LOCAL GOVERNMENT (GRANTS)

HC Deb 08 December 1958 vol 597 cc34-161

3.41 p.m.

Mr. Speaker

Before I call the Motion on the Order Paper, I would ask whether it is convenient for both sides to take the General Grant Order and, at the same time, discuss the Grants and Rates (Transitional Adjustments) Regulations. It seems to me that that might be a convenient course, but I do not wish to take it if it is against the interests of either party. Is it agreed that these two Motions be discussed together?

Hon. Members

Yes.

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

I beg to move, That the General Grant Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved. I am grateful to you, Mr. Speaker, for suggesting that with this Order we might discuss the Grants and Rates (Transitional Adjustments) Regulations, as they are closely related. In view of what you have said, I shall endeavour to cover both of them in my speech.

In the two years that I have been Minister I have found that there are two facets of the duties of the Minister of Housing and Local Government that hardly lend themselves to romantic phrase or poetic fancy. One is expounding local government finance, and the other is opening a sewerage works. I shall endeavour today to be as lucid as I can. These are complicated matters, and I shall be grateful for the attention of the House as I endeavour to bring to its notice what appear to me to be the most significant points. If there are questions to be raised, my hon. Friend the Parliamentary Secretary will be glad to try to answer them later in the debate.

This is, of course, the first General Grant Order to be made under the 1958 Local Government Act. It prescribes the totals of general grants to county councils and county borough councils for each of the next two years. It proposes that those grants be fixed at £393 million for 1959–60, and at £414 million for 1960–61. The same Order prescribes the details of the formula for distributing these amounts between all the different receiving councils.

I am sure that hon. Members on both sides will find it easy to recollect that most of the Opposition case against the general grant was based on the argument that it would be used for making reductions—swingeing reductions—in Exchequer grants, and for cutting down education and other services. The hon. and learned Gentleman the Member for Kettering (Mr. Mitchison)—who, I hope, will be taking part in the debate—was full of suspicions and sinister conjectures earlier in the year and said, even as late as the Third Reading of the Bill: … I regard this Bill as an attempt to relieve the taxpayer at the expense of the ratepayer, and at the expense of the people who are benefited by the local government services which constitute the relevant expenditure under this Bill."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 329.] I shall be intrigued to see whether he repeats that today, for this Order fulfils the Government's assurance and refutes every one of his conjectures. The grants for which it makes provision represent contributions by the Exchequer to the cost of local services that are fully fair to the taxpayer and to the ratepayer alike. The whole plan rests on firm and sure foundations—the estimates of local authority expenditure, of developments in the services, and of all the other matters that Section 2 of the Act requires us to take into account.

The figures and the basis of the estimates are fully set out in the Report that I laid before Parliament, accompanying the Order. If I went into every figure this debate would become an arithmetic lesson. We all want to avoid that, so I will seek to confine my speech to a few of the most significant figures.

In this current year—1958–59—the old specific grants, which are henceforth to be superseded by the new grant, are estimated at £363 million. If Parliament now approves this Order, the Exchequer will be providing £30 million more than that next year, and £51 million more the year after. Hon. Members will find a useful table in paragraph 15 of the Report, which compares grant with expenditure over a number of years. It shows how, under this Order, the share of the cost falling on the Exchequer is being maintained.

The grants that are now proposed will meet 55.5 per cent. of the estimated expenditure for 1959–60, and 55.6 per cent. for 1960–61. But that, of course, is not the whole story. To make a fair comparison with earlier years, one must also take into the reckoning the new extra income to local authorities that will come from rerating industry to 50 per cent. Of this additional income, £10 million will accrue to the local authorities, and £20 million to the Exchequer which, simultaneously, will drop £15 million in tax revenue. Hon. Members will recollect that all this was fully explained in the White Paper of July, 1957.

A sum of £6¾ million towards this £20 million falls to be deducted from general grants. That was set out in paragraphs 30 and 31 of last year's White Paper. This deduction of £6¾ million, therefore, represents grant income that is replaced by additional rate income as a result of Government action, and if this £6¾ million is added back to the general grant the resulting total is seen to be 56½ per cent. of the estimated expenditure for each of the two coming years. That is, in fact, higher than the grant percentage for any of the previous five years shown in the table on page 5 of the Report, and the House may care to know that it is actually the highest percentage ever attained.

I go further than that. The comparison has so far taken account of the additionel rate income only to the extent that it has been set off against general grant. The comparison I have just made leaves out of account the net gain of £10 million a year to the local authorities from the rerating of industry. When account is taken of all the financial provisions of the 1958 Act the effect of this General Grant Order is to make available to local authorities, in 1959–60 and in 1960–61. an income larger by at least £10 million each year than they would have had if there had been no Act and no Order—and £10 million is equivalent to a 4d. rate over the whole of England and Wales.

The Act and the Order, therefore, will enable local authorities to meet their estimated expenditure in the next two years by levying rates which, on the average, will be 4d. in the £ less than they otherwise would have been. I invite hon. Members to judge whether this affords any evidence of transferring burdens from taxpayers to ratepayers, as the Opposition said we intended to do.

Mr. J. A. Sparks (Acton)

Before the right hon Gentleman finishes, I wonder whether he could give us some idea of the burden on the ratepayer. It seems to me that, despite all these savings, the burden on the ratepayer will increase considerably.

Mr. Brooke

The Government are planning for an expansion of the services. We are also setting up a sounder system of local government finance which will make every local authority more anxious than ever to obtain value for money.

The House will find set out in the Report the manner in which the estimates of expenditure taken into account in fixing the grant was arrived at. We started from the local authorities' own figures. We asked the local authorities to submit estimates of their expenditure on the services concerned for the years 1959–60 and 1960–61, together with supporting information showing the developments for which they were providing in the figures. These estimates, therefore, take fully into consideration the authorities' own plans. They reflect the authorities' own assessments of the progress likely to be made in maintaining and developing their services during those two coming years. The estimates we thus obtained from the local authorities amounted to £697.1 million for 1959–60 and £732.5 million for 1960–61.

These estimates were examined by each of the various Government Departments, and it quickly became apparent that they had been framed in a realistic and responsible way. We made few reductions in them. The kind of reduction we made was where the total of all local authorities' estimates of additional staff recruitment was in excess of the number of potential recruits likely to be available. We had to make adjustments for considerations of that sort.

We then held consultations with local authority representatives, during which the figures were modified again, and in the end the total reductions below the local authorities' own estimates amounted to not much more than half of 1 per cent.: we accepted the local authorities' own total estimates with hardly any change.

It was not solely a matter of making reductions, but also a matter of making increases. It was apparent to us that in some respects the local authority estimates were too low, in which case we added something. Amounts were also added for the expansion of some services over and above what the authorities allowed for, and also for developments which have occurred since the local authorities made their estimates. The House knows that one example is the new basis for compulsory acquisition of land provided for in the Town and Country Planning Bill. Sums were also added for wage increases which have been settled, or which have become foreseeable since the original estimates were made by the local authorities. These additions, also, were discussed with the representatives of the local authorities.

The net result of all these calculations and discussions was to increase the estimated expenditure for 1959–60 from the local authorities' own figure of £697.1 million to £707.8 million and for 1960–61 from their figure of £732.5 million to £744.3 million. These are the figures which were finally taken into account in fixing the grant totals.

Mr. C. R. Mitchison (Kettering)

Would the right hon. Gentleman find it convenient to give a semi-breakdown of those increases? I gather that the local authorities' returns were to be in by the middle of August.

Mr. Brooke

I am anxious to help the House as much as I can, but I think that it would be better if I went straight forward and set out the whole story. Hon. Members on both sides of the House will, no doubt, have questions to ask, and I am sure that my hon. Friend the Parliamentary Secretary will do all he can to answer them when he winds up the debate.

As I said, those were the figures which were finally taken into account in fixing the grant totals, and they compare with the estimated expenditure in this current year of £644.1 million. Compared with this year the figures show an increase in 1959–60 of £63 million, which is nearly 10 per cent., and in 1960–61 of £100 million, which is over 15½ per cent. These figures show what nonsense has been talked by the Opposition and their friends about cutting down services. Once again, as with the Rent Act, they have been creating fears which are completely groundless.

I want at this point to explain the position about teachers' salaries in relation to the figures in the Order. At the time the figures were being considered and we had our final consultations on them with the local authorities' representatives—as required by the Act—both sides of the Burnham Committee contemplated a flat 5 per cent. increase to operate from an early date, which was to be followed by a later review of the existing Burnham scales. As the House well knows, members of the National Union of Teachers recently rejected the recommendation of their executive in favour of the 5 per cent. increase; but the preparation of this General Grant Order, the complicated calculations of the distribution formula and the statutory consultations with the local authorities' representatives—with the associations of local authorities—and with the London County Council, had all been completed.

The Government then had to consider what was the right course. The delay which would have ensued if we had at that point reviewed the Order and under-taken fresh consultation with the local authority associations, as we should have had to do under the Act, would have created great difficulty for Parliament, if not for the local authorities, too; because the General Grant Order has to be submitted to and approved by Parliament and it has to be in force in time for the authorities to be notified of their individual grants by the beginning of January. We all have to keep to a timetable. The local authorities must have time to draw up their own budgets and get council approval of them in time to fix their own rates for the ensuing year.

It seemed best to leave the figures in the Order unaltered and publish it without delay, but with this explanation. The figures in the Order have been arrived at on the basis of the 5 per cent. increase in teachers' salaries which was proposed, but nothing in the Order prejudices either way the further deliberations of the Burnham Committee, nor does the Order prejudice the decisions which my right hon. Friend the Minister of Education will have to make if the Burnham Committee decides to submit fresh recommendations to him.

If teachers' salaries are increased by less than 5 per cent. over the period April, 1959 to March, 1961, compared with the present level, this will be taken into account in any future review of the grant for those years. But these matters are purely hypothetical, and I hope that the House will feel that it was wiser to proceed with the Order as it stood than to cause the delay involved in fresh consultations with local authority associations, to make sure that the House had time to consider the matter and approve the Order before we rose for the Christmas Recess.

Subject to that explanation, the Order takes full account of pay increases which have come into effect since the estimates were prepared or which can be foreseen. But nothing is included in the Order for possible further increases in the price level of goods and services, or for any other unforeseeable increases. That means that the increases in the grant total are, in the main, genuine increases for development of the services.

The House already knows the strong and fearless Measures which the Government have taken to squeeze inflation out of the economic system. We intend to keep this dragon of inflation underfoot. If there are other pay increases which cannot at present be foreseen, or increases in the prices of materials and services, local authorities will not necessarily be left to bear them unaided; there is machinery in the Act for an amending Order if there is an unforeseen increase in the level of prices, costs or remuneration, and if its effect on the cost of providing services is of such magnitude that it ought not to fall entirely upon local authorities.

In circumstances like those the position would have to be reviewed. We should then take into account what I mentioned earlier—the outcome of the pay increase for teachers. We should also have to consider what savings had been secured mean-while by the development of new techniques and greater efficiency. The whole position is clearly laid down in Section 2 of the Act.

Referring again to the Report which I presented to the House along with the Order, paragraphs 17 to 31 contain an impressive list of coming developments which have been taken into consideration by the Government on mental illness and mental deficiency. For example, the recommendations of the Royal Commission will call for a considerable expansion of the mental health services provided by local authorities. It is envisaged in the Order that in each of the next two years development of these services will proceed at two-and-a-half times the present rate.

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

Instead of using percentages, would it not be rather more helpful to give the actual figures of increase, showing what they are rising from and what they are rising to?

Mr. Brooke

I was anxious not to prolong my speech overmuch. I was solely inviting the attention of the House to those passages in the Report where the essential facts are summarised. Needless to say, further information can be obtained from my right hon. and hon. Friends, but the essential facts are clear.

Our estimates also provide for continual expansion and improvement of other local health services than the mental health service. They provide for more and better welfare centres, more district nurses, health visitors and home helps, and midwives. Developments are also planned for in the local welfare services, not only for the old and infirm, but also for the handicapped, on whose needs the Piercy Committee reported.

I now turn to education, because that accounts for about 85 per cent. of the estimated expenditure on all general grant services for the two-year period. With only the slightest modifications, the Government have accepted the forecasts of local education authorities for the whole of this expenditure, which shows an increase over the probable level of expenditure during the current year of over £50 million in 1959–60 and £82 million in 1960–61.

Last week my right hon. Friend the Minister of Education published a White Paper, "Secondary Education: A New Drive", which has been acclaimed far and wide throughout England and Wales. It is in the field of capital investment that these new plans of my right hon. Friend will call for an expansion of programmes already laid down. In the matter of expenditure, they will make themselves felt by some increase in loan charges in the latter part of this two-year general grant period. The estimates of expenditure we have adopted and the general grant that we have fixed are fully adequate to provide for their implementation. My hon. Friend the Parliamentary Secretary to the Ministry of Education is here and will be ready to explain the position more fully if it is desired.

The Government knew that the new plan comprised in the White Paper was coming, and took it into account. Not only have we provided for development of the services in the Act; in this Order, made under the Act, we have given positive and vivid proof of what we mean.

The Order also contains the formula for the distribution of the total general grant among all the different local authorities. It will be remembered that the White Paper of July, 1957, gave an illustration of the way in which the formula might be drawn up.

Mr. Mitchison

The right hon. Gentleman is the Minister who is responsible for fixing the amounts. How much did he allow for the additional loan charges in respect of the White Paper which has just appeared?

Mr. Brooke

Either my hon. Friend the Parliamentary Secretary to the Ministry of Education or my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government will be very happy to deal with that matter when he speaks, but I think that it is wiser for me to make my speech in my own way, since there is a great deal of ground to cover. After that, hon. Members who have questions to ask will ask them, and they will be fully answered.

I now want to complete my exposition of the grant Order, which I must do by referring also to the formula arrangements. The formula in the 1957 White Paper obviously would not do now, because the formula now has to distribute totals more than £100 million greater than the total assumed, for illustration purposes, in the White Paper. The earlier 1957 formula met with a fair level of acceptance, but in the course of later discussion and debate some useful suggestions and criticisms of it were made, and we have tried to meet them where we thought they were well-founded.

The Order therefore embodies a number of changes which the Government believe to be improvements on the original. These changes have been fully accepted by the representatives of the local authority associations, which confirms my view that they are improvements. The effect of the changes is not very great; the formula still follows the original lines of the earlier illustration. All this is explained—lucidly, I hope— in paragraphs 32 to 35 of the Report.

I ought to add that, with the help of the local authorities' expert advisers, tests were made to see the overall effects of the whole of the changes put together. An individual change in the formula might well be an improvement and yet, when a number of different changes—all singly thought to be improvements—were aggregated it might have been that the resultant total of changes produced a less satisfactory result.

The tests which we were able to make with the help of the experts established that the general effect of the formula changes that are now incorporated in the Order, far from worsening the actual distribution to local authorities, was to help those authorities which did less well under the 1957 formula used in the earlier illustrations. So, in the light of all that, the changes seemed to be sensible, both when they were judged individually and when they were tested collectively.

When the Bill was before the House I remember several hon. Members, including particularly my hon. Friends the Members for East Grinstead (Mrs. Emmett) and Crosby (Mr. Page), pointing out that, unless up-to-date figures of population were used for the grant calculations, authorities which had rapidly increasing populations might suffer. I thought that that was a valid point, and I am glad to say they will find that the Order provides that the final calculations for each year are to be based on population and other figures current for that year. Figures of population at June, 1959, and of school children at January, 1960, will be used for the final 1959–60 calculations; and so on.

One consequence of this is that the grant will have to be calculated and paid on a provisional basis in the first instance, using the latest available figures. That is formally provided for in separate regulations which were made on 20th November, called the General Grant (Calculation) Regulations, which do not require an affirmative Resolution of the House.

The figures of individual grants, shown in the supplement to the Report which we have published, are for this reason provisional figures, too. They will need to be revised as soon as population and other figures for 1950–60 are available.

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

Will my right hon. Friend tell the House at what part of the financial year it is proposed to make any payments to local authorities?

Mr. Brooke

That has been agreed with the local authorities. I understand that it will probably be on a quarterly basis, but it has also been provided that there will be a transitional arrangement for a period of eight years from the present scheme, under which they get 90 per cent. of the estimated total during the year in question, under an escalator system which will go up from that over a period of years until they get 100 per cent. The ultimate aim is to ensure that the local authorities will get 100 per cent. of this new general grant during the year in which it is due to them.

Before I sit down I want to say a word or two about the second Statutory Instrument which we are discussing at the same time, the Grants and Rates (Transitional Adjustment) Regulations. This is a separate instrument which, unlike the General Grant (Calculation) Regulations, requires an affirmative Resolution of the House. The principles of the transitional scheme, hon. Members will recollect, were laid down by Section 15 of the Act.

Briefly, they are that authorities which are estimated to lose from the financial provisions of the Act are transitionally to receive contributions from authorities which are estimated to gain, and the contributions are to be proportionate to the gains. Gains and losses are to be calculated by estimating what the effect of the financial provisions of the Act would have been on the financies of rating authorities if the Act had been in force in 1957–58. One hundred per cent. of the losses are to be made good in the first years, 1959–60, and 90 per cent. of the losses in 1960–61. Of course, fresh regulations will be needed after that.

These transitional Regulations, therefore, are concerned only with the rather technical details of the method of estimating gains and losses, and with the provision for making adjustments where rating areas are affected by any boundary changes. I can assure the House that all these technical details have been discussed fully with the local authority representatives and have been agreed with them. For myself, I am not aware of anything in these transitional Regulations to which I ought to invite the attention of the House, but my hon. Friend will be very pleased to answer any questions.

The main question before the House today is the rightness or wrongness of this General Grant Order. The partnership between central and local government is now put on a new financial footing. It is a basis which, I am sure, will strengthen the responsibility and the independence of local authorities. We have had very frank and friendly discussions with the representatives of the authorities in framing this Order and I think that that is a good augury for the success of the new partnership.

The representatives of the County Councils' Association, of the Association of Municipal Corporations, and of the London County Council have said to me that they welcomed the attitude of the Government Departments in the statutory consultations that went on, in the use of the local authorities' estimates, and in our readiness to disclose all relevant information for discussion across the table. Although, naturally, they had certain reservations, they said to me that in reporting to their respective bodies the discussions on this first general grant they proposed to tell them that within the context of the Act the result, taken as a whole, was one which they regarded as fair and reasonable.

I am content to rest on that as a tribute to the Government's honesty of purpose and of performance, and I commend the Order to the House.

4.18 p.m.

Mr. Michael Stewart (Fulham)

As the Minister reminded us, this is the first General Grant Order that the House has had to discuss. It represents a new departure in Parliamentary procedure and, among other things, it takes the place of such discussions as might otherwise have occurred in the House on the Estimates of the Ministry of Education. It is encouraging, therefore, to see that Ministry represented in the debate, if only in a subordinate capacity, for its rôle under this now arrangement must inevitably be that of second fiddle to the right hon. Gentleman the Ministry of Housing and Local Government.

I shall have occasion to refer to the education service fairly frequently in what I have to say, for it is agreed that the education service is the one mainly affected by this General Grant Order and by the whole procedure of block grant. But if it is the one mainly affected, it is by no means the one only affected, and if my hon. Friend the Member for New-castle-upon-Tyne, East (Mr. Blenkinsop) is able to catch your eye, Mr. Speaker, I know that he will wish to say something about the local health and welfare services. Also, there are many others of my hon. Friends who will wish to draw attention to many of the services, education and the rest, affected by this Order.

The Minister gave himself a glowing testimonial to his work and told us that what we had to consider was the rightness or wrongness of this General Grant Order. If I may correct him, that is a slightly misleading account of the proceedings. We are not at the moment discussing the principle of whether local finance ought to be run on a block grant or a percentage grant basis. If we were, I can assure the Minister that there would be a very great deal that would be said on this side of the House and we should have no reason to withdraw or modify any of the criticisms which we made when the Bill was under discussion.

Strictly speaking,—as it was put by the rather modified testimonial which the Minister quoted from one of the local authorities—we are discussing in the context of the Act a particular amount designated in this Order. But, even so, before we subscribe to the view that we can accept with any enthusiasm the amount mentioned in that Order, we have to notice, to a limited extent, the way in which the principle of block grant affects our judgment of this absolute amount.

In the first place, we have here an amount of grant based on an assumption that the local authorities will spend certain moneys on certain services. But it is of the nature of the case that this House has no certainty that the money will be

spent on those services, and that is the more likely to be so if, between the time when the grant was assessed and the time when the local authorities have to face the situation in the coming year, certain other expenditures have been added to those which they must meet out of the rates.

First, there is legislation to be considered, such as the House Purchase and Housing Bill, which will require local authorities to make a considerable number of grants. Those grants will attract Exchequer grant outside the purview of this Order. But it will not be 100 per cent. grant. The making of those grants will involve a rate-borne expenditure, and if we try to find out how much and consult the financial memorandum of the Bill concerned we find merely the airy phrase that no estimate can be attempted. What will happen if that expenditure proves to be very considerable? The local authorities will have to meet an expenditure which was not at all in their view when they were drafting their estimates for expenditure for these services, on the basis of which this grant was made. There is nothing, in the nature of the Order, to prevent them, when they are faced with that situation, deciding that the simplest way of meeting their difficulty is to cut down on some of the services to which this general grant is supposed to relate.

That is one of the things that we have to bear in mind, and it is an inescapable criticism of any General Grant Order whatever the amount it may actually contain. Then we have to bear in mind, also, that prices and costs may vary during the two years of the General Grant Order, and we are told in this Order that nothing is included for such possible increases; if they occur the local authorities have to do their best to meet them by making economies. But already, when they drew up their original estimates for the making of the Order, they were asked to be most careful, so there cannot be very much margin for them there.

Perhaps we shall be told that the Government know of their certain knowledge that there will be no increase in costs and prices during the next two years. I can only say that previous recent experience is not encouraging on that point. Let us take a recent two-year period, from January, 1956, to January, 1958. During that time the index figure of retail prices rose by 8 per cent. By June, 1958—two and a half years from January, 1956—there had been a rise of 10 per cent., and the halt in that process since then has been secured only in connection with policies which have meant stagnation and rising unemployment.

Are the Government to continue to apply that kind of remedy to rising prices? If not, what guarantee is there that prices and costs will not rise in the two years which this Order has to run in the way they did in the two years from January, 1956, to January, 1958? Also, if such an increase occurs, how is it to be met? Is a rise in costs of 8 or 10 per cent. to be met by marginal economies made on estimates that have already been most carefully considered? That is another point that we have to bear in mind on any general grant Order irrespective of the amount which it contains.

In addition, we are told that some provision has been made for increased remuneration. If I followed the Minister aright, the estimates by the local authorities of what they would want were made on the assumption that teachers' salaries would go up by 5 per cent.

Mr. H. Brooke

No. When the local authorities made their estimates they had no knowledge of that, but subsequently the two sides of the Burnham Committee agreed to recommend a 5 per cent. increase and the Government added in the requisite amount before arriving at the final figures which they put before the local authorities.

Mr. Stewart

I understand that. I find it rather alarming. I hope that the Minister will correct me if my interpretation of this rather important point is wrong.

The local authorities first put in an estimate which assumes expenditure of £697 million. That had allowed for all the matters described in paragraphs 7 to 12. At the end of the day the Government ended by estimating expenditure at £707 million. There had been an increase over what the authorities estimated of £10 million. The Minister now tells us apparently that included in that £10 million is a 5 per cent. increase on the salary bill of teachers. A 5 per cent. increase on the salary hill of teachers is more than £10 million. It is probably about £12 million.

I understood the Minister to say just now that the 5 per cent. increase in teachers' salaries was not included in the authorities' estimate of £697 million. It must, therefore, be tucked in between the £697 million and the final £707 million which the Government have agreed. I do not follow how one tucks a 5 per cent. increase in teachers' salaries into only £10 million. If I am wrong about this, perhaps the Minister will explain it.

This is more than a little disquieting. It means that the Minister has not been quite so generous as some of his remarks might have led the House to suppose. The only persons who can answer effectively, for they know what the facts are, are the Minister or, in view of the Minister's reaction to questions, possibly the Parliamentary Secretary. Let us be quite clear about this. According to what the Minister has told us, the increase in teachers' salaries is tucked in between the £697 million and the £707 million, and it is difficult to see how one tucks a 5 per cent. salary increase for teachers into £10 million.

Even apart from that, what is now the position of the local authorities? There is a deadlock in the salary negotiations. The teachers are not at present getting the 5 per cent. more. In what position have the local authorities now been placed? They are given a considerable temptation to go on being obstinate. The longer the deadlock persists the more they are in a position of having received a general grant on the assumption that the salaries would go up by 5 per cent. and not having to pay that 5 per cent. increase. If, on the other hand, their solution to the deadlock is to make a better offer than 5 per cent., they do it knowing that the whole of the extra increase will have to come out of the pockets of the ratepayers.

This bears out one of the general criticisms of principle which we have made of the block grant—that it repeatedly places local authorities which want to be generous in a more difficult position than local authorities which want to be mean. I cannot believe that the Ministry of Education is altogether happy at this juncture, when so much of its White Paper proposals depends upon getting enough teachers, and when local authorities are being placed in a position in which there is a positive financial temptation to behave in an ungenerous manner towards the teaching profession. These are certain general criticisms of principle that would, I think, apply in the case of any general grant. They are connected with the very nature of the block grant itself.

