, the waiting list of the County of London makes the long list in Ilford pale into insignificance. In London there are about 55,000 or more urgent cases with no possibility of being rehoused in the next three or four years. indeed, so difficult has the position become that all the people on the waiting list have been informed that the L.C.C, with all its vast responsibilities for rehousing thousands of people from the slum houses which are now being pulled down, will not be able to house more than, at the outside, 2,000 people from the general waiting list. The rest have no hope at all.

Mr. E. Partridge (Battersea, South)

Why did the London County Council pull down the prefabs on Wandsworth Common?

Mr. Gibson

I hope that the hon. Gentleman will not encourage me to say too much about that. I opposed pulling down the prefab buildings on the Common, but the Minister of Housing and Local Government insisted that they should be demolished.

Mr. Partridge

Oh, no.

Mr. Wilfred Fienburgh (Islington, North)

Ask him.

Mr. Gibson

The question is whether it is reasonable that some of the houses built by London County Council should be handed over to places like Ilford, in view of the tremendous housing demand which exists in London. I have all the sympathy in the world with the people in Ilford who want houses and cannot get them, but I think even the hon. Member for Ilford, South will admit that London's claim to houses is very much greater than Ilford's, and that until the London County Council has been able to solve its housing problem it ought not to let go any one of its houses.

The County Council, however, does not say that that is the end of the matter. There was a time when it permitted the sons and daughters of its tenants to have prior claims on empty houses on its estates. That has been altered only because of the enormous difficulty that the County Council is having in housing the people already on its waiting list. It has not, however, refused other applications. It has made arrangements whereby a proportion of the vacancies which occur on its estates are allocated to people on the housing lists of other local authorities. If the hon. Member for Ilford, South would care to know them, I will give him the numbers allocated this year. It cannot be said that the County Council is indifferent to the housing problems of Ilford or of any other borough.

The people whom the hon. Member should complain about are the people who sit on the Government Front Bench. The hon. Member talked about the probability that the London County Council would build more estates outside London, but it has been refused the opportunity of buying additional sites. That occurred during the latter part of my own chairmanship of the London County Council's Housing Committee. For reasons which were regarded as good reasons, I suppose, the county was not given permission to buy new sites on which it could rehouse some people, and at the moment it does not look as though those people will be rehoused in the next ten or twenty years.

There are one or two ideas which, I hope, will develop into practicalities, but at the moment all the houses being built on its out-county estates, and being built, I emphasise, with permission, are nearing completion, and most of them have been completed. The County Council has a long list of applicants waiting for houses, and they are not only people who want better accommodation than that in which they are living at present, but people whose housing conditions are chronically bad, who are suffering from chronic overcrowding or chronic bad health. Owing to the pressure on the County Council to build as many houses as it can as part of slum clearance proposals, and as it is statutorily bound to rehouse its people, it cannot find enough houses for the people at present on its waiting list.

I hope, therefore, that the people of Ilford will recognise that the County Council has an even bigger difficulty to face than they have, and that the hon. Member for Ilford, South will take it from me that we have a known problem ourselves, and that while we also have the greatest sympathy with the Ilford people we think that the needs of London at the moment, and for the next few years, will be greater than the needs of any other part of the country. The London County Council will have to keep what houses it has got and get as many more houses as it possibly can if it is ever to solve the housing problem in London.

I hope that the House will give the Bill a Second Reading.

7.15 p.m.

Mr. Somerville Hastings (Barking)

As my constituency contains approximately one-third of the houses in the Becontree area, which we are now discussing, I think that it is up to me to say a word or two. Perhaps, I am in a better position than the hon. Member for Ilford, South (Mr. Cooper) to speak about this matter, since the Borough of Barking, which I have the honour to represent, has, like the Borough of Dagenham next to it, made repeated representations to the London County Council that something should be done, whereas, as far as I know, the Borough of Ilford has not so far made any application to the London County Council, nor, as far as I know, have any of the other municipalities in whose areas are situated the other 20 out-county housing estates of the L.C.C.

Nevertheless, I agree that there is much in what the hon. Member for Ilford, South has said. It is desirable that all municipal housing in a borough should be owned by that borough. It is easier for local government, and if it be possible it is desirable that negotiations should be carried out to see how far that can be made practicable.

After all, London is in a very difficult position. When, in a primitive village, the population increases and more houses are needed, if the money is available more houses may be built. But London is a very big "village," and has to house its increasing population outside London. When London embarks on housing and slum clearance schemes it needs to move the denizens temporarily outside the county. Not only that, but because of the decreased density that is desirable many of the population cannot be rehoused in the area, which means that more houses are necessary outside the county, too.

I would stress the fact that it is desirable, if local communities are to be formed and to continue to exist, that the children of the people in the Becontree area should be able to settle there. There is great difficulty at the present time, as we find at Barking.

However, it is not only lack of housing accommodation which prevents the young people from remaining on the Becontree estate. There are other considerations. Many go to Avaley and Basildon because they can get not only work but houses there as well, and the houses depend on getting work. This is a real problem, and I feel that we should be grateful to the hon. Member for Ilford, South for having raised it. I think that the suggestion which he made should be given careful consideration, and that negotiations should be carried out, as, indeed, they have been and are being carried out, between the areas affected and the London County Council. I hope that if that is done a solution equitable to all the parties concerned will come to light.

7.20 p.m.

Mr. B. T. Parkin (Paddington, North)

The House might well compliment the hon. Member for Ilford, South (Mr. Cooper) on the ingenuity he has displayed in bringing this controversy on to the Floor of the House, but it is rather unfortunate that the hon. Member has been unable to devise any way other than to put on the Order Paper a Motion which would bring about a result exactly opposite to the one that he desires.

Mr. Cooper

I have no Motion before the House. This is a debate on Second Reading.

Mr. Speaker

I remind the hon. Member for Paddington, North (Mr. Parkin) that the Question is, "That the Bill be now read a Second time ". We cannot discuss the Instruction on the Order Paper until the Bill has been read a Second time.

Mr. Parkin

Yes, Mr. Speaker, but the issue is surely that the hon. Member for Ilford, South has brought this matter to the attention of the House in order to air a difficulty which my hon. Friend the Member for Barking (Mr. Hastings) has just agreed is a real one.

It would be unfortunate if the debate led to criticism, or one were recommended not to give the Bill a Second Reading when this Measure is essential to the day-to-day work of the London County Council. The debate has called attention to the fact that the financial administration of the London County Council is very efficient indeed. [Laughter.] I think that it is sometimes fashionable to laugh at these very large organisations, as though they were not very particular about the details of their administration and always asked for more money than they need. When one examines the working balance of London County Council it may seem to be a great deal of money, but to have only two weeks' outgoings in hand means that there must be a very highly skilled body of officials. These are the officials who do the day-to-day work and whose work would be made impossible if the Bill were not given a Second Reading.

Therefore, the general attack on the Bill must surely mean that the London County Council might be placed in a position where it would have to look at some of the quite small provisions in the Bill. I am interested, particularly, in the provision made in the Bill relating to houses for owner-occupiers under the Small Dwellings Acquisition Act and the Housing Act, 1949. The item in the Schedule is for a modest amount of only £1¼ million, which could not provide for the acquisition of more than 500 or 600 houses.

The Minister of Housing and Local Government told me recently, at Question Time, that he was anxious to push forward with the use of that Act and to encourage boroughs and the London County Council to develop it. I had hoped that if there was to be criticism of the Bill in respect of an item of that kind, it would be that the item was too small and that not enough dynamic was coming from the Minister of Housing and Local Government to urge the Government to make provision by which citizens, in my constituency for example, could acquire the ends of leases of houses in Paddington which only too frequently are sold on the open market to people who do not live in Paddington at all.

I should have thought that the criticism of the Bill would be that the L.C.C. did not provide enough money to cover this item, and I should have thought that there would not have been an attempt to threaten the interests of housing in one area by holding up the Second Reading of the Bill. To ask for modification which would frustrate the day-today working of London County Council in this and other work seems to me a rather childish and spiteful thing to do. I am sure that those who have brought about this debate have no intention of doing anything to hold up the many other works scheduled in the Bill, for which provision must be made, which cannot have any effect in solving all the problems which hon. Members want to air in this debate. I hope, therefore, that the House will give the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time and committed.

7.25 p.m.

Mr. Geoffrey Rippon (Norwich, South)

I beg to move, That it be an Instruction to the Committee on the Bill that they shall obtain from the promoters an undertaking—

1. (1) that during the financial year ending on the thirty-first day of March, 1958, they will reduce by an amount of not less than two million pounds such sums to be ex pended during the said financial year by the London County Council on capital account as are proposed by them to be met out of the general rate of the County of London, and
2. (2) that they will during the said financial year apply towards expenditure on capital account a sum not exceeding two million pounds out of the current working balances on the general and special county rate accounts.

It was a pity that the hon. Member for Paddington, North (Mr. Parkin) should have made his speech when he did, because it was so obvious that he was speaking under the impression that he had missed the discussion which is now about to take place. But I should like to refer now, which is the appropriate time, to some of the matters that the hon. Member raised.

The London County Council claims to be the largest local authority in the world. I do not know about that, but it is certainly the most costly. With its current expenditure running at over £100 million a year and its capital expenditure at over £25 million a year, its annual budget is much larger than that of many small nations. I have more than a suspicion that the fact that the product of a Id. rate is no less than £375,000 encourages an attitude that there will always be available an almost inexhaustible supply of public money to burn.

We must be all agreed that the essential condition for all future progress is economic stability. That means that we must relate the rate of our investment to our available productive resources. The highest priority must be given to re-equipping and modernising industry and to atomic development and matters of that kind. Therefore, in order to maintain the country's economy on an even keel, it is essential to regulate the capital expenditure of local authorities and restrict it to what is absolutely necessary. We must be all agreed also that the attack must be concentrated upon capital expenditure because once capital expenditure has been incurred it is impossible ever again to avoid the resulting maintenance and other annual charges.

That, of course, is the Government's general policy. In October, 1955, the then Chancellor of the Exchequer and the then Minister of Housing and Local Government wrote to the local authorities asking them to undertake an urgent review of capital and current expenditure and to refrain, save in cases of exceptional urgency, from undertaking new services which would place additional expenditure either upon Government grants or upon the rates. That was followed in February, 1956, by Circular No. 10, in which the Government announced their intention to severely restrict for a period for at least six months loan sanctions for capital projects which could be deferred without risk to health and other vital interests.

