Clause 1.—(GENERAL GRANTS.)

HC Deb 05 May 1958 vol 587 cc859-975

4.0 p.m.

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

I beg to move, in page I, line 14, at the end to insert: and not excluded by any provision of Part H of that Schedule". There are a number of Amendments relating to this Amendment, which is substantially a drafting matter, as I think the hon. and learned Member for Kettering (Mr. Mitchison) appreciates. What the Amendment does is to introduce a new Part II of the First Schedule, and its purpose is to collect together, as it were, in a separate part of the First Schedule the various exceptions to relevant expenditure listed in the first part of the Schedule.

This is done very largely in the interests of clarity. The exclusions from revelant expenditure are exclusions which are already stated in the First Schedule, subject to the two additional items of expenditure which attracts grant under the National Parks and Access to the Countryside Act, 1949, and expenditure in connection with acquiring and maintaining buildings of outstanding historical or architectural interest. The intention in these two cases is that the present form of grant should continue.

Mr. G. R. Mitchison (Kettering)

On a point of order. When we come to the proposed provisions of Part II shall we be allowed to discuss them? There are Amendments down to Part II, and I think it more convenient to treat this Amendment for what it is, a drafting Amendment, and to deal with Part II in substance when we come to it.

The Chairman

Yes, by all means.

Amendment agreed to.

Mr. Mitchison

I beg to move, in page 1, line 14, at the end to insert: and hereinafter referred to as 'the existing grants'.

The Chairman

I think it may be convenient to consider with this Amendment the Amendment in the name of the right hon. Member for Blackpool, North (Sir T. Low), in page 2, line 16, at end to insert: Provided that for the year 1961–62 and each subsequent year the amount of the general grant payable to any recipient authority shall not be such that by reason of it a loss, ascertained in the manner set out in section fifteen of this Act, accrues to any rating authority. and also the Amendment in the name of the hon. and learned Member for Kettering (Mr. Mitchison), in page 2, line 16, at end to insert:

1. (3) (a) The prescribed aggregate amount of general grants shall not for any one year be less and may be more than the minimum stated in this subsection;
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2. (b) the said minimum shall be the total of the existing grants or as the case may be, the prescribed aggregate amount of general grants, in either case for a preceding year (hereinafter called "the standard year"), increased if in the year to which the minimum applies the sum of the estimated population of England, Wales and the Isles of Scilly and of the estimated number of children in that population under fifteen years of age exceeds the corresponding sum in the standard year, by an increase bearing the same proportion to ten times the said total or aggregate amount as the said excess bears to the said corresponding sum;
3. (c)the standard year shall he the year next but one before the year to which the minimum applies.

The right hon. Member for Blackpool, North can have a Division on his Amendment in due course, if he wishes.

Mr. Mitchison

I agree, Sir Charles, that it would be convenient to take my two Amendments together, but it seems to me that the point raised in the Amendment of the right hon. Member for Black- pool, North (Sir T. Low) is an entirely different one. Subject to your Ruling, of course, I think that it would be much more convenient to take my two Amendments separately from that.

Sir Toby Low (Blackpool, North)

I would support what the hon. and learned Member for Kettering (Mr. Mitchison) has said. My Amendment raises a narrower point.

The Chairman

I agree. I made a mistake.

Mr. Mitchison

The first of my two Amendments is merely a paving Amendment, and the object of the substantial Amendment, which is the second of the two, is to prescribe a minimum for the aggregate amount of the general grants. This is, I think, the only Amendment from this side of the Committee dealing with the financial side of the prescribed aggregate, though there is an Amendment later relating to the term for which the grants are to be prescribed.

We regard this as a matter of very considerable importance. I want, first, to make quite clear that what we are asking for is a minimum. We are not asking that this should be the maximum. We have, therefore, carefully put into our Amendment that it is a minimum and that the actual prescribed amount may, of course, be more than this. It is, as it were, a safeguard.

Next, how do we arrive at it? What we propose is that we should look first at the period not immediately before but two years before the period to which the prescribed aggregate will relate, and, in no circumstances, decrease the amount which was prescribed in that earlier period—what is called in the Amendment "the standard year".

Next, we have to remember that we are dealing here with an expenditure of which about seven-eighths is education expenditure, that education expenditure has necessarily risen and is expected necessarily to continue to rise, and that for that reason a bare reference to expenditure in the standard year would not be enough. We propose, therefore, that if there is an increase in what I think is commonly called the weighted population that increase should be reflected by making an addition to the standard year expenditure proportionate to the increase. By the weighted population I mean the sum of the estimated population of the country and the estimated number of children under 15 years of age in the population added together.

That is really the substance of what is, in form, quite a simple Amendment, but it raises some wide questions. I would approach the matter first from the standpoint of the local authorities. The local authorities have been reluctant to accept the Bill. If the right hon. Gentleman says that he has their support, he certainly has it only in a very qualified form. It is qualified, first, by the existence of a substantial majority opinion in all the associations, reflecting, in its turn, the existence of a substantial minority opinion in practically every local authority which would otherwise support the Bill. In the local authorities the minority is an educational minority, and where the local authorities have lent their support to the Bill, it has been the support of the financial side of the local authorities.

Secondly, it is qualified in another respect with which we are particularly concerned today, that the local authorities in various forms have been asking two questions upon which their support, if any, of the Bill is contingent. The first of those questions I will not deal with on this Amendment. I merely mention it. That is that there should be a substantial and effective change in the form of control exercised, and necessarily exercised, by the central Government over local authorities and their expenditure.

The second point is a very important one, and that is that they should have some idea at least of what the amount of the aggregate grant is to be. On neither of those two points have the local authorities had any answer from the Government. When I say that I propose to justify it. What the Government purport to give as an answer, and have given repeatedly, on Second Reading of the Bill and on many occasions in Committee, is this. It is pointed out to them that the amount of the prescribed aggregate of the general grants is left entirely to the Minister, subject, of course, to an affirmative Resolution in the House, and that nothing whatever is said about the amount, about its relation to previous years, or about how the prescribed aggregate, as distinct from the general grant, will be made up. That is the case put to them, and they reply by referring to the next Clause and saying that the Minister has to take into consideration a number of matters and that if we look at those we shall get an idea of what the amount of the prescribed aggregate is to be.

I cannot follow that reasoning. No doubt the Minister will take into consideration matters in Clause 2—and they are many and various—but what consideration he will give to the one factor as against the other, and what will be the result, in the right hon. Gentleman's mind, of this consideration is completely in the dark. Without going into detail about a Clause we have not yet reached, I notice that among other matters to which he must have regard are general economic conditions. That opens the door very wide, though we shall certainly not have a discussion on the Finance Bill now or on differing views about general economic conditions.

There are other phrases, such as the demand for the services and the need for developing them. All are matters of the widest possible scope, upon which the right hon. Gentleman and his successors in office may take many and various views. It is, of course, wholly impossible to get any idea from those considerations what relative weight is to be given to any of them or what the result will be at the end of the day.

This was put forcibly by many of my hon. and right hon. Friends during the course of the Second Reading debate, especially by my hon. Friend the Member for Fulham (Mr. M. Stewart), who spoke largely from the point of view of the service that is very much affected—I was about to say principally affected, but certainly it is affected to a very large extent and, from the point of view of amount, principally affected.

In reply, the right hon. Gentleman the Minister of Education made various observations of a general character, and said that a number of attacks upon the general grant system, the prescribed aggregate arrangements, and so on, had been made throughout the educational world. The right hon. Gentleman gave some details and then said: I hope to be able to show that some of these objections, although not all, are based upon a complete misconception. The Minister was aiming high, at any rate. He continued: I want to deal with them first, because I then want to concentrate on the other important objections which remain. The Minister referred again to attacks from the educational angle. Then he mentioned a statement made by the Secretary of the Association of Education Committees. Every education authority, every person of standing in the educational world, regards this form of grant as an indirect attack on educational expenditure which is bound to result in a lowering of the standard of the education service. I may add that many of them regard it as intended to do so.

Finally, having referred to this statement the Minister said that he hoped to be able to show … why this statement and all similar statements are completely inaccurate. He then read out three of the subsections of Clause 2. This did not take him very long. He was asked a question about them and, again, there was an answer—the whole business was extremely sketchy—referring merely to the general considerations to be taken into account under Clause 2. The Minister continued as follows: I have now taken the House through the formal safeguards to be laid down by Statute"— these formal safeguards are simply that the Minister has to take into consideration these matters: but I want to add to that an assurance which I think will interest the House and will, I am certain, interest the education world. One would have thought, if one did not remember the circumstances as accurately as I do, that at that point one would have heard a pin drop in the House, that one would have looked round the country and found people with bated breath opening their newspapers and reading HANSARD to see what it was that was coming next. I will tell the Committee what came next: I want to state categorically, since we know it is in the last resort the responsibility of the Government"— The Committee will notice that the tempo is rising every moment. What did the Minister say?— that it is no part of this Government's policy to reduce the central Government's grant aid to local authorities' expenditure on education. That was what finally came out. The Minister concluded: It is not part of our policy to freeze that contribution at its present level. But it is our policy to make a proper increase in that contribution in accordance with Clause 2 of the Bill."—[OFFICIAL REPORT, 10th December. 1957; Vol. 579, c. 1095–1101.] 4.15 p.m.

We want to know how much. To freeze educational expenditure, or not to freeze it, means nothing. It is necessarily rising with the growth in the number of pupils in schools, with the gradual rise of what is colloquially known as the "armistice bulge," until, now, their expenditure is much greater, and necessarily so, than it was in previous years and is bound to go on rising. In those circumstances, and with that kind of assurance, it is not surprising that we should ask for a more effective minimum than a minimum which would certainly mean a cut in educational expenditure and, if prices, wages and salaries continue to rise, would mean not only a stoppage of the rise in expenditure but an actual cut in it. So what we are really asking for in this Amendment is to know how much.

In Committee we put down a minimum. We stated it, as I did generally in opening my speech, as merely a proportionate rise in the strict sense of the word, the same numerical proportion in relation to the weighted population and its growth. We were met by the Parliamentary Secretary to the Minister of Education with one or two kind words about our Amendment, for which I thank him, and then this comment: If one takes the past five years, up to 1956 and 1957, the weighted population adopted by the Amendment increased during that time by less than 0.6 per annum"— I think he meant "per cent. per annum"— and over the same period expenditure on the relevant services increased by at least 5 per cent. per annum. During the whole of that five years' period, therefore, the Amendment would have had a completely derisory effect."—[OFFICIAL REPORT, Standing Committee D. 28th January, 1958; c. 40 and 41.] That is putting it too high, because it would certainly have prevented a reduction below the previous standard, and there is nothing in the Bill to do that. Indeed, it would have provided for some small increase. However, the Parliamentary Secretary was right in saying that we had not provided for enough, and the Committee will notice that educational expenditure is increasing at about ten times the rate at which the weighted population is increasing.

In those circumstances, accepting with gratitude the information given to us and the suggestion we understood to be made by the hon. Gentleman, we have provided for an increase proportionate to a tenfold increase—that is, the rough relation between less than 0.6 per annum and at least 5 per cent. Accordingly, this Amendment differs from what we asked for in Committee. In relation to the facts as indicated to us, it differs by providing this time an increase which we hope the Parliamentary Secretary will not tell us again is completely derisory, because we are here following his own figures and the facts that he was good enough to give us.

Is there any reason why this provision should not be put in the Bill? In Committee, we were simply told that it is not enough, and then we were given further references to Clause 2. I have said what I have to say about Clause 2. It may present many interesting ideas as to what the Minister should and should not look at, but it certainly does not give the faintest basis for any arithmetical result at all, and, even more important, it does not give the local authorities the faintest idea how much they will get by way of a prescribed aggregate. We recognise that one cannot necessarily lay down the right amount, but what possible objection can there be to putting in the safeguard that we propose? All the criticisms of the educational authorities and the views of the local authorities themselves make it clear that some minimum provision is required.