Now I wish to turn to the actual amendment, and the very interesting, and I agree lucid, explanation of bow it was arrived at, which the Minister gave us. I understand that the first step in the procedure was to ask the local authorities—and how generous it sounds—what, in fact, they felt they would need next year and the year after. That request was made to them by Circular 34 of the Ministry of Housing and Local Government, issued on the 29th May this year. Various matters of detail were referred to, and it was pointed out that they must make an estimate of the development of the services in the two years concerned.

We are told that the information which the Departments—that is, the central Government—needed on this matter was the councils' "sober estimate of what they will achieve." I wonder a little at the choice of adjective. Does the Minister feel that the affairs of town and county halls are usually conducted in an atmosphere of drunken frenzy? However, the councillors, aldermen and municipal treasurers removed the vine leaves from their hair and gat down to making the estimates. When they made the estimates—and I shall comment in a moment on the general Governmental and financial climate in which they had to make them—certain very small modifications, we are told, were made in paragraph 7. I think it is agreed that there is nothing very much to argue about one way or the other in the modifications in paragraph 7.

Then the Government made allowances for some of the results of their own legislation, took an optimistic view of the future of the price levels, allowed for the expenditure on welfare of the handicapped—because that was the cheapest way they could find of complying with the recommendations of the Piercey Committee—and, finally, decided that the local authorities should not get more than one-third of the benefits from rerating, and so arrived at a total figure.

That, broadly, has been the procedure, and it is the first step which, overwhelmingly, determines the amount—the "sober estimate" by the councils of the development of their services in the next two years; but what was the atmosphere during those summer months of 1958 when they were making their estimates?

The circular went out on 29th May, and it was suggested that they had better get the estimates done before July, when they went into recess, and, in any case, their answers must be in by 15th August. In assessing what their services were likely to be and what the costs were likely to be, at that time, so far as education was concerned, they were still governed by that gloomy document, Circular 331, issued on 30th October, 1957. We have just been told in a recent circular that by stages Circular 331 is to disappear; but at this time, when the authorities were making their "sober estimates", their considerations were still governed by Circular 331, which was concerned with capital expenditure.

What we want to notice about capital expenditure is that, if an authority's capital expenditure is restricted, that restricts the scale on which its services will be continued during the next few years. If an authority cannot start a new school next year, expenditure on maintenance will not be in existence in the coming years. When the Government asked them in October, 1957, to restrict their capital expenditure, that meant that it would restrict their ordinary revenue expenditure in the coming years, and it was in the atmosphere that they had to make the "sober estimate" of what the development on their services would be.

What were the things on which they were to restrict their capital expenditure? They sound oddly like the recent educational White Paper in reverse. They were rural reorganisation, special schools, school clinics, school meals, physical training and recreation, and, in general, almost anything that the Ministry could think of at the moment. When the local authorities were doing that, in January, 1958, came Circular 334, telling them directly to restrict their ordinary current expenditure out of revenue. They were to do that, for examule, on awards to students, the furniture and equipment of schools, and, one of the paragraphs of the circular said, in effect, that they were to see whether there was anywhere else where they could do it, and, if so, to do it.

The Government's position, then, is this. They tell the authorities at the turn of the year that they are to cut down their capital projects and their revenue expenditure this way, that way and the other way. By so doing, they conditioned the authorities' whole idea about the development which they would be allowed to make in the next two years. When they have got them into that state they then ask them for their "sober estimate" of what they think their services will be, and, on the basis of that "sober estimate", proceed to give them a general grant. Having done that, they tell them that their services are to be developed in the most magnificent manner between now and the next General Election.

I have referred to the education circulars, but, as the House will know, at the same time, comparable circulars were going out from the Ministry of Housing and Local Government, affecting almost every kind of local government expenditure, some of which is outside the purview of this Order, but some of which lies very much within it. So I say, first, that on this suggestion that the authorities were given what they wanted, their answer was very largely conditioned by the Government's own actions. Secondly, even if that had not been so, there is a bigger question of public policy involved here, and it is that the real judgment on what the community needs to spend on education, on local health services, welfare and many other things, cannot be adequately pronounced by adding up the estimates of the local authorities.

The question of what kind of educational service this country ought to have is ultimately a national question, and the responsibility for answering that question was very plainly put by Section 1 of the Education Act on the Minister of Education himself. What has been happening in the last few years, and is still happening, is that in response to the inevitable needs of a modern State, the country has been developing its educational expenditure, its health expenditure and its social expenditure in many directions. However, while it has been doing that, it has been facing one difficulty—that an excessive proportion of that expenditure has been placed on local authorities whose means of collecting revenue have been far too narrow for the task imposed on them.

I have said in education debates before that we are in danger of reaching a situation in which the nation as a whole, measured by its capacity to produce wealth, can afford a considerable educational advance, but, owing to the peculiarities of local finance, chairmen of local finance committees are compelled to say that they cannot afford the advance—and in that context to say it with truth.

There has been one possible remedy for that, to consider whether other sources of revenue could be found for local authorities. Everyone who studies these matters must have been heartened to read the words: Methods of raising local revenue … must then be overhauled Those words come from the Conservative Party election manifesto of 1951. Since then, those methods have not been so much overhauled as overlooked.

The situation has been such that the structure of local government finance has not been capable of bearing the burden which the needs of the community have been imposing upon it. When the Minister keeps on telling us how much money he has given in his General Grant Order, we should remember how much of the improvement in the social services will have to come out of rates, as is shown by the figures at the bottom of page 5 of the Report on the General Grant Order.

It is because of that situation that over recent years, to solve the problem of the difficulties of local finance, we have been so arranging our affairs that progressively the proportion of the cost of the services borne by the Government has been rising. That fact, too, is brought out in the figures at the bottom of page 5—rising from 55.6 per cent. in 1954–55, through 55.8 per cent, 56.1 per cent., 56.2 per cent., 56.4 per cent. and 56.5 per cent. The achievement of the Minister is that he has brought to a stop that gradual rise in the proportion of social service expenditure borne by the Exchequer.

The right hon. Gentleman comments with pride on the fact that the percentage of that social expenditure borne by the Exchequer in 1959–60 is higher than it was for 1958–59. However, as I have been pointing out, that was an inevitable development if the country wanted the education service it needed. The Government had either completely to revise local finance, or accept the fact that a bigger and bigger proportion of such expenditure had to be paid by the Exchequer.

The rise was an inevitable development. What the Minister has done is to make a smaller rise for the first year than has been the case in previous years and to bring the process of growth to a stop in the second year to which the Order refers. There is not so much in that percentage figure which is favourable to the Minister as he supposed.

I want to mention another matter connected with the future development of education. Neither the Report on the Order nor the Minister has been clear on this matter. The local authorities were asked to make estimates, and then certain adjustments were made—some up and some down—in the end resulting in a figure of £10 million higher than that at the beginning, that figure determining the volume of the grant. That comes after we are told, in paragraph 17, that the provision made in the general grant takes full account of the need for further development of the services.

To carry that further, we are told, in page 9, paragraph 32 of the White Paper, "Secondary Education for All: A New Drive", that In fixing the grant for the first general grant period the Government have taken account of the policies proposed in this White Paper". At what stage did the Government take account of those policies? When they made their "sober estimates" between May and July, 1958, did the local authorities know of the provisions of the Government's White Paper? Did they enjoy that private view of the Government's financial intentions which, up to now, we have always supposed to be the prerogative of the Conservative Central Office?

We ought to know these things, and the question I am asking is plain. When the local authorities made their estimates, which made a total of £697 million, did they know of what the Government have since made public in the White Paper on education? If they did, this is a rather curious way of proceeding.

One would have thought that if the Government's intention had been as firm as that a White Paper could have been laid before the House at that time. I find it a little difficult to believe that the local authority estimates of what would be needed, estimates which were made in the middle of the summer, could have been made in the light of a White Paper published early in December.

I have no doubt that we shall be told that as soon as the local authorities put in their estimates the Government made allowance for the new developments foreshadowed in the White Paper. In that case, we are entitled to ask for how much the White Paper is responsible. If the White Paper on secondary education had not been issued, by how much would the general grant have been decreased in the two years for which it is to run? By how much would the £600 million and the £632 million for education have been reduced if there had not been a White Paper on secondary education? That will give us some estimate of how seriously the Minister of Education's White Paper ought to be taken.

There is one possible comment which the Government may make on that. It is that the White Paper on secondary education is concerned with developments which will occur in the future and that inevitably not very much of such expenditure can fall within the first years of the operation of the Order. However, that is not satisfactory. Let us take as an example the matter of teachers' supply. Reverting to the Government's statement that they are examining developments in education, in paragraph 20 of the Report they say:

It has been assumed that net recruitment of teachers during each of the two years will fall within the limits suggested by the National Advisory Council. … If that is so, it is rather depressing. It is true that the Government have just taken measures to increase the size of teachers' training colleges—after having been implored for four years by hon. Members on this side of the House to do so. We admit that those measures will not produce more teachers for some time beyond the period covered by the Order. Are we to understand that no other measures are to be taken which would be more immediate in their effect to increase the supply of teachers? Is it not to be part of the attempt to implement the White Paper on secondary education to persuade, urge and cajole local authorities into doing everything they can to employ every suitable part-time teacher on whom they can lay hands?

Since there is a bottleneck in the training colleges, is nothing to be done to get more people into teaching direct from universities? Those are the things which could be done to produce an immediate effect, but if an immediate effect is produced, the cost ought to be allowed for in the General Grant Order. However, it is clear from paragraph 20 of the Report that no such allowance is made. The Government must agree that we have some reason for concern on this topic.

There is one other general consideration which we have to bear in mind when assessing the value of the Order. It is that by the time the two years to which the Order refers are over, a General Election will have come and gone. This is the pre-election General Grant Order, and that is one reason, of course, why none of us during the debates on the Bill ever doubted that the Minister would make a brave showing in the first Order that he produced.

Mr. Graham Page (Crosby)

The hon. Gentleman should look back at his own words.

Mr. Stewart

I will quite happily do so. We are quite aware of the way in which the Government proceed, and if the hon. Gentleman will listen for a bit he will see what I mean.

The point I am making is that we now have an Order which is the last one before a General Election, and, therefore, we cannot take it as any assessment of how the Government are going permanently to use the powers to make general grants. We are entitled to be suspicious when we compare the Government's pre-election and post-election behaviour in certain other fields.

I will not labour now, for example, the contrast between the spring and autumn Budgets of 1955, but I think it pertinent to point out that in December, 1954, a few months before the last General Election, we had Circular 283 coming out of the Ministry of Education. That circular told local authorities to go ahead with rural reorganisation, with physical training and recreation, with the provision of school meals, and, in fact, with most of the things on which the subsequent circular told them they had better slow down.

That circular was issued a few months before the 1955 election. Less than a year after that election, on 17th February, 1956, the local authorities were told with regard to all educational building projects that there must be a control of starts, a postponement. Later in 1957 and early in 1958 there followed Circulars 331 and 334. to which I have previously referred.

If we turn to housing, we find that just before the General Election of 1955 local authorities enjoyed an Exchequer subsidy of £22 1s. on every dwelling which they built. By November, a few months after the election, that subsidy had been cut in half, and by the next year it had gone. During that same period, due to interest charges. the cost of building an average house had gone up by nearly 50 per cent.

The present Prime Minister, who at the time was Minister of Defence, said proudly in December, 1954, just before the election: We have built in this year"— that is, 1954— 350,000 houses. I prophesy that that figure will continue. In the next year the figure had fallen to 317,000 and in the two subsequent years to 300,000 and, apparently, by the end of this year it will have fallen to 280,000.

Mr. Page

It never got down to the hon. Gentleman's figure of 200,000, did it?

Mr. Stewart

I suggest to the hon. Gentleman that he should acquaint himself with the political history of the years 1939-1951. He will be aware that there was a war going on at the time.

Mr. Page

I am sure that the hon. Gentleman would not like it to go on record that there was a war going on between 1939 and 1951. At any rate, we have heard that story so many times.

Mr. Stewart

The reason why the hon. Gentleman has to hear it so often is that he does not understand it when told the first time.

Mr. Page

It does not impress me.

Mr. Stewart

There is no sort of comparison between what can be done in the field of housing thirteen years after a great war and what can be done four or five years after a great war. That is a very elementary point.

What we are now discussing is something even more grave. We are discussing the infallibility of the Prime Minister, and that, of course, is a matter of grave concern to all right-minded people. The right hon. Gentleman's prophecy was that 350,000 houses would continue to be built, The figure is now 280,000. Almost from the moment that the right hon. Gentleman made the prophecy up to now the figure has gone down. But the prophecy was made a few months before a General Election, and that, perhaps, accounts for it having been made.

It is not unreasonable, in view of the two Budgets of 1955 and the records of the education policy and the housing policy immediately before and after elections, that we should look at the first General Grant Order, which is a pre-election grant order, with a certain degree of reserve. We note the claims which the Government make about the amount involved in this Order, but we remember their past conduct shortly before elections. We observe that, when all is said and done, a growing rate burden is being placed upon the local authorities. There is still no solution of the fact that if our social services and our education are to develop properly a greater proportion of their cost must be borne by the central Government.

It is difficult to relate the amount in the General Grant Order, and what is said about the way that it is calculated, to the rather vague and general pro-phecies of advance to be made in education and in other fields. It is, therefore, with a great deal of reserve that we have listened to the case which the right hon. Gentleman has attempted to make today.

4.56 p.m.

Mr. Nigel Nicolson (Bournemouth. East and Christchurch)

In spite of all his energy and ingenuity the hon. Member for Fulham (Mr. M. Stewart) has found it difficult to conceal the embarrassment of the Opposition over the disparity between their past claims and the reality which they see before them in this Order. I, like many of my hon. Friends, heard day after day in Standing Committee prophecies made by hon. Members opposite that the General Grant Order when it came to be laid before the House would prove beyond doubt that the object of the Conservative Government, and of my right hon. Friend in particular, was to transfer the major burden from the taxpayer to the local ratepayer.

Hon. Members opposite went on to deduce from this supposition—it was no more than that—that the local government services, and education in particular, would suffer greatly in consequence. They prophesied that the local councils would have to choose thereafter between cutting down their local services and immeasurably increasing the rates. All these prophecies have been shown to be utterly without foundation.

A great deal more money in total is being made available by the Exchequer to local authorities. The percentages of expenditure which are to be rate-borne and Exchequer-borne are, if anything, to the benefit of the local ratepayer. In every individual service my right hon. Friend has been able to show that the local government service will be improved and not harmed by these alterations.

I will go further than this. It became increasingly plain to me during the long passage of the Bill through Parliament that my right hon. Friend the Minister was being particularly fair in redistributing what there was to give to the local authorities as between the traditionally Conservative local authorities and the traditionally Labour local authorities. If we were to compare those two groups we should find that, on balance, it is the constituencies and authorities represented by Labour councils and Labour Members of Parliament which stand to benefit most. Why, otherwise, are the benches opposite so empty? Why has not every single local authority which felt itself aggrieved been in touch with its local Member of Parliament over the weekend and insisted upon his attendance here this afternoon?

There are very few Bills which come before Parliament which directly affect every single constituency in the country. This is one of them.

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

Is the hon. Gentleman aware that the generality of municipal authorities, certainly the municipal treasurers, were unaware of the fact up to three days ago that this matter was to be considered by the House today and that until very late in the week it proved exceptionally difficult for them to obtain copies of the Order?

Mr. Nicolson

The hon. Member's authority must be as alive to what is going on as has been my own local authority, and so would the hon. Member have been. I obtained a copy of the General Grant Order within an hour of its being available in the Vote Office. I am sure that the hon. Member did the same. I immediately got in touch with my local authority. We had discussions on it over the weekend and I have come here this afternoon to give my authority's views upon it. Why could not every hon. Member have done the same? Even if hon. Members had been too lazy, surely their local authorities would have taken the trouble to find out how the Order affected them?

The hon. Member for Walthamstow, West (Mr. Redhead) may not know that I was one of those few Members on this side who strongly objected to certain details of the original general grant formula. In fact, I carried my objection so far as to divide the Standing Committee on the point against my own party. Later, on Third Reading in the House, my right hon. Friend the Member for Blackpool, North (Sir T. Low) and about fifteen other Members, all Conservatives, representing mainly seaside resorts, went into the Lobby against my right hon. Friend the Minister.

I wish to thank my right hon. Friend the Minister for having retrospectively met our point of view. He has changed the weighting in the formula so as to improve the share of the Exchequer grant which will go to local authorities like my own. The change was not an insignificant one. My right hon. Friend reduced the rate product deduction from one shilling to ninepence; and, secondly, he so altered the method of arriving at the supplementary grant for education that no authority in the country is now excluded from this supplementary grant.

That means a very great deal indeed to us in terms of money. In the case of my own authority, the latter provision means £37,000, and in the case of Black-pool, £152,000, over and above what it was suggested we should receive in the first two hypothetical illustrations. In fact, goods have been delivered which are infinitely better than the samples.

We were led up to the stage which we have now reached by two separate hypotheses. The first was given in an annexe to the 1957 White Paper, and during the passage of the Bill through Committee another hypothetical illustration was published. Neither of those examples gave us any idea of the extent to which, either individually or collectively, our local authorities would benefit. It is a remark-able virtue of my right hon. Friend that he concealed his best goods and kept them out of the shop window at the moment when he needed to display them most.

The General Grant Order is an excellent one. It benefits us all and it benefits the constituencies of hon. Members opposite even more than it benefits the areas of hon. Members on this side. I hope that if ever a Labour Minister of Housing and Local Government has to lay a similar Order before the House, he will give such a weighting to the variable parts of the formula that it will benefit all authorities equally, irrespective of party, in exactly the same way as my right hon. Friend.

I have two questions to put to my hon. Friend the Parliamentary Secretary. The first deals with the transitional scheme. In his opening speech, my right hon. Friend the Minister said that the Statutory Instrument was extremely complicated. It certainly is far too complicated for me to follow precisely. Am I correct in assuming that the figures published in the Supplement concerning the General Grant Order will not be varied downwards when the transitional scheme is put into practice? In other words, it will be possible, I understand, for an authority which eventually is to be a gaining authority not to gain quite so much in the first and second years. Is it possible, however, for an authority like my own, which will probably be a slight loser on balance, to receive in cash less than the figures that are mentioned in the Supplement relating to the Order?

My second question is rather more fundamental. My right hon. Friend the Minister made considerable reference to paragraph 7 of his Report, "Local Government Finance", in which it is stated that the Government arrived at their total figure for the general grant by asking local authorities to submit their estimates. Paragraph 7 states that The Government have accepted the figures returned, subject to certain modifications which represent only a very small proportion of the total. In his speech, my right hon. Friend told us that that proportion was less than one-half of one per cent.

My question is this. The total is built up in that way, but the sum so arrived at is then re-divided according to a formula which does not have so precise a relationship to the needs of the particular authority. Each authority states that it requires a certain amount for education, for provision for the old people, for health and fire services, and so on, and presumably each authority has put in those figures to the nearest £10 or £100. Those figures are then accepted after a certain amount of analysis, but the money which a local authority actually receives need not bear much relation to the detailed demands which it has submitted. The total sum is re-divided according to a national formula, whereas the total sum to be divided is arrived at by adding together the detailed requirements of each authority separately.

If I have that aright, there seems to me to be a slight change of focus halfway through the process. It could so happen that, because of the operation of the formula, an authority might receive less than it required and much less than the Minister had agreed that it needed. This is a fundamental point which I do not remember having been brought up while the Bill was passing through Parliament. I certainly would like to know from my hon. Friend the Parliamentary Secretary whether my assumption is correct.

Before I sit down, I wish to repeat my congratulations to the Government upon the Order and to convey my special thanks to my right hon. Friend the Minister for amending the formula to meet the points which I and other hon. Members put to him.

5.9 p.m.

Mr. George Thomas (Cardiff, West)

The hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) made a speech which was not in harmony with his usual attitude to questions discussed in this House. It is not normally given to the hon. Member to be quite so fulsome to Ministers, and I have no doubt that his constituents will be well pleased with what he has done this afternoon.

The Minister made a speech in which he created, or tried to create, a general atmosphere that now all is well with the local authorities; that they are well pleased; that they are taking off their coats and getting down to work, and that the main battle of the block grant may be regarded as a matter of history. No doubt the right hon. Gentleman will have read the Schoolmaster—if he is as enlighthened as some people believe him to be he will have done so—and so he will know that, after the publication of this White Paper, the Schoolmaster published a leading article entitled "Smoke Screen". I believe that the view of the National Union of Teachers, of which hon. Members know that I am a member, will be the view of educationists throughout the country. A note of scepticism and alarm has been sounded. The Minister has based the amount of the grant on present levels of prices, costs and remuneration. As my hon. Friend the Member for Fulham (Mr. M. Stewart) reminded the House in his masterly speech, nothing is allowed for further increases in the cost of educational material.

Surely the Minister knows that for a long time we have enjoyed low import costs and this has helped to keep other prices stable. Commodity prices in the world markets have been running at a low level during the past two or three years. Now the indications are that they will rise and, inevitably, we are bound to feel the effect of higher prices here at home. The benefit of the fall in commodity prices has been withheld from the British people, but I have not the slightest doubt that increases in commodity prices will be passed on. Therefore, there is at once cause for alarm.

Local authorities are told that they will have to meet any increase in the cost of the education service by making economies. In what are they to economise? My hon. Friend the Member for Fulham suggested that the local authorities have already made serious economies in the education service. For the past seven years there has been an atmosphere of economy. Education has been on the defensive since 1951, as the Minister well knows. We started with an appeal from the right hon. Lady the Member for Moss Side (Dame Florence Horsbrugh) when she was Minister of Education. She asked us to reduce estimates by 5 per cent. The President of the Board of Trade, when he was Minister of Education, also created an atmosphere of depression, and it was only just before the General Election that he relieved it. Immediately after the election the teaching profession once again found itself fighting for the elementary necessities in education.

The Minister is quite right in saying that the percentage found by the Exchequer and the percentage found by the rates will be largely unchanged, but this leaves a tremendous burden on local authorities which the right hon. Gentleman ought to be relieving. I believe that education cannot survive as an efficient service on the present formula. It is no use expecting local authorities to be able to raise 50 per cent. and more of all the requirements of the service out of the rates. That is quite beyond local resources. The emphasis should be shifted. We should get a greater percentage from the Government.

I was intrigued by the question addressed by my hon. Friend to the Minister about the amount of £10 million. The Minister said that there would be £10 million more grant than would have been the case had no Act been passed. He also told us that account had been taken of the new plan announced by the Government for an expansion of the education service, and that the 5 per cent. increase in teachers' salaries was also included in the Estimates. Surely the Minister knows that a £12 million increase was estimated for teachers—that was the amount they refused. The arithmetic must be wrong somewhere, and I hope that before the end of the debate either the Minister or myself may be enlightened about where the other £2 million has gone.

Suppose that in the Burnham Committee there is an agreement between local authorities and teachers for a 10 per cent. increase—or rather, suppose there is another meeting of the Burnham Committee. Will the local authorities take part in that meeting not knowing whether they will get a grant on the amount of any increase on which they may come to terms? Will those negotiating for the local authorities wonder whether, if they agree to a 10 per cent. increase in teachers' salaries, they will get only a 7 per cent. increase in grant? This is a vital matter for the teaching profession. I hope that we shall be given a satisfactory answer, and that some information will be provided to show local authorities where they stand.

It is interesting to note that, for the first time, the major influence in deciding teachers' salaries is transferred from the Ministry of Education to the Minister of Housing and Local Government, as we forecast in the debate on the general principle of this question. In passing. may I say that the Minister of Education has been put in an almost impossible position, because the major policy of his Department regarding this grant is decided by the Minister of Housing and Local Government Earlier this year the Minister of Education slashed the estimates for school building submitted to him by local authorities. We badly need a new grammar school at Canton in the City of Cardiff— —

Mr. Robert Jenkins (Dulwich)

Did the hon. Gentleman say "grammar school"?

Mr. Thomas

We propose to extend the grammar school service for young people, and we need expanded grammar school facilities in Cardiff, West.

The Minister has told us that we must wait, that we cannot have these extra facilities, and that the overcrowding must go on. What about the lag in fulfilling the requirements for school buildings? It makes nonsense of the Report issued parallel with the White Paper in which reference is made to £300 million extra for next four years. We could use half of that amount next year to carry on with delayed school building. I say to the Minister that his estimate for education is grievously short of what is required for art expanding service. During the next decade we shall undoubtedly have to expand enormously our education facilities in order to hold our own.

The Minister says in paragraph 20 of the Report that he has taken account of the need for additional teaching staff. We are estimating for 12,000 extra teachers every year towards the end of this block grant period. The National Advisory Council on the Training and Supply of Teachers, which seeks to influence the Minister and guide him in the matter of teacher recruitment, has warned him that he will need not 12,000 but 16,000 teachers. What is the aim? It is to reduce the size of classes by 1968 to what the 1944 Act said they ought to be. We cannot have an extensive service of that scope within the estimates that the Minister is now submitting.

I realise that on this issue the general principle has been decided by the House, but I warn the Minister that he is creating frustration in the teaching profession by pursuing this policy. He is building up resentment which cannot but be harmful to the educational service. I believe that these estimates will place an impossible burden upon local administration. An expanding local government service requires an altogether new formula of finance. Much more help will have to come from the Exchequer. I forecast that long before two years are over these estimates will be exhausted and that someone will have to come to the Dispatch Box with a supplementary estimate so as to help local authorities.