Later in the year there was issued Circular 55/56, which still represents Government policy, drawing attention to the need to maintain the restrictions on loan sanctions. It should be understood that in these matters London County Council is in a very special position. It is the only local authority that is not subject to individual loan sanctions. The authority to proceed with loan expenditure is given by Parliament through the Council's annual money Act. I should say at once, and this is one of the reasons why no one would oppose the Second Reading of the Bill, that London County Council has assured the Treasury that the estimates upon which this money Bill is based have been prepared in the light of the Ministerial circulars to which I have referred. That, however, is not the end of the matter.

In this case, for good or ill, the responsibility and the duty of controlling the borrowing for capital expenditure of the London County Council, which is running at a level of £25 million, and which it has said it will increase to £30 million a year in the course of the next five years, falls upon Parliament. It can discharge that duty in three ways. First, this House might give an instruction to the Committee to strike out any item in the money Bill and so prevent the council from borrowing for that purpose.

I would myself regard that as a desperate last resort because the House, as I see it, in considering this Bill, is not concerned with the authorisation or the approval of the schemes with which it deals, but only with the amount which the council is to be authorised to borrow. The desirability or otherwise of individual schemes of the kind referred to by the hon. Member for Paddington, North ought to be left to the responsibility of the local authority and to the discretion of the council. That, as I understand it, is the essence of local democracy.

Secondly, this House might instruct the Committee to restrict the total amount of the authorisation and leave the council to make the individual amendments, but in view of the assurances which have been given to the Treasury, and which make that aspect of the matter clear, I would not suggest that it took that course this year.

The third way in which Parliament can discharge its responsibility is to have regard to the total amount which ought to be authorised in the light of the general financial position of the council. That is the object of the Instruction which is on the Order Paper in my name and in the names of some of my hon. Friends. If it were to decide to give such an instruction, the House would be saying in effect, "We will only give you the borrowing powers you seek if you undertake to put your financial affairs in proper order, because it is clear that this year you are raising more money than you require to meet your estimated expenditure in the current financial year. We are not normally concerned with the way in which you manage your financial affairs, except in so far as you cannot come to this House and to Parliament to get the authorisation to borrow money which you do not require."

The fact is that this year the London County Council has imposed upon the ratepayers of London a staggering increase in rates that is in no way justified by immediate needs or rising costs. The estimated net expenditure on rate account has risen by 12 per cent, to over £40 million, and by no less than 20 per cent, over last year's actual expenditure. The increase in rates of 2s. 4d., which has been imposed, represents an increase of no less than 35 per cent, over the last financial year.

Mr. J. T. Price (Westhoughton)

Revaluation.

Mr. Rippon

The hon. Gentleman interposes "Revaluation". He evidently knows something about these matters to talk about that, but I would point out that in considering the increase imposed by the London County Council of 35 per cent, over last year, we must take into account the fact that in the case of Kent it was only 10 per cent., in the case of Surrey it was only 16 per cent., and in the case of Middlesex it was only 18 per cent. If the hon. Gentleman wishes to pursue this matter further afterwards, I shall be glad to give him additional information.

It may be confidently argued that the amount demanded in rates by the London County Council this year is about £4 million higher than is really required to meet its estimated expenditure. The position was summed up in a leading article in The Times of 23rd April this year, which stated: When the L.C.C. budget was debated the Conservative opposition argued, with some force, that rate-borne expenditure was being raised beyond immediate needs for electoral reasons; and their case is amplified in the current issue of The Londoner, issued by the London Municipal Society. The sum budgeted for contingencies is high. Capital outlay financed from revenue is raised from £500.000 last year (when borrowing cost more) to £2,500,000, and only £712,000 of expenditure is to be met by drawing on balances, against £2,732,000 last year and £4,800.000 in 1955, the last election year. Of the whole increase of 2s. 4d. in the county rate (from 6s. 8d. to 9s.), up to Is. might have been saved by a more prudent policy if all possible outlay had been deferred until next year, when, it is hoped, the new values for Crown property and the higher liability to be borne by industry will appreciably enlarge the total values on which rates are levied. I agree with that comment, with one reservation in respect to Crown property.

Mr. Albert Evans (Islington, Southwest)

The hon. Gentleman has quoted from The Times leading article of 23rd April last. I was looking at that of this morning. Would the hon. Gentleman enlighten us by reading the last two or three sentences of that leading article?

Mr. Rippon

The hon. Gentleman is always well informed and can no doubt refer to it himself.

The reservation which I want to make, which is perhaps an important one for the record, is that in respect of Crown property an allocation of between £2 million and 12½ million was made in the estimates. Accordingly I would not go quite as far as The Times in making reference to Is. but would be content to suggest 9d.

The first part of the proposed Instruction deals with the proposal of the Council to meet an additional £2 million of capital expenditure out of revenue. I agree with hon. Gentlemen opposite that the financial soundness of such a policy, or the political motives which inspire it, are not matters which concern us here. What is really at issue is the propriety of the council coming to this House to seek an authorisation to borrow money when it does not intend to borrow it. As I understand the position, and I think it is clear from the sixth paragraph of the Preamble, the total estimated capital expenditure of the council for the current financial year is set out in Part 1 of the Schedule. In so far as that is the position, no authorisation is needed to the extent that the amount is to be raised out of revenue. The council cannot expect to have it both ways.

That brings me to the second part of the Instruction. In so far as it is part of the council's policy, in its wisdom, to meet an additional £2 million of capital expenditure out of revenue then I think it would not be unreasonable for this House to limit its authorisation to borrow, not by an arbitrary striking out of individual items but by requiring that this sum should be met out of moneys already available to the council and surplus to its immediate requirements; while at the same time, as part of the same operation, limiting the amount to be expended in order to ensure that an excessive authorisation to borrow is not being provided.

That the council could do that is evidenced by the fact that it has this year, as The Times leading article points out, provided an additional sum for contingencies of £500,000 over and above the normal provision, plus nearly £500,000 for provisional sums which have not yet been approved by the council. It has also provided for a closing balance £500,000 greater than that which was thought sufficient last year. All this in a year which is known to be difficult for ratepayers and at a time when it is essential to limit public expenditure.

There is, furthermore—I think this will be dealt with by my hon. Friend the Member for Lewisham, West (Mr. H. A. Price)—the knowledge which we all have that over many years there has been a gross underestimate of the actual closing balance. I should like to emphasise that I do not think that it would ever be the duty of this House to intervene directly to control the financial policy of the Council as distinct from its borrowing powers, and therefore it would be wrong if this Instruction were to say that the Council should spend "at least" £2 million out of its working balance for any purpose. But it is right to define the limit of the Council's contemplated spending of capital expenditure out of revenue in order to regulate the amount which this House authorises to be borrowed.

There are obvious difficulties in the way of passing an Instruction of this kind. I am sure that no one, certainly no hon. Member on this side of the House wishes to intervene in the affairs of any local authority. It must be emphasised—'however regrettable it may be that we should be forced into that position—that so long as this procedure is adopted, so long as a money Bill comes annually before this House, Parliament has not merely the power, but the responsibility and the duty to consider whether or not this capital expenditure is necessary in the sense of whether it is necessary for this House to authorise the borrowing.

It may well be that in this regard the London County Council should be put on the same basis as all other local authorities and the matter left to the Treasury and the ordinary process of administration. It must be noted, and it appears from the money Bill, that the London County Council exercises a special relationship in regard to the Metropolitan borough councils, and this Bill regulates the amount of money which the London County Council is authorised to lend to the Metropolitan borough councils. No one on this side of the House would wish to deprive them of the opportunity of receiving that money, but it should be emphasised that the London County Council, even though it has the authorisation to borrow, will not necessarily do so.

This has been the subject of a good deal of concern on the part of hon. Members opposite. I think that the last time the subject of financing the Metropolitan borough councils was discussed was on the occasion of the Second Reading debate on the Stockton-on-Tees Bill, on 26th February of this year, when the hon. Member for Leeds, West (Mr. C. Pannell) had this to say: London County Council, I beg the Minister to believe, is not local government. It is a curious form of local government "— At this point the hon. Member for Keighley (Mr. C. R. Hobson) intervened to say, "A bastard type." This is followed by a question mark in the OFFICIAL REPORT so that it is evident the hon. Member was referring to the London County Council and not to his colleague. The hon. Member for Leeds, West continued— which exercises a sort of overlordship over metropolitan boroughs, giving them only powers which equate to less than those of a rural district council. A little later the hon. Member said: Wandsworth and Woolwich are not allowed to grow up. They have to take their sanctions for loans not only from the Ministry, but from County Hall."—[OFFICIAL REPORT. 26th February, 1957; Vol. 565, c. 1144.] I do not believe that that is a very satisfactory state of affairs. It may well be that shortly it will be necessary to have some inquiry into London government.

Mr. Herbert Morrison (Lewisham, South)

While it used to be the case that the London County Council was the loan sanctioning authority for the Metropolitan boroughs, I think—I hope that I am not mistaken—that that power has now been taken over by Her Majesty's Government, and that it is no longer exercised by the London County Council. If that be so, I should have thought, in view of the prominent position which he occupies on the London County Council, and especially on the Finance Committee, that the hon. Member would not have fallen into an error of that kind.

Mr. Rippon

I hesitate to cross swords with so formidable a figure in the history of London as the right hon. Member for Lewisham, South (Mr. H. Morrison). It may be that I made a mistake in taking my information from an hon. Member opposite. But I think that if the right hon. Gentleman looks at Clause 4, and if he will look at Part II of the Schedule, he will see a reference to the amounts authorised to be lent to the Metropolitan borough councils. These are amounts which will not in fact be lent to the Metropolitan borough councils, although authorised by Parliament, unless, in its wisdom, the London County Council decides to lend the money.

Mr. A. Evans

Let us get this matter clear. My right hon. Friend the Member for Lewisham. South (Mr. H. Morrison) asked the hon. Member to correct a mistake which he had made. The hon. Member seemed to say that the London County Council was the sanctioning authority for the loans taken up by the Metropolitan boroughs. Now he seems to be saying something different, that the London County Council in effect advances money and that is something different from sanctioning a loan.

Mr. Rippon

Perhaps I might try to explain the position to the hon. Member, who has been a member of the London County Council, and should appreciate the position. When I used the term "sanction"—quoting the hon. Member for Leeds, West—I was using it, I hope I have made it clear, so far as the provision in the money Bill is concerned. It is an authorisation to the London County Council to lend money to the Metropolitan borough councils. But this House should understand that the Metropolitan borough councils do not necessarily get that £3 million unless the London County Council chooses to lend it to them.