The Committee can, of course, turn down the Amendment, saying that no minimum is required, but if that is done, I suggest that every possible support will be left to those who, like many of us, feel that all these financial arrangements are merely a smoke-screen for cutting down expenditure—principally, but not wholly, educational expenditure—which the Government would find it exceedingly difficult and unpopular to cut down openly. In fact, we regard the provisions of the Bill as one more attempt by the Government to use the local authorities as their instruments for paring necessary social services in such a way that the local authorities, and not the Government, shall appear to be responsible. If that is not the Government's intention, if they do not mean anything of the sort, then I fail to see what possible objection there can be to their accepting the Amendment.

I hope that the Government will give us due credit for having paid such careful attention to the criticisms of our previous Amendment made by the Parliamentary Secretary to the Ministry of Education and using, in this instance, the facts with which experience has furnished us as a guide to what is required in the way of grant.

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

I recall that when we last discussed this question in Committee, about three months ago, I congratulated the hon. and learned Member for Kettering (Mr. Mitchison) on his skill in drafting, and I certainly concede straight away his point that 5.0 is approximately equal to ten times less than 0.6. However, I must tell the hon. and learned Gentleman that in the period between the beginning of the Committee stage and the Report stage we have had, among other things in this House, a debate on education on a rather ill-conceived Motion of censure. I do not think that the hon. and learned Gentleman's argument about the Government trying to cheesepare the education service will carry very much conviction with hon. Members who heard the debate.

I would repeat, at the outset of our proceedings today, what has been said on many occasions in this House in recent months, that we have now had a period of some six or seven years when educational expenditure by the central Government has doubled, whilst prices have risen by rather less than one-third. I do not believe that many people would share the full extent of the hon. and learned Member's fears about the amount of the general grant not being adequate.

The Government believe that it would not be possible to devise a workable formula for ascertaining a minimum grant which would take proper account of all the other factors which over the years might affect the cost of providing services covered by the general grant. I can only advise the Committee, as I said in Standing Committee some months ago, that we believe that when considering the amount of the general grant, the right and proper course is to rely on the perfectly explicit heads laid down in Clause 2 (1) of the Bill. There, we clearly lay down principles which the Government have to take into account when deciding what the amount of the general grant shall be.

I think it would be unreal to try to introduce a guarantee such as the hon. and learned Gentleman has suggested. Let us look at the period of the last five years. We recognise that a large part of the increased expenditure has been due to an increase in cost during that period, and, certainly, we on this side of the Committee would not accept for a moment that, at any rate under this Government, there need be anything like the same proportionate increase in costs during the years ahead.

Furthermore, there is a very real danger to the authorities themselves in the proposed Amendment. As I tried to explain in Committee, one could conceive of circumstances in which the Government and local authorities were both agreed that there was a case for an exceptional increase in the aggregate amount of the general grant for the following year or two, but the Amendment might very well ensure that a temporary increase could not be granted because, through its rigid provisions, the Amendment would continue any such increase not merely for the two years ahead but for longer.

There is another very important point. It is not impossible that the day will come when we can extend the service as necessary without an increase in cost proportionate to increase in population. There would then be no justification for an increase in grant on the bases which are provided for in the Amendment.

We have looked at this matter carefully. I fully realise the concern—I and my right hon. Friend had many times said that we recognise it—which is felt about this matter in the educational world. Therefore, I repeat that there is absolutely no intention on the part of the Government that the amount of the general grant should be inadequate. We shall certainly give full weight to all the factors that will be laid on the Government statutorily by the provisions in Clause 2, but I do not believe that at this stage it is possible to be more precise than this or to devise any rigid formula for ascertaining what the minimum grant should be. Before any grant can be paid, the amount of the general grant will not only have to be declared but will have to be debated in Parliament in the form of an Order. We are looking forward to the time when the Bill becomes law and do not fear at all the inquisition that we shall have to bear when the first general grant Order comes before the House.

I put it to the Committee that the Amendment is not well conceived and that we should not attempt any rigid formula of this kind, but that the Committee should accept that the criteria laid down in Clause 2 are the right ones to decide at the appropriate time just what shall be the amount of the general grant.

4.30 p.m.

Dr. Horace King (Southampton, Itchen)

I congratulate my right hon. and hon. Friends upon the fight which they made in Committee to improve the Bill. I am glad to have the opportunity to support some of their latest attempts.

I am certain that the Committee will be disappointed with the utterly inadequate answer which the Parliamentary Secretary to the Ministry of Education has given to the points which my hon. and learned Friend the Member for Kettering (Mr. Mitchison) put to him. Our Amendment is a reasonable one, and of all the Amendments on the Notice Paper, it is the one which the Minister might be most expected to accept. It seeks to deal with three of the major fears which local government workers of both political parties still have about the general grant. I am a fundamentalist, and I am opposed to the general grant, for much more fundamental reasons than even those with which the Amendment seeks to deal.

There are three anxieties which I want to put before the Committee. The first is that the general grant may be inadequate to cover the needs of local government services. Over and over again the Parliamentary Secretary to the Ministry of Education has expressed confidence in the size of the general grant. He has assured us about it in the House, and has spoken almost mysteriously, saying, "Wait until you see the size of the grant. This Government could never overthrow education." My hon. and learned Friend has quoted the remarks made by the Minister in Committee. On 20th February he said: … it is no part of the policy of a Conservative Government to reduce standards in education …"—[OFFICIAL REPORT, Standing Committee D, 20th February, 1958; c. 392.] and went on to say that he would see that education had a "proper increase". Members of local authorities are not satisfied with words; they seek guarantees written into the Bill.

The second fear is that the general grant will be inflexible and will not move swiftly or adequately enough to deal with the many varying factors which come into local government expenditure. The third fear is that local authorities will not have the degree of certainty they require about the kind of grant that they will receive in future. All we have had as yet are two sets of notional estimates by the Minister, in respect of each of which he has been at great pains to declare that it was only notional and had no real validity.

The second Amendment seeks to deal with those three fears and to improve the Minister's own general grant under each head. Subsection (3, a) provides that the grant must be a certain minimum and that it may be more than that. The paragraph says that The prescribed aggregate amount of general grants shall not for any one year be less and may be more than the minimum stated in this subsection; so that every local authority will have a guaranteed minimum grant. Hon. Members on this side of the Committee have always believed that one of the main objects of the general grant was to effect an economy in Government expenditure on local authorities. This general grant, like the previous ones in Parliamentary and local government history, was introduced at a time when the Government were declaring their intention to cut down or hold back Government expenditure.

Throughout the stages of the Bill the Minister has always argued that we were accusing him wrongly, and that what really indicated the Government's attitude to education was the fine things that Lord Hailsham said when he was Minister of Education, and that we could trust the Government to play their part in the bigger and bigger national expenditure which is necessary on education if Britain is to meet the demands of this age.

The Amendment gives the Minister a chance to prove that, at any rate, that part of our accusation against the Government is unfounded. It guarantees that if the figure that his own new formula produces is less than that for which the subsection provides he must take the higher figure. If, on the other hand, his general grant turns out to be the lavish sum which some honest Conservatives think the Minister will ladle out to local authorities, he need not worry about the subsection, because it will not make him reduce the general grant that he proposes to make. All it will do is to make him increase it if it is not as big as the amount proposed in the Amendment.

As I have said, many variable factors enter into account when local authorities are planning their local government expenditure and fixing the grant for any year. Two of those are the basic factors in the Minister's own formula. They are the size of the population and the number of school children. Paragraph 1 of Part II of the First Schedule lays down these two factors as the first element in deciding the basic grant, but both are fluctuating.

Both are increasing rapidly, and our fear—and, indeed, the fear of those elements inside county council associations and other local authority associations who subscribe to the general grant formula of the Minister—is that the fixed basic grant will not respond swiftly enough to changes in the size of the country's population or in the numbers of the child population.

The second thing that the Amendment seeks to do is to minimise any danger of local authorities carrying an unfair share of the burden of some sudden increase in the country's population, on the one hand, and the child population on the other. It would change the grant each year according to these two factors, so that, first, the minimum grant will be the total of existing grants—that is, the grants made under our present formula to local authorities—and to this minimum there will be added, under the Amendment, an amount in respect of the increase in population or child population. The increased amount will be proportionate to the two increases in population.

If child population and the country's total population go up by 1 per cent., according to the formula in the Amendment which the Minister finds so difficult to administer the grant will rise by 10 per cent. Again, the increase will be a minimum. The Minister may take a much more generous attitude than that which we propose in the subsection, and the subsection will not prevent him from doing so.

Paragraph (c) of the Amendment is useful because it gives the Government time to make their calculations by measuring the two increases proposed against the year but one before the year under discussion. Indeed, the third anxiety of local authorities is an anxiety to know just what money they are to expect year by year. If the Minister will accept the Amendment he will give all who are keenly interested in local government a clear picture of the size and shape of the general grant that they have the right to expect almost automatically as these two factors increase in the years ahead.

I congratulate my hon. and learned Friend in devising so simple, lucid and reasonable an Amendment, and I urge the Minister, in spite of what the Parliamentary Secretary has said, to accept it.

Mr. Michael Stewart (Fulham)

I had hoped that now that we had altered this proposal along the lines suggested by the Parliamentary Secretary in Committee, he would be willing to accept it in its new form. One objection which he advanced against the Amendment in Committee he produced again today. He said, in effect, that safeguards of this kind are unnecessary; that the Government are resolved to provide at least adequate expenditure for education; that we need have no grounds for alarm, and need not therefore insert any minimum safeguard of this kind. On the earlier occasion the Parliamentary Secretary expressed himself more emphatically, and described our safeguard as derisory. If there were any ground in that criticism we have removed it by the ten-times formula explained by my hon. and learned Friend the Member for Kettering (Mr. Mitchison).

The Parliamentary Secretary expressed great confidence that once the Bill had become law and the first general grant had been made we should find it entirely adequate to the needs of the education service. But it is not so much what might be in the first grant that forms the ground for our alarm. At that stage the Government, if they are still here, will still be on their best behaviour, both because it will be the first grant and because it will be shortly before a General Election.

What we find disconcerting is that the Government are quite prepared to give the impression that they will be generous in the first grant, but refuse to accept the proposition that they could not cut down that grant in subsequent years. That is what this Amendment would prevent them from doing. It would prevent the Government from playing what I might call a "confidence trick" of that kind upon the electorate; of making the idea of the block grant appear attractive by a falsely generous grant in the first year, to be cut down in subsequent years.

By this Amendment we are trying to prevent a tactic of that kind, so that when the Government present their first general grant order it will have to be a bona fide one and express the general opinion of the Government on how these services are to be maintained, and not merely a manoeuvre to make the Bill appear, in the first year, more attractive than, in fact, it is.

The Parliamentary Secretary then deployed his second objection, which was that the Government have decided that it was not possible to draft a proper formula for a minimum. We have saved them the trouble. The Government may have found it impossible to draft such a formula, but I do not think that they should be so ungrateful as to refuse the one which we have drafted for them. To refuse a possible Amendment on the ground that the Government have not been able to think of it first, is one of the most remarkable examples of stonewalling that one has ever heard of.

Then it was suggested that this was too rigid a minimum, and that there might be, say, one year of exceptional educational expenditure—which every one agreed was exceptional for that year—but, if we had this Amendment, having once committed themselves to that exceptional expenditure, the Government would not be able to drop below it in subsequent years. I was interested to notice that the Parliamentary Secretary, in deploying that argument, did not describe what kind of emergency or special need might give rise to that kind of educational expenditure. In fact, of course, the development of the education service is not at all likely to be of that character. Indeed, one of the things we have noticed ever since we got matters reasonably straight, following the end of the war, is that the satisfactory handling of the education service depends on a steady expansion year after year; that it is deleterious to the proper development of the service to imagine that it can be done by spasmodic fits and starts.

One of the criticisms of the whole attitude of the Government to education is that there have been too many sudden cuttings down after hopeful periods of moderate expansion. That was why we moved a Motion some weeks ago which the Parliamentary Secretary described as ill-conceived. I might remind the hon. Gentleman that the debate on that Motion is not the only thing that has happened since we discussed the matter earlier. The other thing has been the local government elections, where enthusiasm for the block grant and for the record of the Government in the matter of education was not very large among that section of the population which follows local affairs with keenness.