5.22 p.m.

Mr. Bryant Godman Irvine (Rye)

I should like to follow the hon. Member for Cardiff, West (Mr. G. Thomas) in his remarks about education, but I am sure he will appreciate why I am not in a position to do so. For the same reason I shall not comment upon much of what. was said by the hon. Member for Fulham (Mr. M. Stewart). Even though it is not strictly relevant to the debate, I would remind the hon. Member that I was fighting the election in 1951 in London. I do not recall his Government then putting forward the defence which he put forward today that the war made it impossible to build more than 200,000 houses each year.

I am glad to be called this afternoon, Mr. Speaker, because I spent three days trying to catch your eye in order to say something in the debates on the Local Government Bill and the White Papers. I had no success on those occasions. When the White Papers were first published, I discussed them and the principles set out in them with representatives of all my local bodies. As a result, I had some matters to place before the Minister and to ask him to consider. I am grateful to all concerned, and particularly to the Bexhill Chamber of Commerce, for the meeting they organised to enable me to discuss these matters with those who were interested. As I failed to put these matters to the Minister on the Floor of this House, I tried to do so by correspondence. This did not appear to be entirely successful, so the Minister was good enough to see me and discuss the matters which were worrying my constituents.

There were people who criticised me about that time for supporting the Minister without putting to the House the points which were worrying my constituents. These people had made no approach to me and had not defined their objections to the Bill. I have again discussed with representative bodies the White Paper before us today. I am glad to tell the Minister that the difficulties have been overcome and that I am now unable to find any criticism to put before him. I therefore want to thank him for the way in which he was willing to consider the matter and for the result.

There is one other matter. I have to look at every proposal which is put forward in this House in its effect on those living on small fixed incomes. One brief advantage of these proposals is that the Chancellor of the Exchequer is able to budget accurately each year. That is also an advantage to everyone, and not least to those living on small incomes. Another advantage in the proposals is that they place the responsibility fairly and squarely upon the local authorities. It will soon become quite clear which authorities are not carrying out those responsibilities better than others. That will be an advantage to people who have to consider very carefully what they have to spend and will give them a better control over those who are spending money for them.

The way in which the hon. Member for Fulham criticised the Minister's speech means that he trusts neither the Government nor the local authorities. He did not trust the Government because he thought this was a pre-election proposal and he did not trust the local authorities because they might not spend the money on the things on which it should be spent. If we are not able to trust as many people as that there is no good future for any of us. I trust the Government and I trust the local authorities. I am glad to have the opportunity of thanking the Minister for the way he has handled this problem and of congratulating the Government upon the Local Government Bill.

5.27 p.m.

Dr. Horace King (Southampton, Itchen)

My comment on what the hon. Member for Rye (Mr. Godman Irvine) has said is that I share his sympathy for the people living on small fixed incomes; but I fear that if the general grant continues through the years ahead the people who will be hit most and hardest will be those on low fixed incomes because, whereas taxes are graded according to income, rates bear inequitably on poorer people.

I have been asked by the Southampton Labour Party to protest against the Minister's action in giving the Press details of the general grant before the local authority have seen them. The Minister is usually a model of courtesy; our quarrels have always been political and not personal. I know, for instance, that the local authorities have appreciated the way in which the Minister has met them, listened to them and made concessions. I hope the Minister will agree that it is wrong that finance committee chairmen should first hear the details of the general grant through the Press or on radio. It may be that Southampton is alone in this experience, and therefore ask the Minister to look into that protest.

The Government are adept at changing both Ministers and policies. But in Housing and Local Government the Minister remains; the policy it is that changes. The Minister is now being congratulated on making a general grant large enough not to impose in the first two years any shifting of the incidence of rate and tax burdens which he advocated in his White Paper of 1957. Today's general grant reveals the Minister as Mr. Hyde pretending to be Dr. Jekyll. In 1957 the aim of the Minister's policy, as shown in paragraphs 26 and 27 of his White Paper, was ultimately to correct the disparity between rate increase and tax increase, which was grieving the Treasury so much. The House will remember how we debated this at that time.

Yet now the Tory Press is cock-a-hoop because in the first two years the Minister runs away from his own policy and praises the general grant because the percentage of the general grant is the same as that of the percentage grant it destroyed and because local government finance, which the Minister boldly set out to reform in 1957, is now no worse off than before he started. This afternoon the Minister modestly agreed with the Tory Press. Even if the Tory Press were right, certain comments ought to be made.

In the Third Reading debate on the Minister's otherwise excellent Local Government Bill, I congratulated those who had fought in this House and in the country against the introduction of the general grant—men like Sir Ronald Gould and Dr. Alexander and my hon. Friends so ably led by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). I said in that debate: one of the results of the fight upstairs, and the campaign in the country … has been to step up the size of the block grant."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 290.] The hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) has himself shown that his opposition in the earlier stages helped to secure some minor concessions for Bournemouth. If he and Bournemouth can be bought for £37,000 and change their minds from the attitude taken by the city fathers of Bournemouth when the block grant proposals came before them, they may well have another change of mind when they realise the total implications of the new grant. Last week the able chairman of Southampton Finance Committee was perfectly right in saying that the general grant would have been much smaller if it had not been for the very strong criticisms that were made throughout the country against the original block grant proposals. So the opposition can to some extent claim a victory today in the size of the grant we are discussing, but that is very small comfort.

After all, everybody knew that the Minister dared not cut the percentage of the grant in the first year in the face of the opposition of every educationalist in the country, in the face of the opposition of every good Tory who serves on education committees and in other forms of local government, especially as the new grant would come into operation exactly in election year, and especially as the Government have already abandoned the harmful restrictive policy they were pursuing when he first brought the block grant proposals to the House and have now started on a spending spree.

We must remember when we look at the size of the grant that for years local authorities have been asking not for the same percentage but for more financial help. The increasing costs of local government services, especially if we and the Government mean what we and they say about education, threaten the whole structure of local government finance in the years ahead. What local authorities will need in the years ahead will not be less, not the same, but either much more financial help, or some new source of local means for raising revenue.

Let us examine the grant itself. It has been arrived at by the old percentage method. The local authorities sent in estimates, the Minister looked at them and made only minor changes, worked out a percentage in the old-fashioned way, and arrived at his general grant. There was no other way in which he could work. He has not the knowledge of the local circumstances, just as he has not the knowledge of all Ministries connected with local government services. But he has actually cut the percentage. In the last three years the percentage has advanced steadily. It was 56.1 per cent., then 56.2 per cent., this year it is 56.4 per cent., and now he cuts back the percentage for 1959 to 55.5 per cent. and for 1960 to 55.6 per cent. "But," says the Minister, "I am really giving local authorities the old percentage because I am not taking from them the £¾ million I ought to take from rerating. Ministers are entitled to £20 million out of £30 million that has come from local authorities' rerating, but I am taking only £13¼ million out of my new deficiency grant and leaving the local authorities with this extra £6¾ million."

Local authorities believe, and I also believe, that they were entitled to the whole of the benefits of the new rerating finance, not just part of it. Rerating was not an exercise to benefit the Treasury, but was introduced in the first place to put right an injustice in local rating and to provide local authorities with a new source of finance. Moreover, the rerating £6¾ million which the Minister proudly displays in his memorandum and in his speech today is not going to benefit all local authorities equally. Bournemouth will get little out of it— —

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

The hon. Member keeps repeating the figure of £6¾ million, but the actual amount which goes to the advantage of local authorities is £10 million.

Dr. King

I hope the Minister will understand in time what I am saying. The figure is neither that mentioned by the Parliamentary Secretary nor by myself, but £16¾. I am speaking at this stage of the £6¾ million which is at the bottom of page 5 of the White Paper, the amount of rerating money which the Minister includes to raise the percentage from 55.6 to 56.5.

Mr. Bevins

The hon. Member got it wrong. The £6¾ million is the amount by which the general grant is shaved, but it still leaves the local authorities with £10 million net.

Dr. King

I am afraid we are at cross purposes. I am being much kinder to the Minister than the Parliamentary Secretary is. If one shaves the general grant by £6¾ million one is assuming that the local authorities will get £6¾ million, but if that is not so the position is worse. I assume that the local authorities are to keep £10 million of the £20 million and the argument of the Government in not stepping up the general grant to the equivalent percentage for last year is that there is also the £6¾ million of the rerating money. It is the argument of the Government in the White Paper, and perhaps we can return to it when the Minister replies to the debate.

In any case, whether the figure is £6¾ million, £10 million or £16¾ million, of the rerating money by which the Government are cutting down the deficiency grant, neither of those sums, none of this money, is to be distributed regularly as between local authorities. All local authorities are to get the basic grant, as shown in the White Paper, of 55.6 per cent.—at least I hope so—but there may even be authorities which do not get as much as that. Many are by no means going to get the new percentage of 56.5 per cent. which the Minister proudly displays at the bottom of the table on page 5 of the White Paper. That is because some will not get any share of the proceeds of rerating and the share of the old Exchequer equalisation grant—now the new deficiency grant for others—has been savagely cut to meet the demand of the Minister for the £13¼ million, which both the Parliamentary Secretary and I agree he is taking.

It is no consolation to badly hit local authorities to be told that there is an overall gain to local authorities by the £10 million rerating money referred to by the Parliamentary Secretary. It is no consolation to such authorities even if this year they are offered as a temporary sop 100 per cent. compensation for the loss they are to suffer under the new proposals, and 90 per cent. compensation next year. The Minister is artful. He divides local authorities in order to reign over them. We have had a practical example of it in the erratic behaviour of Bournemouth in the various debates on the general grant. He counts on the backing of the fortunate local authorities who can see in the years ahead some gain, as against the unlucky ones who see even the temporary compensation rapidly fading away after the first two years.

Who are to be the unlucky authorities? In the main, they are those which bore for 50 years the inequitable burden which the rates system imposed on places such as Merthyr Tydvil and Stoke—a burden which my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) eased in the equalisation grant. Some portion of that burden is put back on to those authorities in the new arrangement and reduced size of the deficiency grant. These are the authorities which contribute the bulk of the Ministers £13¼ million difference between the Exchequer equalisation grant and the deficiency grant. Indeed, there are also places like Bournemouth who will find, when they examine the implications, that there is exceedingly little for them and other towns with few industries out of the re-rating of industry.

My criticism of the grant is much more fundamental than anything I have said so far. First, the grant itself makes the Minister almost a dictator over local authorities. They make their estimates. His is the power to allocate to help meet the cost of their services whatever sum he likes. The sum bears no relation to the specific demand of any specific authority for a specific service. Any local authority will receive for education not a grant to meet what it thinks it ought to have for education but what the average amount over the country estimated for education has been, subject to the formula for distribution.

Parliament cannot amend these figures this afternoon. It cannot amend the details, it cannot alter the weighting system, it cannot alter the share-out. This is an Order; we can only accept it or reject it. Indeed, we cannot even reject it, because if we did we should be depriving the local authorities of their money. The Minister says to Parliament, "I have spoken. You must take it or leave it." This is indeed local government by the Treasury. All the great schemes of other Ministers, including the exciting new White Paper on education, have to go through this Minister's censorial control.

Local authorities are faced with new expenditure, as the Report points out, on the welfare of the handicapped and on mental health—a vast programme of which nobody yet knows the shape. It could not have been in the minds of the county and borough treasurers at the time of their estimates or in the Minister's mind when he decided the grant. It is not even shaped in the mind of Parliament yet. There are to be new extensions in local health, maternity and welfare services, new costs in planning and even new expenditure on acquiring sites.

The Government claim that they have allowed for all these factors, about some of which local authorities knew nothing when making their estimates and about which nothing was known when the general grant was fixed at 55.6 per cent. Surely it is clear that whatever increases under these headings had not been foreseen by municipal and county treasurers or even by the Treasury itself when making the estimates for the next two years, or whatever increases are imposed by the Government's new policy in the months ahead, will have to be met either by increasing the rate burden or out of the fortuitous incidence of the fractional benefit which they will get from new re-rating finance.

Mr. Raymond Gower

(Barry): The hon. Member has noticed the additional power which the Minister has.

Dr. King

I will come to that. These expenses must be met by local authorities either by increasing the rates or, if they are fortunate enough to get it, out of the benefit of the incidence of re-rating—unless the Government increase the grant.

Moreover, although the Government have increased the size of the grant, even the Government do not claim that the per centage has increased. The grant is up because the estimates are up. The ratepayers must find their share of the extra cost. They must match the Government's extra £30 million in the first year with £33.7 million of their own and the Government's £81 million over the two years with £82.9 million of their own in extra rates. Incidentally, this extra £82.9 million of rate-borne expenditure shows how comparatively small is the gain of £10 million from the re-rating of industry.

Worst of all, the grant is based on estimates which did not and could not take account of increased costs of goods and services. On this, in paragraph 9 on page 4, the Minister says: it is natural that public authorities will seek. as they normally do, to meet increases by economies and that they will constantly improve efficiency by the use of new techniques. As a local government man I protest against this statement that new economies and new efficiencies can be found in local government. Local councillors and local government officers seek, and have achieved by any comparison which anyone cares to make, efficient and economical local government administration. If I have any criticism of local government at the moment it is that economies in house standards and school standards, on instructions from the Government, have been pursued too far. What the Government are saying in that paragraph to local authorities is that if prices rise, services must be cut or rates must carry the extra burden.

Coming to the point made by the hon. Member for Barry (Mr. Gower), it is true there is a saving Clause in the parent Act—Section 2 (4). This reads: If it appears to the Minister that during any grant period any unforseen increase has taken place in the level of prices, costs or remuneration, and that its effect on the cost of providing the services …. is of such magnitude that it ought not to fall entirely on local authorities, the Minister may by order … increase the annual aggregate amount of … grants. The statement does not contain a single guarantee. When we were discussing the Bill, local authorities pressed that a guarantee should be written into it, and we tried in vain to do so. I am sure that I am expressing the view of all local authorities on this point when I say that the attitude of local authorities to both the Minister and the new grant will be determined by the way in which he interprets that subsection.

I try to be fair when I attack the Government, and I therefore say that I was pleased to note that the Minister took the initiative when he increased the grant to meet certain extra costs, such as the proposed 5 per cent. increase in teachers' salaries. At least, I was pleased until I heard his own figures this afternoon, but we shall probably have some clarification of the figures at the end of the debate.

I would, however, point out that teachers have rejected the offer of 5 per cent. The Government and local authorities must take note of this unprecedented action and of the determination of the teaching profession at the moment that, in addition to the tributes of words which have been given to them by Parliament and local authorities, they shall get for the first time an adequate professional salary. Even if they succeed in their demands a teacher will only be getting one-third of the income of a doctor, one-third of the income of a lawyer, one-half the income of a dentist, oculist or industrial scientist. Yet if they get any measure of their demand the sums involved must throw out of gear the general grant, or heavily burden the local authorities.

I was very glad to hear the Minister approach this question in such a forthright way and say that, just as he told the Press that he would downgrade the grant if the rise in the teachers' salaries were less than 5 per cent., so—or so I understood him to say this afternoon—he is prepared to upgrade it by whatever addition to 5 per cent. is secured in the negotiations between the teachers and the local authorities in the Burnham Committee.

Nevertheless, it is on education that the grant is most disappointing. If we compare the Report with the thrilling document "Secondary Education for All" produced by the Minister's colleague the Minister of Education, what a contrast we find. The Government White Paper merely says: … The main task here will be to maintain and where possible improve standards … Primary schools get merely a factual reference.

Compare this with the exciting panorama in the Minister of Education's new pamphlet: end of the all-ages school; give the secondary schools all the resources they need; we cannot afford to waste any potential source of skilled manpower; every child to go as far along the road as his ability or perseverence can carry him: replace old out-of-date secondary schools; a minor works programme to improve obsolescent schools; new primary schools where necessary; twelve thousand new extra teachers from new extra training colleges; a vast technical education programme at all levels to advanced technology—and all to come out of the general grant. It is the contrast between the expansionist programme revealed in that White Paper on Education and the entirely opposite picture that we get in the General Grant Report that very much frightens me.

Last week, it was pointed out by Dr. Alexander that whereas the speed of educational expenditure has been accelerated in the last two or three years, this new grant marks a slowing down. Educational expenditure has advanced by 9.3 per cent., 15 per cent., 13 per cent., and 9.2 per cent. in the last four years. The figures for the next two years are 8.2 per cent. for 1959 and 5.5 per cent. for 1960. We have a right to an explanation of the constrast between the acceleration implicit in the White Paper on secondary education and the deceleration in this general grant.

On the one hand, the Minister of Education says "Advance education." On the other hand, the Minister of Housing and Local Government says "Slow down, or, at any rate, if you carry out the programme you will have to step up the rates." We have the right to ask which of the two voices we are to believe. The most charitable view is that the Minister of Housing and Local Government drafted the whole of the general grant proposals while the document on secondary education was still in the melting pot.

I urge the Minister to study the pamphlet "Secondary Education for All." If he believes in it, as, I believe, the Minister of Education believes in it, then some time within the next two years this general grant will have to be modified, not only to meet the first taste of the capital expenditure foreshadowed in the White Paper on education, but the increased annual charges that are also mentioned in it. I urge the Minister to interpret flexibly and generously the powers Parliament has given to modify this general grant, wherever circumstances warrant it, to meet new costs, to meet new expansions of important services, and, above all, to make possible the full implementation of the White Paper on Education.

5.54 p.m.

Mr. Roderic Bowen (Cardigan)

On the Third Reading of what is now the Local Government Act, 1958, the Parliamentary Secretary said that … local government needs are such that large-scale financial support from the centre is quite inescapable. … "—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 247.] What I am concerned about is how far local authorities whose needs are especially great are affected by this financial rearrangement, and to what extent the scale of assistance they have hitherto received from the central authority will be affected. I represent an authority which has very serious financial problems in carrying out local government functions, and its position is shared by the other authorities in mid-Wales.

If anyone has any doubt as to the difficulties that those authorities have to face, I will give one or two illustrations. The cost per thousand of population to my county council of the welfare services is double that of the average for all other county councils in England and Wales; for education, it is one-third higher than that average, and for highways, it is three and a half times that average. That cost, of course, is met partly out of rates and partly out of Government grants.

We have been given to understand by the Minister and by one or two other speakers opposite that the financial position of local authorities generally will be improved by this General Grant Order, and I want to examine whether that really applies to particularly needy local authorities. I only wish that I could share the optimism displayed by the Minister this afternoon. My suspicions were somewhat aroused when I learned that the wealthy county borough of Bournemouth was to gain some £37,000, and that Blackpool was to get £100,000.

On the figures supplied to me, the effect of this Order on my local authority—and I refer to it only as an instance of what is happening to all similarly-placed local authorities—is to make it worse off to the tune of about £ 110,000. That amount is made up as follows. The amount that we shall get from the general grant will be at least £50,000 less than we would have received had the present specific grant arrangements continued.

In addition, the county council will lose about £50,000 as a result of the abolition of the Exchequer equalisation grant, and of the rate deficiency grant being paid direct to the county district authorities. That is to say, the net loss to the county council—that is, the difference between what it once obtained from the Exchequer equalisation grant and the amount it had to pay per capita to the county districts—amounts to a further £50,000.

In addition, it will lose about £10,000 because of the changes in respect of Section 100 of the 1948 Act—although I concede that, in this respect, the rating authority will regain some of that loss. The only factor that could possibly make up for this reduction in the scale of assistance given by the central authority to the local authorities in these areas is a substantial increase in the amount obtained from the rate deficiency grant as compared with the amounts received by way of Exchequer equalisation grant. If my authority, the Cardiganshire County Council, is to be reimbursed for what it will lose from the effect of the General Grant Order and the loss of the Exchequer equalisation grant, the amount obtained from the rate deficiency grant will have to be at least 11 per cent. higher than that obtained from the Exchequer equalisation grant.

So far, I have not been able to obtain any information on how local authorities such as my own will fare when we get down to details in relation to the rate deficiency grant. If the Parliamentary Secretary has any information to give in that respect I would be very glad to receive it, because unless there is a substantial increase in that sphere local authorities such as my own, these sparsely populated local authorities with a low product of 1d. rate, will be placed in grave difficulties in maintaining basic local government services in their own areas.It is true that the rerating of industry will have the effect of emphasising the poverty in relation to rateable values of these authorities. All we can hope is that the increase will be at least something in the nature of what I have indicated.

I wish to refer to one or two other matters connected with this Order. The Minister has referred to the formula and has drawn attention to the fact that there is provision for supplementary grants in respect of the proportion of old people and in respect of low density, among other matters. In my view, the supplementation provided for by reason of those factors does not anything like make up for the additional costs incurred by authorities which have particular problems arising from the factors which it is intended to cover by those grants.

In my area, for example—and the latest figures I have are from the 1951 census—the number of people in the technical category of "old people" in proportion to the rest of the population is substantially greater than that in England and Wales as a whole. I believe the figure for England and Wales as a whole was 13 to 14 per thousand of the population whereas in my area it was 19 to 20 per thousand. By reason of these numbers and of the geographical nature of the area, the costs are substantially increased for such services as home help, home nursing and welfare services generally. That accounts for the fact that the costs of these services in the area which I represent are double those of the national average.

While we welcome the supplementary grants which are provided for in this Order, it would be idle to pretend that they really meet the additional costs which these areas have to meet. The same applies in the case of low density grants. They go some way, but only a small way, to meet our difficulties, particularly in relation to highways. I have already mentioned that the cost is three and a half times that of the national average in respect of highways, and the main difficulty in that respect arises in relation to unclassified roads.

While recognising that these provisions in relation to supplementary grants are helpful, we would be deceiving ourselves if we thought that they really helped to the extent which they should in meeting the difficulties of areas such as that which I have the honour to represent. I repeat the hope that the Parliamentary Secretary will have some specific news to give the House about the extent to which the new rate deficiency grant will meet the gap which has to be filled if local authorities such as my own are to receive at least the same measure of assistance from the central authority as they have done in the past.

6.5 p.m.

Mr. John M. Temple (City of Chester)

I am very pleased to follow the hon. and learned Member for Cardigan (Mr. Bowen), but, if he will excuse me, I will not follow him in all his arguments because they were specifically applicable to West Wales and to his own constituency in particular.

I was one of the fortunate Members who had the honour to be called to speak during the Second and Third Readings of the Local Government Bill, and I also had the privilege of taking part in the Committee stage of that Bill. It must be of great interest to those hon. Members who were in that position to see today the financial provisions of that Bill being unfolded. I remember so well on the Second and Third Readings saying that I considered that the fears of educationists would prove unfounded. I believe that those fears have to a large extent proved unfounded, and I would go so far as to say that the critics of that time have been confounded.

There are two keynotes to this Order. One is stability and the other is progress. The Minister drew attention to this in his opening speech when he said that he wished to keep the dragon of inflation underfoot. That is the stability. That is what everyone throughout the length and breadth of the country has been wanting —to keep this bogey of inflation behind us. It is for that reason that local authorities will be able to budget ahead so that it will be possible to achieve stability.

The hon. Member for Fulham (Mr. M. Stewart) drew attention to the fact that there had been a rise in the cost of living over the last two years. That is perfectly true, but what he did not say was that the rise in the cost of living had largely been arrested over the last twelve months.

Mr. Edward Evans (Lowestoft)

The hon. Gentleman should not believe that.

Mr. Temple

I said "largely".

The first main provision of this Order is the facility for local authorities to budget ahead, and it is very much hoped that this will be a stabilising factor in the battle to keep the cost of living steady. The second keynote is progress, and as I read paragraph after paragraph of the White Paper the emphasis is on development—development and progress, not stagnation. We have, firstly, the development to which the hon. Member for lichen (Dr. King) referred—development in education. I believe that the critics of today will again be confounded and that development will, in fact, take place. We have foreshadowed the improvement in primary school education, the lessening of the numbers in the classes and the passing of the all-age primary school.

The hon. Member for Fulham said that the Minister of Education was acting in the capacity of second fiddle. I rather think that he is playing in the capacity of leader of the orchestra. In his White Paper, Cmnd. 604, "A New Drive", the Minister of Education certainly does not appear as playing second fiddle. I believe that the chief emphasis in this General Grant Order is on the expansion and development of education. Many other facets of educational expansion are referred to. such as the extension of teacher training colleges, and the like. I do not, however, wish to discuss all the matters to which attention is drawn in the White Paper.

Far beyond education alone, development in local government services is envisaged. There will be development in the medical services, particularly in respect of the mentally sick, who are to be boarded out under residential care. As a justice of the peace, I have had the privilege of visiting mental hospitals, and I believe that one of the most important factors in treatment is that those who are mentally sick should be brought out and put under residential care. It is far better for them to do that than spend all their time in institutions. Under residential care, the mentally sick can be in an environment which brings them closer to the realities of the life that they will have to lead once they are away from specific treatment.

The Order refers also to the care of children. The number of crossing patrols is to be increased. Crossing patrols provide a valuable source of part-time employment to many people on retirement pensions and the like, and I believe that they perform a very valuable service for our children. Road safety also is referred to, especially the training of child cyclists.