The capital expenditure of the Metropolitan borough councils is, of course, subject to the ordinary control by loan sanction under the various circulars, and at the beginning of my remarks I said that the London County Council, so far as concerns the formal loan sanction, was in a unique position since its loan sanction derives from Act of Parliament.

I hope that consideration will be given to this question of London government as soon as possible. When that is done, the opportunity might be taken to remove the anomaly of an annual money Bill. In the meantime I have no doubt whatever that the power and expenditure of that remorseless juggernaut at County Hall has increased, is increasing, and ought to be diminished.

7.47 p.m.

Mr. H. A. Price (Lewisham, West)

I beg to second the Motion.

I am sure that everyone here realises that our interests are not so much with the Amendment as with the concluding words of my hon. Friend the Member for Norwich, South (Mr. Rippon) in calling on the Minister to institute an inquiry into the London County Council. I have great hopes that my right hon. Friend will be sympathetic to this suggestion. I have been a member of the London County Council for six years. I had the honour of serving under his leadership— unfortunately, always on the minority side of the chamber—and I have often heard him express views similar to those now being urged upon him.

My hon. Friend the Member for Norwich, South has dealt so adequately with the subject that he has left me with but a few "i's" to dot and "t's" to cross. There are two arguments which I wish to underline in urging the need for this inquiry upon the Minister. There is a feeling throughout London, as every hon. Member representing a London constituency will know, that the London County Council is too large —

Mr. Gibson

Rubbish.

Mr. Price

The hon. Member cannot dismiss an argument merely by calling it rubbish.

There is a feeling that the London County Council is too large, too powerful and too impersonal and, therefore, that it is hopeless to oppose it on any issue whatever. Whether or not this impression is soundly based is immaterial to my argument. The fact remains that the impression is widespread.

Mention has been made of the London County Council housing programme. We all know, especially those who have been members of the London County Council, of the difficulties experienced by the Council in discharging its housing duties. One aspect which greatly concerns me is the grossly uneconomic nature of its housing operations during recent years. The trend has been for it to become uneconomic.

The position has now been reached where the L.C.C. subsidy, which is borne by the rates, is more than twice the authorised subsidy and where sites are being acquired at such a high cost that the site cost per flat or house is more than the ultimate cost of building the flat or house. Economic rents are soaring to astronomical figures. The L.C.C. still has no differential rent scheme, and the deficit which is falling upon the rates is increasing rapidly.

I entirely agree that this House would not wish to interfere with local authorities, but it must be borne in mind that local authorities operate within powers conferred upon them by the House. It is right that from time to time a review should be held to ensure that those responsibilities are properly discharged. The case for a review of the way in which the L.CC. is discharging its housing responsibilities is very strong indeed.

My hon. Friend the Member for Norwich, South referred to the closing balances. This is a very old sore. My right hon. Friend and I fought this battle year after year at County Hall when, year after year, the actual closing balance was far in excess of the estimated balance. We argued year after year that it was far too high. Every student of local government knows that it is bad local government finance for the closing balance to be too high.

Mr. A. Evans

Is the hon. Member quoting the district auditor on that?

Mr. Price

I will quote him.

Mr. Evans

Can the hon. Gentleman tell the House in which year the district auditor ruled that the closing balance was too high?

Mr. Price

I propose to do just that.

Mr. John Hay (Henley)

It was 1942.

Mr. Price

I am grateful to my hon. Friend for giving me the year. Every year we argued —

Mr. Gibson

And we disagreed with you.

Mr. Price

In that case hon. Members disagreed with the district auditor, which was a pity. There may have been a difference of opinion as to what the level should be, but the case which my right hon. Friend and I argued at County Hall year after year was completely vindicated by the district auditor himself, who bore out our criticisms. [HON. MEMBERS: "Which year?"] With regard to the year, my hon. Friend the Member for Henley (Mr. Hay) tells me that it was 1942. I think it was later. I was a member of the L.C.C. from 1946 to 1952 and I am fairly sure that it was during my years there.

Mr. Hay

Perhaps he did it twice.

Mr. Price

The district auditor may have done it twice.

Mr. Evans

The hon. Gentleman has quoted a public official who obviously cannot defend himself, and has done so on the hearsay of his hon. Friend the Member for Henley (Mr. Hay). Are we clear as to the year?

Mr. Price

No —

Mr. Evans

And about what his hon. Friend has led the hon. Member to believe the district auditor said about that year's balance?

Mr. Price

I must admit that I am not prepared to be dogmatic about the year.

Mr. C. W. Key (Poplar)

What did he say?

Mr. Price

If I had known I was to be challenged on this point I would have armed myself with the information. Every member of the L.C.C., particularly members during those years, will know that what I am saying is true. I would not be surprised if my right hon. Friend the Minister of Housing and Local Government could furnish the year. If he can, I hope that he will do so when he answers the debate. My recollection is quite clear and I am prepared to check on this in the Library and consult the hon. Member afterwards. The district auditor criticised the floating balance very severely in one of the years when I was there.

The L.C.C. has not mended its ways since and I have the figures since 1952. In 1953–54, the estimated closing balance was £2,800,000 and the actual closing balance was £6,390,000. In the following year, the estimated balance was again £2,800,000 and the actual closing balance was £5,780,000. In the following year, the estimated closing balance was £2½ million, but the actual closing balance was £5,301,000. I argue that those closing balances were grossly excessive and should be reduced.

But that is not the end of the argument; there is the whole argument referred to by my hon. Friend which relates to the use to which those closing balances were put. Hon. Members opposite seem to have figures in front of them. If they refer to the amount of these closing balances which were devoted to the relief of rates, they will find a rather curious phenomenon. They will find that the amount in relief of rates had a habit of rising very steeply in Election years and falling very low the following year, or possibly being low the year before.

In 1952–53, as The Times has said, the amount devoted to the relief of rates was £4,832,000. That was election year. In the following year it was only £806,000. This year the amount devoted to the relief of rates is only £711,000. I wonder what it will be next year. If I were a betting man I would be willing to wager that it will be considerably more than £711,000.

My hon. Friend the Member for Norwich, South has drawn attention to the item of £2½ million to be raised from the rates of capital expenditure. This is an exceptionally high figure when compared with only £½ million last year. The argument, as I understand, is that this sum is necessary owing to the increased cost of borrowing, but the argument does not hold water. The cost of borrowing is lower this year than it was last year. If that argument were sound it would apply even more strongly to last year than to this, yet last year's figure was only £.½ million and this year the figure is £2½ million.

At this time of night the House would not want me to go into greater detail than that, or to give a long and complicated list of figures. My hon. Friend and I have submitted a strong case that the time has come for an inquiry into the functions and administration of the L.C.C, particularly its financial administration, and I hope that my right hon. Friend will give this suggestion his sympathetic consideration.

7.58 p.m.

Mr. Herbert Morrison (Lewisham, South)

Both as a Parliamentarian and as one who has spent a good deal of his life in local government I very much regret, irrespective of party politics, that this debate is taking place and that the proposed Instruction has been moved.

We have listened to two Government back bench Members. One is a member of the L.C.C. and one has been a member. We have really been listening to a repetition of the debates held at County Hall. The debates in County Hall are always worth listening to, because they are very good, but I do not think it is necessary that they should be repeated in the House of Commons. Therefore, this is a misuse of Parliamentary time and is merely using a Parliamentary stratagem for the purpose of making a party political attack upon a local authority that happens to have a majority which is unacceptable to the two hon. Members opposite. I do not think that that is the right and dignified use of the occasion of the Second Reading of a Private Bill in the House of Commons.

To the best of my recollection, we never did it when the Conservatives were in power. We never used this House for that kind of purpose, except when we got two high policy Bills like the London traffic co-ordination Bill and the electricity Bill, which were separate, clear issues. We did not use the Council's Bills for the purpose of staging here a general debate on London County Council administration by the Conservatives. I think it is wrong that this great Parliamentary institution should be used for the purpose of local government electioneering.

Mr. Partridge

Does the right hon. Member suggest that on the money Bills which come before us we should just content ourselves by praising London County Council and saying, "Good luck. Let it go on"? Is that our duty as Parliamentarians?

Mr. Morrison

I do not expect too much.

Mr. Partridge

I should not think that the right hon. Member does.

Mr. Morrison

By the sound of the hon. Member I should not expect much.

Certainly, the House has a right to deal with a money Bill. I suggest that what the House has a right to deal with vis-à-vis a money Bill is: is the total amount of capital expenditure proposed too much? Is it too much on particular items? I think that that was contemplated when this legal provision was made, but I should not have thought we ought to turn the House of Commons into what might well be a meeting of the Finance Committee of the London County Council.

The hon. Member for Norwich, South (Mr. Rippon), who leads the Conserva- tives at County Hall on financial matters, has used all these arguments there. Unfortunately for him—I am sorry about this, purely on grounds of his personal disappointment—he did not get his own way and now he comes to the House of Commons to vent his feelings and repeat the arguments he used at County Hall. Those arguments were quite suitable for a debate on the budget of the London County Council, but not suitable to be used in the House of Commons.

Mr. H. A. Price

I am sure that the right hon. Member, as a local authority man, would agree that proceedings at County Hall get very little publicity and that it is desirable that they should get publicity. May not this debate serve a useful purpose in that respect?

Mr. Morrison

I regret, with the hon. Member, that the London County Council does not get more publicity for its debates. That is unfortunate. Provincial cities do rather better in that respect, because most of them have local newspapers. The curse of London is that we are afflicted by national newspapers and that there is no London Press left. The hon. Member had better come here for a minute and look at the Press Gallery of the House of Commons. He will find it quite empty. The probability is that there will not be much more publicity for this debate.

If it is publicity the hon. Member wants, having watched his activities in Lewisham, I should say that he did get a bit for his Middle-class Alliance, especially when it died. I do not mind publicity myself and I think it is a pity that newspapers do not report the proceedings of the London County Council. The vacant look of the Press Gallery of the House of Commons tonight is one of the saddest things that I have seen in this institution.

The hon. Member for Norwich, South said that he was not moving to strike out any item, or part of an item, from the Bill. That was not very courageous if he thinks, as evidently he does, that the Council is spending too much. If he had moved to strike out a great many millions on housing, that would have been an act of courage. But he has not done it, nor has he moved to strike out on education, health, or other things. I should have had more respect for the hon. Member if he had enough courage to say, "This is too much and I move that the Committee be instructed to reduce it."

Mr. Rippon

I do not think that the right hon. Member has followed my argument, which was not directed to particular items or to a repetition of the L.C.C. budget debate, but to whether or not this House should authorise, or encourage the authorisation of, capital expenditure by borrowing when it knew that the financial resources of the Council were such that it could, and did, in fact, intend to, raise the money out of revenue.