Another reason why there is little in this argument is that if we look at the education service today, and at the 1944 Education Act, we find that there is still an enormous gulf between what we are doing now and what the nation held itself out the hope of doing in 1944. That means that a Government with any conscience at all about education must foresee a steadily expanding expenditure on it for a good many years to come. We cannot picture a situation in the immediate future in which a Government, having spent a certain amount on the service in one year, would go below that figure in the next year; unless it were a Government determined to make a real atack on education, and that, the Parliamentary Secretary says, is far from the thoughts of the present Government.

4.45 p.m.

The same objection applies to his argument about the costs of the education service. He said that it was not the intention of the present Government that costs and prices should go on rising as they have been doing in recent years. We shall see whether the Government will have any better success with that problem in the future than they have had in the past. But suppose even that they did succeed in slowing down the rate at which prices and costs are rising. Set against that the undoubted need for expansion in the service. A short time ago a previous Minister of Education was inviting local authorities to consider all the things that might be done—smaller classes, a readjustment of the school leaving age, county colleges. Nothing came of it, but those objectives are still before us, to be considered by any Government who take education seriously. Even though this, or any other Government, succeeded in bringing down prices and costs, that is quite unlikely to outweigh the need for a real and growing expansion in the education service.

The Parliamentary Secretary held out the possibility that we might achieve what I think we could call real economies in the education service; that is to say, getting more service for less cost. I wonder where he expects to do that. Thanks to the work of the Labour Government, he has found a good deal in the reduced cost of school buildings over the past few years. But, for that very reason, I do not think that we can expect a great deal more real economy in that direction. Where is it to be found? Once again the hon. Gentleman does not provide us with any examples.

There has been a good deal of argument in educational circles about the percentage of the total national income which ought to be spent on education. I think that I shall carry with me the Parliamentary Secretary and the Committee if I say that no one regards the present percentage as too high; that, as this nation goes on adding to its total wealth, we may expect that the percentage of that total wealth devoted to education should at very least remain the same. That means—unless the prophecies of the Parliamentary Secretary, under the Government of which he is a member, result in a decline in the total national income—an increase in total expenditure on education. We ask the hon. Gentleman, if that is what he believes, to accept this Amendment. We are asking him whether the Government really believe what Lord Hailsham said about education so shortly ago in time but so long ago, apparently, in the history of ideas and policies.

If the Government really believe what Lord Hailsham said, they cannot have any practical objection to accepting this Amendment. It is an Amendment which is bound to be assented to by anyone, except those who say, "We want to reduce educational expenditure; we want to see it become a smaller proportion of the total national income."

Sir E. Boyle

The total sum spent on education, expressed as a proportion of the national income, has gone up very much faster during the past six years than during the period of administration of the Labour Government.

Mr. Stewart

If the hon. Gentleman is making that point, why does he object to the Amendment? It cannot have been very much faster, in any case, because if we look at the percentage of the national income now spent on education and what was spent, even before the war, the difference is not very substantial. I know that calculations about the national income are subject to margins of argument and error, but, on any calculation, the proportion is not very much greater now than before.

Sir E. Boyle

The hon. Member knows that under this Government productive investment in industry by the central Government has itself gone up by 36 per cent. So it is all the more remarkable, that when investment in industry has been going up there has been a big percentage increase in the proportion of the gross national product spent on education.

Mr. Stewart

The hon. Gentleman keeps talking about a great increase in the proportion of the gross national product spent on education, but although the percentage has increased a little, it has not increased very much. The total amount has benefited from the total national income; that is plain enough. If the hon. Gentleman says that the total national income has been increasing faster since 1951 than before, I only say, "I hope so." One would expect that there would be greater prosperity from six to ten years after the war than in the years immediately succeeding the conflict. We need not go over that ground again. It was the stock-in-trade of every Tory propagandist at the recent council elections and much good it did them.

I take it that the Parliamentary Secretary is not arguing that the percentage of the total national income going to education ought to be reduced, or that there is any reasonable possibility of reducing it in the next decade or so, in fairness to education. The proportion will, at the very least, remain the same. The absolute amount spent on education, unless the country becomes poorer, will become bigger each year. If that is so, why are the Government so coy about accepting an Amendment that will oblige them to recognise that obvious fact, unless their real intention is hostility to education?

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

The hon. Member for Fulham (Mr. M. Stewart) has demolished his own case. There is no need for the Amendment. Set out in the next Clause are the factors to which the Government and Parliament must have regard when the amount of the general grant is being fixed.

The hon. Member said that every Government must foresee the expenditure on education for some years to come, but if he thinks that, he could have saved the time of the Committee by not speaking in favour of the Amendment, which is clearly unnecessary in those circumstances. It is far wiser to lay down clearly in the Bill the main factors to which we must have regard when the time comes, as is done in Clause 2 (1), than to insert an Amendment purporting to indicate that some special sanctity attaches to one or other of these factors and singling it out to provide a floor and fix a minimum.

Besides being unnecessary, the Amendment is fundamentally the wrong way of proceeding. In fixing the grant, the Government of the day and Parliament should be forward-looking and not backward-looking. The Amendment asks us to see what has happened in previous years and then to make an appropriate upward adjustment from that. The correct way to proceed is to judge the need for development of the services concerned. That applies not only to education but to all services subsumed in the general grant. This was not brought out by the Opposition. We must have regard also to the general economic situation, and then fix the amount of the general grant.

The hon. Member for Fulham pooh-poohed the argument for increasing for a period of years, not continually and permanently, the amount of the general grant to take account of some bulge and not necessarily the bulge in the educational sense. I mean any bulge of expenditure which we may be approaching. To write the proposed Amendment into the Bill would make it impossible for any prudent Government to provide for the bulge by increasing the general grant, because any such increase would be rendered permanent.

We should get away from any idea that the amount of the general grant should be looked at primarily by looking back and then doing something. We should, on the contrary, arrive at the general grant by taking into account all the factors in Clause 2 (1) and reaching a decision, and Parliament can then debate that decision on the merits of the case at the time. That is my convincing argument for resisting the Amendment.

Mr. Mitchison

I speak again because the Minister shows a desperate confusion of mind. He has produced arguments to show why the aggregate general grant should not be arrived at in a certain way. The question posed by the Amendment is not that, but an entirely different one: ought there or ought there not to be some minimum?

The right hon. Gentleman has succeeded in putting a confidence trick over upon local authorities. He has sold them the Bill without telling them what control they will get or what sort of aggregate sum as their general grant. The individual general grant is bound to follow the prescribed aggregate.

The Minister is now asked, not to vary the provisions of Clause 2, which have nothing to do with a minimum, but to look at certain considerations when he is prescribing the aggregate. We are not asking him to drop them or alter them but to provide one single safeguard, by way of the Amendment.

I dismiss at once the idea that exceptional expenditure is an obstacle to a provision of this sort. The Parliamentary Secretary, who put it forward in a tentative way, seemed to realise that anything of the sort was unlikely. If exceptional expenditure is likely we can make exceptional financial arrangements for it. We are asked to trust the right hon. Gentleman and his hon. and right hon. Friends and we are not prepared to do it. We do not know what the result will be of their looking at all these considerations

in Clause 2 (1) and we have not the foggiest idea what the arithmetical outcome will be. We feel bound to put some safeguard into the Bill. A lot of factors have to be considered, and when the person who is to consider them is a member of a Tory Government, the Bill seems to us a Bill for the purpose of cutting down the expenditure of local authorities in the fields covered by the general grant, and particularly in education.

We have taken a simple formula. If it is too simple, let the right hon. Gentleman accept it in principle and make it more complicated. He tells us he can give no safeguard whatever, yet we know perfectly well that a safeguard is needed. Since the right hon. Gentleman cannot find one, we shall express our opinion that this safeguard, perfect or imperfect, is at any rate better than trusting the Government to let the local authorities and the educational authorities get on with their job and develop the necessary local government services.

Question put, That those words be there inserted:—

The Committee divided: Ayes 173, Noes 227.