All these things. in my view, represent not stagnation but progress. The Order represents another step forward in our long history of social advance. Having had the privilege of serving on the Standing Committee which considered the Bill, I welcome being associated with my right hon. Friend the Minister of Housing and Local Government in this further step forward in our social progress.

6.12 p.m.

Mr. J. P. W. Mallalieu (Huddersfield, East)

The Minister of Housing and Local Government prefaced his remarks this afternoon by saying that local government finance does not lead to poetic fancy. I should have been inclined to agree with him until I heard his speech, which rose to lyric heights that I found exciting but rather puzzling. With my colleague, the hon. Member for Huddersfield, West (Mr. Wade), I spent some part of the weekend discussing this Order with a sub-committee of the finance committee of Huddersfield Borough Corporation. After listening to the Minister I began to wonder whether the Order he was talking about and the Order we had spent so much of the weekend studying were one and the same. The figures which we got out—admittedly they may be wrong, and I hope to goodness that they are wrong—suggest to us that the Order has dealt the Borough of Huddersfield a very serious body blow.

According to the figures we have prepared, we believe that the amount we shall receive under the total proposed grant will be less than we received in 1956–57 from the grant specifically for education alone. The total new grant will be less than the old grant solely for education. Whereas the specific grants used to cover 55.6 per cent. of our expenditure—the sort of figure which the Minister suggests will be true for the whole country—the amounts we shall receive under the new grants will cover not 55 per cent. but 46 per cent. That is a very serious blow indeed.

How typical our experience is I do not know. We have some peculiarities in Huddersfield one of which is that we have a rather low school population. Having that factor in mind, I was delighted that the Minister has revised his figure of 120 down to 110 in the supplementary grant. But it still seems to me that, on education alone, we shall be very hard hit in Huddersfield.

We have made some comparisons with nearby towns. We find that, although in years gone by, particularly last year, we had for education about 31 per cent. more than our neighbours in Barnsley, under this scheme we shall have something like 35 per cent. less to spend on education.

Our real complaint arises from other factors, however. We have recently committed ourselves to what is, for a borough, a very large programme of capital expenditure amounting to about £3½ million. Over £1 million of that is for the purpose of building a new technical college in our district, something that everyone in the country agrees is an important thing to do. We undertook those commitments on the understanding that the then existing system of local government finance would be maintained. We find now that it is not to be maintained.

I would put to the Minister, first, a very minor aspect of the matter. In order to build the new technical college we had to clear 118 houses from the proposed site. When we were negotiating about it, we asked whether these houses could be treated as slum-clearance properties and thus attract a subsidy in that way. We were told that they could not be, but, so I am advised, we were told that they would, on the other hand, attract education grant. Now, of course, they will not attract education grant because there will not be a specific education grant any more.

In the current year the deficit on that small item alone which we shall have to face will be about £5,300. That, however, is a mere bagatelle compared with the loan charges to which we are now committed. In 1956–57, our loan charges per thousand of population were £706. They will jump in the year 1957–58 to £1,035. In the following year they will be £1,596, and in the year after that they will be £2,092.

Everybody knows perfectly well that a Government must have the right to change their policy. I happen to think, as do so many hon. Members on this side of the House, that this change is very much for the worse. It will, I am afraid, mean there will be varying standards of education as between one borough and another; a child going to school in one borough may well be penalised by the fact that he happened to be born in town A and not in town B. Surely, although the Government have a perfect right to change their policy, if in making the change they cause exceptionally severe hardship to particular local authorities, as we claim they are causing to Huddersfield, they have a duty to safeguard any local authority thus affected, and not only by these transitional payments; they must safeguard such an authority against the effects of entering into commitments in perfectly good faith and then finding that the basis on which those commitments were undertaken has been completely changed.

Mr. Donald Wade

(Huddersfield, West): I am in entire agreement with the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu)—I think that we are all in agreement on this occasion—but would he point out that these loan charges will continue for many years and will, therefore, amount to a very considerable sum?

Mr. Mallalieu

I am most grateful to somebody I may on this occasion call my colleague, because this is a united front in Huddersfield. Most members of the borough council are very much opposed to my way of thinking, but they feel as strongly as I about the effects of the new proposals on our finances. As the hon. Member for Huddersfield, West has pointed out, these loan charges will continue for a great number of years.

Sometimes there is a trace of bias in the Government against county boroughs. For example, we have been pressing to get a grant towards the maintenance of classified roads. County boroughs cannot get them, but counties can. I notice that in this grant considerable changes have been made in the total amounts compared with the first White Paper. An increase has been made, but the counties seem to have got the bulk of it.

According to my calculations, under the supplementary grant, the counties have an increase of about 55 per cent. whereas the boroughs have only 24 per cent. of the total grant, the amount for counties has gone up by 38 per cent.

whereas the amount for county boroughs has gone up by only 27.7 per cent. I do not know whether that is bias or simply that the counties have a somewhat better lobby for putting pressure on the Government than have the county boroughs. However that may be, I ask the Minister to have a look at the position of county boroughs in general, hut specifically to have a look at the position of the county borough of Huddersfield which seems to be extremely hard hit.

Mr. N. Nicolson

While the hon. Member has been talking, I have been comparing the figures for Huddersfield given in the original White Paper with those given in the Government's latest estimates. Taking school children alone, a subject upon which the hon. Member has concentrated, I notice that between the two documents the figure for Huddersfield has gone up from £136,000 to £278,000. How did the hon. Gentleman's Finance Committee come to the conclusion that Huddersfield would he worse off?

Mr. Mallalieu

The figure has gone up by reason of the reduction from 120 to 110 in the weighting figure. Therefore, we are certainly better off under the new proposals than we were under the old. This is a calculation based not merely on that one weighting figure, but on the total, and our calculation is that the net result of what is being done, so far as we can work out the calculations, represents an increase of about half a crown in the £ on the rates in Huddersfield.

Mr. Nicolson

If one compares the totals in the last columns of the two documents, one sees that, in total, Huddersfield is likely to receive £990,000 compared with £683,000. That represents an increase of over £300,000 for this one county borough. How can the hon. Member claim that Huddersfield will be worse off?

Mr. Mallalieu

These are surely comparisons between the first and second Waite Papers.

Mr. Nicolson

Yes.

Mr. Mallalieu

What we in Huddersfield are complaining about is the difference between what we used to get by way of special grant compared with what we are now to get under the general grant. That is the whole point of my protest. I am delighted that under the second White Paper we shall be considerably better off than under the first, but the protest that I make is that, so far as we can judge, we shall be so much worse off even under the revised White Paper than under the system of specific grant.

Mr. Wade

Would the hon. Gentleman agree that the estimated figure for grants that would have been received under the specific grant system would work out at approximately £1,028,000 as against £990,991 in the White Paper?

Mr. Mallalieu

Yes. It means a difference of about half a crown on the rates.

6.25 p.m.

Mr. Geoffrey Rippon (Norwich, South)

I first apologise for not having been present throughout the debate, but I have been here long enough to see that a very different atmosphere prevails than prevailed during our discussions on the Local Government Act. I feel that that must be very disappointing for some of the hon. Members opposite who so fiercely opposed the Bill, because they said that the general grant provisions meant that the Government were planning an assault upon the expenditure of local authorities. We can now see that that is not true. Indeed, it never was true. From the beginning, the Minister made it perfectly clear that the whole object of the Government's policy was to give greater freedom and responsibilities to local authorities. That is what they will now have. I believe that is something the vast majority of them welcome.

The hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu)—and I should for the purposes of this discussion perhaps call him the hon. Member for Huddersfield "United"—pointed out that the figures show that the percentage of local authority expenditure which will be met by grant, taking the country as a whole, will be very similar to what it was before. Of course, under a change of procedure some authorities will gain and some will lose, but I think that all of us who have been concerned with local government know the inequities and injustices caused by the operation of the old Exchequer equalisation grant. Taking the country as a whole, I believe that the position will be very much better under the new procedure.

As the hon. Member for Huddersfield, East pointed out, it is gratifying to local authorities that the Minister has gone so far to ensure that, quite apart from the transitional grant, the amount which authorities may lose has been reduced to the greatest possible extent. I think that local authorities are now pretty well satisfied with the results of the review of their future expenditure. The local authority associations have said specifically that they regard the Order as fair and reasonable—within the context of the Act. [HON. MEMBERS: "That is a qualification."] It is not so much of a qualification if ones takes account of what they have said by way of criticism. I think that they regard themselves as having been extremely well treated by the Minister throughout the negotiations.

It may perhaps be of interest to the House to hear what the Chairman of the General Purposes Committee of the Association of Municipal Corporations, Sir Francis Hill, had to say to a meeting of the Council of the Association on 4th December. Referring to the preliminary discussions which the Association had with the Minister, he told the Council: You will be very pleased to know that in the discussions, the Ministry representatives used as a basis the figures which had been supplied by the local authorities themselves. This was regarded by the Treasurers at the time, and subsequently by the Grants Sub-Committee and the General Purposes Committee, as the proper basis for the discussions. Certain adjustments were suggested by the Departments concerned and their representatives were most helpful in explaining the reasons for these and in giving the fullest possible information on all questions posed by the local authority representatives. Following these preliminary discussions, the statutory consultation under the Act took place with the Minister of Housing and Local Government and some of his colleagues on 17th November, and the General Purposes Committee on 27th November were pleased to note that the White Paper itself took account of most of the points—and there were not many—which had been put to the Minister on that occasion. The amount of grant to be distributed for 1959–60 is £393 million and for 1960–61, £414 million. (Members may recall that the original White Paper on Finance referred to the smaller sum of £291.4 million.) The representatives of this Association, the County Councils Association and the London County Council told the Minister, at the conclusion of the discussion, that they welcomed the attitude of the Government Departments in the consultations and their use of the local authorities' own estimates, and the readiness of the Departments to disclose all relevant information for discussion across the table. We also said that in reporting to our respective bodies about these discussions on the first General Grant Order we would say that, within the context of the Act, the result taken as a whole is one which we regard as fair and reasonable. It is the Order made under the Act that we are discussing this afternoon.

Mr. Charles Pannell (Leeds, West)

The hon. Member has given a long quotation about what the Chairman said. At the end, however, the Chairman said: within the context of the Act". Had the hon. Member referred to the President of the Association of Municipal Corporations, my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), he would have been given a very different picture. Of course, the Ministry should be helpful "within the context of the Act," but I do not see that that long quotation proves anything at all.

Mr. Rippon

I do not know what views the President might express. He was not there to express them on that occasion. I am quoting the Chairman of the General Purposes Committee, who made a report to the Council of the Association which it accepted readily enough.

I have not disguised what the Chairman said about the result being fair and reasonable within the context of the Act. It is not necessary for me to do so, because the Association of Municipal Corporations and most of the other local authority associations warmly welcome the principle of a general grant in substitution for the old specific grants. Therefore, I do not think that the Association of Municipal Corporations of which the hon. Member for Leeds, West (Mr. C. Pannell), like myself, is a vice-president, would complain of the change of policy which is contained in the Act.

We have to bear in mind not merely that the Government have ensured that the percentage which they contribute towards local authority expenditure remains the same to all intents and purposes under the new procedure as it did under the old, but that the Government have envisaged the payment of very much greater sums of money to allow for important developments of local authority services. The services which are to be developed have already been referred to in this debate. When we look at the White Paper as a whole, it is not only a justification of the Government's financial policy. It is an extremely important social document describing the broad advance along the whole field of local government services that the Government propose to make.

There is one specific point with which I wish to deal which causes anxiety to same of the smaller non-county boroughs. The boroughs do not dissent in any way from the principle of the general grant. They are, however, anxious on one particular point. which my hon. Friend the Parliamentary Secretary might be able to answer when he replies. As the House will appreciate, the grant is now paid direct to the county councils and to the county boroughs, but not to the non-county boroughs. There is a fear that they will be in difficulty because of the loss of the direct contribution for town planning purposes. They will, of course, share in the general distribution by the county council. but, as we all appreciate, redevelopment is essentially a borough problem.

This point was raised on Second Reading of the Town and Country Planning Bill. Whereas the larger authorities can absorb without difficulty the additional cost of redevelopment, which is now going ahead much faster than ever before, the smaller ones may be in trouble. No specific account of this expenditure can be taken by the county councils in their distribution. They could, of course, make a direct grant. but it is accepted that even if that were possible, it would not be very satisfactory. I shall be grateful if, when he replies, my hon. Friend will indicate whether this matter is being borne in mind

As far as I am aware, the only other serious criticism directed against the Order is that the amount of money which the Government are making available does not take account of the possibility of further inflation. I do not, however, see how that could have been done. I do not see how the Minister could have gone further than the statement in paragraph 9 of the White Paper. If it transpires that there is a considerable and unforeseen increase in costs, we know that it will be covered. If it is merely a case of minor fluctuations, I have no doubt that local authorities can absorb them by way of making economies, as the White Paper suggests. That, however, is the only serious criticism which has been directed against the Order.

That is why the atmosphere is so very different this afternoon than when our earlier discussions took place. This was another example of the Opposition, when the Government come forward with new policies, saying that they would lead to all sorts of disasters as soon as they were introduced. Every time, however, we find that those disasters do not occur and that the Opposition, which was so loud and vigorous on Second Reading, is silent when the time comes to implement the policies which the Government are pursuing for the great benefit of local government and which will ensure further great social advances.

6.37 p.m.

Mr. Edward Evans (Lowestoft)

I do not propose to make a constituency speech as such, but I wish to traverse a field in which I am intimately concerned and interested. I want to say a few words concerning grants affecting welfare services for the handicapped. The whole subject of the disabled gets little consideration in this House except at Question Time or by a point raised by a private Member.

The grants in respect of the disabled are open to objection on two main grounds: first, the method of application, and second, their total inadequacy. The services that they are designed to help are those which flow from the National Assistance Act, 1948, and are embodied in Section 29 and following Sections. The Act laid upon appropriate local authorities the duty of providing welfare services for handicapped persons. These are defined as persons who are substantially and permanently handicapped by illness, injury, or congenital deformity or such other disabilities as may be prescribed by the Minister. If ever there were a section of the community which should demand, rather than request, the warm help and support of any Government, it is that unfortunate mass of our friends who are handicapped or disabled, physically and mentally.

Unfortunately, at the time of the passing of the Act these duties were not made mandatory, except as regards the blind. There was a reason for this because the blind community had derived substantial benefits from the Blind Persons Act, 1920, which has sometimes been called the charter of the blind. Nor, unfortunately, has any Minister seen his way to make them mandatory even today, and this has been a great disappointment to all of us who work in a voluntary capacity, and also those who are officers of voluntary associations and local authorities.

I am pleased to say that a large number of local authorities have submitted schemes voluntarily and that these have been endorsed by the Minister. So far, out of 145 local authorities 126 have promoted schemes for the welfare of what we call the general classes—that is to say, those who are cripples, spastics, epileptics and so on—and 116 have promoted schemes for the welfare of the deaf and for the hard of hearing.

These services up to now have been operated without any financial grant from the Exchequer; that is to say, they have been financed out of the rates. It is a great tribute to the public spirit of those local authorities who have implemented these schemes, despite the great cost to the ratepayers, that they have found a ready acceptance amongst the people in the areas in which they operate.

Naturally, for this reason there is a wide divergence in the scope of the work as between different authorities. Some are excellent. It would be invidious for me to name them, but it might comfort the hon. Member for Norwich, South (Mr. Rippon) to know that the London County Council and other great authorities. because they have the resources and the good will, have embarked on welfare services which are a pattern for the rest of the country and have been copied by other great civilised countries.

It is difficult to get the figures, but according to some I have obtained today, the money expended by local authorities for the blind amounted to £2,887,000 last year, and most of that is covered by grant. For all the other disabled persons, including the general classes and the deaf and the hard of hearing, the total net sum, after allowing for repayment grants from the Ministry of Labour and so on, was £270,000 according to the White Paper. This disparity hits one in the eye straight away. I hope I shall not be misunderstood. I am in agreement with the expenditure of this huge sum of money, which is all paid by grant apart from the vast sums spent by voluntary societies on the blind. However, it is disappointing to those of us who work in other fields to find that the amount of money spent from the rates is only just over £2¾ million.

The House will recall that in March, 1953, the Minister of Labour, jointly with the Minister of Health, appointed the Piercy Committee to survey problems relating to the rehabilitation and resettlement of handicapped persons. The Committee took a long time but sent in a most valuable report in November, 1956, and there have been only a few allusions made to it in this House. Referring to the local authority welfare services for the handicapped, the Committee stated: … it is clear that in the field of local authority welfare services for the disabled only the fringes"— That is a damaging statement— … have been touched so far and there is no doubt that there is need for fuller and better provision and scope for considerable development. Recommendation 12 reads as follows: It therefore recommends that local authorities be grant-aided for their expenditure on services provided both under Section 29 of the National Assistance Act … Further the Committee states: Any such grant should be available without distinction between the type of disabled person or of services concerned. This view has been emphasised time and again by several bodies, particularly by many with which I am intimately connected, the Minister of Health's Advisory Committee and so on, and repeated attempts have been made in this House and elsewhere to persuade the Government to accede to this recommendation of the Piercy Committee. In spite of the failure of the Government to help financially, the welfare work has gone on and the voluntary societies, supported by charitable bequests, have continued to do a fine job. In effect, this means that we are running our welfare services for the disabled by charity in a disproportionate measure, and we are getting back to the time when we dealt with education by charitable endeavours 100 years ago.

Now we are to get grants in respect of further developments but nothing for the existing services, nothing for those people who have had the courage to develop services, the 116 who promoted schemes for the welfare of the deaf and the 126 who provided them for the general classes. They must continue to provide the existing services, and only when they expand those services will they get a tittle from this grant. How this money will be distributed and what will be the amount remains a mystery.

I quote paragraph 11 of the White Paper as saying: Expenditure on welfare services for the handicapped classes does not at present attract Exchequer assistance— Everyone knows that— … but in order to promote a fuller development of these services as envisaged by the Piercy Committee, the Government have agreed that the cost of further developing these services above the present level should rank for general grant. Accordingly, the estimated increase in expenditure above the level of 1958–59 is taken into account. How can they possibly estimate the increased development? How do they know what local authorities' expenditure will be? How do they know whether those local authorities who have not yet submitted schemes will do so and what will be the scope of those schemes?

Mr. Rippon

Would not the hon. Gentleman agree that this position is much better than the old position where there was nothing? Is he not aware that the question of the amount of development which will take place was considered in the discussions between the local authority associations and the Minister?

Mr. Evans

I am sorry, but I cannot take the hon Gentleman's assurance on that point. I would not for a moment believe that recalcitrant authorities have submitted claims to be included in the general grant scheme. Indeed, some of them are satisfied with the lack of development and in leaving this work to the voluntary societies. It is a nice way out for some of them if they can get those services free. I do not know how anyone can calculate an expanding service. Flow can it possibly be taken account of in making such a grant? It is no use the hon. Gentleman saying that, because they have not had it before and they are going to get it in future.

Mr. Rippon

They are going to get it.

Mr. Evans

They are not going to get grants for the work they are doing already. When we see the L.C.C. accounts we shall find that a very wonderful service will not attract grant, although what they develop in future may do so.

Mr. Rippon

But would not the hon. Gentleman, to be fair, agree that this is a substantial improvement?

Mr. Evans

It is like saying that two clouts across the head are better than three.

I could give a list of many of the services which are inadequately performed by the majority of local authorities, not because of a lack of desire on their part but because of lack of funds and encouragement by the Government. We want more sheltered workshops, more domiciliary employment and training schemes, more special homes for the disabled, especially for the maladjusted, handicapped and those with multiple handicaps, more gadgets and appliances, more reconstruction of houses for the disabled, more ramps, railings and lighting. I could go through a whole range of the improvements which are the right of the disabled and which it is the duty of local authorities to provide, as given in Circular 16/58, which contains the pious hope that the new grant will meet our complaints. There is a whole paragraph devoted to the projects which could be the subject of effective action.

To me, this is a frivolous and mean approach to a great human problem. The Government can take no credit for their action, which, I am sure, does not represent the wishes of the community nor match the responsibilities that a Government should undertake in respect of these people.

6.52 p.m.

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

I thought it might be for the convenience of the House if I rose at this stage to answer some of the points raised by the hon. Members for Fulham (Mr. M. Stewart), Southampton, Itchen (Dr. King) and Cardiff, West (Mr. G. Thomas), who have spoken about the implications of this Order for the education service.

Before doing so, I should like to make a very brief comment on the speech of the hon. Member for Lowestoft (Mr. Edward Evans). No one who has held my present office—I have now held it for nearly two years—could be in any doubt about the time and trouble which the hon. Member devotes to working for the handicapped classes. I had the pleasure of attending a conference for the deaf last year in which he takes a special interest.

I am not, naturally, going to make any comment about the Piercy Committee. but I should like to take the opportunity of saying that one cannot help being impressed by how much is done by many local authorities for handicapped children. It is not only the large local authorities. It is extremely encouraging to see what is being done in, for example, Reading today for a certain number of deaf children.

We can take some pleasure in the thought that there is today no serious shortage of places in special schools for the deaf or blind, and we are rapidly overcoming the shortage for handicapped children. I recognise that there are still many places needed for children who are educationally subnormal, but we can all take some pleasure and pride in the progress in our special schools during recent years.

Mr. Edward Evans

I thank the hon. Gentleman for his very kind reference, but I would point out that my speech was concerned with welfare services.

Sir E. Boyle

I realise that, but the hon. Gentleman, by what he said, reminded me to make a brief comment on our special schools.

My hon. Friend the Member for Norwich, South (Mr. Rippon) was justified in drawing attention to the difference between the atmosphere of our debate this afternoon and the atmosphere of many of our debates while the Local Government Bill was going through the House and through Standing Committee. I do not want to spend a long time going over the past, but it is fair to say that during the proceedings on that Measure two charges were frequently levelled by hon. Members opposite, and frequently levelled during deputations to the Ministry of Education, both of which have been conclusively refuted by the Order.

The first was the accusation that the introduction of the general grant would mean that all local authorities which wished to expand their services would have to meet the cost of expansion as to 100 per cent. from the rates and would not receive assistance from the Ministry of Education. I am sure that the hon. Member of Itchen will not mind if I give this one quotation from his remarks: Those who wish to lead the country in sending lads to the university, or pulling down slum schools, or cutting down the size of classes, can do so only if they themselves bear 100 per cent of the cost of their educational generosity and wisdom, while the Minister of Education stands aside and does not offer a penny to help."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 284.] I do not see how anybody could possibly read this Order and feel that the Government have been untrue to their pledge that we would maintain a fair balance between grant-borne and rate-borne expenditure, and also that the Government would pay a fair share of the amount of money needed for educational expansion.

The second charge, a rather less plausible one, was the one that one read in, for example, the pamphlet "The Threat to Education" which suggested that the amount of the general grant would be fixed by the Treasury irrespective of the needs of the social service departments. As my right hon. Friend the Minister of Housing and Local Government pointed out this afternoon, we have taken as our starting point throughout the estimates of the local authorities themselves, and I find it very difficult to see how the charges which were most frequently levied during the stages of the Measure can be regarded as plausible any longer.

The hon. Members for Fulham and Itchen referred to the possible effects of inflation on the general grant, and the hon. Member for Itchen specifically mentioned the article which appeared in "Education" recently, suggesting that the Government's proposals were not really very generous. But those figures in "Education" have to be used with a certain amount of care. For one thing, the author of the calculation deducted the money added for a possible Burnham increase in each of the next two years, but included a figure of between £17 and f18 million for each of the years 1956–57 and 1957–58 for the last Burnham increase.

Secondly, there is the point that the Government have, broadly speaking, accepted the estimates of the local authorities themselves. The estimates are avowedly based on the level of costs obtaining in July, 1958, and in consequence we are justified in saying from the Front Bench that the increase in estimated educational expenditure for 1960–61 over 1959–60 is wholly, and the increase for 1959–60 over 1958–59 largely, due to the real development of the service. That is to say, for the two years for which the Order provides we are budgeting for a real development in the education service. I suggest that it is misleading to compare these assumed development figures with increases in expenditure over earlier years which contained very much larger elements of cost inflation, of which the Burnham increases effective during the financial years 1956–57 and 1957–58 were the most obvious examples.

When one looks at the percentage increases for 1956–57 and 1957–58 one has to be very careful indeed not to take credit for the inflation of recent years as though this inflation represented a real development of the education service. The hon. Member for Fulham fairly quoted the increases in the price index between 1956 and 1958 and pointed out that between January, 1956, and June, 1958, there was an increase in the retail price index of 10 per cent. During this period, expenditure on education was rising by approximately 14 per cent. Therefore, the real development in education during those years in real terms was somewhere in the region of the difference between 14 and 10 per cent.; and it is the firm determination of the Government that during the years 1959–60 and 1960–61, in real terms, educational expenditure should develop at a faster rate than it was developing during the previous two years to which I have referred.

I should also like to come to the point made by the hon. Member for Fulham, which interested me, about the climate in which the estimates of the local authorities were prepared. He made a good deal of play in his speech with Circulars 331 and 334. I think he made slightly heavy weather of these circulars, because, after all, whatever may have been contained in them, and however much we all may have regretted having to postpone or hold up temporarily the programme of rural reorganisation, it has remained the Government's policy throughout this period to cut down the size of classes.