Mr. Morrison

With the merits of that argument I shall deal shortly and give the history; it is interesting.

The hon. Member and his hon. Friend said that they did not wish to interfere with the administration of London County Council or any other local authority. The Minister of Housing and Local Government has advanced policies which he says are based on the doctrine of giving local authorities more initiative and freedom, particularly in financial matters. I hope that the Minister will—I feel sure he will—stick to the principles he has uttered in that connection tonight and resist the proposal put forward by his hon. Friends. They believe in local democracy, but they are trying to turn the House of Commons into a sort of House of Lords over the London County Council.

They say that the Council should be treated in the same way as any other local authority, with which, of course I agree, and—a different matter—dealt with by the Minister and not by the House of Commons. If the Minister wanted to do what the hon. Members propose vis-à-vis the London County Council, if the Minister waned to put it on the same footing as the great City of Birmingham or the City of Manchester, I do not think that he could do it. He could refuse loan sanction, but I do not think that he would interfere with balances and expenditure, and the setting aside of money for capital expenditure. He could deal with particular capital expenditure for specific purposes.

It is also said that the London County Council is a much too big authority. Some people think that it is not big enough. I do not necessarily put myself among them, but some take that view. It is not very much bigger in area than the City of Birmingham. It is also said that it bosses the Metropolitan boroughs. It does not. It has very little, if any, power over the Metropolitan borough councils and does not particularly want to have that power.

Mr. Hay

It puts the rates up.

Mr. Morrison

Of course it precepts its rates, but it was implied that it could boss the Metropolitan boroughs. I do not think it can.

The borrowing sanction has gone and all that happens is that at the request of the Metropolitan boroughs the London County Council makes available, so far as it can, money they need for capital purposes. That does not mean that it is the sanctioning authority. Those sanctioning powers went about 1940 with the good will of London County Council. As a matter of fact, the relationship between London County Council and the Metropolitan boroughs is better today than it ever was and notably better than ir was, curiously enough, when there was a majority of Conservative borough councils and a Conservative majority at County Hall. Then, they did not get on too well.

The hon. Member for Lewisham, West (Mr. H. A. Price) referred to the district auditor and the working balances. Let us consider what the district auditor said in 1944–45. The hon. Member for Lewisham, West did not know what the district auditor said, he did not know when he said it, and did not know who the district auditor was. Apart from that, he knew all about it. In 1945 the district auditor said that the figure then was "a strictly moderate figure". It was then £2.8 million. If we take the then level of expenditure of about £50 million a year, that was the equivalent of about double the present working balance of the London County Council, so the provision for the working balance is moderate compared with 1944–45, and in 1944–45 the district auditor said that ii was "a strictly moderate figure" Perhaps the hon. Member for Lewisham, West would like to withdraw the aspersions which he has cast upon the district auditor.

Mr. Robert Jenkins (Dulwich)

I have before me the London County Council's minutes of 3rd December, 1946, dealing with this very matter. The report by Mr. Hurle Hobbs, the district auditor, on 24th May, 1946, gave as great a castigation to the irregularities of the London County Council's Finance Committee as has ever been given by any district auditor in the history of local government in this country. The right hon. Gentleman said that the London County Council was cleared by the district auditor. The opposite is the fact.

I do not wish to make a speech by interruption, but if the House and the right hon. Gentleman will bear with me for a moment, I should like to say that, with reference to balances, according to the report of Mr. Hurle Hobbs, in 1944, the estimated balance in the Council's budget was £1,900,000, but the actual surplus for that year was £14 million. Mr. Hurle Hobbs castigated the London County Council for irregularities in budgets.

Mr. Gibson

Not for its balances.

Mr. Morrison

We were dealing with balances. The hon. Member for Lewisham, West said that the district auditor had specifically condemned the balances. 1 have quoted what the district auditor said about the year 1944–45, and I have shown that the present provision for working balances, taking account of the changed circumstances, is moderate compared with what it was then. At the time, it was blessed by the district auditor. While the hon. Member for Dulwich (Mr. Robert Jenkins) has enjoyed himself and has surely made a speech, it is like the flowers that bloom in the spring, it has nothing to do with the case.

It has been said that it is a very serious thing—-of course it is—that the London County Council rate has risen by 2s. 4d. I am a London ratepayer and I have to pay like any member of the Council has to do. Why should I want the rates to rise by 2s. 4d.? We had better see how the increase is accounted for. It seemed to be implied that to raise the rate by 2s. 4d. was an electoral device. It is the first time that I have heard a rate increase described as an electoral device to win the next election.

I have heard of people losing elections because they had increased the rates. I also had the experience of being instrumental, in the Borough of Hackney, in reducing the rates by 2s. just before an election, only to find that we lost every Labour seat on the council. Goodness knows what is right about the business, but I have never heard the argument advanced that to increase the rate by 2s. 4d. has an advantage electorally.

Let us see how the increase in the rate is made up. First, there is a 20 per cent, reduction in the rateable value of shops and commercial and miscellaneous properties in the Administrative County of London by virtue of the Rating and Valuation Act, 1957. From their local experience, hon. Members may feel that that Act is not as serious as it might have been, but it is particularly serious in the County of London, where there is a large amount of commercial property and large shops. Indeed, as I have said, the rateable value was reduced by 20 per cent. The product of a 1d. rate there is reduced by 12½ per cent, compared with only 7 per cent, for the country as a whole. Therefore, a certain amount of the increase of 2s. 4d. can be attributed to this factor, which the House will agree is entirely beyond the control of the London County Council and is the consequence of legislation brought in, rightly or wrongly, by Her Majesty's Government. It is no good blaming the London County Council for that.

Then there is the smaller amount available from the rate balances, for the rate balances ran down, partly owing to increased expenditure in other ways over which the Council had no control. It was necessary to increase the rate balances, because these are needed not as an electoral device for playing about with at the end of the financial year in making the rate, but for the purpose of meeting expenditure throughout the year when income is not balancing the outgoing money, though the income will come in in due course.

They are also needed by the London County Council and many other local authorities, because they give them more elbow-room in deciding when they should go on the market or elsewhere to borrow money. Consequently, it was necessary that the working balances should be increased. For these reasons, that was done, but the fall in the amount available in the working balances accounts for an increase of 5d. in the rate.

There was a modest increase in the expenditure falling on the rates, most of it outside the Council's control. For example, nearly half the increase in expenditure falling on the rates arose from the recent Burnham award which increased the salaries of teachers, and the bulk of the remainder is due to other increases in salaries, wages and prices and to the increased cost of borrowing. For all these things, the Government and the House have some responsibility. The total increase in rate attributable to higher expenditure is about 6d.

Mr. Gibson

That is 1s. 11d. gone.

Mr. Morrison

As my hon. Friend says, that is 1s. lid. gone out of the 2s. 4d.

Let us now come to the point about meeting capital expenditure. This policy was instituted by the former Conservative majority on the London County Council. I remember the occasion very well. My late friend, Mr. Emil Davies, who was leading our people as an opposition on the Finance Committee, came to see me and some of my colleagues and said that the Conservatives were proposing to levy a Id. rate, and would probably make it materially more, to meet some of the Council's capital expenditure out of the rates instead of borrowing and having to pay interest on the borrowed money. It was a long-sighted scheme for economy.

I say freely and frankly that the whole credit for what was a good idea belongs not to the present Labour Party majority on the London County Council, but to the former Conservative Party majority. I never thought I should see the day when Conservative hon. Members in this House would condemn the former Conservative Party majority on the London County Council.

What was proposed by the Conservative majority was done. The figure was put up to 3d. I believe that the amount collected in pre-war years averaged about £700,000 annually, then nearly a 3d. rate. Some of the years were Conservative years and some were Labour years. The idea is that if one can manage to get some of one's capital expenditure out of revenue, one is saving interest payments, and interest payments on what is borrowed now are fairly substantial. It is estimated that the proposals which the Council has approved for setting aside revenue for capital purposes will save it at least £100,000 a year for sixty years. Surely that is an act of constructive economy which ought to be approved, instead of condemned, by hon. Gentlemen opposite.

I tremble to think what would happen to the London County Council's finances if the hon. Member for Norwich, South became chairman of its Finance Committee. I hope that it will not be the case, but I am sure that as he wants to abolish the London County Council, hates the place, has no pride in it, he would not wish to be chairman of its Finance Committee or hold any other prominent position in a Conservative mapority in that assembly. I was sorry to hear his anti-London County Council bias, and also that of the hon. Member for Lewisham, West, because, altogether apart from party politics here, the London County Council is a great municipality, it is honourably operated and it is efficiently administered. We can argue about its policy and about its financial arrangements, but surely it is a municipality of which London and the country can be proud. Indeed, it is recognised as such by local government people all over the world.

This Instruction is wrong in principle. It is trying to do for a local authority what it could do for itself, and I would not agree with it no matter what the local authority was—whether the London County Council or any other local authority in any other part of the United Kingdom. This Instruction is improper. First, it instructs the Committee, "Before you start with the Bill, get these London County Council people together and tell them that you will not pass the Bill unless you have an effective finger in the pie, in the internal domestic management of the finances of the London County Council."

That is what it means. If this were the City of Birmingham, or Manchester or Liverpool, Leeds or Glasgow—or Norwich—hon. Members would not dare to attempt this. This is done because of the Council's special position in London, and because the House of Commons has always liked having a bit of fun with the London County Council—as it did some years ago over the Waterloo Bridge. That was straightforwardly done. I did not agree with it, but it was straightforwardly done by striking out the provision for Waterloo Bridge. In that case, Parliament made a big mistake. Having denied the right of the Council to borrow for the bridge, it could not stop the Council, within its lawful powers, proceeding with the bridge out of the rates.

Everybody now says what a beautiful bridge Waterloo Bridge is, and how wrong the House of Commons was to try to stop it being built. That ought to be a warning. I did not say, while that debate was on, that we would defy the House of Commons—it is always better not to do that then; it is better to reserve that until the decision has been reached. Nevertheless, Parliament made a great mistake on that occasion.

Our decision was popular. It is still popular. One has only to mention that jolly old bridge and one is sure of a cheer. It goes well. It did not do Parliament any good to decide in that way, because Parliament was doing—what? It was really intervening in what was within the lawful powers of the London County Council on that occasion. It was intervening not only with the Labour majority then, but it had interfered with the Conservative majority at County Hall before. The difference was that the Conservatives did not know how to deal with the situation, and we did.