Division No. 106.]	AYES	[5.02 p.m.
Ainsley, J. W.	Crossman, R. H. S.	Houghton, Douglas
Albu, A. H.	Dalton, Rt. Hon. H.	Howell, Charles (Perry Barr)
Allaun, Frank (Salford, E.)	Darling, George (Hillsborough)	Hughes, Cledwyn (Anglesey)
Allen, Arthur (Bosworth)	Davies, Ernest (Enfield, E.)	Hughes, Hector (Aberdeen, N.)
Allen, Scholefield (Crewe)	Deer, G.	Hunter, A. E.
Bacon, Miss Alice	de Freitas, Geoffrey	Hynd, H. (Acorington)
Baird, J.	Delargy, H. J.	Hynd, j. B. (Attercliffe)
Balfour, A.	Diamond, John	Irving, Sydney (Dartford)
Bellenger, Rt. Hon. F. J.	Donnelly, D. L.	Isaacs, Rt. Hon. G. A.
Benson, Sir George	Dye, S.	Janner, B.
Beswick, Frank	Ede, Rt. Hon. J. C.	Jay, Rt. Hon. D. P. T.
Bevan, Rt. Hon. A. (Ebbw Vale)	Edwards, Rt. Hon. John (Brighouse)	Jeger, George (Goole)
Bottomley, Rt. Hon. A. G.	Edwards, Robert (Bilston)	Johnson, James (Rugby)
Bowden, H. W. (Leicester, S.W.)	Edwards, W. J. (Stepney)	Jones, Rt. Hon. A. Creech(Wakefield)
Bowles, F. G.	Evans, Albert (Islington, S.W.)	Jones, David (The Hartlepools)
Boyd, T. C.	Evans, Edward (Lowestoft)	Jones, Elwyn (W. Ham, S.)
Brockway, A. F.	Finch, H. J.	Key, Rt. Hon. C. W.
Broughton, Dr. A. D. D.	Fletcher, Eric	King, Dr. H. M.
Brown, Rt. Hon. George (Belper)	Foot, D. M.	Lawson, G. M.
Burke, W. A.	Gaitskell, Rt. Hon. H. T. N.	Ledger, R. J.
Butler, Herbert (Hackney, C.)	Gibson, C. W.	Lee, Miss Jennie (Cannock)
Butler, Mrs. Joyce (Wood Green)	Gordon Walker, Rt. Hon. P. C.	Lever, Harold (Cheetham)
Callaghan, L. J.	Grenfell, Rt. Hon. D. R.	Lewis, Arthur
Castle, Mrs. B. A.	Grey, C. F.	Lipton, Marcus
Champion, A. J.	Griffiths, David (Rother Valley)	Logan, D. G.
Chapman, W. D.	Griffiths, Rt. Hon. James (Llanelly)	Mabon, Dr. J. Dickson
Chetwynd, G. R.	Griffiths, William (Exchange)	McCann, J.
Clunie, J.	Hall, Rt. Hn. Glenvil (Colne Valley)	MaoColl, J. E.
Coldrick, W.	Hamilton, W. w.	McGhee, H. G.
Collick, P. H. (Birkenhead)	Harrison, J. (Nottingham, N.)	Mclnnes, J.
Collins,V.J.(Shoreditch & Finsbury)	Hastings, S.	McKay, John (Wallsend)
Corbet, Mrs. Freda	Hayman, F. H.	McLeavy, Frank
Cove, W. G.	Henderson, Rt. Hn. A. (Rwly Regis)	Mallalieu, J. P. W. (Huddersfd, E.)
Craddock, George (Bradford, S.)	Hobson, C. R. (Keighley)	Mellish, R. J.
Cronin, J. D.	Holman, P.	Messer, Sir F.
Mitchison, C. R.	Price, J. T. (Westhoughton)	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Moody, A. S.	Price, Philips (Gloucestershire, W.)	Swingler, S. T.
Morris, Percy (Swansea, W.)	Probert, A. R.	Sylvester, G. O.
Morrison, Rt.Hn.Herbert(Lewis'm,S.)	Proctor, W. T.	Taylor, Bernard (Mansfield)
Mort, D. L.	Randall, H. E.	Thomas, George (Cardiff)
Moss, R.	Redhead, E. C.	Thornton, E.
Moyle, A.	Reeves, J.	Tomney, F.
Mulley, F. W.	Roberts, Rt. Hon. A.	Viant, S. P.
Noel-Baker, Francis (Swindon)	Roberts, Goronwy (Caernarvon)	Watkins, T. E.
Noel-Baker, Rt. Hon. P. (Derby, S.)	Robinson, Kenneth (St. Pancras, N.)	Wells, Percy (Faversham)
Oliver, G. H.	Ross, William	Wells, William (Walsall, N.)
Oram, A. E.	Shinwell, Rt. Hon. E.	West, D. G.
Orbach, M.	Short, E. W.	Wheeldon, W. E.
Paget, R. T.	Silverman, Julius (Aston)	Willey, Frederick
Palmer, A. M. F.	Silverman, Sydney (Nelson)	Williams, Rev. Llywelyn (Ab'tilliery)
Pannell, Charles (Leeds, W.)	Simmons, C. J. (Brierley Hill)	Williams, Rt. Hon. T. (Don Valley)
Parker, J.	Slater, Mrs. H. (Stoke, N.)	Willis, Eustace (Edinburgh, E.)
Parkin, B. T.	Slater, J. (Sedgefield)	Yates, V. (Ladywood)
Paton, John	Snow, J. W.	Younger, Rt. Hon. K,
Pearson, A.	Sorensen, R. W.	Zilliacus, K.
Peart, T. F.	Soskice, Rt. Hon. Sir Frank
Pentland, N.	Stewart, Michael (Fulham)	TELLERS FOR THE AYES:
Popplewell, E.	Stones, W. (Consett)	Mr. John Taylor and Mr. Rogers.
Prentice, R. E.	Strauss, Rt. Hon. George (Vauxhall)
NOES
Agnew, Sir Peter	Duthie, W. S.	Jenkins, Robert (Dulwich)
Aitken, W. T.	Eden, J. B. (Bournemouth, West)	Johnson, Dr. Donald (Carlisle)
Allan, R. A. (Paddington, S.)	Elliott,R.W.(Ne'castle upon Tyne.N.)	Johnson, Eric (Blackley)
Alport, C. J. M.	Emmet, Hon. Mrs. Evelyn	Jones, Rt. Hon. Aubrey (Hall Green)
Arbuthnot, John	Errington, Sir Eric	Joseph, Sir Keith
Armstrong, C. W.	Farey-Jones, F. W.	Joynson-Hicks, Hon. Sir Lancelot
Astor, Hon. J. J.	Fell, A.	Keegan, D.
Atkins, H. E.	Finlay, Graeme	Kerby, Capt. H. B.
Baldock, Lt.-Comdr. J. M.	Fisher, Nigel	Kershaw, J. A.
Baldwin, A. E.	Fletcher-Cooke, C.	Kirk, P. M.
Balniel, Lord	Foster, John	Lagden, G. W.
Barter, John	Fraser, Hon. Hugh (Stone)	Lambton, Viscount
Baxter, Sir Beverley	Freeth, Denzil	Langford-Holt, J. A.
Beamish, Col. Tufton	Gammans, Lady	Leather, E. H. C.
Bell, Philip (Bolton, E.)	Gibson-Watt, D.	Leavey, J. A.
Bell, Ronald (Bucks, S.)	Glyn, Col. Richard H.	Legge-Bourke, Maj. E. A. H.
Bennett, F. M. (Torquay)	Godber, J. B.	Legh, Hon. Peter (Petersfield)
Bennett, Dr. Reginald	Goodhart, Philip	Lindsay, Hon. James (Devon, N.)
Bevins, J. R. (Toxteth)	Gough, C. F. H.	Linstead, Sir H. N.
Bidgood, J. C.	Gower, H. R.	Lloyd, Maj. Sir Guy (Renfrew, E.)
Biggs-Davison, J. A.	Graham, Sir Fergus	Longden, Gilbert
		Low, Rt. Hon. sir Toby
Bingham, R. M.	Grant-Ferris, Wg Cdr. R. (Nantwich)	Lucas-Tooth, Sir Hugh
Bishop, F. P.	Green, A.	McAdden, S. J.
Black, C. W.	Gresham Cooke, R.	Macdonald, Sir Peter
Body, R. F.	Grimston, Hon. John (St. Albans)	Mackeson, Brig. Sir Harry
Boyd-Carpenter, Rt. Hon. J. A.	Grimston, Sir Robert (Westbury)	McKibbin, Alan
Boyle, Sir Edward	Gurden, Harold	Mackie, J. H. (Galloway)
Braine, B. R.	Hall, John (Wycombe)	Maclean, Sir Fitzroy (Lancaster)
Bromley-Davenport, Lt.-Col. W. H.	Harris, Frederic (Croydon, N.W.)	Macleod, Rt. Hn. Iain (Enfield, W.)
Brooke, Rt. Hon. Henry	Harris, Reader (Heston)	Macmillan, Rt. Hn. Harold(Bromley)
Brooman-White, R. C.	Harrison, A. B. C. (Maldon)	Macmillan, Maurice (Halifax)
Bryan, P.	Harrison, Col. J. H. (Eye)	Maddan, Martin
Bullus, Wing Commander E. E,	Harvey, Sir Arthur Vere (Macclesf'd)	Manningham-Buller, Rt. Hn. Sir R.
Burden, F. F. A.	Harvey, John (Walthamstow, E.)	Marlowe, A, A. H.
Butler,Rt. Hn.R.A.(Saffron Walden)	Hay, John	Marshall, Douglas
Carr, Robert	Heald, Rt. Hon. Sir Lionel	Mawby, R. L.
Cary, Sir Robert	Heath, Rt. Hon. E. R. c.	Maydon, Lt.-Comdr. S. L. C.
Channon, Sir Henry	Hesketh, R. F.	Milligan, Rt. Hon. W. R.
chichester-Clark, R.	Hicks-Beach, Maj. W. W.	Molson, Rt. Hon, Hugh
Conant, Maj. Sir Roger	Hill, Mrs. E. (Wythenshawe)	Morrison, John (Salisbury)
Cooke, Robert	Hinchingbrooke, Viscount	Nabarro, G. D. N.
Cooper, A. E.	Hirst, Geoffrey	Nairn, D. L. S.
Cooper-Key, E. M.	Holland-Martin, C. J.	Neave, Alrey
Cordeaux, Lt.-Col. J. K.	Hornby, R. P.	Nioolson, N. (B'n'm'th, E. & Chr'ch)
Corfield, Capt. F. V.	Hornsby-Smith, Miss M. P.	Noble, Comdr. Rt. Hon. Allan
Craddock, Beresford (Spelthorne)	Horobin, Sir Ian	Oakshott, H. D.
Crosthwaite-Eyre, Cor. O. E.	Horsbrugh, Rt. Hon. Dame Florence	O'Neill, Hn. Phelim (Co. Antrim, N.)
Crowder, Sir John (Finchley)	Howard, Gerald (Cambridgeshire)	Orr, Capt. L. P. S.
Cunningham, Knox	Howard, Hon. Greville (St. Ives)	Orr-Ewing, Charles Ian (Hendon, N.)
Currie, G. B. H.	Howard, John (Test)	Page, R. G.
Deedes, W. F.	Hughes Hallett, Vice-Admiral J.	Pannell, N. A. (Kirkdale)
Digby, Simon Wingfield	Hughes-Young, M. H. C.	Peel, W. J.
Dodds-Parker, A. D.	Hurd, A. R.	Peyton, J. W. W.
du Cann, E. D. L.	Hutchison, Sir James (Scotstoun)	Pickthorn, K. W. M.
Dugdale, Rt. Hn. Sir T. (Richmond)	Hylton-Foster, Rt. Hon. Sir Harry	Pike, Miss Mervyn
Duncan, Sir James	Iremonger, T. L.	Pilkington, Capt. R. A.

Pitman, I J.	Scott-Miller, Cmdr. B.	Thompson, R. (Croydon, S.)
Pitt, Miss E. M.	Sharples, R. C.	Thorneycroft, Rt. Hon. P.
Powell, t. Enoch	Smithers, Peter (Winchester)	Thornton-Kemsley, Sir Colin
Price, David (Eattlelgh)	Smyth, Brig, Sir John (Norwood)	Turton, Rt. Hon. R. H.
Price, Henry (Lewisham, W.)	Soames, Rt. Hon. Christopher	Vane, W. M. F.
Prior-Palmer, Brig. O. L.	Spearman, Sir Alexander	Vickers, Miss Joan
Ramsden, J. E,	Speir, R. M.	Wakefield, Sir Waveil (St. M'Jebone)
Rawlinson, Peter	Spent, Rt. Hn. Sir P. (Kens'gt'n, S.)	Walker-Smith, Rt. Hon. Derek
Redmayne, M.	Stanley, Capt. Hon. Richard	Wall, Patrick
Remnant, Hon. P.	Stevens, Geoffrey	Ward, Dame Irene (Tynemouth)
Renton, D. L. M.	Steward, Harold (Stockport, S.)	Webbe, Sir H.
Ridsdale, J. E.	Steward, Sir William (Woolwich, W.)	Williams, R. Dudley (Exeter)
Rippon, A. G. F.	Stoddart-Scott, Col. Sir Malcolm	Wilson, Geoffrey (Truro)
Roberts, Sir Peter (Heeley)	Storey, S.	Wood, Hon. R.
Robertson, Sir David	Stuart, Rt. Hon. James (Moray)	Woollam, John Victor
Robinson, Sir Roland (Blackpool, S.)	Studholme, Sir Henry	Yates, William (The Wrekin)
Robson Brown, Sir William	Summers, Sir Spencer
Rodgers, John (Sevenoaks)	Taylor, Sir Charles (Eastbourne)	TELLERS FOR THE NOES:
Roper, Sir Harold	Teeling, W.	Mr. Wills and
Ropner, Col. Sir Leonard	Thomas, P. J. M. (Conway)	Mr. Edward Wakefield.
Russell, R. S.	Thompson, Kenneth (Walton)

Mr. M. Stewart

I beg to move, in page 1, line 14, at the end to insert: Provided that, if it appears to the appropriate Minister that there is risk of undue variation, as between one area and another, in the standard of provision of any of the services giving rise to relevant expenditure, or that there is special need to expand any part of any of those services, he may, if he is not the Minister, notify the Minister accordingly; and the Minister (on such notification, if he is not himself the appropriate Minister) may pay such part of any of the last-mentioned grants as may be prescribed for such period as may be prescribed. These words go right to the heart of the financial principle that is involved in Part I of the Bill. The general effect of Part I is, as is now only too well known to all of us, to remove the existing percentage grants for a number of services, of which education, measured by the amount of money involved, is the chief, and to substitute in place of them a grant which will be both a general grant, not tied to any one of these services in particular, and a block grant, fixed in amount over a period of time, and not determined as a percentage of the expenditure of the local authorities.

That is what the Bill in its present form proposes to do, and, procedurally, it does it by first creating the idea of the general grant and then announcing that the present percentage grants are to be discontinued.

We considered this matter and felt that the objection to proceeding in that way was as follows. Ever since the Bill was first introduced, a great many arguments about the dangers of using the block grant principle rather than the percentage grant principle have been advanced. In particular, it has been urged that the block grant principle does, at the very least, make possible, and may even encourage, dangerous and undue variation in the quantity and quality of the service as between one local authority and another. Secondly, there may be certain special parts of some of the services which in the national interest require special expansion but which the local authorities faced with the more discouraging procedure of the block grant might be unwilling to expand. Those are the situations with which the Amendment is designed to deal.

We have been told, and perhaps we shall be told again, that all our fears about the effect of the block grant on local authorities were ill-founded, that local authorities will not be discouraged from spending in a manner consistent with the national interest and that undue local variation between one local authority and another will not occur. We may be wrong on this point, but, at least, I think it will be conceded to us that the anxieties which have been expressed about the effect of the block grant have a reasonable ground.

It is unquestionably true of the block grant procedure that if a local authority wants to be mean and to pursue economy on the rates to a point that is inconsistent with the national interest, the block grant arrangement gives it an added incentive for doing so. It gets an added reward for that anti-social act. There is, therefore, reasonable ground, at least, for having fears about the block grant.