The principal reason for the increased estimates of educational expenditure during the forthcoming years is the simple point that there will be more children than ever at school, and, in particular, there will be more children than ever in the secondary schools. The main reason for the increase, as the hon. Gentleman very well knows, is the bulge which is now coming up into the secondary schools, which means that there will be more children than ever in secondary schools. Another factor which we must always remember is that, we hope, the trend towards more children staying on at school until after 15 will continue, which will, in itself, add to the total cost. This is quite unaffected by anything that may have been contained in Circulars 331 and 334. Therefore, I think, with respect, that the hon. Gentleman made slightly heavy weather over the matter of these circulars and the climate in which the estimates were prepared.

The hon. Gentleman specifically asked what immediate steps could be taken to increase the supply of teachers. I can promise him that, so far as we are concerned, the answer is that everything possible is being done to get more teachers in advance of the expansion of output from the training colleges. As he knows. we are engaged at the moment in crowding up the existing training colleges as far as possible. We are doing our best to get more graduate teachers and more part-timers, but the results of these minor measures to increase the teaching force are allowed for in the estimates of recruitment in the coming years.

We need all these extras, and as many as we can possibly get, in order to reach a target of nearly 6,000 more teachers a year, which has been assumed for the purpose of these calculations. While I entirely realise the seriousness of the teacher position, and while teachers are still by far the scarcest educational resource, I wonder whether hon. Members realise what they are saying when they put in their propaganda that it will be Labour Party policy to get all classes down to a maximum size of 30 during the lifetime of the next Parliament. That assumes an increase in the teacher supply of 40 per cent., and it is a quite unrealistic target.

The hon. Gentleman also asked—and a good deal has been asked—about the effect of increased loan charges on the proposals in the Government's White Paper, and on the estimates given in the White Paper.

Mr. Mitchison

I wonder if the hon. Gentleman could deal with one point before he goes on, and if I am disturbing the order of his speech I apologise. My hon. Friend asked what was the cost of the additional 5 per cent. increase in teachers' salaries, which the Government have included in the final figure, and how, in short, he fitted that increase into the total increase of £10 million between the figure submitted by the local authorities and that finally taken by the Government?

Sir E. Boyle

I was actually going to say a general word about the programme and I will include in it the answer to the hon. and learned Gentleman's point. For the moment, I should like to answer another question which has been asked by the hon. Member. It is the question whether, in fixing the amount of the general grant for the next two years, the Government made due allowance for the cost of the new drive in secondary education. I think I might put my answer to that question into three parts.

First of all, my right hon. Friend the Minister of Housing and Local Government has already stated that the cost, in terms of loan charges, during the two years of additional capital expenditure, must be pretty insignificant in relation to a total revenue expenditure of £600 million. That is to say, we must be careful to distinguish between the capital cost of the new programme in terms of its share of the total amount of investment in the public sector, from, on the other hand, its effect on revenue expenditure by the local authorities. A capital expenditure programme of £300 million over five years is quite a sizeable proportion of the total volume of national investment in the public sector, which, as hon. Members know well, is running at the moment at about £1,500 million a year. But when one considers the effect of this on revenue expenditure, the effect is altogether different.

What I can tell hon. Members is that, supposing that local authorities as a whole were to spend an extra £10 million of capital expenditure, the effect of that on their revenue expenditure would, in fact, be approximately £700,000 and that is a pretty small proportion—indeed, it represents a marginal figure, when we are dealing with a total revenue expenditure on education of £600 million a year.

Mr. Mitchison

I am sorry to interrupt the hon. Gentleman again, but this is the substance of what we are discussing. The White Paper said that in fixing the amount for the first general grant period, the Government have taken account of the policies proposed in this White Paper. What was the sum of money they took into account?

Sir E. Boyle

I am trying to give as fair an answer as I can. In the first part of my answer, I have pointed out that we are here dealing with sums of money which are very marginal in relation to the total of the revenue expenditure of local authorities as a whole.

The second point is that the estimates of the local education authorities were submitted at a time when the downward trend in interest rates had already begun, and it has since gone further. Therefore, there is room within these forecasts for some expansion of capital expenditure without the local authorities exceeding their estimates of expenditure on loan charges.

The third point is that, in any case, apart from these figures for expenditure for the service as a whole, which would be taken into account in fixing the grant, the figures. as the hon. Gentleman knows from the White Paper, are £600 million for 1959–60 and £633 million for the year after. This deliberately includes a margin so far as capital expenditure is concerned, and I do not think it would have been really necessary to regard that capital expenditure as making any substantial effect on the total revenue expenditure of the local authorities during those years.

The hon. Gentleman referred in his speech, quite fairly, to the question of maintenance and upkeep of schools, once they are built. After all, the five-year programme announced in the White Paper only starts in 1960–61. Furthermore, it is not until a year after a school has been started that that school will be completed, and it is only after a school has been completed that the cost of maintenance really arises. And therefore the hon. and learned Gentleman's point must apply to the next General Grant Order rather than to the Order which we are discussing this evening.

Mr. M. Stewart

The hon. Member will remember that the White Paper on education is not concerned solely with the capital expenditure of building new schools, but also refers to raising standards of secondary modern schools, for instance. If that is to be done, it will involve expenditure on equipment, staffs, libraries and so on, which will be current expenditure. We are told that the projects mentioned in the White Paper—not only capital building projects, but all the expenditure which the White Paper will involve—have been taken into account in arriving at the figures of £600 million and £632.83 million. The simple question which we are asking is by how much would those figures have been reduced if the White Paper had not been produced.

Sir E Boyle

My answer to that is that we should not forget that the programme mentioned in the White Paper only starts in 1960–61, which is the second year of the General Grant Order which we are discussing. The point is that, taking into account the facts that the cost of additional loan charges must be very small. and that by far the biggest items of expenditure will be accounted for by the number of children at school and the additional teachers we hope to gain, the extra items to which the hon. Gentleman refers must be marginal in relation to the total of £600 million. Therefore, while the Government have certainly considered the point, those extra items could not have affected the Government's decision about this General Grant Order.

Mr. M. Stewart

Let us get it quite clear. The answer to the question is, "Nothing to speak of".

Sir E. Boyle

The answer can be more fairly stated by saying that the big items in education expenditure over the next years have been fully taken into account in the Order which we are now discussing, while the items to which the hon. Gentleman refers will affect the next General Grant Order. The Government do not believe that they can have more than a marginal effect on the present Order, since the first year of the drive is 1960–61 and the schools cannot be completed until that financial year is over. And, after all, it is the new school buildings themselves that are fundamental to the Government's plans.

I want now to refer to the Burnham award. The hon. Member for Fulham said that the inclusion of the 5 per cent. in the general grant will make authorities take a rather more stubborn line since they will feel that they have the money for the 5 per cent. "in the bag", whereas they will have to carry the whole of any increase over and above 5 per cent. The answer is that the authorities do not have the extra 5 per cent., except, as it were, provisionally, since my right hon. Friend has made it perfectly clear that they are on warning that if the teachers in the end get less than the additional 5 per cent., the extra amount will be taken into account when the amount of any future review is fixed.

On the other hand, the authorities know very well that the Government have undertaken to consider adjustment of the general grant in the light of any significant Burnham award. That pledge has been given again and again, so I can see no reason why the authorities should be stiffer on this occasion than they might otherwise have been.

The hon. and learned Member for Kettering (Mr. Mitchison) asked about the amount of the 5 per cent. No doubt my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government will have further comments to make on this matter, but the position is that the amount of the 5 per cent. represents approximately £14 million, and the difference between £4 million and the £10 million is accounted for by certain marginal items.

Mr. Mitchison

I am sorry to interrupt the hon. Gentleman again. He has been most courteous in giving way. Is this the figure of ½ per cent. which was mentioned by the right hon. Gentleman? Is that the marginal calculation, and to how much does it amount?

Sir E. Boyle

Yes. My right hon. Friend was referring to the difference between £14 million and £10 million.

Mr. Mitchison

So the only thing taken into account as between the figures supplied by the local authorities and the figure taken by the Government was the 5 per cent. increase in teachers' salaries?

Sir E. Boyle

No, that raises a wider point, and the hon. and learned Gentleman must not tempt me into a sort of Committee stage debate on this matter. My hon. Friend the Parliamentary Secretary will deal with this at greater length when he replies to the debate. I have given the hon. and learned Gentleman an answer to his specific question. The answer is £14 million.

I need not detain the House very much longer. I have tried to answer the questions which the hon. Member for Fulham raised, but there is one point I want to make before concluding. The hon. Member for Fulham said that ultimate responsibility for education must rest on the Government. In that connection, he quoted Section 1 of the Education Act, 1944. There is no dispute about that on this side of the House. On the contrary, if asked to describe the responsibilities of my right hon. Friend, I think that all my hon. Friends would say that his first and prime responsibility was to see that there were sufficient funds available, a sufficient share of national resources available, for the education service. We should also agree that his second function was to lay down certain broad priorities and, by co-operation with local authorities, to see so far as he could that those priorities were observed. It is exactly in that spirit that the Government have introduced their White Paper, "Secondary Education for All: A New Drive".

But when the hon. Member says that responsibility for education rests on the Government, I find it very difficult to see how a system of percentage grants of necessity makes it easier for the Government to honour their pledge, because with a system of percentage grants there has always been a good deal of difference in standards between one authority and another.

We believe that whatever system of finance is in force, educational progress must essentially be a co-operative matter between the Government and the local authorities, backed all the time by public opinion and by a growing national realisation of how essential to the nation are improved educational standards. It is in that spirit that my right hon. Friend has introduced the Order. I believe that it will form an adequate and firm base for the educational expansion which we all wish to see during the years ahead.

Mr. Speaker

Mr. Blenkinsop.

Mr. James Simmons (Brierley Hill)

On a point of order. May I seek your guidance, Mr. Speaker? It is now twenty minutes past seven o'clock and we are about to have another speech from the Front Bench. Does this mean that we are about to have the Closure moved, or is it to become a regular feature of our debates that we shall have three opening bats on each side to the exclusion of back benchers? Is it another privilege that if an hon. Member speaks from the Front Bench he has a priority with Privy Councillors over other speakers even if he is not a Privy Councillor? May I seek your guidance in the interests of other back benchers?

Mr. Speaker

I gathered that the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) was not attempting to close the debate but was merely making an intervention. I hope that I shall get an opportunity to see the hon. Member for Brierley Hill (Mr. Simmons) rise to catch my eye.

7.18 p.m.

Mr. A. Blenkinsop

(Newcastle-upon-Tyne, East): I have no desire to keep my hon. Friend out of the debate. I hope that he and others will take part in the discussion to make their attitude clear. I intervene merely to raise certain matters affecting the health aspect of these proposals.

The hon. Member the Parliamentary Secretary to the Ministry of Education is always a vigorous speaker, but his vigour this evening did not cloak his dampening words about the educational aspect of these proposals. I am sure that all hon. Members have noted that he said that the more detailed aspects of the education proposals would be dealt with not by him but by the Parliamentary Secretary to the Ministry of Housing and Local Government. Apparently, the Ministry of Education is to that extent surrendering its responsibility for some of the education services.

I am afraid that I am in an even worse case than some of my hon. Friends. I had an apology presented to me by the Parliamentary Secretary to the Ministry of Health, who regretted that he had to get away a short time after six o'clock. I thought I had given him sufficient opportunity to get back again, or if not he, the Minister of Health, who does exist, I understand. One of them should be present to deal with a matter which affects the Government very considerably and affects the services for which the Minister is personally responsible. It is unsatisfactory that we should have a debate on a matter which deeply affects the health services without a representative of the Ministry of Health being here. While I appreciate that the early apology was given, it should not have covered the whole of the period of time during which I have been waiting for the hon. Gentleman to return.

Just as my hon. Friends were anxious when they raised matters affecting the education aspect of this grant, so I am anxious to raise matters affecting the Health Service. It appeared to be common ground—but now I am doubtful whether it is—that both sides of the House desired in this country a major development of our domiciliary community services, if we were to make any progress with the nation's health in the future. I thought this much was common agreement between both sides. Indeed, this has been supported by Royal Commissions and the most expert advice has been given on the same lines. We have been anxious to help in the furthering and the development of the domiciliary services, because we know how anxious all those concerned with this matter have been. For example, we want to move many of the mentally afflicted out of institutions which are not suitable back into the community for more effective or useful care which would break down the isolation from which they have suffered.

In the same way we have been anxious about the provision for the handicapped, to which my hon. Friend the Member for Lowestoft (Mr. Edward Evans) referred a little earlier. We all listen to my hon. Friend with great care, especially when he is speaking of services for the handicapped, because of his very long and detailed experience in that matter. We have all been looking forward eagerly to developments in that direction and have been particularly concerned about what might be done about provision for old people. We know that in this country we shal1 inevitably face a steady increase in the number of old people in our population, and we know that the best place for those old people is not the hospital, except for active treatment. They need the proper welfare and care in their own homes which can be provided, no doubt, both by local authorities and the hospital services.

Some of my hon. Friends, looking at the explanatory White Paper, must have been delighted if they took the words they read at their face value. It appeared that the Government were accepting fully this new responsibility and were proposing to move into this new, exciting development of domiciliary services. They were really going to open up new opportunities in this field. The great, resounding words on page 7 of the White Paper were referred to by the right hon. Gentleman who opened the debate as an "impressive list" of developments. One of my hon. Friends has referred in terms of some adulation to the great advance that was being projected—I see that an hon. Member nods his head—presaging a great new step forward.

In fact, when they are examined, what a dismal account this is. Far from being an impressive list, it is miserable. The first item which is covered on page 7 in this part of the "impressive list" is provision for mental illness and deficiency. One should look first at the recommendations of the Royal Commission on the Law Relating to Mental Illness and Mental Deficiency, in which are set out the Commission's own proposals. It will be clear to anyone who has taken an interest in this development that the Royal Commission was eager to see concentration for the future upon community care, because it made a series of very important recommendations in this regard.

Under these proposals of the Royal Commission it would be a requirement that local authorities should establish a wide new range of services which would need buildings, equipment and trained staff of a very considerable character. The proposals accept that if this is to be done there must inevitably be special financial provision. From time to time in this House, over a period of six or nine months, I have been asking the Minister of Health for details of the financial provisions he proposed to make for the new services. Always he has replied that the matter was under consideration and that we should hear them in due course.

The reply is contained in effect in these provisions for the general grant. According to the White Paper there is to be increased provision of all kinds. It says that the Estimates will take into account and allow for an annual rate of development in the mental health field in each of the years 1959–60 and 1960–61 at roughly two and a half times the rate which has obtained in recent years. That is a rather peculiar way of expressing the development. I have always been told that if one wants to cloak the actual amount of development one must put it in percentages. It looks much better. If development has been so minute in the past as hardly to exist, we can multiply it by two or by five and the extension will still be on a modest scale. That is what the Government have done here.

Everyone knows that the development of the mental health services of the domiciliary kind by local authorities has been minute in recent years. If we multiply it by two and a half the result is relatively nothing. The Royal Commission said it wanted to recommend that there should be up to 75 per cent. grant. It recognised that was no longer possible, because of the Government's proposals for a direct general or block grant. So it said it hoped that the Government would find means of making extra finance available to ensure that the developments took place. Taking the most generous assumptions from the answer which I had in the House this afternoon in reply to a question to the Minister, we are to have about £900,000 extra expenditure throughout the country upon domiciliary health services of all kinds in the first year. and another increase of a comparable size in the second year.

If the Minister of Health really believes that is going to make any kind of effective start in tackling this problem, he has to think again. I do not believe it will make any kind of provision for patients who, we hoped, would be brought out of mental hospitals and institutions. It will not deal either with the type of case referred to by my hon. Friends at Question-time today. They were referring to cases of people who, in effect, had been illegally detained in mental institutions but could not be discharged simply because there was no place for them to go. Those are some of the cases the Royal Commission has been making recommen- dations about and for whom there must be some domiciliary provision.

This kind of expenditure provided for will not meet that problem. I should have liked the Minister of Health or the Parliamentary Secretary to be present to answer these questions, because it is important that we should know the answers. One can only assume that in the consultations with local authorities the great bulk of them have said, "We are not going to do anything about it". That is the only sense one can make of this. Yet I know that some of the plans put forward by my authority in Newcastle would absorb a great part of the provision which is to be made for the whole country. This provision is simply ridiculous. It is part of the "impressive development" but so far from being impressive, it has completely prevented any hope of the recommendations of the Royal Commission being carried out.

If my assumption is correct and local authories are saying: "We are not going to do this." we can only assume that the recommendation of the Commission that it should be mandatory upon local authorities to carry out these things is to be disregarded by the Government and the provision is to be purely permissive. I should like to know whether that is so. I hope an answer will be forthcoming before the end of this debate, because I think it shocking that we should be led to imagine from the flowery language of the White Paper that we are to have a revolutionary new approach, such as was suggested by the hon. Member for the City of Chester (Mr. Temple), yet we find nothing will come out of it.

Mr. Temple

I think the hon. Member will agree that two-and-a-half-times the existing amount is a good start. Possibly it is not everything we wanted, but it is a very good start.

Mr. Blenkinsop

That is the point I have been trying to make. If nothing has been done there would be no expansion, because two-and-a-half times nothing is still nothing. In the same way, if the development is on the modest scale it has been in recent times and it is to be multiplied by ten, we still have a very modest form of development, which would not in any way meet the recommendations of the Royal Commission. On those grounds, the provisions in this White Paper would in no way meet the recommendations but are, in fact, a douche of cold water on those who sincerely and eagerly have been looking forward to the opportunity of developing effective community mental health services.

It will mean that the kind of experiments which some local authorities and hospital boards have been making on this kind of basis cannot go forward. As many hon. Members know, Dr. Bierer has been running satisfactory experiments in psychiatric social clubs and other work, which is exactly the kind of work the Royal Commission is recommending to be increased and developed and which might have a remarkable effect on reducing the call on hospital beds. I understand that in response to an approach for extra assistance London County Council has had to say that under the expected provision it regrets it will not be able to give that assistance. If that is so in London, how much more true it is of other parts of the country where authorities have smaller resources? It is obvious that in fact we shall get next to no development in this matter. It is a very tragic position.

Turning to the next part of the "impressive" list of developments, it is rightly said in the Report that development of the domestic help service could do a great deal to make provision for many old people and might do a great deal to avoid their having to go into hospital. As in the case of the mental domiciliary service, in this case also we are trying to save the Exchequer a great deal of money in the long run. Unlike some of the other services we have discussed, this would save hospital expenditure which would fall entirely on the Exchequer. Whatever the extent of grant aid, there is a considerable contribution from the local authority itself and there is a great attraction about that for the Treasury.

Of the domestic help service, which the Government now realise is so important, they say that this "impressive development" is to provide an increase in staff from just under 22,000 at 31st December, 1958, to nearly 24,500 by 31st December, 1960. There are 140 authorities listed in the supplement to the Report which probably are ready to take advantage of this wonderful development. If my calculations are right, that means something like seven more home helps to each local authority each year. That is a magnificent development! But how does it stand up to any kind of estimate of the increase in the number of old people in our population, quite apart from the enormous extra load we have of old people who, unhappily, are not provided for today as we need to provide for them?

It is obvious that this provision is not at all adequate. The same can be said of the other proposals. I want, in particular, to emphasise the provision for the aged and infirm. Every hon. Member, no matter in what part of the house he sits, has from time to time brought before the House examples of the number of old people needing residential accommodation of a welfare kind. We all know from our experience—I know from my experience, on Tyneside, and I am sure every hon. Member knows from his own experience wherever he lives—that if we had welfare accommodation available we could move a great many old people out of unsuitable institutional buildings to far more suitable accommodation. There they could take a more active part in the life of the community, which would be far better for them and for everyone else. We know that that is so.

What does this do? It is estimated that since 1948, the date of the passage of the relevant Act, just under 30,000 places ranking for contribution will have been brought into use in homes up to the end of the current financial year and that the number will be increased to 33,000 by 31st March, 1960. It is hoped in two years to raise the number of places by 3,000. That is, 21 places for each authority in two years. That is ten per year for each authority. That is the majestic advance.

What does it mean? It means that many local authorities will presumably do nothing at all and have made no proposals and that some local authorities will try to tackle the job. Will the Minister of Health be satisfied with that? With the growing problem of more and more old people in our population, and with our knowledge of the great need for accommodation of this sort in every city and town and in the rural areas, too, will the Minister regard this progress as good enough? It is obvious that the proposal which is made in the Report takes us nowhere towards providing the facilities we need.

I could deal with other proposals, but let me mention a few things which are not even referred to in this marvellous Report. There were some Questions this afternoon about the need for chiropody services. The hon. Member for Blackley (Mr. E. Johnson) asked the Minister when we should be able to start chiropody services for old people—and answer came there none; or, at least, the answer, such as it was, said that the Government regretted that they were not able to provide any services. Nor is any provision made in this Report. Yet it is common knowledge that there must be an adequate national provision of chiropody services for old people under the National Health Service if we are to keep old people active in the community and to avoid them becoming institutionalised. I understood that that was what we all wanted to achieve, but there is no glimmer of hope from the Report.

The Gillebaud Committee made recommendations about this, but it might as well not have bothered. It recommended that this was a service which ought to be provided as soon as possible, and it also recommended that there should be grant provisions for both capital and running expenses for the residential accommodation for old people to which I have been referring. Obviously these recommendations are not to be implemented. None of this service is to be provided.

I come to the point made by my hon. Friend the Member for Lowestoft about handicapped persons. I will not take long on this subject because he has so much authority on it and has said much of what I otherwise would have said. It is true that we have the clear recommendation of the Piercy Committee that local authorities should be grant aided in their expenditure on welfare services for handicapped persons. The recommendation was that there should be specific provision for them.

My hon. Friend pointed out what we are to get from the Report, if anything. It is all mixed up in the general grant, and heaven knows whether the handicapped persons will in fact get anything. The only words of comfort we can find are that there will be some provision for any increased expenditure in this respect by local authorities but nothing for existing expenditure. As my hon. Friend said, it is remarkable that the authorities which have tried to move in a progressive way in this work are to have no help at all. This is an encouragement to local authorities to be dilatory and to take no action which they are not compelled to take.

This is a miserable proposals. From some of the figures given by my hon. Friend in respect of provision for the disabled other than the blind, I can only assume that the expenditure expected is about £50,000, and that must assume nothing more than an occasional pilot scheme here and there in the country.

I feel that this set of proposals is nothing more than a hoax. In the Report we read the phrases which we like to read and the apparent sign that the Government are interested in providing what we know is needed, but when we examine it with some care we find that the Government are satisfied, in effect, with the local authorities carrying on their present path without making any inroads into the problem which lies before us.

As the Minister knows very well, some of us have taken a great deal of interest in the Health Service. In many areas we have been concerned about the possibility of its development, and we have been excited by the new opportunities which appear to be before us. We are told by the Government that now, just before an election, they are willing to make extra capital and revenue expenditure available. But in effect they are not even doing that for the National Health Service. We can take the absence from the Front Bench of representatives from the Ministry only as indicative of the weak position which the Minister of Health has reached in this Government. It has the power neither to affect usefully the proposal for grant which is put before us to aid the National Health Service nor even to provide a representative of the Ministry to be here when the subject is being discussed.

7.48 p.m.

Mr. James Simmons (Brierley Hill)

I originally desired to say a few words on the lines initiated by my hon. Friend the Member for Lowestoft (Mr. Edward Evans) about the position of the disabled and of handicapped persons as a result of the White Paper and the Order, and the development of the welfare services for the handicapped. It appears from the Report by the Minister that this development is to be fostered by a percentage increase in the block grant to local authorities.

Looking at the back of the Report, I find that welfare for the handicapped will receive less than street crossing patrols, road safety, police traffic controls and the registration of electors. That is precisely what the Government think about the handicapped and the disabled. If this purports to be a fulfilment of the promises contained in the Piercy Report, it does not measure up to the expectations which were aroused.

As my hon. Friend the Member for Newcastle - upon - Tyne, East (Mr. Blenkinsop) has pointed out, we get from the Government glowing prospectuses, but when it comes to paying out dividends we see that we have invested in a fraudulent concern.

The Piercy Report is quite explicit on the care of the handicapped and disabled. Paragraph 106 reads: The total amount spent by local authorities in England and Wales for the year ending 31st March, 1955, on services for the disabled other than the blind and partially sighted was only some £250,000 as compared with £2.4 millions spent in the same period on the blind and partially sighted. It goes on to say that the local authorities: … now have the task of building up their services, in particular those concerned with social activities for the handicapped (e.g., the establishment of social clubs) and with providing some form of occupation for them either at the clubs or in their own homes. It is clear that only the fringes of the field have yet been touched. The Act gives local authorities very wide permissive powers to make provision for the welfare of disabled persons, and on the evidence received there is no doubt that there is a need for fuller and better provision and scope for considerable development. Paragraph 124 of the same Report says: Since local authorities were first invited in 1951 to submit for approval schemes for the welfare of handicapped persons, there has been, and indeed continues to be, a general pressure for economy in their services and their expenditure. This must have retarded the development of these services. Nevertheless, the Committee believes that more would have been done by local authorities in this field if it had not been the case that most of the services which they can provide attract no grant from central funds towards the considerable cost which would be involved. It seems anomalous that. for example, an occupational therapy department in a hospital should be financed completely from Exchequer funds whereas an occupational service provided by a welfare authority at a recreational and occupational centre attracts no direct Exchequer grant whatever. It is clear that the Piercy Committee believed and, in fact, recommended, that a great deal more should be done by the local authorities, with Government support, for the welfare of these people.