Parliament did not do itself any good, because it went over the rather imaginary line of- what is Parliamentary and what is municipal and local government. That bridge was local government. It was London's business, and if there was to be a row it was for the Council to have a row with its own citizens, and with anyone else who wanted one, and, having listened to it all, it was for the Council to come to its own decision.

With great respect, I say today that the House of Commons—and I like the place —was not the appropriate tribunal to settle the details of that bridge, nor is it the appropriate place in which to do the work of the London County Council Finance Committee. The hon. Members for Norwich and for Lewisham, West, having had a night out—and I hope that they both get a lot of publicity; I hope that we do, too—and having conducted this experiment, I would advise them to go back to County Hall and get on with this business in the place in which it properly belongs.

Mr. H. A. Price

Before the right hon. Gentleman concludes, perhaps he would let me correct him on two small points, one unimportant and the other important. He said that I did not knew who the district auditor was. He is wrong there —I did. He said that I criticised the district auditor. I do not criticise the district auditor. I have been criticising the London County Council.

Mr. Morrison

If I said that the hon. Member criticised the district auditor, I am sorry. I did not mean to. I intended to say that the hon. Member said, or implied, that the district auditor had criticised the Council.

8.26 p.m.

Mr. E. Partridge (Battersea, South)

I am glad to follow the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison) in order to remind him that it is he who has a bad argument who descends to abuse and personalities. I should have thought that before lecturing us on what we should do he should first think of his own conduct. I am not at all impressed when cheap jokes are made by a man who is renowned for clowning. If that is his idea of debate, it is not ours. We believe that we have a right and a duty to perform, and if it pleases him— and I do not want to do that—I am about to attack specific items in this money Bill.

I will deal first of all with the tenth item in the Schedule Acquisition of property erection of dwellings provision of hostel accommodation demolition of overhead buildings at White City site and other purposes "—

Mr. Gibson

On a point of order. May I ask, Mr. Deputy-Speaker, whether in view of the terms of the Motion, the line which the hon. Member for Battersea, South (Mr. Partridge) is taking is in order? This Motion makes no reference at all to any specific item in the Bill. It is a general Instruction, and I submit that if he continues his argument on the present line he will be out of order.

Mr. Deputy-Speaker (Sir Gordon Touche)

The Bill has been read a Second time, and there is, therefore, no point in discussing what is in the Bill. The hon. Gentleman can discuss the Instruction.

Mr. Partridge

It is the Instruction to which I am addressing myself—[HON. MEMBERS: "The hon. Member is not."]—but it is a specific item—[Interruption.]If I may be allowed to address you, Mr. Deputy-Speaker, without any help from the yahoos on the other side —

Mr. Denis Howell (Birmingham, All Saints)

On a point of order. Is it in order for the hon. Member to refer to my right hon. and hon. Friends as yahoos?

Mr. Deputy-Speaker

I did not hear the hon. Member say that. He should not say it.

Hon. Members

Withdraw.

Mr. Howell

That is a high standard of dialectic.

Mr. Partridge

The first Instruction is that they will reduce by an amount of not less than two million pounds, such sums to be expended during the said financial year by the London County Council on capital account as are proposed by them.… It is on those proposals that I thought I was entitled to address you, Mr. Deputy-Speaker. If these are not necessary, that is a reason for reducing the amount.

Then I would address you further on the second part of the Instruction. I submit that it is not necessary to ask for loan sanction for expenditure on those items which I have just read out, in view of the act of the Council in destroying the prefabricated houses on Wandsworth Common and Clapham Common. The Council has destroyed houses which people needed, ten years before it was necessary to do so. To come to Parliament and ask for money which the Council can squander again is far too much to ask of Parliament. It is for that reason that I support the Instruction.

Mr. Gibson

May I interrupt the hon. Gentleman?

Mr. Partridge

No.

Mr. Gibson

The hon. Gentleman had better get his facts right.

Mr. Partridge

I have got my facts perfectly right. A little while ago the hon. Gentleman gloried in the fact that he had rendered a large number of people homeless. If he likes to continue rejoicing in that fact, he will rejoice by himself. At all events, he should know that his name is held in execration in the Borough of Battersea as a result of what he has done.

Mr. Gibson

May I put the hon. Gentleman right on his facts? He said that the London County Council had spent millions of pounds in building prefabricated houses on the Common —

Mr. Partridge

No I did not.

Mr. Gibson

—and that we ought not to be allowed to have money, as he says, to waste again in that way. Does he not know that the Ministry of Works and not the local authority paid for the prefabs? The Government paid for them all over the country.

Mr. Partridge

The amount of money which is required for building houses in Ilford and elsewhere is twice as much now that they are engaged in replacing the prefabs which have been pulled down on Wandsworth Common. I should have thought that anybody with meagre intelligence could have understood that.

Mr. R. J. Mellish (Bermondsey)

On a point of order. May we get this matter straight? As I understand it, what the hon. Member for Battersea, South (Mr. Partridge) is saying should have been said on the Second Reading, and I think you have already ruled to that effect, Mr. Deputy-Speaker. The Instruction which we are now discussing—and the Bill had to have a Second Reading before we could deal with the Instruction—relates to current working balances. Are we to have a general discussion of individual parts of London where money has been spent for one purpose or another, or are we to talk about current working balances?

Mr. Deputy-Speaker

The rule in Erskine May is that the debate on an Instruction must be strictly relevant thereto and must not be directed to the general objects of the Bill or anticipate the debate on specific Clauses of the Bill.

Mr. Mellish

If the hon. Member for Battersea, South continues with this argument, will you please rule him out of order, Mr. Deputy-Speaker?

Mr. Deputy-Speaker

I will do my best to keep all hon. Members in order.

Mr. Partridge

Hon. Members opposite are trying to teach you your business, Mr. Deputy-Speaker, and you have shown them that they cannot do so.

I should have thought that the hon. Member for Bermondsey (Mr. Mellish) would have been able to read the first part of the Instruction, which says nothing at all about working balances but refers to money spent on capital account. It is the money spent on capital account to which I am directing myself.

It is unnecessary to ask for all this extra money, in view of what hon. Members opposite have done. I think also that it would be unnecessary to ask, under item 14, for money to buy further open spaces, when the Council is still denying the open spaces on Wandsworth Common to the people who need them. The prefabricated houses were pulled down over a year ago.

Mr. Deputy-Speaker

Order.

Mr. Partridge

Am I out of order in saying that it is not necessary to ask for further money in order to buy open spaces, when there are now available open spaces which could be used but are not capable of being used at the moment because they are cluttered up with the remains of the prefabricated bungalows? That is the tenor of my remarks to you, Mr. Deputy-Speaker, and if I am out of order, I will accept your Ruling.

Mr. Deputy-Speaker

Let the hon. Member proceed.

Mr. Partridge

I think that I have made my point that it is not really necessary for the L.C.C. to ask for more money for open spaces when there are plenty available, if only they would get busy and clear them of the rubbish left over from the prefabricated houses which they nearly demolished, but left on the open spaces, which are thus not fit for the people to use. It is for that reason, and for various other reasons that I could advance—[Interruption.] I am not going to be put off. The attitude of hon. Members opposite really shows the bankruptcy of their arguments. It shows that they are themselves bankrupt of ideas, and that they are trying to bankrupt the city of London, but they will not succeed.

I think that I have said enough to show that it is right that this Instruction should be given to the Committee on the Bill, and I hope that my right hon. Friend will bear in mind the views expressed by hon. Members on this side of the House, who have pointed out the defects of the London County Council, and have asked him to look very seriously into whether the powers, duties, obligations, functions, and sphere, of the London County Council might be reviewed.

8.37 p.m.

Mr. John Hay (Henley)

I think that the debate has been of some value, because it has sought to bring to the attention of the House an aspect of London's affairs which all too seldom receives the consideration that it deserves.

The undertaking managed by the London County Council is enormous. The L.C.C. spends vast sums of money each year, and it is an unfortunate fact that the average citizen of this city does not know enough about how the London County Council works, what it does, or how much money it spends. It spends sums of money that have been quoted tonight, running into many millions of pounds, and the object of this debate has been to try to show the House how necessary it is that, Parliament having provided this type of machinery, we should examine very carefully the undertaking of the London County Council in its capital aspects and the way in which it proposes to carry out its capital projects.

It has been made quite clear from the Bill and from the speeches that have been made that in this coming year the London County Council asks Parliament to approve capital expenditure amounting to £26.2 million. The Council's total overall expenditure this year will be over £100 million, and I think it is true to say that this is the first time in history that the London County Council has ever spent or proposed to spend as much money as that. It is not far short, may I remind the House, of the total Budget of New Zealand. [Interruption.] If the hon. Member for Clapham (Mr. Gibson) will restrain his impatience for a moment, I will make it perfectly plain to him. We are talking in terms of a request from the London County Council for authority from Parliament to spend £26.2 million —

Mr. Gibson

That is not in the Motion.

Mr. Hay

That is the point of the Bill, and I suggest that the hon. Member should read the Schedule.

Mr. Gibson

On a point of order. You have already, ruled, Mr. Deputy-Speaker, that speeches must be directed to the Motion before the House. I suggest that the hon. Member for Henley (Mr. Hay) is indulging in another Second Reading speech about the whole of the Clauses in the Bill. The Motion itself refers to the £2 million to be raised out of the rates, and surely that is all to which the hon. Member can refer?

Mr. Deputy-Speaker

I thought that he hon. Gentleman was referring to the capital account.

Mr. Hay

The point of the Bill, to which the Instruction, of course, refers, as you well know, Mr. Deputy-Speaker, as to authorise the spending of £26.2 million.

Mr. Gibson

We have given the Bill a Second Reading.

Mr. Hay

I know. The Instruction relates to the Bill. If the hon. Gentleman really does not understand these things, I am surprised that he ever left the London County Council.

As the right hon. Member for Lewisham, South (Mr. H. Morrison) said, we are faced with this question. Is it right that Parliament should exercise some degree of detailed investigation into the activities of the London County Council in its more domestic sphere, or should we rather reserve to ourselves the right to criticise individual items in the Bill? My hon. Friends and I thought it right to put down this Instruction because it would not be possible to criticise the points which have been criticised tonight by the method of putting down reductions or deletions of the various estimates contained in the Schedule. It is to the way in which the London County Council is managing the whole of its capital expenditure for the forthcoming year that we wish to draw attention, and it is only by putting down an Instruction in these terms that we can bring such a debate within the bounds of order.

We wish to remind the House that this enormous authority proposes to spend £26.2 million on capital account during the coming year. It proposes to raise by five times in the present year the amount of money normally devoted to capital expenditure from its rates. Last year, the London County Council raised out of rates for capital purposes £500,000. This year, it proposes to multiply that sum by five and make it £2,500,000. That is the equivalent of about a 5d. rate.