What we are asking the Government to do, therefore, is this. They insist on having the block grant. We accept that on the main issue the Government, with their majority, will have their own way, but in view of the reasonable fears that have been expressed, will they not leave open to themselves a possible way of dealing with those evils should they arise?" If the block grant should prove in practice to have either of the undesirable results which I have suggested, our Amendment puts into the Minister's hands a possible remedy for that by reintroducing, either in whole or in part, the percentage grants that are destroyed by the Bill.

The Bill proposes to introduce the block grant and completely and permanently to destroy the percentage grants. The effect of the Amendment is that the block grant is introduced, the percentage grant is put on one side, but the idea of percentage grant, either in whole or in part, can be brought out again and used if the block grant does not come up to the Government's expectations.

5.15 p.m.

If the block grant proceeded according to the Government's optimistic estimate of the matter, probably no need of an Amendment of this kind would arise. This is admittedly a safeguard against possible over-optimism in the Government's view of the reaction of local government to the proceedings of the block grant.

What are the particular circumstances in which we consider that this special provision might be useful? The Amendment mentions two: the risk of undue variation, as between one area and another, in the standard of provision of any of the services and secondly, the special need to expand any part of any of those services". Let us consider the point of undue variation. In the earlier stages of the Bill, we have had many arguments about some of the aspects of the education service. We have just argued, for instance, about the fact that the number of children who voluntarily stay on at school beyond school-leaving age is increasing and that in the years of the immediate future it may be difficult to predict how much more it will go on increasing and still more difficult to predict whether that increase will be even throughout the country or whether it will occur more in one local authority than in another.

Still more difficult to predict is this. Suppose that local authorities find in the next five or ten years that the number of children staying on in this manner, whose parents want them to stay on, is increasing. What will be the reaction of local authorities to that situation? Some of them may react in a proper and public-spirited manner, seeing that there is proper provision for the increased number of children staying on at school. Others might be less public-spirited and allow that number of children in school to increase without making adequate provision, either in buildings, in staff, in equipment or in books, to cope with that increased number. That is one way in which an "undue variation", in the words of the Amendment, might arise in the quality of service provided as between one local authority and another.

Again, we know already that there is marked difference between one authority and another in the opportunities for children to get what is now called grammar school education. I think it is admitted that those variations are wider than they should be. The President of the Board of Trade, when Minister of Education, in effect said so. I think it will be admitted that there is nothing in the block grant arrangement to make it more likely that that undue variation will be remedied. If anything, if the block grant has any effect on the matter, it will be to widen rather than to narrow that degree of variation. There, then, is another field in which undue variation in the quality of the service may arise as between one authority and another.

The matter is not confined to education. We can take any of the services to which the block grant applies. It would not be disputed that wide variations in the quality of the fire service between one authority and another would not be in the public interest. Neither do I think it will be disputed that if there is anywhere in the country a local authority that does not take a proper view of its responsibilities towards that service and spends too little on it, the effect of the block grant is that the reward for doing so is made greater than it was before. It is not unreasonable, therefore, to have in the Bill some last-ditch safeguard against neglect of that kind.

Let us take another service which was introduced into the Bill by a Government Amendment in the later stages of the Committee proceedings—expenditure in connection with the care of handicapped persons. It is extremely undesirable as a matter of humanity and justice that the quality of provision made for such persons should vary very greatly according to the part of the Kingdom in which they happen to live. The Amendment says that if that is found to be occurring anywhere the Minister should have a remedy in his own hands.

There is another possibility at which the Amendment looks, that of special demand arising for a certain part of any service. It is always, possible that the Government might listen to the long and unhappy complaints which have been made in many quarters about the position of the youth service and the youth employment service and that they might feel that it was imperative to do substantially more in those directions than is being done at present. In order to do that, they would require the co-operation of the local authorities. By introducing the procedure of the block grant they have made it somewhat less easy than it was before the Bill was introduced for them to get the co-operation of a local authority which does not want to be co-operative. Once again, therefore, it is not unreasonable to put into the Bill a device which would help the Minister meet that situation. Those are the circumstances in which we think the device might be used.

I turn now to the nature of the device itself. It is, simply, that if the Minister, after he has made a general grant order and done all the other financial things required in Part I, found by experience that there was either undue local variation or that some important demand in any one of the fields concerned was not being met, he could reintroduce, either in full or in part, the existing percentage grants. I say "he could", but it would perhaps be more accurate to say "they could", because the Amendment follows the structure of the Bill in its reference to the "appropriate Minister". The device which we propose would operate by the appropriate Minister—the Minister of Education, the Home Secretary or whoever it might be—if he were satisfied on the point at issue, notifying the Minister of Local Government. If it were a field within the responsibility of the Minister of Housing and Local Government, no notification would be required and the Minister could immediately proceed to use the powers which the Amendment would give him.

The Committee will notice, too, that the Amendment is permissive in character. It does not attempt to defeat the whole purpose of the Bill by thrusting the percentage grant back into local government finance whether the Minister likes it or not. The Amendment gives him the power to reintroduce it in part if the change which is being made from percentage grant to block grant produces any of the undesirable results which a number of very responsible critics of the Bill have foretold.

The Government are proposing to destroy one method of local government finance and to commit themselves to another on which people well qualified to speak have passed adverse opinions. What we suggest is that, before committing themselves entirely to their new horse, the Government should not slaughter the other one but should keep it in the stable so that it can be brought out again and used if required.

This is, thus, an extremely moderate Amendment. It does not attempt to destroy the principle of the Bill. It merely invites the Government not to be too certain of the rightness of the arguments which they have advanced about the block grant, which so many who have good reason to know have doubted ever since they were first proposed.

Dr. King

I hope the Minister will listen to the persuasive words of my hon. Friend the Member for Fulham (Mr. M. Stewart) in moving this reasonable and modest Amendment. The Amendment does not seek to alter the block grant; it seeks to deal with some of the dangers of the block grant which the Government have denied will ever exist but against which we believe there ought to be safeguards. I am sure that the Parliamentary Secretary to the Ministry of Education must have been impressed by the weight of the educational arguments which my hon. Friend put before him.

One of the remarkable features about educational development in the last ten years has been the narrowing of the disparities existing between local education authorities. Country children are nearer now than they were ten years ago to getting the kind of opportunity in education that the town child has. Local authorities who have neglected this aspect in the past have been stepping up the provision of grammar school education for children. In many village schools that I know, the sanitation has been modernised. There is still a tremendous amount to do, but we have narrowed the gap between the worst authorities and the best ones. Hampshire, of whose education committee I am a member, has moved in the league tables of local education authorities from a position almost at the bottom of the list towards the top in some of its educational developments in the post-war years.

I am afraid that one of the effects of the block grant may be to widen the disparities which still exist. We have by no means achieved equality of opportunity. I believe that we still need to have inducements to narrow the disparities between the best authorities and the worst ones. I will not argue in detail why I believe that to be true. I will merely give a simple example, that of my local authority. We have a rapidly expanding population; it is probably expanding more rapidly than in any other county. Our child population has almost doubled since the war. We have a tremendous leeway to make up in the rural areas.

Now we shall have to work under a general grant the formula of which the Hampshire County Council does not think will make adequate provision for all the special problems facing Hampshire. It believes that the grant will not move flexibly enough to meet the expansion of the child and adult population of Hampshire. That may set back even a keen authority like Hampshire. Instead of going on with its remarkable development, it may under the new grant have to struggle just to keep pace, just to make average provision for its children. That is one kind of disparity which the general grant may produce in relation to well meaning, idealistic and progressive local authorities merely because it does not meet their own specifically local burdens.

On the other hand, as my hon. Friend pointed out, reactionary local authorities, of any political party—finance committees especially—may find themselves arguing under the general grant "If we can save money on a service because the sum which the Government give us a fixed one, we can save the ratepayers every penny that we save on that service. "There is the possibility of an authority trying to cheat the Government by spending less than the average amount which the Government are giving for a service. That is the temptation which the general grant puts before every councillor; if he can persuade his authority to employ fewer teachers than the national average, he makes a profit for the ratepayers at the expense of the progressive authorities, but will hurt education in doing so. Even if that is not true, even if no authority turns out to be as bad as that and no finance committee as ruthless as that, a disincentive creeps in for the authority which is backward and which has been struggling in past years to raise its provision to the level of the best authorities.

5.30 p.m.

The Amendment simply gives the Minister power to remedy any serious new divergencies which he sees emerging between the average local authority—not even the best—and the worst. It will enable him to step in and to make a special grant to an authority which is falling down on its job for some local reason possibly beyond its control.

The second feature of the Amendment I believe to be just as important and in many ways a positive contribution to educational progress. It is a simple fact of educational history that when a Government or a Minister wished swiftly to expand some particular service in local government, because the country needed it, the instrument at hand was a percentage grant which the Minister could make, if he were keen enough, of up to even 100 per cent. The classic case is the revolutionary drive which we made towards the provision of school meals and which was carried out in the first place by the system of a 100 per cent. grant. If the Minister felt keenly that the country needed a service, he could encourage the local authority to provide it by the kind of grants which he gave.

That power has disappeared under the general grant formula. In the Amendment we are asking the Committee to write into the Bill power for the Minister to introduce specific grants for specific purposes which are educationally worth while. This would enable him to say to a local education authority, "In addition to the general grant which we make to you under the main provisions of the Bill, we are so keenly interested in a particular service which ought to be provided that we propose to make you a special grant towards what you spend on it."

For example, the nation might suddenly appreciate that it was betraying the youth of England by educating them fairly generously to the age of 15 and then throwing them on to the streets with a pitiful youth education service. If the nation suddenly realised that and if the Minister of Education, who would be the appropriate Minister under the Amendment, realised that what the country needed was an expansion of the youth education service, the Amendment would provide him with an Instrument not to use against a local authority which did not care for youth, in order to make it do something for youth, but as an incentive to a local authority which was keen to do such work.

The country might decide that it was time that we pulled down the ugly, dark, slum schools of the industrial areas of England and gave all our children the chance, which millions have, of being educated in decent modern buildings. The country might decide that it wanted to make a drive to get rid of insanitary village schools and to remove the worst 500 or 1,000 village schools from the map. The Amendment would give the Minister the instrument with which to do it.

We might decide to eliminate the black list schools of England, the schools which were condemned in 1918 because they did not conform to the building standards laid down in 1902 but which still house English children. This black list of schools has grown steadily, even though for many years the Ministry has removed the black list from its Annual Report.

If the Minister wanted an incentive to use to wage a campaign on some evil things still surviving in education or a campaign to encourage some good things which he wanted to develop, this provision would make it possible. For instance, he could say to local authorities, "We want all children to learn science in laboratories and therefore we are earmarking a special extra grant for those local authorities which are keen enough to see that all their children learn science inside a laboratory instead of inside an ordinary classroom."

The initiative need not necessarily come from the Minister. After all, most educational progress in this country has come from keen, little men in local government who carried out some piece of progress. An example is Chamberlain, in Birmingham, in his radical days at the end of the last century. These men have carried out some keen piece of municipal progress which has gradually permeated into the law of the land. It may be that some keen local authority could come to the Minister and say, "Here is something excellent that we want to do in education. Can we have a special grant for the purpose?"

I believe that this is an exceedingly useful Amendment. I ask the Minister to accept it from us that it asks him to yield none of the principles which he wrapped round himself throughout the Committee stage of the Bill in imposing the block grant on the nation's local government services. Having accepted, as the Committee must, the Government's main contention, let the Minister now be reasonable and accept a worthwhile Amendment.

Mr. R. H. Turton (Thirsk and Malton)

The trouble with a Report stage and Recommittal is that one rather forgets that the Measure has been through the Committee stage. If I raise any points which have already been thrashed out, I hope that my right hon. Friend will pardon me and will give me the explanation.

I do not think that the Amendment is well drafted for its purpose. It raises an important point about uniformity, and it also raises the question of new services. I am probably not in entire agreement with the hon. Member for Southampton, lichen (Dr. King), because I do not want to see uniformity of pattern throughout the country. I want to see equal opportunity for the children, and I believe that that can be obtained just as well by local, democratic authorities who are trying to pursue their own pattern of education in their own areas as by policy sent down from Whitehall and imposed. That is my view and I expect that I am not at one with hon. Members opposite.