During the Second Reading of the Disabled Persons Bill, several of my hon. Friends and I raised the issue of a general versus a direct grant for this purpose, and my hon, Friend the Member for Stockton-on-Tees (Mr. Chetwynd) said: There is the question of finance. I understand that the work will be grant-aided, but is this grant to be part of the new block grant, or is it to be a grant especially for this purpose? It is a pity that we have not now present a representative of the Ministry of Labour and National Service. My hon. Frend went on to say: If it is to be part of the block grant, then, as with education, I am a bit dubious about the extent to which it may be used by an authority that. perhaps. wants to save the ratepayers money. It would be much better if this grant were specific, with a percentage relation to the work done by each authority. I myself made some reference to the issue in that debate, which I now venture to quote. I said: It appears that the local authorities will be under a duty to exercise their powers under the direction of the Ministry of Labour. The financial aspect of this has been raised in debate. Will the local authorities receive direct grants, or are the handicapped to be further handicapped by being fed on the crumbs that fall from the table of the municipal block grant This is an important point which ought to be cleared up before we part with the Bill. Once the municipal 'economaniacs' get on the warpath at local government elections and scare the daylights out of Tory councils, the social services will be sacrificed to lower the rates. Those of us who have been in local government know quite well that the first cry of the "economaniacs" is "reduce the rates'', and the first thing they want to do is cut the social services. During that Second Reading debate there was an explicit demand for an assurance from the Government on the financial aspect. and that assurance was forthcoming. The then Parliamentary Secretary said: The hon. Member for Brierley Hill and the hon. Member for Stockton-on-Tees also raised the question of finance in connection with the employment services dealt with in the Bill. They wanted to know whether they would now be part of the block grant or would remain direct grant-aided. I can reassure them instantly; they are to remain direct grantaided."—[OFFICIAL REPORT, 31st March, 1958; Vol. 585, c. 964–9781] Nothing could have been more specific than that. The care of the disabled was to be financed by direct grant. That was the Government's deliberate promise, made only in March last. I know that this referred to the responsibility of the Minister of Labour, but as the object of the Bill that we were then discussing was to unify the care of the handicapped under one Ministry, one would have thought that the best way of getting effective control would have been to concentrate the financial arrangements under one Ministry as well. This present meagre grant for welfare services for the handicapped is an attempt by the Government to evade their responsibilities to the handicapped.

If we are to have this as part of a block grant, certain questions arise. Paragraph 26 of the Minister's Report specifically refers to the Piercy Report, and its recommendations for considerable expansion. How much expansion are we to have? Cannot we have the exact amount that the Government intend to give? As my hon. Friends the Members for Lowestoft and for Newcastle-upon-Tyne, East have said, these services are in existence. They have been maintained by the local authorities. Progressive local authorities have been prepared to ask their ratepayers to shoulder part of the nation's responsibility for the disabled and the handicapped. They are to be penalised by this paltry grant.

The Government Report designates a percentage increase in the block grant to cover specific improvements and extensions in this welfare service, but it is important to know how this block grant will work. Will these increases be given to local authorities, irrespective of the work accomplished by them? What check is there to be on the work of local authorities? If it is to be a block grant, are the local authorities to get it, with something in respect of the welfare and care of the handicapped and disabled included in it, but no guarantee required that it will be used for the purpose for which the Government have designated it?

If they get this increase, must they improve the welfare services of the handi- capped by that amount, or is it just an indication that they may use it for that purpose? What check is there of the way in which this block grant will be used? We ought to have an answer to this question because it is most important. When the Bill dealing with the handicapped and the disabled was debated on Second Reading we had a promise, a definite guarantee, from the Parliamentary Secretary to the Ministry of Labour and National Service that these services would be taken care of by a direct grant. Now the Government say, "We think we had better put this in the block grant. We shall be able to hide our deficiencies a bit better if it is put in with the block grant. We shall not be called to account so easily as we should be if it were a direct grant from a Government Department."

As I understand the general problem of the care of handicapped and disabled persons, according to the Bill which was passed through the House last Session and comes into operation on 1st January next, this is the responsibility of the Ministry of Labour and National Service. The Ministry is empowered to make direct grants to local authorities for carrying out certain obligations under the Bill. We have a right to know from the Minister whether this miserable percentage of the block grant will have any effect upon the amount of the direct grant which the Ministry of Labour and National Service should be giving to local authorities in respect of these services to the handicapped and disabled.

The Ministry of Labour and National Service has a very good record in the training and rehabilitation of disabled persons. When, then, the Government decided to put the care of the handicapped and disabled under the Ministry in co-operation with the local authorities we expected a great development to take place. We expected that great schemes of rehabilitation would be launched in areas where no such schemes were already in existence. We believed that the welfare services which were inadequate in certain areas would be improved and that the money would go in the form of a direct grant from the Ministry of Labour. Now we are told by the present Government, in the Minister's Report, that these services are to be dealt with in a meagre way by a percentage of the general grant to local authorities. I am sure that the House will feel, as I do, that the handicapped and disabled have been betrayed by the Government who have gone back on their promise.

As my hon. Friend the Member for Lowestoft said, we get very little time in which to discuss problems of the handicapped and the disabled on the Floor of this House. People do no realise what an important problem this is. According to the Piercy Report, half of the disabled are civilians; I am speaking of those registered under the Disabled Persons (Employment) Act. Out of a total of 798,000, 362,000 are non-ex-Service men. I usually speak in this House with an ex-Service bias, but in this problem of the handicapped and disabled there is no question of differentiation. Both types are assets to the community, and they can become greater assets if they have the proper training and care. If the State is prepared to spend money on mending broken bodies and minds, those who are now on the industrial scrap heap because of their handicap and disability can become productive members of the community by being restored in body and mind.

The best way to make these people productive members of the community is by not allowing them to rot and feel uncared for. That is the great value of the welfare services which are referred to in the Minister's Report. But there is no provision to initiate services. Their initiation is left to the efforts of the local authorities, and all that the Minister's grant is concerned with is the development of services where they already exist. I suggest that throughout the country there are centres where the handicapped and disabled could be cared for, where welfare services are necessary to make these people feel that they are no longer the forgotten men and women of this country, that somebody cares for them and is concerned about their problems, wishes to lead them out of the slough of despond and despair and set their feet on the path towards recovery both of mind and body so that they may become productive members of the community.

What are the Government doing to solve this great problem when they fob it off as part of a general grant to local authorities, instead of carrying out the promise which they gave on Second Reading that the care of the handicapped and disabled should be the subject of a direct grant? The whole basis of the Piercy Report was to unify the care of the disabled under one Government Department. That has been done. One Government Department is now made responsible. It has power to direct the local authorities to do this, that and the other in the interests of the disabled. What is the good of them having the power to direct local authorities, unless they have the power to give them the grants sufficient to see that the services which they set up for the welfare of the disabled and handicapped are efficient and carry out the full purpose of those who initiate them?

I have spoken for longer than I intended, but I got a little wound up. I am sorry. I often get wound up on these subjects because I feel very deeply about them. During the Second Reading debate on the Disabled Persons (Employment) Bill, as it was then, we said that we felt that not sufficient had been done to implement the recommendations of the Piercy Committee. We were rebuked for saying that. We were told that all that was necessary had been done in the Bill.

The Government have gone hack on the pledge they gave then, and I urge the Minister to consult with the Minister of Labour and National Service to see whether something, can be done to increase the direct grant for the work being carried out by local authorities, under the Minister's direction, for the welfare of the disabled and the handicapped.

Mr. Mitchison

On a point of order, Mr. Deputy-Speaker. We have been discussing a very important part of the Government's statutory report which accompanies the Order, the part which deals with the affairs of the Ministry of Health. During the discussion we have had, if I may say so, three very well-informed and serious speeches from my hon. Friends. There is no representative of the Ministry of Health here. There is no one to answer a question. There is no one even to hear what is said.

In the circumstances, Mr. Deputy-Speaker, I ask your leave to move the Adjournment of the House until a representative of the Ministry of Health attends. I say at once that I have no complaint whatever to make—quite the opposite—of the diligence and courtesy of the right hon. Gentleman the Minister of Housing and Local Government, who has been here during the whole of these proceedings, but the Ministry of Health is not his Department.

Mr. Deputy-Speaker (Sir Gordon Touche)

I am afraid that I could not accept a Motion for the Adjournment at the present time.

Mr. Blenkinsop

Further to that point of order, Mr. Deputy-Speaker. This is a matter of courtesy to the House in respect of which you ought, I submit, to do your best to protect the House. It has been known that specific points relating to the Ministry of Health were to be raised, and it was understood that a representative would be here. Presumably, the Minister of Health still lives and is breathing somewhere in London. Either he or the Parliamentary Secretary should surely find it possible to be present in order to make for a valuable discussion here in the House.

Mr. Deputy-Speaker

It is not my responsibility who represents the Government on the Front Bench.

8.12 p.m.

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

It has been very interesting to observe during the debate the way in which practically every Member speaking from the Government benches has joined in a chorus of praise, drawing our attention particularly to the sheep's clothing which the Minister has adopted in presenting this Order. Indeed, one had a vary similar feeling in listening to the theme of the right hon. Gentleman's opening speech. There seems to have been more emphasis put upon trying to represent what good boys the Government were, and how badly misunderstood they had been in this connection, than upon any really honest attempt to answer the very cogent questions about the Order which have been put from this side of the House. Finally, we have had what one can only regard as the discourtesy to the House, to which attention has just been drawn, of the absence of the Minister of Health or any representative of his Department to answer the very powerful speeches which have been made about matters which are his particular concern.

The Minister of Housing and Local Government and other Government spokesmen have made considerable play of the fact that the proposed amounts of the general grant for the first two years determination, namely, 1959–60 and 1960–61, are greater by £30 million and £51 million respectively than the aggregate of the specific grants which preceded them in the year 1958–59, and that the proportion of local authorities' estimated expenditure which will be borne by the general grant, putting it at the most favourable figure, on the Minister's own calculation, of 56.5 per cent., is even slightly more than the proportion borne by the specific grants in 1958–59.

It has been the constant theme of hon. and right Gentlemen opposite that those figures prove that the fears of those who opposed the introduction of the block grant system were entirely groundless and the alarms expressed by the Opposition were without any foundation. Far from this being any evidence of Government generosity, quite the contrary is true; to suggest otherwise is to take a wholly superficial view. Whatever comfort the Minister may derive from it, the very qualified expression of approval which he has obtained from the local authority associations is not likely to be very long-lived when the real implications of the block grant are fully appreciated by individual authorities.

At an earlier stage in the debate, it was suggested by one hon. Member that it was, perhaps, significant that representations from local authorities had found little voice in the course of the debate. I suggested to the hon. Gentleman that, as yet, the majority of local authorities had not had the opportunity of appreciating what is involved in the proposals contained in the Order. I am told that officers attending a conference of a certain group of municipal treasurers only last week found themselves completely unable to know exactly what this would mean in respect of their own local authorities.

With all sincerity, I suggest that those who are genuinely concerned about the health and future of local government should be wary when the Government appears to be coming to them with gifts in their hands. During the past few years, local authorities have experienced cuts in their programmes, restrictions in their plans, higher interest charges, with all that they have meant in burdens upon local authorities, and constant fluctuations of policy which have frustrated intelligent and effective planning. In these circumstances, local authorities and local rate-payers would do well to be cautious before accepting the Government's own appraisal of the value of this General Grant Order.

After all, no serious-minded person imagined for a moment that the Government would be so stupid as to present, in this first determination of the general grant, figures which would provide an immediate and abundant justification of all that has been said in opposition to the principle. I acknowledge quite readily that the window-dressing has been done with some cleverness. That it should be done at all should occasion no surprise, considering that. after all, a General Election may well be in the offing. Further, it is clear from every Ministerial statement which preceded the Local Government Act and every word which was uttered during the passage of that Measure through the House that one of the principal underlying purposes of the introduction of the block grant was the eventual reduction of the Exchequer contribution towards local authority expenditure. Nothing that has been said or has happened since avoids that conclusion about the basic purpose of this fundamental change, with all that will be entailed in additional burdens and restriction of services.

Notwithstanding the facade now presented for this Order, for quite obvious propaganda and publicity purposes, the danger still remains. Whatever may be the façade presented, whatever may be the pretence now put up to lull the unwary, when the pretence has served its purpose, after the General Election—if the electorate is foolish enough to be deluded into returning this Government again—all the machinery will be there to effect the original object of the introduction of the block grant. We shall then see the full revelation of the true nature of Tory policy in the matter, with a cat-back in the general grant and all the consequences which will flow from it.

In any case, this present representation of Government fairness to local authorities, even its generosity to them in the amounts proposed in the Order, is not necessarily what it may appear to be. The proportion which the general grant will bear to total expenditure of the local authorities is based upon estimated expenditure, which we are told in the Minister's Report has been arrived at, first, by an acceptance of the estimates put forward by the local authorities themselves, and. secondly, by a measure of uplift applied to those estimates by the Departments concerned in anticipation of certain developments and expansions of services which are not by any means clearly defined, as has been revealed today and which it is contemplated will be authorised and encouraged by the Government during the grant period. The whole assumption as to the adequacy of the general grant figures, their fairness or even generosity, rests on whether the estimates of expenditure are not only adequate for current needs but commensurate with the highly necessary and desirable developments and expansions of local government services, the initiative for which does not rest wholly or even primarily. with local authorities but with the Government.

In this regard, it is necessary to examine two aspects of the matter. Firstly. in what circumstances and on what basis will local authority estimates of expenditure be submitted? It has been said already, and I emphasise it, that this, after all, is the basis factor that has gone towards the determination of the general grant. Secondly, what kind of developments and expansions of those services have been provided for by Departmental adjustments of the local authority figures and to what extent has such provision been made?

With regard to local authorities' own submissions, local authorities undoubtedly will have been conditioned by the circumstances at the time the figures were prepared last summer. Surely no one who has any knowledge of local government will deny that that was a period of continuing restriction and constant exhortations of economy from every Ministry concerned with local authorities when authorities could not possibly have foreseen the easing of the restrictions which the Minister has recently announced.

In short, what local authorities would have done in framing estimates for submission was to put them forward, not on the basis of the developments and expansions of services that they regarded as desirable or even necessary, but on what they believe would be permissible and authorised within the ambit of Government policy. I find support for this view in the Ministerial circulars which were issued calling for the estimates or forecasts. The first was the preliminary Circular No. 34/58 issued by the Minister of Housing and Local Government on 29th May. It intimated that the form of the estimates would be notified to the local authorities by the various Departments concerned at a later date, but went on to give general guidance as to the basis upon which the figures were to be prepared.

My hon. Friend the Member for Fulham (Mr. M. Stewart) has already quoted from paragraph 6 of this circular. He drew attention to the significant phrase, that the authorities were required to put up their figures as the "councils sober estimate." I quote from the succeeding paragraph, paragraph 7, which also has a real bearing in determining what the atmosphere was for local authorities, and what the basic condition was upon which they should compile their figures. Paragraph 7 reads: Post-war experience has commonly been that approved programmes have not always been achieved because, taken in total, they have exceeded the available resources. The Departments will examine the estimates put in by local authorities critically from this point of view, and the Government will consider both whether they are, collectively, a realistic estimate of what is feasible, and also what the country can afford to aim at achieving in the relevant services during the grant period having regard to the general economic prospect and to other aspects of national policy. In the light of what the authorities knew about the representation of the national economic position and the Government's economic policy last May and June, I suggest that that paragraph offered no encouragement to the view that a general policy of expansion was likely to be authorised or that it could properly be the basis for the computation of local authorities' figures. Furthermore, local authorities were told that their estimates would be wanted in considerable haste, which again has significance in deciding whether the ultimate figures provided did any more than reflect the needs based on the then current policies and conditioned by the atmosphere and climate of economy which was then current.

Of the more precise and detailed Departmental circulars which were subsequently issued to local authorities about the forecasts that were called for, I will refer to only one, namely, the Ministry of Health Circular No. 14/58 concerning local health and welfare services to which reference has already been made by several hon. Members on this side of the House. The Ministry of Health circular was issued on 19th June. It called for forecasts by not later than 15th August.

I emphasise that that gave less than two months for local authorities to prepare and submit forecasts for the next two financial years. In the case of county councils this involved the necessity of first referring to area officers for their estimates of local needs for the ensuing year and to provide time, within a strict timetable of less than two months from Ministerial circular to submission to the Ministry, for the labyrinth of submission to the county office for officerial examination and for submission to subcommittees and committees of county councils through which county councils customarily proceed in their budgetary processes.

In the case of Essex, I have ascertained that the area financial officers had exactly six days in which to prepare the relevant forecasts of health expenditure for their areas. So confusing was the immediate result, with so many discrepancies in the first figures, that the whole job had to be done all over again a few days later, again at only a few days' notice.

I have seen a copy of a letter which one such area financial officer, in forwarding the estimates for his area, submitted to the county council and from it I quote this significant passage: I must stress that the information submitted can only be taken as a guide since it has not been possible to give mature thought to probable future developments, having regard to the fact that this task virtually entailed the preparation of three years' annual estimates in three days. With a timetable of that kind, how can it be seriously said that the local authorities' estimates represented any real provision for requisite development and expansion of their services?

It is important to note in this connection that the opportunity for consultation with the elected members of the authorities was only of the most minimal character, for, clearly, these were in the main officers' submissions. I remind the House that on policy decisions, the responsibility is that of the elected members and not of the officers who, in these circumstances, were bound to have acted with the utmost caution and framed their estimates within the known conditions and not in anticipation of any development in policy for which they themselves could not accept responsibility.

I mention that because if it was typical, as I suspect it to be, or the build-up of county forecasts from the aggregate of area and district forecasts, not only in health, but in education and other services, what reliance can possibly be placed on the adequacy of the ultimate aggregate figures and, even more so, on the provision that they may make for necessary development and expansion of the services?

It may be said—I expect it will be—that the subsequent Departmental adjustments of the local authority figures took all that into account and that additions were made to cover the foreseeable and intended development of services contemplated by the Government. That is a point worthy of examination. In this connection, it is worth while to remind ourselves of the figures which have been mentioned. We have been told that the sum total of the departmental additions to the local authority figures, according to the Minister's Report, was only £10 million for 1959–60 and £12 million for 1960–61 or approximately 1.5 per cent. of the total.

I was going to suggest in any event that that does not seem to contemplate any spectacular development of local authority services in the next two years, despite all the pressing needs. Having heard some of the explanations which have been given to us from the Government Front Bench today, however, I am even more bewildered by the long array of developments which, in the Minister's Report, has been said to be contemplated and taken into account in this determination of the general grant. We are told that there is to be an addition of £10 million over the local authorities' figures for the first year of determination.

The Parliamentary Secretary to the Ministry of Education has told us that there has been included in the grant an item for the prospective increase in teachers' salaries of 5 per cent. He told us that the figure was £14 million and then said that the full amount for which allowance has been made has been trimmed down a little by reason of compensating factors. He left us, however, with the impression that that £10 million which has been placed on top of the local authorities' aggregate figure is wholly due to the anticipated rise in teachers' salaries. When challenged on the point. the hon. Gentleman said that it was not.

Now, we are left in a worse state of confusion to know exactly what that £10 million represents. It cannot possibly be an adequate cover for the increase in teachers' salaries and for all the developments that are forecast in the White Paper and of which the local authorities in many instances could have had no foreknowledge and could not, therefore, have included in their figures. Therefore, when hon. Members opposite talk about this proposal by the Government representing an impressive broad advance in local government, one is tempted to say that that is just poppycock and an entire delusion and something that ought not to go out to the responsible local authorities as representing the real intentions of the Government.

I want to test the position in this regard, as other hon. Members have tried to test it in relation to the major services of education and health. I want to test it in relation to what is financially a much smaller but nevertheless important community service. I hope that the Parliamentary Secretary, when he replies, will be able to furnish an answer to this point. I refer to the question of the fire services.

On the last page of the Minister's Report on Local Government Finance, in the Appendix, the estimated expenditure for these given as £24.72 million in 1959–60 and £25.05 million in 1960–61. I cannot compare these estimates with the actual expenditure for these services in the immediately preceding years because I have failed so far to trace any figures of total expenditure under these heads from 1956–57 onwards. The Minister may be able to supply that deficiency.

In the Explanatory Notes in the Minister's Report dealing with this item, paragraph 28 states: "Development of the Fire Services. Some increases in man-power establishments for the fire services are contemplated in the years under review. Steady progress in other parts of the service has been allowed for. Just what is meant by "some increases in manpower"? Frankly, it could mean little or nothing. At least until recent times there was known to be a serious deficiency in the complements of many fire services owing to the difficulties of recruitment; a shortage by reference to the actual authorised establishments at that time. In any event, therefore, progressively increased expenditure under this head was to be expected in order to repair that deficiency.

Beyond that, for the last three or four years there has been a serious question as to whether the authorised complements of the fire services were sufficient to provide an adequate fire cover. This was the subject of investigation by the Select Committee on Estimates which in its Fourth Report published in June, 1954, recommended that there should be a comprehensive review of the standards of fire cover. In consequence the review was undertaken by a joint committee of the central fire brigades advisory councils which, in turn, published its Report early in 1957.

In that report various recommendations were made for modest improvements involving increased manpower for the fire services. It is not necessary for me to go into all the technical details of those recommendations. Suffice for me to say that even though the Fire Brigades Union did not assent to these recommendations, believing that they did not go far enough to provide the kind of service which the man on the job feels to be requisite in the face of modern fire risks, they continued to press the Home Secretary on this matter.

The result was that the Home Secretary recently issued a circular to fire service authorities stating that he will be prepared to consider favourably for approval, schemes of establishment based on certain of the recommendations of the joint committee of the central fire brigades advisory councils. These recommended standards, if implemented, will involve an increase of establishments to the extent of 920 men in England and Wales and 190 in Scotland, at a total estimated increased cost of over £¾ million, and indeed it may be somewhat higher by now at current rates of remuneration.

Therefore, what I want to know in this connection is whether this expansion. authorised now by the Home Secretary, has been allowed for in the total estimated expenditure in the next two years. and whether it has been taken into account in determining the amount of the general grant. On the face of it, it seems extremely unlikely, for in the first instance the Home Office Circular was issued only on 26th November, some days after the Order which we are discussing was laid in this House. The local authorities could have had no knowledge of it whatever and could not have taken it into account in framing their estimates under this head, and it is doubtful whether the Ministry did so either.

If it has not been taken into account, what is the result? It surely must be that local authorities can hardly be expected to agree to implement the recommendations put up by the Home Secretary in this connection, for they are not obligatory, the local authorities having been given discretion about them, until they have some assurance that they will have a measure of Exchequer assistance to provide for them. Even if it is suggested that an allowance has been made for this in the computation of the general grant, the fact that the element of the general grant attributable to this is, like so many other things, obscured in the generality of the total figure and not separately discernible, will discourage local authorities from adopting the new standards of fire cover, despite their importance, if the general grant presents them with difficulties in other directions. The whole purpose of the circular will be virtually frustrated in this connection and the fire service will be left in what is admittedly an inadequate condition.

I mention this instance to illustrate the dubiety that will arise in many other similar matters and every time a Ministry sends out a circular recommending some form of expansion or development in a local authority service.

In his Supplement to the Report the Minister sets out what the allocation of the general grant will be to the county councils and the county borough councils in the first year of determination. Ostensibly, this is done to guide local authorities in framing their budget and rate demands in the first year. It may be of some use to county councils and county borough councils to have this information, but I have yet to meet the municipal treasurer of a county district council who has the slightest clue what the result of all this will be or who has any confidence in advising his authority what the effect will be for guidance in framing the budget and the rate demand for the ensuing financial year.

Indeed, the so-called greater freedom and independence which is ostensibly one of the purposes and objects of this operation will be bought at the price of even greater uncertainty in local government, increasing doubt and hesitation and frustration in planning. This will mean for the progressive authority a risk, whatever it may do in its dubiety, of placing undue burdens on its ratepayers and in the case of the not-so-progressive authority the temptation to take refuge behind restriction of services rather than to be expansive in their development.

I acknowledge that the proof of the pudding will be in the eating, but, notwithstanding the apparent sweetness of the sauce with which the pudding has been embellished for this first bite, I have a most unhappy conviction that in the end it will prove to be a very unappetising meal for the ratepayers.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

8.45 p.m.

Mr. J. A. Sparks (Acton)

I am very glad to see such a large attendance in the House at this time to hear the closing speeches in this debate.

There is one aspect of this problem to which the Minister completely failed to refer. He referred at great length to the White Paper and to the specific grants which the Government propose to make in the next two municipal years, and went on to claim for the Government a generous measure of credit in fixing the figures of the general grant. The figures may not be so bad as they could have been, but this problem must also be looked at from the point of view of the ratepayer and of the ordinary man—and woman, too—without whose rate contributions there would be no system of local government at all. The Government are merely a partner in this effort, and I think it is important that we should pay some regard to the effect of these proposals upon the ratepayers themselves.