Our first criticism is that with this proposed capital expenditure of £26.2 million, the London County Council is making an increase in the rate of 2s. 4d., of which 5d. could be saved. That is not the only point.

Mr. Gibson

How could it be saved?

Mr. Hay

It could be saved if the London County Council had done what we suggest in the second paragraph of the Instruction, and to that I am coming.

Every year, the London County Council ends its financial year with a surplus.

Mr. Gibson

So does every other local authority.

Mr. Hay

If it were a trading organisation, it would call it a profit. One reason for the surplus usually is that some committees have under-spent. Another reason is that the London County Council habitually under-estimates the product of a penny rate. The consequence is that, every year, year by year —

Mr. Ede (South Shields) rose —

Mr. Hay

May I finish the sentence? Year by year, the London County Council winds up with a reserve fund greater than it ever estimated.

Mr. Ede

The London County Council does not estimate the product of a penny rate. The rating authorities do that, and supply the information to the London County Council which, under the Statute, cannot question the figure supplied to it.

Mr. Hay

The right hon. Gentleman was not, I think, listening with his customary care. I did not say that the London County Council underestimates it. I said that it was due to such a factor as the underestimating of the product of a penny rate, and the consequence is reflected in the fact that, year by year, the Council winds up with a bigger closing balance than was anticipated.

Mr. Ede

When we see HANSARD tomorrow, we shall know what the hon. Gentleman did say.

Mr. Hay

In any event, it is a comparatively minor point.

The point that I want to make—and it is the important one—is that the Council always winds up with a larger sum of money in the "kitty" than it expected to have, and at the end of the last financial year it had a balance in hand of £32 million.

I put the two points together. Here is the London County Council saying that it must raise £2½ million out of rate revenue, from the ratepayers direct, to finance its capital expenditure in the forthcoming year; but at the same time it already had in the "kitty" £3.2 million and this year it does not intend to raise so much from its reserves to pay for its capital expenditure on housing, schools and the rest, as has been done in former years.

We believe—I think it is true—that this is done largely because next year, as has been said, is a London County Council election year. [HON. MEMBERS: "Really."] Whether that be true or not, is it not a matter which should be investigated by Parliament, and one in which the average citizen of this great capital city has an interest? Most of us here, I expect, are ratepayers in the County of London. Is it right that we should be called upon to pay a rate 5d. more than we ought to be paying if the London County Council managed its finances properly? That is what the debate is all about.

It is no use the right hon. Member for Lewisham, South getting up in the pulpit and saying how he deplores this sort of debate and how it is like debates in the Finance Committee of the London County Council. These are not pennies that we are talking about. They are vast sums of many millions of pounds, and it was, in this year more than in any other, due to the very fact that the right hon. Gentleman mentioned, that so many premises have been derated to the extent of 20 per cent, that, if in any particular year, it was in this year that the L.C.C. should have done its utmost to keep its rate level as low as it could.

When we have the derating of commercial property, it follows that other ratepayers have to bear a consequently increased burden.

Hon. Members

Hear, hear.

Mr. William Ross (Kilmarnock)

I do not remember seeing the hon. Member in the Division Lobby.

Mr. Hay

Allowing the noise on the Mappin Terraces opposite to subside, I will simply say that I am delighted to hear that hon. Members opposite agree with the argument I am putting forward.

If the point that the right hon. Gentleman makes is that this derating of 20 per cent, was an unexpected shock to the London County Council, is it not surely the case that the Council ought by that very token to have done its utmost to keep its rate as low as possible and so relieve the other ratepayers as much as possible from having to bear this additional burden? That, however, is not what the L.C.C. has done. This year, it is budgeting not only for a very substantial sum of capital expenditure, but for an overall increase for all the other purposes of the Council. This year, for the first time, the total to be raised and spent by the London County Council tops the £100 million mark.

These are all matters that the House of Commons is entitled to consider. It may be said that that is interference in the domestic affairs of local authorities.

Mr. Ross

The hon. Member could not do it in Glasgow.

Mr. Hay

The hon. Member had better sit up again all night tonight. I hope that he enjoys it.

I can understand that point of view being held, but we are here dealing with a very special case, for two reasons: first, because Parliament has itself laid down that by means of this annual money Bill, we are entitled to investigate this sort of matter; and secondly, because this is the largest local authority in the country, disposing of larger sums of money than any other.

I would not mind betting that it was because of the size and scale of the London County Council's operations, financial and otherwise, that our predecessors in Parliament decided that this was the right thing to do and that the L.C.C. should not be in the position of having to go to a Ministry but should come to Parliament. If that is the case, is it not right that we should make a searching investigation of what it does?

Some of us though not unanimously, as this debate has shown, feel that these are matters which require investigation, and I think that the effect of the debate will be to turn a searchlight on some of those murky corners of the London County Council's financing. [HON. MEMBERS: "Smear."] Far too few people in London know what this is all about. They stand faced by this monolithic organisation. They vaguely know what it means. They see the letters "L.C.C." in different parts of the capital. But they believe they are completely helpless. The Metropolitan borough councils know they are virtually powerless. They are forced to increase their own rates by the amount of the precept arbitrarily fixed by the London County Council.

Mr. Gibson

Nonsense.

Mr. Hay

The Mayor of Holborn in correspondence in the Press only a few weeks ago complained bitterly of this.

It is a fact that the ordinary person in London, the ordinary ratepayer, feels himself helpless. This debate, if it has no other effect, will still be a useful debate because it helps to show the average ratepayer in London that there is a body stronger than the London County Council. That is the House of Commons. If the House of Commons chooses, unless the London County Council financially mends its ways, the House will intervene, and will prevent the London County Council from carrying on in this profligate and spendthrift way. It is for that reason that we have sought to debate this matter tonight.

I do not know what my right hon. Friend is going to say. He is in some difficulty, I suppose. Seeing him, with his long London County Council experience, and my hon. Friend the Financial Secretary to the Treasury, who has also been somewhat connected with these matters in the past, sitting on the Government Front Bench, I think that this is a somewhat ironical position. Be that as it may, I think it may well be that my right hon. Friend may feel it his duty to advise the House not to accept the Instruction. In that case, I have no doubt that my hon. Friend the Member for Norwich, South (Mr. Rippon) may wish to withdraw it.

Mr. J. T. Price

He has withdrawn himself.

Mr. Hay

Whether the Instruction be withdrawn or carried to a Division, neither this House nor the L.C.C. should underestimate the importance of this debate because it shows the amber light —

Mr. Gibson

The hon. Member ought not to lecture people.

Mr. Hay

I shall certainly lecture them if they need it. The one body in this Kingdom which needs lecturing is the London County Council.

Mr. David Jones (The Hartlepools)

This is not the London Municipal Society.

Mr. Hay

Unless and until the London County Council mends its way we shall, year by year, acting as watchdogs—

Mr. D. Howell

The hon. Member is not a watchdog. He is a lapdog.

Mr. Hay

—on behalf of the ratepayers of London, do our utmost to defeat the bad way in which the London County Council manages its affairs.

8.53 p.m.

Mr. Arthur Skeffington (Hayes and Harlington)

I think at first blush the House may wonder what the interest of the hon. Gentleman the Member for Henley (Mr. Hay) is in the municipal affairs of London.

Mr. Hay

I will tell the hon. Gentleman.

Mr. Skeffington

I know. I will tell the House. Although he represents the riparian and delightful rural constituency of Henley it is not unknown to us that he is a director or some officer of the London Municipal Society. Therefore we cannot help feeling that the reason for the Motion is not unconnected with his political activities in the London Municipal Society, a Conservative organisation.

Mr. Hay

That is a perfectly fair point to make, but being in that position gives me a greater insight, perhaps, than the insight given to the ordinary ratepayers outside into the bad way in which the London County Council manages its finances, and it makes me more than ever eager to bring the matter to the attention of the public.

Mr. Skeffington

I am very glad to think that the London Municipal Society, which does not seem to have the most striking political success in municipal affairs, at any rate serves some purpose in keeping the hon. Member informed about some of the conditions in London. But the very statement that the hon. Member has made reinforces the protest made by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) that this Instruction has been placed on the Order Paper more in the interest of municipal politics than of the House of Commons.

We ought to regret it and record our protest that this method has been used. The only other occasion in recent years on which a similar event occurred in the House of Commons was when another hon. Member opposite proposed certain Amendments to the general purposes Bill of the London County Council which, had they been carried, would have prevented the L.C.C. from seeing to it that bad landlords who refused to mend the drains could be proceeded against in the courts.

Our experiences when hon. Members opposite have sought to tamper with legislation started by the London County Council have not been very encouraging or helpful, and I hope that the House will say that it does not like this kind of Parliamentary manoeuvre. But in any case, even from the standpoint of the standards and principles adopted by hon. Gentlemen opposite and enunciated on the platforms outside the House, I find it very difficult to understand this Instruction, which seems to be so very much at variance with what they say elsewhere. The gravamen of their charge, so often made outside the House, is that local. government ought really to be local —

Mr. Hay

And it ought to be good.

Mr. Skeffington

—and that it ought to be independent of central authority as far as possible, and out of the shadow of Whitehall. Yet the detailed instructions now suggested would completely undermine the independence of local government, whether it happens to be a great authority or a little one. I do not understand how the hon. Member for Henley reconciles what is supposed to be Conservative municipal principle outside the House with the kind of tactics that he and his hon. Friends have adopted in the House tonight.

In addition, they seek to set themselves up as very much better informed about the affairs of the County of London than hon. Members on both sides of the House who are members of the Council at County Hall. That claim ought to be decisively rejected by the House.

I know that that is not so with regard to the hon. Member for Norwich, South (Mr. Rippon). He is a member of the London County Council. His case is even more regrettable. Having failed to persuade members of the County Council to adopt his point of view he is now using Parliamentary time for a purpose for which it was never intended—to reverse decisions taken at County Hall.

Instances of attempted interference by the Government have been very unhappy. The last time that the Government attempted to interfere was over the question of Waterloo Bridge. Everybody regretted it, including the Government of the day in due course.

It is important to realise that the sums required under the Bill are all for purposes which I imagine are generally approved. There are developments like the duplication of Blackwall Tunnel, the widening of the Strand, the housing of old people, education, and others, detailed in various parts of the Bill, which it will be out of order for me to traverse at present; but it is quite wrong to suggest, as the hon. Member for Lewisham, West (Mr. H. A. Price) suggested, that to meet the cost of such developments there was a fantastic increase in the rates.