Dr. King

Will the right hon. Member accept not only my assurance but, I am certain, that of my right hon. and hon. Friends that we, too, have no desire for a uniform drab system? What we desire is equality of opportunity. We do not want two schools necessarily to be identical. We want them both to be clean and healthy and well-built.

Mr. Turton

That is why I think the Amendment is not appropriately drafted to meet the point. I thought it was putting a uniform pattern into operation. I want to see a good deal of variation. My authority in the North Riding of Yolk-shire provides just as good an education as does Southampton, but it varies considerably in many ways.

I think it is vital in our system of education that there should be equality of opportunity for children to go from local education to the universities, and that is not happening at present under the system of percentage grants. We should look at the position again to see whether we can work this Bill in order that there shall be more equality of opportunity in education in different authorities, and if we can do that we shall have achieved an improvement in education.

I feel, personally, that it is far better in local affairs to allow a local authority to run its own show. We have a very fine lot of local authorities. I was confirmed in that view by the hon. Member for Itchen, who said that in his view all the improvements in local affairs had been carried out by keen, little men in local government. I am sure that he is right, and that is why, broadly speaking, I think that the Government are right in giving more discretion to local Government. The difficulty is this. It is a mistake to try to ensure equality of opportunity by the provision of minimum standards and the reduction of grants in default as provided in Clause 3. In addition, we require some other means of variation in the grant to secure that equality of opportunity to which I have referred not by way of a penalty imposed but by way of a boon conferred by the Minister.

I am not certain how this new general grant will work out in relation to Part III accommodation. A local authority may have gone in for a good deal of the provision of Part III accommodation and may have enjoyed for some years grants under Section 21 of the Act of £7 10s. per bed or £6 10s. per multiple bed. Another area may be defective in Part III accommodation. There may well be a need for much more Part III accommodation, consisting of suitable sized homes in the next ten years when the aging population is expected to grow. Is that provided for in the present system of the general grant?

I would like those authorities who have been rather backward in the provision of Part III accommodation to be encouraged, so that when they incur heavy maintenance costs and capital expenditure they will get sufficient provision from the central authority. That point may have been dealt with in Committee; I apologise if it has been, but I think it would be helpful if the Minister could say a word on the subject.

Finally, what will happen when we get a Report like the Percy Report, which makes a very important recommendation that in future local authorities should be responsible for the after care of patients in hospitals, whether general hospitals or mental hospitals? That is of vital importance to everybody. We want to be quite sure that in this part of the Bill the machinery is swift and definite to encourage local authorities when the necessary Bill is passed to go forward with the provision of that accommodation. I believe that to be one of the most important things to be done under the social policy in the next few years. We want, if possible, those who, as I think, are wrongly accommodated in large mental hospitals to be properly looked after in some form of hostel provided by the local authority or by whosoever Parliament thinks fit when the Bill is passed.

Reading through the Bill, I am not clear whether there is adequate machinery laid down to deal with that sort of case. I hope that my right hon. Friend may be able to clear my mind on this point, and I hope he will be able to design some form of words to meet the evident desire of hon. Members in all quarters of the Committee to ensure that there is equality of opportunity, but not uniformity, and that the machinery is sufficiently elastic to deal with the new problems which will arise in the coming years.

Mr. Ede (South Shields)

s: It is a great pity that the speech of the right hon. Member for Thirsk and Malton (Mr. Turton) has been delivered at so late a stage of the Bill, because after sitting through 31 sittings of the Standing Committee, which according to my calculation represent about 80 hours of time, I think we have at last heard a speech from the other side of the Committee which epitomises our fundamental objection to the whole system that we are inaugurating in this Bill.

5.45 p.m.

The right hon. Gentleman spoke of equality of opportunity. I was brought up in a family that believed in equality of opportunity. In fact, it was one of the great tenets of the Radical Party in my youth that that was the essential reform which it was necessary to carry out if we were really to have a democratic country. I accept the doctrine that the right hon. Gentleman has laid down, particularly in education. I do not want to see uniformity. I want to see every child in this country given the opportunity, in the environment in which he lives, to get a chance to develop his own personality. I am grateful to the right hon. Gentleman for having put the point so well.

The first requirement with regard to equality of opportunity is that the child shall be taught, no matter where he may be, in a reasonably small class. In my view, smaller classes all over the country constitute the first reform that should be carried out. This Bill was defended in the House on Second Reading by the the Minister of Education who said that if the schools were not staffed adequately there would be "an uncovenanted financial gain." My hon. Friend the Member for Birmingham, All Saints (Mr. D. Howell), who played no small part in ensuring that we had 31 sittings in Standing Committee, drew attention to the plight of Birmingham which is 400 or 500 teachers short. The Minister of Education, for some reason or other, thought it desirable to point out that under the block grant this would be an asset. He said: I think the hon. Member for Small Heath's point was that expenditure is getting on for £500,000 and they will not get any more under this proposal. I should like the hon. Gentleman to realise, and I think it is a good example for the House to appreciate in regard to the problem as a whole, that the general grant will be fixed with due regard to the Government's policy and to the average teaching establishment which is necessary for the education service in the country as a whole. That, of course, means that a city like Birmingham, which is at the present time several hundred teachers below establishment, would, if the general grant were in operation, already be getting the money in respect of the proper establishment of teachers. They may be 400 or 500 teachers short, but under the general grant they will get the grant on what they ought to have had and not on what they have had. Therefore, it would be getting a general grant which assumed that it was fully staffed. It would be getting benefits from a strictly financial point of view which would certainly help it to meet its problems. That means that we cannot get teachers but we can have a turntable for the fire service.

My hon. Friend the Member for All Saints interrupted the right hon. Gentleman, and then the Minister replied: 'I am saving that the grant would be fixed in order to make an appropriate contribution in relation to the average staffing throughout the country. Therefore, if the city, as at present, were below staffing establishment it would not suffer but, would, in fact, make an uncovenanted financial gain."—[OFFICIAL REPORT, 10th December, 1957; Vol. 579,c. 1102.] It is true that the city ratepayer would not suffer. He would be making "an uncovenanted financial gain". At the present time, a child in the larger classes in Birmingham, with the shortage of staff which that authority has, is suffering very considerably; yet that is an area where, after all, a high standard of technical education ought to be regarded as the first requirement in the schools of the city. I am quite prepared to accept the criticism of the right hon. Member for Thirsk and Malton with regard to the wording of the Amendment. We do not have the advantage of Parliamentary draftsmen to do it for us, and certain of us who have served in Government Departments have been rather longer out of office than has the right hon. Gentleman, who is, we realise, quite competent and quite right to criticise us for a loss of memory which may, perhaps, afflict him in a few years' time. I make no complaint that that criticism should be made on this highly technical point.

I am distressed about another matter. My hon. Friend the Member for Southampton, Itchen (Dr. King) and my hon. Friend the Member for Fulham (Mr. M. Stewart) both alluded to what is the most important feature in the education service of the country today, namely, the desire of parents to give their children an uncovenanted benefit by allowing them to remain at school beyond the compulsory school-leaving age. After all, and long may it remain so, it is the duty of the parent in this country to educate his child. The Education Act, 1944, lays down that It shall be the duty of the parent of every child … to cause him to receive … full-time education suitable to his age, ability, and aptitude, either by regular attendance at school or otherwise. My hon. Friend the Member for Peckham (Mrs. Corbet) referred during the Second Reading debate to the difficulties in some areas caused to parents who wish to secure that their children remain on at school by the shortage of accommodation for those children who are within the ten years of compulsory school life from five to fifteen. One of the subjects to which an energetic Minister of Education will, in the years not so very far ahead, have to give his attention is the need to ensure that parents desiring their children to stay on beyond the school-leaving age shall have an opportunity to do so. I hope that, where there is any shortage of capacity to comply with that wish of the parent, the Ministry of Education will take such steps as are open to it to remedy the deficiency.

This Amendment, were it adopted, would afford one means of ensuring that parent and child should have that opportunity. I am quite sure that education given like that, at the wish of the parent and when the child has reached a fairly advanced age, is likely to be more effective than education given and received merely because the law says that it must be so. I hope that the Minister will feel that the case made out by my hon. Friend the Member for Fulham and those who have spoken on the Amendment, particularly the right hon. Gentleman the Member for Thirsk and Malton, merits more attention than it has so far received. I hope that something on these lines will, even at this late stage, be incorporated in the Bill.

Mr. George Thomas (Cardiff, West)

I listened with deep interest to the right hon. Gentleman the Member for Thirsk and Malton (Mr. Turton) who was able to interpret, within the terms of the Amendment, a reference to the Health Service, on which he has a special knowledge. I have no doubt that other right hon. and hon. Gentlemen who have special knowledge of the various services within local government would be able to give to the Committee considerable advice about how necessary it is not to be too rigid in our grant formula. The one thing which local government requires is elasticity in the grant formula.

One of the major reforms of the 1944 Education Act was that it gave increased power to the Minister of Education. He could encourage local authorities which were backward. He could help the progressive authorities. Part of the complaint of educationists about the block grant proposals has been that the powers of the Minister of Education to help and encourage local authorities have been undermined.

I see the right hon. Lady, the Member for Moss Side (Dame Florence Horsbrugh), who was Minister of Education in a turbulent period, sitting opposite. She will know that I am not meaning to be unkind to her. I think—I had better not say what I think—but the right hon. Lady will, I hope, lend her weight to the attempt being made, by this Amendment, to restore to the Minister of Education powers which he will otherwise lose. The Minister of Education will be given power, under our proposals, to draw the attention of the Minister who holds the reins of power to the fact that there are very widespread discrepancies between the opportunities being offered to children in different parts of the country.

One of the most notable features of educational change during the past two decades has been the way in which the process of of levelling up has progressed. There is not a very wide disparity today between the opportunities in education for children in one part of the country as compared with children in another part. Local government officers and parents have been so keen that their children shall have equality of opportunity that we have been privileged to see a great advance in this respect. My anxiety is that, if the Amendment be not accepted, we shall begin to see disparity of opportunity. Local authorities need encouraging to give similar capitation allowances for expenditure on the children within their care. As the Committee will know, there are authorities which, if they can save by reducing capitation allowances on the various children in various types of school, are very quick to do so.

I hope that the Minister will say that he can, at a later stage, when we go back to Report, put into the Bill adequate words to cover the intention behind the Amendment. I am anxious, as I believe all people of good will in all parties are anxious, that we shall not see a lowering of education standards in the country. If we are to prevent it, the block grant system is just not good enough. It is too rigid. Let the Minister fortify himself with this added power and give additional grants in the period between setting of the grant and the consideration of the next. Let him set free the hands of the Minister of Education so that he shall keep what he now enjoys, the right to encourage those who are doing their best, by giving them added incentive, added grant, for special needs.

6.0 p.m.

Dame Irene Ward (Tynemouth)

This is a very complicated and difficult Bill and this is a very difficult Amendment to discuss in detail and with any certainty. I am very glad indeed that I did not vote for the Second Reading. There are some things about which I know quite a lot, and then I never mind throwing my weight about, but when I do not feel competent to assess what is being said by either the Government or the Opposition I prefer to hold my hand. In other words, I am rather cautious, although I do not suppose that most hon. Members agree with that.

Anyhow, I have listened to what has been said on both sides about this Amendment. I am not particularly happy about a document issued by the Ministry of Housing and Local Government about hypothetical financial arrangements. I like to have my money on the table, and I am not prepared to vote against this Amendment unless I know from the Minister—who, I am sorry to say, is not listening in the least to what I am saying—what will happen in the County of Northumberland.

The County Borough of Tynemouth and the Borough of Whitley Bay are very good local authorities, but I am not satisfied that their administration is well considered or very good. I am sure that they endeavour to do the best they possibly can in local government. But for a very long time we in Northumberland have been hamstrung in the educational world because we are certainly below the national average in the provision of grammar school places.