The figures in the Report by the Minister of expenditure by local authorities seem to be regarded by many hon. Members opposite as being the total expenditure of the local authorities for the period of years mentioned in page 5. It is not the gross, total expenditure of the local authorities, but what is known as the relevant expenditure. In other words, certain expenditure has been extracted from the general budget of the local authorities, and only that expenditure which previously carried a Government grant is included in the expenditure which is listed. It is called the relevant expenditure, and it is based upon the specific circumstances in which grants have hitherto been paid.

That is a very important matter for us to remember, because the local authorities and the ratepayers have to bear a very considerable burden of expenditure on local services for which there is no form of grant whatever. Some of these we can call to mind, such as libraries, the maintenance of district roads, refuse collection and disposal, and certain other services carried out by local authorities for which there is no grant whatsoever. The non-grant-aided expenditure of local authorities is a considerable amount which grows from year to year and places an additional burden on ratepayers.

I referred to the figures in the Report by the Minister where there is a list of local government expenditure on grant-aided services over a number of years. It shows that for the year 1958–59 the expenditure was roughly £644 million; for next year that will rise to £707.8 million, and in 1960–61 it will be still higher, at £744.3 million. The Government pay only a part of that expenditure. The increased expenditure on what were grant-aided services will cost ratepayers an additional £28.4 million in the next year and £44.7 million more in 1960–61 compared with the current municipal year.

That additional burden will have to be borne in addition to the cost of the non-grant-aided services, a cost which regularly increases from year to year. Some idea of the increasing burden is given from a study of the rates estimated to be collected per head of the population. I will not instance too many years, but it is important to show the substantial increase which has already taken place.

In 1950, the amount of rates collected was about £278 million, representing a rate per head of the population of £6 10s.; in 1957, the corresponding figures were £483 million and £10 18s. 6d.; for 1958, they were £528 million and £11 13s. Figures for the current year are not available, but they will show a substantial increase. The average rate poundage in 1957 was 15s. 8d., last year it was 18s., and for the current municipal year it will be very much higher.

The burden on the ratepayer can be considered in other ways. For instance, the figures of the average rates levied per head of the population for the current municipal year can be broken down into types of authorities. Those figures are most revealing. In the county boroughs the average rate levied per head of the population in the present municipal year was £11 13s. 5d. If we go back ten years to 1948–49, the amount was £6 9s. 7d. In the Metropolitan boroughs of London the average rate levied per head of population in the current municipal year is £26 10s. 8d. as against £13 18s. 11d. ten years ago. In the non-county boroughs the figure for the current year was £12 9s. 5d. as against £6 14s. 8d. ten years ago. In the urban districts it was £10 18s. 1d. as against £5 19s. 5d. ten years ago. In the rural districts it was £8 8s. 11d. compared with £8 3s. 0d. in the previous year, 1957–58. Ratepayers who live in rural areas pay a very much lower amount of rate than those who live in the Metropolitan boroughs.

The point of giving these figures is to emphasise to the House, and particularly to the right hon. Gentleman, that it is all very well for the right hon. Gentleman to crow from that box that the grant-aided payment is to be maintained at the average of 55.5 per cent., but he must not ignore the other side of the picture which is the continuous and growing burden on ordinary people who maintain and develop the services of the municipality. It must never be forgotten that this House and Her Majesty's Ministers decide from day to day matters which impose very heavy burdens upon local authorities which do not have the last word about the financial burdens or charges which are placed upon them. They are merely told, "This is what it is to be".

We have heard about salary scales for teachers this afternoon. They are settled by national negotiation. In many other activities of local authorities the financial aspects are decided at national level and the local authorities merely carry out national policy. Therefore, a sound case could be made for increasing the comparative proportion of 55.5 per cent. towards grant-aided expenditure by a fairly substantial amount.

We must not forget that as a result of Government policy local authorities have been deprived of at least £72 million worth of rateable value through industrial derating. The right hon. Gentleman might have given back to them something like £10 million by advancing the derating of industry from 25 per cent. to 50 per cent., but the Exchequer takes two-thirds in the process. The right hon. Gentleman crows about it as though he had done a magnificent thing for local authorities. In fact, at the moment, the local authorities have lost and still lose about £72 million of their rateable value through industrial derating.

Last year this House passed a Bill which deprived local authorities of a further £45 million of rateable value through the derating of shops and miscellaneous hereditaments. All these measures which are carried out by the Government and other national bodies from time to time tend to impose a burden on the ratepayers which ought not to be overlooked.

I emphasise that local authorities are engaged on a great job of work. I do not think we give them the full credit that we should for all they are doing. They have a wider and wider range of services entrusted to them—some of them very vital services. We must be quite sure that those services are not cramped, restrained and restricted because of shortage of money or through Government grants being inadequate. We must do all we can to encourage local authorities to develop and extend these services. Therefore, I should have liked to see the right hon. Gentleman going further than he has to lighten the growing and very heavy burden which ratepayers throughout the country are having to endure.

9.1 p.m.

Mr. G. W. Reynolds (Islington, North)

I was intending to make quite a long speech, but in view of the shortness of the time— —

Mr. Blenkinsop

There is no restriction.

Mr. Reynolds

I thank my hon. Friend for reminding me of that. I was under the impression that we were finishing at the normal time this evening.

I agree with what a number of hon. Friends have said and about which a great deal has been made by hon. Members on the Government benches. Hon. Members opposite say that all we on this side of the House have said about the cutting of expenditure under the block grant has apparently come to naught because the Government say that more is to be given to local authorities than ever before. The Minister even went so far as to point out that the estimates of local authorities had been accepted and that, if things went well, most local authorities would get a 4d. reduction in their rates this time because of the effect of the proposals the Government have brought before us as a result of the Local Government Act.

I ask the Minister to think hack to the last time when local authority finances were adjusted. He will realise that when that job was last done, by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), local authorities benefited to the extent of a 6d. rate. So it is not for those on the Treasury Bench to do a lot of crowing about a mere 4d. rate reduction, which, we are told, they are to make.

Many figures have been given in the Supplement to the Report showing what each local authority will receive, but that gives but a small part of the total picture of what will actually happen under the block grant. It does not help us in regard to the old Exchequer equalisation grant, which is now called a deficiency grant. On page 5 of the Report, percentages are given of what local authorities received during the last few years. What we are not told is what percentage would have been met from Government grants if the system had not been changed. We are told what it has been in the last few years, what it will be in the next year and the year after. I should think that somewhere in the archives of the Ministry—because of the mass of figures which has been presented to us—there would be an idea of what the percentage would have been but for the change in the financial relationship between Government and local government.

I have a suspicion that but for the change the percentage would have been going up. I do not know whether the Parliamentary Secretary has the figure and would be able to give it to us this evening, or it would be more useful if it could be given in a White Paper at some time in the future. I should like to see not only the figures which we have in the Supplement but also figures showing the differences which would have arisen in the rate deficiency grant, in order that we might look at each local authority and see which are the gainers and which are the losers and also look at the whole picture. I hope that we may have an assurance this evening from the Minister that, once the figures are available in a slightly more concrete form, we shall be able to see the whole picture in a table instead of, as at present, just part of it.

We are told that 90 per cent. of the money will be paid to the local authorities in the coming year and that the balance will be paid in the following year. We are told that in the year after that 91.25 per cent. will be paid in the year in question and the balance in the following year. This will continue and it will be eight or nine years before local authorities receive the full amount of the grant in any one year.

This surprises me, because, speaking on this subject in the Standing Committee, the Minister said: The purpose of the Government is that the whole of the general grant shall be paid to local authorities in the year in question so that they will not only know where they are but will have the money. On those grounds, which I consider overwhelming, I invite the Committee to approve the Clause."—[OFFICIAL REPORT, Standing Committee D, 20th February, 1958; c. 398–9.] Apparently now it is to be eight or nine years before these grounds, which the Minister considers so important, are to take effect.

I consider that local authorities should be treated a little better than this. We know that at the moment there is between £30 and £40 million outstanding on the old percentage grants and that the Government will withhold £39 million from the first payment of the block grant and will pay that £39 million in the following year. At the same time, the Government are themselvees getting some extra money. They are getting £20 million—£13¼ million as a saving on the rate deficiency grant because of the increased rateable value of local authorities due to the re-rating of industry and £6¾ million which they are taking from the benefits which local authorities themselves are to get from the re-rating of industry.

If it is so important—and I believe it is important—under the new system that local authorities should have all the money during the year in question, why cannot the Minister hurry up the process by allowing local authorities to retain some of this rerating money? Instead of waiting eight or nine years before we reach the condition described as desirable by the Minister in Committee, why cannot we get there in two or three years? If it were so important to warrant the Minister calling upon the Committee to accept the Clause, it is most important that local authorities themselves should not have to wait eight or nine years before they reach that stage.

I am also surprised that in the working out of the supplementary grants the Minister has chosen to give exactly the same amount of grant to all local authorities within the Metropolitan Police District, whether they are wholly within that area or only partly within it. As I understand it, when the Bill was first published the position was a little obscure, and in Standing Committee an Amendment was moved which made it possible for the Government to pay different percentages to local authorities—one percentage to those entirely within the Metropolitan Police District and another, presumably smaller, percentage to those not entirely within the Metropolitan Police District.

This Amendment was moved in Standing Committee. The report of the discussion took less than one column of the OFFICIAL REPORT, and the Parliamentary Secretary accepted the Amendment by saying, I do not think that I need add to what has been said by my hon. Friend the Member for Crosby (Mr. Page). The Amendment seems to my right hon. Friend to provide for an eminently sensible piece of clarification, and we advise the Committee to accept it"— [OFFICIAL REPORT, Standing Committee D. 22nd April, 1958; c. 1443.] I agree that it was a sensible piece of clarification, but it also included a provision allowing the Minister to specify two separate percentages, one for an authority wholly within the Metropolitan Police District and another for an authority not wholly within the Metropolitan Police District.

It appears to me that there is a case for having two sets of percentages, and I am surprised that only one figure has been fixed in the Order. In fixing this amount the Minister has to look at the extra cost of running services in and adjacent to the Metropolitan area. May I draw attention to the fact that one of the most important of these costs arises from the wages and salaries of the employees concerned. The additional part in the Metropolitan Police District is generally the London allowance paid on top of the standard salaries applying elsewhere in the country

For instance, the London allowance for teachers is paid for the London County Council area and the Middlesex County Council area. They are entirely within the Metropolitan area. But, when we come to Surrey we find that allowance paid in the areas of only 15 of the 33 district councils; that, in Kent, the London rate is paid in only 10 district areas out of 56; in only 12 out of 43 in Essex, and in only 7 out of 34 in Hertfordshire. Therefore, whilst these higher wages have to be paid in only comparatively small numbers of the areas, they will all get the same grant. The extra salaries to be paid to local government officers apply only to the Metropolitan Police District, so that cost covers a smaller area.

I am, therefore, surprised that in allocating the block grant between the local authorities the Government have decided to make to those authorities whose areas are only partly within the Metropolitan Police District the same payment as to those that are wholly within it, despite the fact that the Standing Committee deliberately inserted in the Bill a Clause, which was accepted by the Minister, enabling him to use two separate percentages. I can only assume that there is a reason for it, and I hope that the Parliamentary Secretary will tell us what it is.

We have heard much today of education and of the health services, and with what has been said about them by my hon. Friends I fully agree, but there is an item of £1¾ million for electoral expenses for each of the next two years. The fact that it is the same for the two years rather disturbs me. The House will remember that in the Representation of the People Act, 1948, provision was made for the preparation of two electoral lists every year. Then, first for economy and, second—and just as important—because of a shortage of those capable of doing the work, as soon as that Act came into operation the Electoral Registers Act, 1949, was passed amending the original Act to provide for only one register to be prepared every year.

I should like to see us getting back to two registers per year as soon as possible, but from the amounts calculated for the new block grant it appears that the Government assume that, at least for the period of this Order, there will be no such attempt to make that return. Although there are comments in the Report on the improvement in the various services, there is no such comment in relation to the electoral registration service.

A necessary improvement is to return to the two registers. For one thing, there is the Government's liking for February elections. This is most unfair on those who have moved their homes in the previous fifteen months. Again, overspill housing entails people moving from their present dwellings to the very outskirts of towns, and, as they have no postal vote they have long distances to travel to the polls. I am disquieted by the fact that the Government are not making an attempt in the next two years to return to two registers a year, especially when the present unemployment position would seem to indicate a better supply of those capable of doing the work. We should get back to the provisions of the 1948 Act.

I am disappointed, too, that declining population is to be calculated over as long a period as 21 years. At a quick glance, it appears to me that the authorities that will benefit from this are mostly those that have suffered from bombing and consequent loss of population in the war. I do not criticise that, but instead of looking at the past it would be better if the Order provided something to help at present.

Many authorities should be encouraged to do more than they are doing to re-house overspill population and to reduce the populations in their areas. To look back on the last 21 years may do some good, but I would rather the Government looked back for only two or three years so as to give financial help to those authorities that ought to be reducing their populations at present. A term of 21 years is far too long.

I am also disturbed to note this reduction from Is. to 9d. in the rate deduction to be made once the other calculations for the new block grant have been carried out.

The hon. Member for Bournemouth. East and Christchurch (Mr. N. Nicolson) virtually thanked the Minister for having displayed no political partiality in working out the various elements in connection with the block grant. I would not have thought that political partiality would have entered into this matter. I would not have thought of it unless the hon. Member had mentioned it. He said that 14 authorities, of which his was one, had already benefited from changes which had been made between the publication of the White Paper and the making of the Order.

Then I began to get suspicious. Obviously a reduction in the rate reduction factor from 1s. to 9d. benefits the richer authorities. Obviously it benefits places like Bournemouth and Blackpool, both of which places were mentioned, and the Minister was thanked for changing his mind and reducing the amount. I should have preferred to see this particular aspect increased from 1s. upwards rather than reduced from 1s. downwards. We have to realise that it replaces in effect what was originally a 30d. rate deduction factor, which eventually became 17d. rate reduction in the old education main grant. It went down to 1s., as proposed in the White Paper. It has now gone down to 9d. It ought to have gone up to something like the 17d. which operates at the moment for education.

I know that we shall be told that the rate deficiency grant deals with variations as between one local authority area and another, but the sort of case which was put by my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu) arose largely because the reduction in the education grant, which is at present 17d., is being reduced to 9d. under this new grant. I am certain that if the reduction was at 17d. we would not have had the quite justifiable complaints that we had from my hon. Friend the Member for Huddersfield, East. I am disappointed that it has been reduced to 9d.

One last factor which I would like to mention is the way in which the transitional adjustments are going to be dealt with. The new block grant is to be paid to county boroughs and county councils, but I understand from the Regulations that the transitional payments as between gainer and loser authorities will be based on the rating authority areas. I have studied the Regulations carefully and have spoken to people with more experience of them than I have, and I have been unable to find out what mechanism is to be used to make this adjustment. I hope the Parliamentary Secretary can give us some idea of this. Are the extra amounts, where they have to be paid to loser authorities, going to be paid direct by the Exchequer to the rating authorities? Are the rating authorities which are gainer authorities going to pay the money in, or is it to be dealt with by alteration in the county precept? That seems to be up in the air. I cannot find the answer anywhere and I hope the Parliamentary Secretary will be able to throw some light on the problem this evening.

A lot has been said about what might happen in the future. I am convinced that the only reason why the Government have apparently been so generous with the Regulations is that there is likely to be a General Election. We have had experience of this before and I think we shall experience it again. I shall not be happy until we get back to a more sensible relationship between local authorities and the central Government in the financing of their services.

9.18 p.m.

Mr. G. R. Mitchison (Kettering)

We have listened to some very informed, knowledgeable and sensible speeches from this side of the House. My hon. Friends the Members for Islington, North (Mr. Reynolds) and for Walthamstow, West (Mr. Redhead) and other hon. Friends of mine who spoke in connection with those aspects of the matter relating to health, said things which I hope were not only attended to by such few Tory Members as were here at the time but will also get the serious attention of the Minister afterwards, and will at least get a reply from the Parliamentary Secretary tonight.

The Government band has been somewhat out of tune. We were told early in the debate that the Minister of Education was the second fiddle, and it did not take much to discover that the right hon. Gentleman was the trumpeter, blowing his own trumpet. We lost the bassoon for some time, but now the prodigal bassoon is back. I will tell the right hon. and learned Gentleman that there is more joy over a prodigal Minister of Health who returns than any sorrow we may have felt at his absence.

There has been some discord. What we are dealing with are two rather dismal Orders, if I may say so, dismal in form at least, the product of the Local Government Act and the instrument called "Ernie", which the Government must have borrowed from the Post Office for the purpose. No doubt some part of it is serious calculation, but the more I heard of the debate, particularly from the Government side, the less certain I felt about how they arrived at some of the figures which have gone to make their total.

It is perfectly true that education takes by far the largest share of the expenditure, but I ask right hon. and hon. Gentlemen to remember that other services with which we are dealing are of vital importance to the community and have been the subject lately of great public anxiety. They involve matters which it is our particular and special duty in this House to attend to, matters like mental health and what is commonly called Part III accommodation, the care of the aged, and a number of other things to which I shall have to return a little later.

The right hon. Gentleman, a member of this Government of weathercocks, amused me by charging me with inconsistency. He did that, of course, on the principle that, if one knows that somebody is going to accuse one of inconsistency—and we can accuse him of that quite easily—one had better get in first. I looked up the remarks of mine which he thought were inconsistent. I very much dislike the practice of quoting one's own speeches, but what I did say on Third Reading seems to me now so apposite to what we are, discussing today that I will risk the distaste of the House by quoting it: The difficulty in all these cases is not only that these are essential services, but that they are expanding ones. Education has got to expand. It has expanded and has to go on expanding. As for mental health, look at the Guillebaud Report"— I think I had the name wrong— and as for handicapped persons, look at the Piercy Report. Things have to be done in recognition of our duty as a community to the kids, the old people and those who are ill. We have to meet rising expenditure. This block grant is intended to limit expenditure and to see that the Treasury knows where it is in advance. That is the real object. I stand by every word of that today, and I stand by what I said a few sentences later: One was the block grant, the amount of which they "— that is, local authorities— did not know, do not know, and will not know until the very last moment."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 333.] The criticism about the block grant levelled at the right hon. Gentleman when what is now the Act was going through, was that he would not tell anybody what he intended to do about it. All we had was a shadowy promise from the Minister of Education, which was really of no value at all, to say that he would not cut down the expenditure on education. Since education is just about the most obvious instance of a necessarily expanding service that one can have, and since his own estimates indicated necessary expansion, it was really toying with the House to suggest that a promise not to cut it down meant anything at all. Obviously, he could not cut it down.

The difficulty about the Minister's attitude today is this. He is dealing with expanding services. Some of them, at any rate, are health services which, to quote the phrase which has been applied to the mental health services, must be reorientated—something a good deal more sweeping than mere expansion. He is so bad at political relativity. He is proceeding at a given rate and when he begins to slow down, which I think is what is happening on the figures in this case, he then says, "We are going forward". In one sense he is going forward—he has not completely stopped yet—but in another he is slipping back.

If one looks at the figures in the White Paper Report of the Minister, one finds that that is exactly what is happening. One Government spokesman tried to wriggle out of it on grounds of rising costs, but the percentage figures are not affected by rising costs, and they show, as my hon. Friend the Member for Fulham (Mr. M. Stewart) said, a steady fall in the increases in the proportion of expenditure borne out of grants. Naturally, in the ordinary course of things, the tendency for some time past now has been for the proportion of grants to rates to rise, and one of the reasons, as my hon. Friend the Member for Fulham said, is that the rates cannot manage the requirements of some of these services. They become obvoiusly oppressive when one reaches a certain point, and the regressive element in rates, the unfairnesses between the moderately off man and the really well off man, becomes too marked to escape attention. For that reason, there has been a constant tendency for grants to increase in relation to rates.

The table in the Explanatory Memorandum sets out these percentages, and it shows that that tendency, which is a natural one, is actually being stopped. One finds from the figures that the rise in grants has been persistently getting smaller. In 1956–57 there was £42 million more in grant than the year before. The next increase was £37 million, the next £30 million and the first of the figures we are concerned with today shows another increase of £30 million. The next increase is £21 million. If one takes that as a curve, a rate of increase, it is clear that the effect of this grant is to slow down a rise, which is due partly to the nature of the demands on local authority finance and partly to the character of the services in question. The result, therefore, is that in total this is a niggardly expenditure.

That is not all. We heard the most extraordinary story about what happened as between local authority estimates and the Government's final figure. I invite the House to consider exactly what was said. First, there was circular No. 34/58 in May, at a time when the stringent economy campaign was in full swing. To quote my right hon. Friend the Member for Huyton (Mr. H. Wilson), the Govern- meant had not yet … turned Peter's face to the wall."— [OFFICIAL REPORT, 3rd November, 1958; Vol. 594, c. 617.] The circular to local authorities reflects the position in May. My hon. Friend the Member for Walthamstow, West made this quotation from the circular: The Departments will examine the estimates, … and the Government will consider both whether they are, collectively, a realistic estimate of what is feasible, and also what the country can afford to aim at achieving in the relevant services during the grant period having regard to the general economic prospect and to other aspects of national policy. It was that somewhat frightening observation which had to be coupled with a request to local authorities to make a sober estimate, and these preparations amounted to saying to local authorities, "Tell us the least amount which you can do with. Tell us your most economic estimate in the light of the national policy of the Government at the moment." The resulting figure was £697 million; I am taking the first year.

Then, what happened? The Departments went through it and by now, I suppose, the climate may have been beginning to change. At least, all that they succeeded in doing was cutting down less than one-half of 1 per cent., about £3½ million from that figure. Then, there was another £10 million or thereabouts. Those two figures taken together amount to the 5 per cent. increase which the teachers were being offered at the time.

It is perfectly clear what happened. The local authorities' estimates were taken, allowance was made for the 5 per cent. increase for the teachers and nothing else whatever of any substance was done. Therefore, all the talk in the White Paper about the health services and the rest, and all the talk in the other White Paper about the expense of secondary education, is the purest election propaganda and nothing else.

Let me remind the House again of what was said in the White Paper, Cmnd. 604, which has only just appeared. Paragraph 32 deals with cost and the capital expenditure programme and states: In fixing the grant for the first general grant period the Government have taken account of the policies proposed in this White Paper". We now know, on the figures and on the persistent refusal of the Government to answer what account they had taken, that that sentence can be described in the time-honoured phrase as a terminological inexactitude of the most pillar-box-red colour. That is exactly what it is. I am allowed to think and say rude things about Government White Papers that I would not for one moment think or say about the author of any one of them, but to have that kind of thing coming from a responsible Government and then to get the admissions and the refusals that we had today, and the final figures that resulted from them, throws a lurid light on the real intentions of the Government.

The object of the White Paper is to explain the two Orders that we have to consider today. It is just as well that there was not another White Paper to explain this one, because it would have had some startlingly frank things to say. When we get to the lurid purple patch at the end of the White Paper about secondary education, opportunity for all and the wonderful idealism of the Government, and when we listen to some of the stuff we heard today about the wonderful generosity, wisdom and all the rest of it from the Government, it makes me wonder what on earth are the limits to the belief that the party opposite thinks it can impose on the electors shortly before a General Election. Members opposite have it well and firmly fixed in their heads that the public will swallow anything and this White paper is the result of that sort of belief.

I turn now to another matter, to what I might without unfriendliness call the prodigal bassoon. The Health Services, of course, do not amount to nearly so much, but do hon. and right hon. Members appreciate the effect of what I have been saying about these figures? This is what it comes to. The local authorities were asked to make estimates. They were asked, as appears in the instructions, to follow their old and tried procedure of making estimates in the usual way through the usual committees and, finally, reviewing them in the finance committee. They had to consider a number of things that were tolerably clear. They were, no doubt, expanding, but a good chief education officer could give a measure of the extent of the expansion in education.

When we come to the health services we are dealing with an entirely different matter. We are dealing with things which have to be "reorientated "—I quote the word again. We are dealing with responsibilities as regards mental health which are now being put on local authorities for the first time. We are dealing, too, in the matter of the handicapped with an extremely difficult problem on which there has been a full Report and, I am sure, full consideration by the Government.

These are not town hall matters, these are matters of national policy. How can we expect a county council like Essex, to which my hon. Friend referred, in six days or thereabouts to consider the whole matter, to formulate its future policy on mental health and handicapped persons? And is it the county council's business to do so? It most certainly is not its business to do it. It is the business of the central Government, and the central Government left themselves no elbow room. These £10 million and £3½ million were fully accounted for by the teachers' salaries and, so far as I can see, there appears to have been no provision by the central Government for any definite sum for any of these health services. It may be that the bassoon was away and we did not hear the right note played, but we could not get it out of anybody. After all, the right hon. Gentleman the Minister of Housing and Local Government is the responsible Minister in these matters, and he must not be so occupied in blowing his own trumpet that he does not keep the rest of his band in order.

There it is. It is a really scandalous performance to let a responsible county council have six days, ten days or even a fortnight at any rate, a lamentably short time—in which to consider what is being asked of it on the first occasion of a general grant and then to come up with all this stuff about the health services, saying how wonderfully the Government are doing. When we come to analyse the facts, my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) pointed out the full story—ten old men and seven domestic helps as an average of the Government's contribution in this matter.

One can have fun with it and laugh at it but what are being laughed at are the old, the sick and the handicapped folk, and it is thoroughly in line with the usual habits of the Tory Party that they should bring out a grossly deceptive White Paper like this one, pretending that they have paid some attention to these things, and when we get down to the facts we find that they have paid no attention whatever, monetary or otherwise, but have just written it up out of their fertile imaginations. They really are a wonderful political party. The more I see of them, the more I marvel at them. Well, that is what one has to say about the health services. Now let us turn to another aspect of the matter.