I want to emphasise the point, which was made so well by my right hon. Friend the Member for Lewisham, South that 1s. 6d. of the 2s. 4d. increase was the result of agencies completely outside the control of London County Council. There is the shilling which is a result of the new Rating and Valuation Act, and which also falls on the County of London much more heavily than anywhere else. I am glad to see the hon. Member for Norwich, South resuming his place. He commented on the fact that other county authorities had not increased their rate as much consequent upon the revaluation. It must be remembered, that the 20 per cent, reduction in the revaluation of shops and business premises bears very much more hardly on London than elsewhere. It has reduced the product of a penny rate by 12 per cent, in London as against 7 per cent, in the rest of the country.

Mr. D. Howell

Will my hon. Friend allow me to put on the record the fact that the revaluation proposal has in respect of the City of Birmingham added Is. 9d. to the rate this year?

Mr. Hay

Only revaluation?

Mr. Skeffington

At all events, it is important to reinforce the point made by my right hon. Friend the Member for Lewisham, South, that 1s. 6d. of this increase was as a result of factors entirely outside the control of the L.C.C. In fact, Is. of it was due to the revaluation of shops and similar property and another 6d. was due to the recent Burnham award and other increases in costs. Now 1s. 6d. out of 2s. 4d. is a considerable sum, so the wild suggestion of the hon. Gentleman the Member for Lewisham, West that this was a fantastic increase, shows how little he has addressed his mind to how the increase is made up.

The Instruction is divided into two parts. These have been dealt with adequately by previous speakers and I only wish to make a few points about them. First, in relation to the use of revenue for capital account, it must be realised that this is nothing novel. It must have been done by many authorities, certainly by the L.C.C, for a long time. If anyone can recall the dim and distant days when there was a Conservative majority in County Hall, they will find that the contribution made from revenue to capital expenditure was at a higher rate than is that proposed in the current year.

In the last year of Conservative control, in 1933–1934, the total net debt was £80 million and the majority party at that time devoted £3¼ million for meeting capital expenditure from revenue. Having regard to the figure today, it is clear that what is proposed now is a much smaller proportion than was the case then.

Mr. Hay

Can the hon. Gentleman tell us whether in any of those dim and distant days the amount of capital expenditure directly financed from the rate was increased by five times in one year, in a year when the ratepayers were least able to bear it, because that is what is happening this year?

Mr. Skeffington

What I am telling the hon. Gentleman, and meeting the point that he made originally, was that the proportion derived from revenue in those days, when it was very much easier to borrow money than it is today, and when rates of interest were much lower, was much greater than it is today. We are now faced with a debt which is three times that which faced the council in 1933–1934, and altogether, including the £2 million referred to in the Instruction, only £4½ million will be devoted to meet capital expenditure or repaying debt.

Surely it is the duty of any local authority, includng the L.C.C, to adopt a policy which is not only sound but also economical, and the very high interest rates—for which the Government must take responsibility because of their deliberate policy, quite apart from any other economic considerations—-mean that there is great inducement for any local authority, if it can, to finance capital development from revenue.

Hon. Gentlemen opposite so often pose as the champions of economy, of sound financial management, but in the unlikely event of the Instruction being carried tonight, the people of London would pay over sixty years £6 million in interest to get £2 million with which to get on with their works. That is a fact—£100,000 a year at least in interest, for sixty years. If anyone suggests that is a good bargain for London, I think that he should consult a mental specialist.

Mr. Hay

We are not suggesting that this £2 million should not be borrowed. We simply say that instead of putting the burden on the backs of the ratepayers, the County Council should use the money that it has in its own reserves. I should have thought that was the simplest thing in the world to understand. It does not require the quoting of any astronomical figures in interest charges.

Mr. Skeffington

There are only two ways in which this could be done. I am coming to the second part of the Instruction because the two parts hang together. Either we shall take sums from the working balances which would endanger the financial integrity of the County Council—and I shall advance arguments to prove that in a moment— or, alternatively, work like the duplication of Blackwall Tunnel and the widening of the Strand could not be proceeded with. We should not be able to carry out schemes for housing of old people or for the provision of new facilities for education. I am sure that hon. Gentlemen opposite now realise that they are in a dilemma. Either we should have to cut out some projects which we consider absolutely necessary, or pay high rates of interest, which in the long run —indeed in the short run too—would not be to the benefit of Londoners.

I wish to examine the second part of the Instruction, and to deal with the working balances. We find there that only £2½ million are being set aside as a working balance: and that is supposed to be a very large sum. But judged on any accounting test it is a very moderate sum indeed. It is equivalent to two weeks' expenditure of the Council. There are few prudently managed businesses which would not wish to have at least the equivalent of a fortnight's expenditure in the "kitty" to meet financial liabilities. Hon. Gentlemen opposite should realise that.

For example, rates do not become payable until 15th May. It is the practice of many people not to pay their rates until the last possible moment. Indeed, some hon. Gentlemen opposite may be familiar with the little red notice which eventually is sent to people who have not paid their rates. But the London County Council has to pay its contractors and its servants, teachers and everyone else "on the nail." It is expected to do so. Therefore, to suggest that this balance—a fourteen days' expenditure— is a fantastic sum seems to me to be a misplaced argument.

Mr. H. A. Price

If the argument of the hon. Gentleman is sound, can he explain why it is that last year, when the estimated balance at the end of the year was £2,100,000, the County Council devoted £2,730,000 to the relief of rates, whereas this year when the estimated balance is £2½ million, it devotes only £711,000?

Mr. Skeffington

The hon. Member will receive an answer to his question, because I am proposing to deal with the changes during the course of my speech.

First, I was dealing with the suggestion that this financial liquidity was fantastic. I suggest that there are few businesses which would wish to be in the position of not having in hand the equivalent of a fortnight's expenditure. Prices are rising all the time, and that has nothing to do with the County Council. Prices have continued to rise, despite what hon. Gentlemen opposite said at the last General Election and previous Elections, and this year, as in previous years, when making the estimates, about £1 million has been allowed for to take account of rising prices and wages and materials. If that amount is exceeded—on the total volume of the council's expenditure and having regard to what has happened in the past it may well be exceeded—these balances are necessary to meet the higher prices. Otherwise the council would not be in a position to meet its financial Obligations. In the past year the working balance was in fact, too small.

On the point about using revenue for certain capital development, there is no other sound and economic policy for the L.C.C., having regard to the high interest rates. Secondly, the working balances are extremely modest. Reference has been made to the district auditor. He made a comment in the year 1944–45 when the balances, as a proportion of the Council's total finances, were higher than they are today, and said that they were "strictly moderate." I am afraid that the house must come to the conclusion that the case for the Instruction has not been made out.

I hope that the Minister will advise his hon. Friends to withdraw the Instruction because the facts of the case have not been made out, and because to interfere in the domestic and financial concerns of a local authority is a very dangerous precedent; and, finally, because Conservatives, who have lost no fewer than six London County Council elections, are now at last trying to get their own back in the House of Commons. It would be a very sorry day for the Government and for the House if the Instruction were carried.

Mr. Price

Is the hon. Gentleman going to deal with the point that I put to him? He said that he would.

Mr. Skeffington

I dealt with it earlier.

9.12 p.m.

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

I do not want to get into a controversy, but I do not remember losing the London County Council election of 1949, despite what the hon. Member for Hayes and Harlington (Mr. Skeffington) said.

Mr. Gibson

The right hon. Gentleman did not win it.

Mr. Brooke

I have been listening attentively to the debate for the last two hours and ten minutes and I seem to have been dreaming that I have heard some of these arguments and counterarguments before. Indeed, in my dream I thought that I had at one time been uttering some of them myself. In dreams things are not always just what they are in real life.

In my dream it seemed to me that we were debating among red upholstery and not green—and not in another place in the Westminster sense, because in my dream the Chamber was of a circular and not an oblong character. I must confess to the House that these are matters of discussion and dispute on which, in my previous life, I have expressed views, and possibly militant views, on the other side of the water, as has the right hon. Member for Lewisham, South (Mr. H. Morrison).

This evening I am going to be meticulous in saying nothing whatever about the merits of these arguments and counter-arguments which have been bandied about the Chamber. It is true that this evening the House of Commons has had a view of some of the personal pleasantries which arise in debate in the London County Council.

I certainly could not uphold the view that it is wrong for Parliament to have a debate such as this. It seems wholly in order, as, indeed, you, Mr. Speaker, have ruled, that when an important Bill such as the London County Council (Money) Bill comes before Parliament there should be scope for wide debate. It might be contended that the L.C.C. Bills, both money and general powers, are of such a magnitude that Parliament ought not lightly to let them go without debate, whichever party is in power.

Having said that, I want to make it perfectly clear that as Minister of Housing and Local Government I believe that it would be wholly wrong for me to declare myself about the rights or wrongs of the conduct of the L.C.C.'s finances, in the context of this debate. In my Departmental work from time to time I may have to reach judgments about these matters, but I hope that I shall have the assent of both sides of the House when I say that in a controversial and political debate like this the Minister should not, as it were, take sides between the parties, but should rather seek to guide Parliament to the ultimate decision which it should reach.

Let me say here and now that I could not on anything known to me at present comply with the request of my hon. Friends to set up a committee of inquiry into London County Council finances unless, of course, at some future date the district auditor should—I speak hypo-thetically—disclose such a state of affairs that it should be the duty of the Minister of the day to do that.

Mr. Rippon

I should not like the impression to be given that we were suggesting an inquiry into London County Council finances. I was going no further than saying that if there were such an inquiry as was envisaged in the White Paper on local government reform this might lead to an opportunity to remove the anomaly of the money Bill.

Mr. Brooke

The money Bill procedure—if it is an anomaly, and I am not sure that it is—could only be altered by legislation in this House.

When I speak about not setting up any committee of inquiry into London County Council finances I am not to be taken as meaning that all the local government problems of the County of London, or of the County of Middlesex, or of the Greater London conurbation, are settled and need no further thought.

On the contrary, I hope that I shall carry hon. Members on both sides of the House with me in saying that while we are giving attention, as we seek to do, especially to the questions of organisation and functions of local government throughout the country, we must not forget that both in the County of London and in the County of Middlesex and, maybe, around them, similar questions arise which require careful thought and study from time to time, because conditions change and economic developments take place and the whole pattern of local government as determined at one point of time may require modification as the years go on.

That is a very different thing from instituting a specific inquiry into the finances of London County Council and nothing I have heard said in this debate has convinced me that it would be right for me to take any action of that kind. I want to see whether I can make as many friends in all parts of the House as possible this evening, because I can imagine that some hon. Members, on both sides, may have been wondering what has been passing through my mind in view of my past—murky or otherwise.