I want to know from the Minister whether, when the Bill is passed, we shall have equality of opportunities from a financial point of view. I fully realise that it would take a long time for us to pull up to the much more satisfactory position of education in many other local authority areas, but I want to know what will happen to Northumberland under the Bill. I agree with what my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) has said, but if one is not on the Standing Committee it is very difficult to "keep tabs" on what is happening. Therefore, I am dependent today on hearing from my right hon. Friend the Minister exactly what the position of Northumberland will be.

My right hon. Friend the Minister of Housing and Local Government will agree, if he has consulted the Minister of Education, that from time to time the County Borough of Tynemouth has been in conflict with the Minister of Education over certain aspects of educational policy. Of course, it is difficult when the Minister keeps on saying that he believes in local administration. So do I; but when the County Borough of Tynemouth gave priority to certain aspects of education only last year the Minister of Education would not accept the Tyne-mouth recommendation.

I do not know how we shall get out of our difficulties. But I want to know whether we shall have sufficient money in Northumberland for education. As I said before, I believe that my local authorities do spend wisely. Of course, they do not always spend money in ways that I like, but that is because, naturally, we all have our individual points of view, which is very right and proper. I never mind losing a battle, but I try to take care that I do not lose the last battle. I consider that this Amendment is very important from the point of view of education in Northumberland.

Unless I get a definite assurance that the position of Northumberland will be fully safeguarded, I am not prepared to vote against this Amendment. We are behind in so many things, and I am not

prepared to think that the future will be brighter and rosier, because it never is unless we fight for it.

Scotland takes a great deal of handling in this House—and so does Wales. They have many more hon. Members than the County of Northumberland.

Mr. James Griffiths (Llanelly)

So have we.

Mr. Edward Short (Newcastle-upon-Tyne, Central)

Does my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) realise that Northumberland was a kingdom long before Wales became a Principality?

The Chairman

I do not think that we had better pursue that point any further.

Dame Irene Ward

You will not mind my saying, Sir Charles, that I am delighted at that interruption from the hon. Gentleman opposite.

The balance of power today is not quite as good as it was in the old days. Therefore, it is all the more important that we should be absolutely certain that we shall get our rights.

I will not detain the Committee, because there are other Amendments in which I am interested. But I want a straight assurance from the Minister that Northumberland will be able to build up its education system, and that we shall not be any worse off than other counties. In other words, we want equality of opportunity. Unless I get that assurance, I do not propose to vote against the Amendment.

Mr. Philip Goodhart (Beckenham)

I originally decided not to speak on this Amendment because there is much in it with which I disagree, but I should like to say a word or two in support of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), who hit a great many nails on the head.

During the last few months, we have heard a great deal from Ministers about the controls that they can impose on local authorities which do not do their duty by the children and do not fulfil their educational functions. I have often heard it said that Conservatism is a mixture of the stick and the carrot. We have heard a great deal about the educational stick. I should like to see somewhere in the Bill reference to educational carrots, to educational incentives. I do not want the Minister to commit himself at this moment, but I do ask that he should not shut his mind to including some subjective factors in the assessment of the general grant. I ask him to make a statement on those points when he replies to the Amendment.

Mr. H. Brooke

I have listened to this debate, which has been most sincerely conducted on all sides, with very great care and interest. I hope the Committee will allow me, first, to reply to the speech of my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), who covered a great deal of ground on this somewhat narrow Amendment. My right hon. Friend voiced genuine fears lest we might be so planning the transformation from specific grant to general grant that authorities which were not keen on developing some service or other might be left to lag far behind the acceptable national minimum standard. He also asked what provision would be made in the general grant machinery for services. such as building under Part III of the National Assistance Act, and new or developing services connected with mental health and the like, to go forward.

The simple answer as regards the National Assistance Act is that this kind of expenditure is named in Part I of the First Schedule, paragraph 10, as part of the relevant expenditure which will need to be taken into account by the Government and by Parliament when fixing the amount of the general grant. I doubt whether, with all his experience, he would maintain that the existing formula' of settling these grants have worked so satisfactorily that they ought not in any way to be interfered with.

With regard to developing services, the Bill makes a full and adequate provision for development of any service which is named in Part I of the First Schedule. There is no difficulty at all if a committee or commission makes a report recommending that, in broad terms, more public money should be spent on development in a certain direction. If the Government and Parliament take that same view, there is no difficulty at all about the general grant, when next it is fixed, being enlarged to take account of and to provide for that. There is, of course, a difference in the case of an entirely new service. I should explain to the Committee that if it is a wholly new service the local authority will not have power to conduct it until Parliament has given that power. There must be legislation, and in that legislation is the appropriate place to make provision, if it is so thought fit at the time, for the expenditure on that service to come within the general grant, or to be financed in whatever way may be appropriate. The main point I want to establish and make clear is that embarking on an entirely new service would necessitate legislation and that legislation will afford the opportunity for financial provision.

Mr. J. T. Price (Westhoughton)

I quite appreciate the point made by the right hon. Gentleman, without necessarily agreeing with it, but, in speaking of a developing service or a new service requiring legislation, he has entirely overlooked another type of circumstance directly linked with education. Pleas have constantly been made in this House and elsewhere for greater emphasis to be placed on technical education in grammar schools because of the need for more scientists, technologists and so on. It is not only a question of the provision of places in schools, but once the emphasis is shifted in some of the older grammar schools there is the need for more laboratories and equipment, which will not be provided if the money is not forthcoming under the block grant. I think the right hon. Gentleman has evaded that point, not only in Committee, but in the House.

6.15 p.m.

Mr. Brooke

The hon. Member will appreciate that I was only at the beginning of my speech on this Amendment. I have a great deal more on which I should like to express the views of the Government.

The general criticism which has been embodied in speeches by hon. Members opposite is that a general grant may produce a lack of uniformity through there being, presumably, a great difference in the approach and attitude of individual local authorities. Cases have been adduced by various hon. Members as to lack of uniformity in grammar school provision which has existed in the past. There is a fear that that may be perpetuated, and therefore it is suggested that this Amendment should be accepted to obviate that happening. Hon. Members who have argued like that can hardly have appreciated that the lack of uniformity which they deplore and have used to illustrate their point has itself come into existence under specific percentage grants. They are falling into the logical mistake of seeking to press the Committee to restore the possibility of using percentage grant in order to remedy a situation which has already come into existence through the operation of percentage grants. [Interruption.]

I hope hon. Members will allow me to develop my argument; I have not interrupted anyone else. It really is not the case that percentage grants make for uniformity. I have discussed this matter with the Parliamentary Secretary, who is vitally concerned, and I know I have his full support in what I say. In the case of a percentage grant a wealthy authority, with substantial financial resources, can go ahead and do things knowing that 50 per cent. or 60 per cent. of the cost will be reimbursed to it from the Exchequer. A poorer authority which, because of its relative poverty, might not feel that it could embark on those pioneering efforts, thereby has to hang back and thereby loses the possible advantage of a percentage grant which a richer authority can have. Contrast that unsatisfactory arrangement with what the Government's Bill is to bring into existence.

The Government plan is to provide a global sum of money, which will be arrived at after taking into account the need for development of the services and other things. That global sum will be distributed between all local authorities, not according to their willingness to spend—in parenthesis I say, willingness to spend in part other people's money—but according to their genuine needs and circumstances.

That is a far wiser and fairer way in which to secure uniformity. This gives local authorities equality of opportunity. That is precisely the purpose of the Government. It is wholly untrue, and the falsehood of it is shown by examination of circumstances and past history, to argue that percentage grants have greater efficacy than other forms of grant in ironing out variations in the provision of a service. There will, of course, be the safeguards at key points and those safeguards are strengthened by Clause 3.

Mention was made of the fire service. Under the new arrangements for the tire service, it will not be the case that the Home Office will sit back and take no interest. There will be these controls at key points, but, so far as possible, they will be concentrated on the key points so as to give local authorities as much freedom and responsibility as possible because that is one of the central objects of the Bill. It is a cardinal purpose of the Bill to put more responsibility on to local authorities. In that way we on this side of the Committee believe the country will get better local government.

Our case is that the development, and the wise development, of these services does not depend in the last resort upon sticks or carrots or anything like that. In the last resort, it depends upon public opinion. If there is a sound public opinion up and down the country, services will go ahead. If public opinion is indifferent, nothing which this Committee can do is going to bring about expansion of services in areas where expansion of services is not considered necessary—except, may be, the centralisation of all power in Whitehall; but that, again, is one of the developments which we on our side believe would be fatal to the general cause of local government. We wish indeed to strengthen and enhance the relationship between central and local government so that local authorities will not be treated, and not be made to think of themselves, as mere agents or puppets of the central Government, but as genuine partners in carrying out the purposes which public opinion lays in front of them.

I have spoken of the first part of the Amendment which deals with lack of uniformity. As to the second part, the need for expansion of the services, that is already directly covered by the provisions in Clause 2 (1) which lays down that the need for developing the services must be taken into account in fixing the total of the Government grant. That Government grant, as I say, will be then distributed according to the needs and circumstances of individual authorities.

My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) asked particularly about Northumberland. She, too, said there had been a lack of uniformity in the past. I hope, therefore, that she will not support this Amendment, the practical effect of which would be to make it possible to bring back the type of grant which produced the lack of uniformity of which she complains.—[HON. MEMBERS: "No."] With her interest in Northumberland, she may have studied the document which I circulated to Members of the Standing Committee and placed in the Vote Office and which gives what is, frankly, a hypothetical calculation of what would be the effect on local authorities for the next two years of the provisions of this Bill, if we were to make a general grant order based exactly on the formula and figures set out, for illustration purposes only, in the White Paper of last July. She will find there—and, as I say, these are no more than hypothetical figures—that under the grant, at any rate hypothetically, the figures are not too bad: of the county districts in Northumberland only three are losers and 17 are gainers under the Bill, and the Borough of Tynemouth is a quite substantial gainer.

Dame Irene Ward

That is just one of the points. Tynemouth County Borough is a gainer, and I am delighted, but the Borough of Whitley Bay is a loser. It is no good at all telling me that 17 gain and only 3 lose. I am not going to support a proposition under which one of my people loses. I can say that. I am not interested in the old percentage grant. What I want to know is, are we going to be better off under the new grant?

Mr. Brooke

My hon. Friend says she is not interested in the old percentage grant, but in her earlier speech she said she was not sure whether to vote against the Amendment, the effect of which would bring back in part the old percentage grant. This is a free country and a free Parliament, and she can vote as she wishes, but if she does vote against this Government she will have to explain to her constituents—[HON. MEMBERS: "Oh."]—in Tynemouth why she opposed a Measure which, at any rate on the hypothetical figures, would bring the Borough of Tynemouth an immediate gain of a 10d. rate.

Dame Irene Ward

What about Whitley Bay?

Mr. Brooke

The figures for Whitley Bay are that in the first year it would make no difference at all to Whitley Bay and in the second Whitley Bay would suffer a loss of 1d.

Dame Irene Ward

There they have small fixed incomes.

Mr. Brooke

I hope my hon. Friend will bear in mind the fixed income groups in the Borough of Tynemouth, too.

Dame Irene Ward

Oh, I do.

Mr. Brooke

The hon. Member for Southampton, Itchen (Dr. King) argued that the education authority in Hampshire did not think that the grant would be adequate, and, therefore, he pleaded the cause of this Amendment. Neither that nor any other education authority has any right at this stage to say that the grant will not be adequate. That is a matter which has to be determined by the Government and Parliament in the light of what is said in Clause 2, which we have not yet come to on Recommittal. That will be the time for the hon. Member and others, if they wish, to argue that the proposed amount of Government grant does not take sufficiently into account the need for development of the services. If it does not do that, if it does not give due weight to that factor, it will be an offence against the terms of the Bill. Therefore, this Government, being a responsible Government, would not bring forward any such suggestion.

The hon. Member argued on the school meals service that as the Government desired that to go right ahead they should offer a 100 per cent. grant, but surely neither he nor anybody else would maintain that it would be desirable in general to support education or any great service by a 100 per cent. grant. That is entirely unsound, and whereas I can fully agree with him that one can get local authorities to do almost anything and to spend almost anything if we offer a 100 per cent. grant, there is a difference in principle between a 100 per cent. and a 50 per cent. or 60 per cent. grant.