I wonder if hon. and right hon. Gentlemen opposite realise that they are not merely laying down this figure for today but for two years to come, with the variation allowed for in the recommendations and in the Order. Only on one point can they change their minds and increase it, and that is the cost of goods, services and remuneration. Even then, suppose there is more inflation. Is anybody bold enough to say today that there will not be any inflation in the next two years? Is anybody bold enough to venture his opinion on that point at the risk of the old people, the sick people and the children, with whom the substance of this Order is dealing?

If there is inflation let us look at what will happen. It is left to the Minister of Housing and Local Government to decide whether or not the local authorities can carry the burden, and the right hon. Gentleman is the person who is responsible for the remarkable sentence that I shall never forget in the first local govern-White Paper about local authorities and money, namely: The present system of percentage grants acts as an indiscriminating incentive to further expenditure. Anybody who can be responsible for a sentence like that about local authorities ought never to be allowed to judge on his own, or with his colleagues, on whether the local authorities can or cannot carry extra expenditure in connection with vital services such as education and the health services about which we are talking.

Short of that, look at the position. We can take the education services, but let us take the health services first. We are venturing on new ground, ground which has been charted for us by Royal Commissions, but we have had no practical experience of the enormous change envisaged in the rÔle of the local authorities in relation to mental health services. We have had no experience of the effect of stimulating them on the lines suggested by the Piercy Report. We are venturing on new ground, and we are doing it —this is mentioned in all the Reports— because the public conscience at large has lately become more alive to these matters and we hon. Members are here to reflect it as best we can.

It is right that it should be done, and no one disputes that, but to say that everything is ascertainable in advance is a very bold statement. One of the troubles about the Order and the block grant system is that one ties oneself up for a period ahead when, as in this instance, one is dealing with things which one cannot measure, because one does not know how they will turn out and what will happen.

It is the same with education. Even with this Government we had a White Paper on technical education and now we have a White Paper on secondary education. The Government change their mind often enough. Look what they have done about financial policy. Do they never change their mind about education? I do not know. If they have covered the whole field already, are they fully satisfied that no further major developments are possible in education which will affect local authorities during the next two years? Yet, the Government are committing themselves to a fixed figure and taking town hall estimates, pruning them a bit and adding something for the teachers' 5 per cent. That is how they have arrived at it, as far as I can see. If they have arrived at it in any other way it will take a good deal of explaining how they manage to make the two things coincide so remarkably.

This kind of thing that happens just before a General Election. The right hon. Gentleman comes along and says how well he has treated the local authorities, blows his trumpet as hard as he can and get much of the Tory Press to say how wonderful and how generous the Government are and that things are not as bad as the Opposition have painted them. That is not the point. The point is that this is a very dangerous experiment. The Government have taken a very narrow margin and forget that what they are dealing with is expanding and new services. This is a most risky experi- ment, and I regard it as very distinctly on the stingy side.

On the other hand, what are we to do about it? This is a matter which it is possible for the Opposition to criticise but almost impossible for it to replace; for they have not the machinery to deal with figures of this sort. I think it very doubtful indeed whether there is any real increase having regard to the demand. The Opposition have been thinking about this and we have come to the conclusion that the right thing to do is to let the Order pass at the moment with our comment that we are not a bit satisfied with it, that there are things in it with which we are grossly dissatisfied and that we regard some of the White Paper as nothing but propaganda of the cheapest sort; and then see how it works out.

After all, after two years there may be a different Government. There may not even be the same system of grants. The Labour Party is pledged to review all the financial relations between the central Government and local authorities, and when we do it I hope we shall do it in a better spirit than that which animated the authors of these Reports and these Orders.

9.45 p.m.

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

The House has had a rather longer debate than was generally expected, and certainly more questions have been asked than I had anticipated. I hope quite shortly to answer most of the questions that have been put to my right hon. Friend, and if there are any of a particularly detailed character that I do not deal with in the course of what I have to say, I will take the opportunity of getting into touch with these hon. Members who have put these minor points.

The hon. Member for Fulham (Mr. M. Stewart), who opened the debate, and the hon. and learned Member for Kettering (Mr. Mitchison), both made a most valiant attempt to make bricks without straw, and I must say that I thought their intellectual equipment was far superior to their material and their arguments. First of all, may I say that neither my right hon. Friend nor any of my hon. Friends on this side of the House retract a single word of what we have ever said about our support and backing for the principle of the general grant. Having said that, I realise, of course, that the Opposition throughout this matter have always distrusted our motives. The OFFICIAL REPORT of the various stages of the Local Government Bill is very freely littered with the most extravagant phophecies and forebodings of what was going to happen.

For example, the hon. Member for Birmingham, All Saints (Mr. D. Howell) made a speech on Second Reading of the Local Government Bill on 9th December, 1957, in which he said that: … the proposals in the Bill are a complete fraud and confidence trick that the Government are now perpetrating upon the country, the bill for which will be paid by the ratepayers for years to come."—[OFFICIAL REPORT, 9th December, 1957 Vol. 579, c. 934.] The hon. Member for Fulham today went out of his way to use words suggesting that none of us would ever have doubted that my right hon. Friend would make a bold show by cutting down the general grant before a General Election. It is all very well to say that tonight, but that qualification to the attack on the general grant was never made on Second Reading, in Committee or on Third Reading by a single hon. Member on the other side of the House.

The hon. and learned Member for Kettering was, I thought, rather unusually sensitive when he was replying to some of the comments of my right hon. Friend. I thought my right hon. Friend was extremely gentlemanly, as indeed he always is, with the hon. and learned Gentleman, because he at least selected the most innocuous of the hon. and learned Gentleman's comments on the general grant. Therefore, perhaps I may be allowed to refresh the memory of the hon. and learned Gentleman on one or two other things which he said about the Government and the general grant. On 10th December, 1957, in the Second Reading debate, the hon. and learned Gentleman said: The Treasury is to be indemnified this time and the local authorities can go hang for all it cares. We will come to that in a moment. A little later on, he said: The Bill, and the way it has been treated, verges on the fraudulent. … If the Minister can talk about immoral arguments, I can tell him that his Bill is really fraudulent. The Government have been altogether too smart with the local authorities."—[OFFICIAL REPORT, 10th December, 1957; Vol. 579, c. 1187–8.]

Hon. Members

Hear, hear.

Mr. Bevins

It is all very well for hon. Gentlemen to echo, and presumably endorse, this rather foolish and rather extravagant statement, but, if that is really what they feel, how is it that all the old fury has gone out of their bellies in this debate? Why is it that there is no suggestion of dividing the House on the first General Grant Order ever put forward?

In our earlier debate, a great deal was said about the views of the education world, and I well remember many quotations which were used in the House coming from the Chairman of the Association of Educational Committees, Dr. Alexander. That gentleman was very forthright, and I am putting it mildly, in some of his criticisms of my right hon. Friend, but what does Dr. Alexander say in the current issue of the journal Education? When the proposals for these changes were first made there was a good deal of evidence that one of the outcomes would be a transfer of part of the burden so far as education was concerned from the taxes to the rates. But these proposals show that on the basis of estimates, the level of grant hitherto obtaining has been maintained. He went on to say: Perhaps the campaign in which the A.E.C. took an active part has not been without effect. Be that as it may, the fact of the matter is that all the steam and heat has gone out of that gentleman's criticisms. It was chiefly because of the hostility of Her Majesty's Opposition to the principle of the general grant, which had nothing to do with functions or with the Local Government Commission or with boundaries, that the House divided on Second Reading. It was chiefly because of that that we had six Divisions in Standing Committee against the principle of the general grant, and that was why the Opposition divided the House on Third Reading.

I now come to the more specific points mentioned by the hon. Member for Fulham and the hon. and learned Member for Kettering. What my right hon. Friend made perfectly clear was that in the present financial year—and no amount of argument can blur this picture—grants will be paid and are being paid by the Exchequer to local authorities throughout England and Wales to the tune of £363 million. Nothing can alter the fact that under the proposed arrangements which would operate during the first year, the next financial year the total amount of grants will be £393 million. I say nothing about rerating or any of the minor issues. I confine myself to those two simple figures, which show an increase in Exchequer aid to local authorities of £30 million. I do not begin to understand what is fraudulent in an exercise which produces that result, nor do I see where there is any lack of good faith.

Mr. Blenkinsop

Presumably the hon. Member will deal with what I said about the Health Service and so on. For example, will he say whether the Government are making a mandatory provision for local authorities to undertake mental health services of a domiciliary character? If such services are to be provided, can they be provided under the provisions of the White Paper?

Mr. Bevins

I will deal with that when I deal with the Health Service provisions.

It was argued by several hon. Gentleman opposite, chiefly by Front Bench speakers, that there had been some jiggery-pokery, some strange machinations, which enabled the Government to progress from the figure of £697 million —the aggregate of the local authorities' estimates—to the agreed figure for relevant expenditure of £707¾ million. It was assumed that because the difference between those two figures amounted to only £10 million, it was difficult to see where the Burnham award came in and also difficult to see where various charges in connection with various kinds of capital expenditure came into the picture.

Before discussing the details of those figures, I want briefly to comment on the play made by the hon. Member for Fulham on the wording of the circular wherein my right hon. Friend invited local authorities to put forward their sober estimates of expenditure. I see nothing wrong with that. Every hon. Member with experience of local government knows that estimates of expenditure, especially in their preliminary stages, are very often lacking in sobriety. Local councils, whatever their political complexion, often have to trim their original estimates of expenditure. It is true that my right hon. Friend went to the local authorities and asked them for these estimates. What would have been said in this debate if he had not taken that step? Had my right hon. Friend not gone to the local authorities for that information he would have been accused of far worse things that he has been in this debate.

The hon. Member for Fulham said that it was perfectly clear that the Government had allowed for the Burnham award only; this brings me to the explanation of the figures. Local authority estimates aggregated £697 million. The final agreed figure for local government relevant expenditure was £707¾ million. So we start with the local authority figure of £697 million, and from that we take certain reductions which were agreed with the local authority associations. They total £5½ million. That leaves a balance of £691½ million. To that my right hon. Friend added the 5 per cent. Burnham award, which gave £14 million. He then added a further figure for certain small pay increases and other developments in the services of £2¼ million, which gave us the final figure of £707¾ million. That is the perfectly fair explanation.

The hon. Member for Fulham referred to the fact that my right hon. Friend had used a phrase in connection with reductions from the local authority estimates of not much more than ½ per cent. I concede that £5½ million is rather more than ½ per cent. It is accounted for by the agreement with the local authorities that £1 million of these estimates referred to contributions in connection with child care which should not have been within their original figure.

Mr. Mitchison

I am very much obliged to the Parliamentary Secretary. I only get up to rescue Dr. Alexander. In Education of 5th December, 1957, he said: … when it comes to the provision of money in the form of grants for the development of the service the process is one of deceleration. That is exactly what I said here.

Mr. Bevins

He may have said that in that context, but that is not what he said in the context to which I was referring before.

I would make one further point. It has been suggested by several hon. Gentlemen opposite that no provision has been made for the expansion in education, particularly in secondary education, during the period of the two-year general grant, that is to say, the first two years of its operation. The Parliamentary Secretary to the Ministry of Education very rightly pointed out earlier that most of these developments will, in fact, commence during the second year of the two-year period of the general grant.

The principal impact of these developments will, in the financial sense, be that the local authorities will have to pay loan charges during the second year of the general grant. The House would be very unwise to exaggerate the impact of those loan charges. I have had them worked out by my advisers, and this shows that for each additional £1 million of capital expenditure in the second year of this period the loan charges will increase by only £35,000. The grant on that figure would be only one four-hundredth part of 1 per cent.—.0025 per cont.—of the general grant for those years. The forecasts of expenditure the Government have used in fixing the amount of general grant cover the probable increases in capital expenditure.

A great deal has been said on the question of inflation and rising prices. The hon. Member for Fulham said that during the two and a half years ended June, 1958, the Index of Retail Prices had risen by 10 per cent., and proceeded to give us a homily on the case for inflation by means of expansion, in accordance with the Socialist doctrine. I agree that the total of relevant expenditure makes no provision for possible further increases in the price level. That is true, but if it seems to my right hon. Friend that during this grant period there is any unforeseen rise in the level of prices and that it is so large that it ought not to fall on local authorities, of course he has power under the Local Government Act to amend the Order.

We hope that that will not be necessary; indeed, we do not think it will be necessary, because for the first time since the end of the war we have got inflation under control. [HON. MEMBERS: "Oh."] Hon. Members opposite really must not take offence if they are sometimes reminded that in the twelve months which preceded the 1951 election, when we were sitting on the opposite side of the House, the Index of Retail Prices rose by 10 per cent. In the last twelve months that figure has been less than 2 per cent., and certainly there is no intention on the part of the Government of stoking up the fires of inflation again. I should be foolish to deny that at some time in the future inflation may rear its head again. That depends very largely on the result of the next General Election. The Labour Party's latest 6d. "glossy" reads to me like a batch of prescriptions for inflation with the lid off, but I do not think hon. Members opposite should worry too much about that because it will never happen.

Before I turn to the health criticisms made by the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), I should like to refer to some of the speeches made from this side of the House. My right hon. Friend is indebted to the appreciative speeches made by my hon. Friends the Members for the City of Chester (Mr. Temple), Rye (Mr. Godman Irvine), and Norwich, South (Mr. Rippon). [HON. MEMBERS: "Bournemouth, East and Christchurch?"] I am coming to the speech of my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. N. Nicolson). He put two questions. First he asked what the figures for individual local authorities in the settlement really meant, that is to say, whether they were liable to change or not under the transitional arrangements. The short answer is that if a local authority happens to be a loser, as my hon. Friend's constituency is, the figures in the Supplement would be increased because the local authority would be entitled to contributions from the Government under the transitional arrangements.

His second question related to the connection, if any, between the estimates of relevant expenditure by local authorities and the grants which are actually paid. He was perfectly right in understanding that there is no necessary, automatic connection. The estimates of relevant expenditure are simply what they are represented to be, whereas on the other hand, the distribution of general grant is based on the formula which is largely founded on need, although to some small extent it has regard to the resources of the local authority. I know my hon. Friend is glad that the rate product deduction factor has been reduced from 12d. to 9d.

The hon. and learned Member for Cardigan (Mr. Bowen) dealt with the County of Cardigan, but I am afraid that there is not a great deal I can say to him except that I commiserate with him and his constituents. As I know the House realises, it is impossible when one is trying to work out a formula to avoid the fact that some local authorities will gain and some will lose. I think that probably the great majority of the rest of the Welsh counties are beneficiaries by these arrangements. Cardigan undoubtedly is not, although we tried, not only in the case of Cardigan but in the case of other Welsh counties, to make their plight a little easier by changing the low density factor. It has helped, and I think that Cardigan will also be assisted by the transitional arrangements.

The hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu)—who is not in his place although his colleague of a different political colour, the hon. Member for Huddersfield, West (Mr. Wade) is—referred to the difficulties there. I have not been able to secure exact figures in the time available to me, but I think that the hon. Member's figures were somewhat exaggerated. If he will be so good as to leave it with me, I will certainly examine the case of Huddersfield and get in touch with him.

My hon. Friend the Member for Norwich, South asked about the cost of redevelopment in non-county boroughs. The position there is that those non-county boroughs which are least able to bear this expenditure by reason of small resources will be helped through the agency of the rate deficiency grants. For the rest, of course, the county councils have power to make contributions where they think fit.

The hon. Member for Islington, North (Mr. Reynolds) who, if I may say so without being patronising, made a delightfully well-informed speech which I am sure the whole House enjoyed, asked me a number of questions, to one or two of which I will refer. He asked about the payment of general grant within the period of the 12 months to which the general grant refers. Our intention is that in the first year we shall pay 90 per cent. of the full amount, and the balance will be paid in the succeeding year. The figure is to be only 90 per cent., because, frankly, there are such large arrears of education and other grants to be paid that I doubt very much whether it would be practicable to go at a more rapid rate.

As for the mechanics of the transitional arrangements, there will be no calculations between local authorities or anything of that kind. All the calculations will be made in the Ministry of Housing and Local Government and when the net amounts have been calculated, those sums will be paid to the receiving authorities. I think that the hon. Member will find that most of the arrangements are provided for in Section 15 of the Act.

The hon. Member for Brierley Hill (Mr. Simmons)—and I apologise to both him and his hon. Friend the Member for Newcastle-upon-Tyne, East for missing their speeches—suggested that the Government were going back on a pledge given by my hon. Friend the then Parliamentary Secretary to the Ministry of Labour and National Service that there would be specific grants from the Ministry to local authorities. The answer is that by virtue of the Disabled Persons (Employment) Act, 1958, which comes into operation at the beginning of next year, the specific grants which up to now have been paid in respect of sheltered employment services by the Ministry of Labour will continue to be paid by that Ministry. They have in no sense been superseded by the general grant. I hope that that will satisfy him.

The hon. Member for Newcastle-upon-Tyne, East and several of his hon. Friends had a good deal to say about mental illness and the services for the handicapped. My right hon. and learned Friend the Minister of Health would like an opportunity to study in detail all that has been said on these very important matters, and I have no doubt that in due course, if he thinks it necessary, he will communicate his views to those hon. Members who have evinced such an interest in these subjects. Meanwhile, perhaps I might be allowed, with the consent of my right hon. Friend, to say one or two things that I hope may be of some help.

First of all, I refer to the deliberations of the Piercy Committee. That Committee considered that while the welfare services for the blind were very comprehensive, there was still need for a great deal of improvement in the services of all other classes of handicapped people, and that the absence of Exchequer grant was slowing down the development of those services.

As the House knows, the Committee recommended that local authorities should be grant aided by the Exchequer in their expenditure on services provided under Section 29 of the National Assistance Act. The Report [Cmd. 9883] went on to say that: Any such grant should be available without distinction between the type of disabled person or of service concerned, but the rate of grant would need to be calculated having regard to the extent to which services have already been provided in some fields. The advent of the general grant ruled out any possibility of introducing a specific grant for those services. It will be recalled that when the Bill was in Committee, my hon. Friend the Parliamentary Secretary made a statement which made it quite clear that the Government intended to exclude expenditure on account of which grant has not been paid before the year 1959–60. He added that up to the level, I think, of 1958–59—the current financial year—expenditure will not rank for consideration in the general grant. but that any excess will.

The case for taking into consideration expenditure over and above the 1958–59 level is the accepted need to promote development in the service. Financial assistance towards current expenditure would not contribute to this object. It may help a little if I give one or two figures relating to this service. The estimates that we received from the local authorities showed that the present level of spending is at a rate of about £2.34 million a year, and that they expected to increase their expenditure by £027 million in 1959–60, and by £0.44 million in 1960–61. These expenditure figures have been taken into consideration in the general grant calculations in the same way as have the expenditure figures for the local health services.

So, in effect—and this is the effect— the general grant contains a 50 per cent. allowance towards the cost of a future development—

Mr. Blenkinsop

I am grateful to the hon. Gentleman for what he has said, but I should be glad if we could hear the Minister of Health himself saying something at the proper time. In this particular instance, does it not mean, in effect, that the few local authorities that have developed considerable services are being put in a disadvantageous position as against those authorities newly coming into this sphere?

Mr. Bevins

What the hon. Gentleman says is perfectly true in the case of the local authority that has done this work in the past. In respect of that past expenditure, it does not derive any benefit from this arrangement.

Mr. Blenkinsop

Perhaps I can make the point quite clear. I am not referring to expenditure that has gone, but to the continuation of the existing level of expenditure, which, as I understand it, will also not be counted.

Mr. Bevins

I am perfectly seized of the hon. Gentleman's point. I was about to add only that this expenditure, at this moment, is not of an enormously important order. After all, the local authorities are doing far better under these revised financial arrangements than they have been doing in recent years.

I come to the question, with which I should like to deal briefly, of mental deficiency grants. The Government do not think that it would be appropriate, when most of the major specific grants are being taken into the general grant, to introduce a new specific grant in the mental health services either for revenue account or for capital expenditure. Spending by local authorities on the mental health services we estimate at just over £4 million in the current financial year. In the next financial year we expect it to rise by about 22 per cent. to a total figure of £5 million, and the year after that we expect it to go up to almost £6 million. We shall, therefore, have had an increase in expenditure of 44 per cent. within two years.

My right hon. Friend not only accepted the local authorities' estimates in toto and made no deduction of any kind under this heading, but even increased the total estimate where it was represented that some authorities had omitted to make any provision for development on the lines suggested by the Royal Commission. The estimates take into consideration in the fixing of the general grant totals providing for development in each of the years 1959–60 and 1960–61 at roughly two-and-a-half times the previous year's level.

Mr. Blenkinsop

I apologise for interrupting—I know it is most unsatisfactory—but it is due entirely to the fact that we did not have a representative of the Ministry present while these matters were being raised. I should like to know whether or not every local authority is being required to make these provisions. As far as we can see, they are not being required to do so. We should like to know. Cannot the Minister himself answer?

Mr. Bevins

I understand that what the hon. Gentleman has suggested would require an amendment to present statute law. I think he will agree that that is the case, and I rather think that there is such a thing as the rule of anticipation.

The general conclusion to be drawn from all this is that while the full extension of the local authority community services which the Royal Commission recommended, and which is accepted as being desirable, must inevitably take a matter of years to complete, there is no reason to believe that the financial arrangements that are proposed will constitute a serious obstacle to progress. Indeed, there is every reason to feel confident in the willingness of the local authorities generally to shoulder these responsibilities. I think I have dealt with the majority of the questions and arguments that have been raised—

Mr. Blenkinsop rose—

Mr. Bevins

I really think that I have given way enough. I have sought to deal with most of the questions and arguments which have been advanced from both sides of the House during this debate. I entirely agree with my hon. Friend the Member for Norwich, South in his references to the disabilities of the Opposition.

It seems to me more and more as time goes on that the trouble with Her Majesty's Opposition—and it is one of the defects of all radical idealistic parties —is that they think they possess a monopoly of good faith. To them the very word "Tory" seems to represent the quintessence of political evil and everything that my right hon. Friend attempts to do is supposed to be influenced by the blackest of motives. The Opposition prophesied that wholesale disaster would flow from the Rent Act, and they were wrong. Indeed, at this time last year, hardly a day passed without some sort of demonstration or tirade against either the Rent Act or my right hon. Friend.

The Opposition were really enjoying themselves at that time, but they are not so vocal about it now. There are no demands for debates, no Bills under the Ten Minutes Rule, not even the odd Parliamentary Question to my right hon. Friend. Tonight, once again, the Opposition have been proved to be wrong and have been confounded.

Mr. Blenkinsop

I should like to ask now the questions which the hon. Gentleman has not answered. Indeed, I should be even more grateful if the right hon. and learned Gentleman, who is sitting on the Front Bench now, would answer them himself. First, I understand from the Parliamentary Secretary that, in his understanding—

Mr. Deputy-Speaker (Sir Gordon Touche)

Order. I think that the hon. Gentleman has already made one speech.

Mr. Blenkinsop

As the Parliamentary Secretary had resumed his seat, Mr. Deputy-Speaker, I was merely asking a question, and I understand that that is in order. I wish to ask him whether it is true that the proposals with regard to mental health, in the view of the right hon. and learned Gentleman the Minister of Health, will do no more than make some obstacle, but not a serious obstacle, to the development of the mental health services. Secondly, I wish to put again the question I asked with regard to the domestic help service—[HON. MEMBERS: "Speech."]—and inquire whether what is proposed amounts to an addition of no more than seven extra domestic helps to each authority per year. So far as local authority domiciliary services are concerned—this is the last point I want to make—these are the questions I put—

Mr. Douglas Glover (Ormskirk)

On a point of order, Mr. Deputy-Speaker. Is it in order, because an hon. Member makes such an incompetent speech in the first instance, for him to be allowed to rehash the whole thing in the form of questions?

Mr. Deputy-Speaker

I hope that the lion. Member for Newcastle-upon-Tyne, Fast will conclude his questions very shortly.

Mr. Blenkinsop

It is the third question which I asked earlier, to which I had no answer, and the Minister actually responsible was not present. May I ask whether the provisions here for residential accommodation for the aged and infirm represent a smaller provision per year, about half of what, in fact, was provided last year? May I have an answer to that?

Mr. Bevins

The answer to the hon. Gentleman's second question about domestic helps is that my right hon. Friend was given estimates by the local authorities of what they required for the following year, and those estimates were accepted without any qualification at all.

Mr. Blenkinsop

Seven per authority. What about residential accommodation for the old folk?

Mr. Bevins

I am simply saying that these were the estimates of the local authorities. As regards the provision for mental health, it is, I think, perfectly clear from paragraph 21 of the Paper what we have done. We say there that Similar substantial further development of the local health authority services is provided for, especially in the field of mental health.

Mr. Blenkinsop

That is not an answer to my question.

Mr. Deputy-Speaker

Order. I am afraid that the hon. Gentleman cannot ask any more questions.

Question put and agreed to.

Resolved, That the General Grant Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved.

Grants and Rates (Transitional Adjustments) Regulations, 1958, [copy laid before the House 25th November] approved.—[Mr. H. Brooke.]