During the course of the debate I had the feeling that the right hon. Member for Lewisham, South was not far wrong when he said that one of the troubles about London County Council is that its proceedings are so little reported. If we are agreed about that, I think that that may be part of the explanation of this debate, which has given opportunity for both the critics and the defenders of London County Council to state some, at any rate, of their arguments in a forum which does receive wider public attention than many debates on extremely important London questions in County Hall, in practice, do.

Mr. D. Jones

If that is the view of the right hon. Gentleman about publicity, and if this is the way to get publicity for London County Council, would he raise any objection to towns in the provinces doing precisely the same to get publicity for their authorities?

Mr. Brooke

I was not saying that a debate of this kind should take place annually because of the difficulty to which the right hon. Gentleman called attention, that of there being no London local newspaper. That in itself, is a serious matter. To my mind—to the mind of the right hon. Gentleman, too, I think—it has the undesirable result that matters of great public moment can be debated in County Hall by the elected representatives of the people of London-issues which affect millions of Londoners and may run into tens of millions of pounds—and yet there never is the play of public opinion upon them as there is the play of public opinion upon the matters which we debate in this House, and which are more widely reported in the newspapers. But 1 must not allow myself to stray down that avenue, because it is not the main thought which is in my mind.

I will not be held to say that there has been any misuse of Parliamentary time tonight, as the right hon. Gentleman suggested. I am sure that when a matter is in order, as this Instruction has been ruled to be in order by the Chair, Parliament cannot be criticised for exercising its powers and its rights to debate it.

The crux of the matter is: what shall we do at the end? I wish to offer the House the guidance which I believe it is right for the Minister of Housing and Local Government to give. The Instruction would not, as I read it, at all affect the content of the Bill. The Bill would still remain a request to Parliament to permit the London County Council to borrow £48 million. The effect of the Instruction, if it were carried, would be, as I understand, to tell the London County Council that it must either drop the Bill or give an undertaking, in effect, to rescind a decision which it reached on budget day and meet a portion of its expenditure by drawing on its balances instead of imposing upon the ratepayers a rate equivalent to that amount.

The alternative, as I see it, if the Instruction were carried and if no such undertaking were given, would be that the London County Council would lose its opportunity of borrowing £48 million, which would mean that it would have either drastically to reduce its capital programme—my hon. Friends have given an assurance that they do not desire that —or to meet the whole of the £48 million out of revenue, which would certainly have a more disastrous effect on the London ratepayers than anything which the London County Council can have done recently under its own autonomous powers.

I must in all seriousness advise the House that we should be setting a very bad precedent if we were to approve an Instruction of this kind, which would have the presumed effect of virtually compelling a local authority to rescind a rate decision which it had already made. I believe not only in local government but in local self-government, and it seems to me that one of the cardinal points of local self-government is that moment on budget day when the aldermen and councillors record their votes as to what the level of the rate shall be for the ensuing year.

Do not let us for one moment imagine that Parliament has no power at all to examine how local government is carried on, but let us be careful how we exercise that power. Let us exercise it with a sense of responsibility. If we do use those qualities of parliamentary responsibility which, I believe, are possessed on both sides of the House, I believe that they will lead us this evening to express the wish that this Instruction should not be carried—indeed, to express the wish that it should not go to the vote.

9.25 p.m.

Mrs. Freda Corbet (Peckham)

We have had a very exhaustive debate. I had hoped that we should have been able to finish within the hour but obviously the subject was of great interest to the hon. Members who remained in the House. I should like to say how grateful I am to the right hon. Gentleman the Minister—who sat across the road for so long in close relationship with myself— for what he has just said.

The arguments from this side have been expounded extremely well. We were fortunate in enlisting the services of my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) who, for so many years, played so prominent a part in the affairs of the London County Council. After he had finished I really thought that there was not very much more that needed to be said. He analysed the reasons for the budget conclusions to which we came at County Hall, and put the whole case against this Instruction extremely cogently.

The Minister has done something to relieve the minds of those of us who act for the L.C.C. in this House. When this kind of thing occurs, we are concerned, we are anxious. We do not know whether such an Instruction will be pressed to a Division and, if it is, what will be its fate. Many anxious hours of thought are given to the whole subject, not only by hon. Members but by the officers of the Council. Those officers have to spend time perhaps unnecessarily, and the ratepayers' money may very well be unnecessarily expended by such a thing as this.

What the Minister has said has been helpful in relieving our minds of that anxiety. Again, I dare say that the Minister, pleasant though he has been, could very well have more profitably used the last two-and-a-half hours. We have been reminded in the House only this wek that Ministers are very busy people, and perhaps we might give a thought to avoiding overworking them in future.

The hon. Member for Norwich, South (Mr. Rippon), whom I know very well, I think sincerely believes that the financial policy of the London County Council js misguided. I do not think, however, that he feels that there is anything wrong, or anything corrupt, or anything that needs a ministerial inquiry. I am certain that his disclaimer can be accepted. But his hon. Friend the Member for Lewisham, West (Mr. H. A. Price) asked for such an inquiry. I made a note to the effect that the Minister himself, when Leader of the Opposition in the London County Council, never asked for such an inquiry. He was satisfied that the financial affairs of the London County Council were conducted on a proper basis.

It is no good the hon. Member for Lewisham, West pretending that he is not insinuating that there is something corrupt and wrong in the conduct of the financial affairs of the London County Council. These miserable insinuations are, after all, only the forerunners to the campaign connected with the L.C.C. elections which will take place next year, and are largely inspired by the London Municipal Society. There is no real basis for these accusations against the financial integrity of the L.C.C.

Mr. Hay

The hon. Lady keeps on saying that people have made accusations against the financial integrity of the London County Council. She spoke a moment ago about allegations of corruption. Nobody on this side of the House has used that expression. All that my hon. Friends and I have said is that the London County Council manages its financial affairs very badly. We do not say it is corrupt or improper. We just say that it is a very bad manager.

Mrs. Corbet

I used the word "corruption" because we were told that the L.C.C.'s affairs were managed badly.

Mr. Hay

Very badly.

Mrs. Corbet

What is meant by "badly"? Does it mean that we are spending money that we ought not to spend?

Mr. Hay

Yes.

Mrs. Corbet

Does it mean that we are providing services that we ought not to provide, and that we are being extravagant instead of being reasonably economical?

Mr. Hay

Yes.

Mrs. Corbet

I deny such charges. Every consideration is paid by the London County Council to economy. That is one of the cardinal principles by which we act.

I admit that there may be matters on which hon. Members opposite may not be prepared to spend money because of their attitude to the social problems of the times. That is, of course, a difference of policy. That is the reason the electors of London go to the polls to elect one party or another. When hon. Members opposite belong to a party which does not succeed at the polls, surely they should be prepared to accept the implications involved in carrying out the policy of the party which does succeed.

Are we to have debates such as this every year? Is the L.C.C. to be threatened every year with this sort of thing, with a repetition of the work, anxiety and cost involved in connection with these matters of policy which ought to have been decided at the hustings —

Mr. H. A. Price

Would the hon. Lady be prepared to apply such a doctrine to this Chamber? In other words, the election being over, does she say that we should not discuss these matters any more? Are the Opposition not to be criticised any more until the next election?

Mrs. Corbet

I do not think that that question needs an answer. In all sincerity, I deprecate the course that has been taken here tonight. I hope that it will not be repeated. I agree that the attitude adopted by the party opposite has been adopted over the years. But there is a simpler explanation of the working balances, and I hope it will be accepted by hon. Members opposite.

There has been some difficulty in years gone by about the accumulation of balances the size of which the majority party in the L.C.C. could not always be sure about. For instance, in the early days after the war, Civil Defence suddenly had to be discontinued, but provision was made for it. Evacuation had to be discontinued, and provision was made for that. There were years of very grave shortage. Nevertheless, it was always hoped that it would be possible to get the supplies, the books and apparatus that we wanted for our schools. Year by year, provision was made, but very frequently the items did not materialise, and it was not possible to spend the money.

All kinds of things like that have occurred, and such difficulties are occurring today. We do not know what salaries we shall have to pay during the coming year. We do not know what rise there will be in prices. We just have to make a much more extensive and lavish provision than we would have done in the days when prices were stable. Everybody should bear that in mind.

Many of our difficulties today are caused by inflation and by the constant rise in prices. The increase in expenditure of the London County Council year by year is very simply explained. If hon. Members will only remember that half our expenditure is accounted for by education, and the fact that we are still dealing with the rising numbers of children in our schools, they will realise that our expenditure must, therefore, automatically rise. We need not then make such bogeys about these things, but should understand one another better, and attack those points which are fairly open to attack and not those which cannot fairly be attacked.

One point that I wish to make is on the provision which the Council has made this year for capital expenditure to be met out of the rates. I had myself been hoping that the Council would be able to make such provision on such a scale ever since the war, but, unfortunately, we have not found it possible to do it, and this seems to have been the first opportunity that we have utilised. It was not, in a way, a very good year, because last year we were able to have a very substantial reduction of rates owing to revaluation. It was unfortunate, of course, that the provision with regard to commercial derating did not take place last year. The Government could have foreseen that, and could have helped us in that way, but it did not take place. Therefore, we had a substantial reduction last year, and, of course, this year every authority has been bound to increase its rates.

In welcoming this provision that we have made this year, I regret that it has been so late, but I suggest that it is essentially a sound financial provision for an authority to make. This is confirmed by the advice which, I understand, has been given to the nationalised industries. My information is that the Minister of Power, on the advice of the Treasury, has already advised the nationalised industries to meet more capital expenditure out of income.

Mr. Speaker

I am sorry to interrupt the hon. Lady, but on an Instruction the debate must be limited to the subject-matter of the Instruction. I think that the hon. Lady is going a little wide. If I may suggest it, I think that the matter might be brought to a conclusion in time to enable us to hear the remainder of the speech of the hon. Member for Fulham (Mr. M. Stewart), if such a course was agreeable to the hon. Lady and to the House.

Mrs. Corbet

Thank you very much, Mr. Speaker. I should, therefore, like to conclude my speech by saying that I hope that supporters of the Instruction will be kind enough to follow the advice given by the Minister.

Mr. Rippon

The House will agree that the debate has served the purpose which the right hon. Member for Lewisham, South (Mr. H. Morrison) intimated it might serve—to afford an opportunity to discuss this Bill, and to make it clear that its presentation was not a mere formality. In view of the discussion which we have had, I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.