Dr. King

The right hon. Gentleman must not do me the injustice of saying I advocated a 100 per cent. grant. He is quite aware that I did not.

Mr. Brooke

The hon. Member did use the argument that we could encourage a service by a 100 per cent. grant, and I quite agree with that, but what we are discussing now is a 50 per cent. or 60 per cent. grant and the like.

The final point I want to make in reply to the debate on this Amendment is this. We must bear in mind that, in the long run, whether these services go ahead or not will depend in part on the amount of the general grant and in part on the keenness of local authorities. Local authorities will be the keener if they are given the maximum amount of freedom, and that is one of the principles underlying all our proposals in changing over from a specific to a general grant.

My hon. Friend the Parliamentary Secretary, in the debate on Second Reading, quoted figures which, I believe, proved this conclusively. In reply to all the arguments which were made then, some of which have been repeated today, that a percentage grant is essential if a service is to develop, he pointed out that in the nineteen-thirties, between 1931 and 1939, expenditure on education, which was assisted throughout by a specific grant on a percentage basis, increased by 16 per cent.; police expenditure, also aided by a percentage grant, increased by 18 per cent.; and yet on the services which were not aided by specific grants, services which the local authorities had to finance entirely out of their own resources, the expenditure increased, not by 16 per cent., not by 18 per cent., but by 24 per cent. The reason for it was that public opinion operated strongly in the direction of operating those services.

Hon. Members

No.

Mrs. Harriet Slater (Stoke-on-Trent, North)

Which services?

6.30 p.m.

Mr. J. Griffiths

Would the right hon. Gentleman tell us what are those services? Do they include public assistance?

Mr. Brooke

Public assistance, in the sense the right hon. Gentleman is thinking of, was not a public service in those years.

Mr. Griffiths

Of course it was in the 'thirties. In 1929 it was a local service conducted by the county council until the war years, and, indeed, after.

Mr. Brooke

If the right hon. Gentleman had allowed me to finish my speech, I would have sat down and listened to what anybody else had to say. The fact remains that, whether we take that or other elements, it is by no means the case that local authorities neglect services which are not aided by specific grants and concentrate on the expansion of those which are. Local authorities are highly responsible bodies. I have given the proof to this Committee that it would not be wise to seek to serve these two purposes in the Amendment by restoring the possibility of raising the percentage grant, which has failed to produce the results desiderated in the past. On the contrary, what matters is that the general grant shall be adequate, and this Government means, first, that it shall be adequate and, second, that public opinion, both nationally and locally, shall be favourable to the development of the services.

Mr. Mitchison

I think that the right hon. Gentleman has been dealing too much with education lately. In the absence of his right hon. Friend the Minister, may I tell him that he reminded me of a rather old-fashioned school master. At one point he brought out the whip and turned round, rather ungallantly I thought, to his hon. Friend the Member for Tynemouth (Dame Irene Ward) and said that terrible things would happen to her for a little bit of noise in the class. Then, finally, we had an appeal to the local authorities to the effect that it all depended on the spirit they showed, that money did not matter, that a little bit of zest, some of the old school spirit, would carry them through any difficulties.

The right hon. Gentleman was badly off the point. He was defending his Bill. He must have had an uneasy conscience about it. All he needed to do was to answer this Amendment, which does not propose to substitute a percentage grant for block grants. It proposes, in certain circumstances, merely, to give the Minister power—not to oblige him—to supplement the block grant. The right hon. Gentleman is so confident that he will never need to do it that he disdains the power we wish to give him.

Mr. H. Brooke

Perhaps the hon. and learned Gentleman will allow me to say that if my speech ranged widely it was because some of the preceding speeches had done the same. I thought that it would be discourteous of me if I did not answer the general as well as the specific points.

Mr. Mitchison

No doubt it was discourteous of me not to appreciate the connection between what the right hon. Gentleman was saying and the speeches made previously, but to my mind the connection was a little obscure. But let us return to the Amendment. This is simply the power, in certain circumstances, to supplement what is commonly called the block grant by limited percentage grants, and in the discretion of the Minister.

Dame Irene Ward

Jolly good.

Mr. Mitchison

I am much obliged to the hon. Lady and I am glad to learn that we are agreed on this point. What I want to know is why the Minister objects to this, and I have not yet had the answer. It is absurd to say that percentage grants mean that the wealthy local authority does more and gets more. We had the figures in Committee. If I give them again shortly it is merely to show the inaccuracy of what the right hon. Gentleman was saying.

By and large, county boroughs received 59 per cent. in 1955–56. The L.C.C., certainly the wealthiest local authority in the country—as the right hon. Gentleman ought to know because he led the opposition in it for some time—received only 43 per cent. If we make the comparison between England and Wales, the counties received 60 per cent. in England and 65 per cent. in Wales. The story that the percentage grants work in the way suggested by the right hon. Gentleman is not only irrelevant, but inaccurate.

Now, on this Amendment, it seems to me to be the complement to two things. First, there is a penal Clause in the Bill for local authorities who fall short of certain standards, and the Minister has to be satisfied not only that they have fallen short, but that for this reason the general grant payable to them ought to be reduced. Suppose they fall short of standards for reasons which do not invite the Minister to invoke the penal Clause, and for reasons which are not their fault. What will happen to them? Are they to get no assistance, or what does the right hon. Gentleman suggest?

His only answer to this part of the purpose of the Amendment was to say that in certain circumstances the total would be put up. That may be. If the prescribed aggregate is increased that does not affect the position as between one local authority and another, for they are to be governed by the basic grant and the various supplementary grants, one of which may, by accident, cover one of these cases, but which my no means necessarily does so. All we are trying to do on that is to give the right hon. Gentleman an alternative to the big stick. The big stick is in Clause 3, but it is only to be exercised if the local authority is at fault. If, without the local authority being at fault in any way, there is still need to give some special help, and if the local standard has fallen there, not because of its own fault, what does the right hon. Gentleman suggest should be done?

Apparently, what he suggests should be done is this: there may or may not be a case for raising the prescribed aggregate. There is nothing in the Bill to enable the Minister to help a special local authority in these circumstances, and he is now refusing the power to give that help while retaining the power to punish them in other circumstances where the standard has fallen through their own fault.

If this is the Tory attitude towards local authorities, if this is what Tory freedom means, it does not surprise us, but it may surprise some of his hon. Friends who show some symptoms of believing in it at intervals. What a position. We are to punish them for a fall in standards if it is their own fault; if the fall in standards is not their fault, we will refuse to take the power to give them help.

There is another object of this Amendment. When we were talking just now about prescribing a minimum, the Parliamentary Secretary to the Ministry of Education seemed to me to produce the one logical argument against doing it. It was that there might be exceptional circumstances in one area which would call for exceptional help, and that, if there were a minimum, that exceptional help would have to be continued in future years. The hon. Gentleman thereby recognised the possibility, at any rate in the educational field, of an exceptional fall of that kind.

Again, this is not a question as between one local authority and another but as between one service and another. There is no machinery in the Bill for giving special help for that service, at any rate, none I can find. Let me take one or two fairly obvious examples. Consider, first, the educational field and some of the small services, the things on which local authorities are likely to cut down if they are cutting down at all. Take, for example, the Workers' Educational Association, in which, I dare say, the hon. Lady the Member for Tynemouth (Dame Irene Ward), like myself, has always taken a great interest. These are just the kind of people who may find that they suffer unduly from the effect of the general grant. Surely, in a case of that sort, there should be power to continue some form of grant towards that service or some other.

Let us take another case, this time the form of scientific teaching. My impression—I speak subject to correction, but I have a little knowledge of what I am talking about—is that the character and the subject matter of scientific teaching has varied considerably in recent years and has varied because of the developments of science itself, on the one hand, and, on the other hand, because of the requirements of industry and public service in relation to science. When that happens, there may well be a change in requirements and a need to give special help towards that part of the educational service. I find nothing in the Bill which enables that sort of thing to be done.

I therefore regard this as a most important Amendment, because it gives the opportunity to keep the grant system up to date. I am quite unimpressed by all the general arguments that the right hon. Gentleman produced about percentage grants. If he does not like that way of doing it, if he is so obstinately wedded to the block grant that whenever we suggest the percentage grant he takes his big stick and says, "No, not on any account. I am horrified and terrified of that. I never want to see it again"; if he does not like that kind of machinery, let him accept the principle and produce another Amendment that will have the same result. The Minister cannot do that under the Bill as it stands and he shows no sign whatever of inventing any other method of doing it than that suggested in the Amendment.

Therefore, to provide for the inevitable difficulties of some local authorities, whether in Northumberland or anywhere else, who may want this, that or the other by way of something which is not their own fault and which has caused a local lowering of the standard, and to provide for the similar type of case where the exceptional difficulty—the falling standard, it may be, or the particular need—is not a local one but is one which is peculiar to some service or to some part of a service, I suggest that the right hon. Gentleman should not have replied in the way that he has done. In so doing, he has shown how rigid, how harsh, how unprogressive and how unsuited to the requirements of these vital social services this form of block grant is unless it is supplemented in some such way as is suggested.

I remind the right hon. Gentleman, when he denounces the percentage grant, that the old educational grant was by no means a pure percentage grant. If, instead of prejudice, he prefers a little wisdom, he would do better to look at these forms of grant on their merits and not to be deterred by one catchword and so attracted by another that he inflicts this piece of rigidity on local authorities and local services without any help in the special circumstances to which the Amendment is directed.

6.45 p.m.

Mr. Short

I should like to say a few words on the Amendment, because it raises one of the cardinal issues in the Bill. The Amendment would provide an element of flexibility in the working of the block grant. It would give power to the Minister to give extra financial assistance to local authorities to deal with two contingencies: first, if there were undue local variations; and, secondly, if there were a need to expand any of the services specified in the Bill.

Concerning the second of those contingencies, the Minister said, a short while ago, that this provision was unnecessary because the Bill itself already provides machinery to deal with the need to step up any particular service. He said that it would be done by increasing the overall global sum for block grant. How can the Government be sure that that increase will be reflected in the development of the service? The Government have said all along that one of the virtues of a block grant was that a local authority would be able to please itself what it did with the grant.

If the Government made an addition to the grant, how could they be sure that that would reflect itself in the development of a specific service? If that is the Government's instrument, if that is the device that they are providing to develop any specific service that they wish to develop, all I can say is that it is a very blunt instrument.

With regard to the second point, the Minister made an astounding assertion. He said that the unequal development in educational provision which exists at the present time was due to the operation of the percentage grant. Surely, that is the reverse of the truth. Any of us who have been concerned with, or interested in, educational development, even since the war, have seen, even under the present Government, a tremendous progressive ironing out of educational inequalities throughout the country. All that has been achieved under the percentage grant.

Mr. H. Brooke

If I said that it was due to the percentage grant, thereby implying that that was the only cause, of course I went too far. What I was seeking to say was that it was inseparable from the percentage grant.

Mr. Short

I am glad that the Minister has corrected himself and agrees that he has gone too far. I hope that, on reflection, he will think that in the Bill he and the Government have gone altogether too far concerning education. I should have thought that we are nearer now than ever before to equality of educational provision as between different local authorities. The progressive levelling up of the provision of grammar school places since the war is sufficient evidence of that and there is lots of other evidence as well.

There is, however, still a great deal to be done. I represent almost a slum constituency and the great post-war boom in school building has made no impact whatever on the schools in my constituency. There are still 500 or 600 children here and there on one-eighth of an acre of ground without any playing space and with old, poor buildings. When I asked recently for particulars, the Minister said, in reply to my Question, that the information was not available. My type of area is not the only one. The same thing applies in a different way in rural areas, represented in many cases by hon. Members opposite. There is still a very great deal to be done.

Under the block grant, however, a local authority such as my own, or a county council of a rural area, wishing to continue the process of ironing out or catching up on this process of providing equality of educational opportunity, will not be able to afford to do so unless it puts the whole burden on to the rates, because there is so much catching up to be done. These local authorities have much to do above the ordinary national need. Therefore, they can do it only by putting the burden on to the ratepayers. As I said in Committee, I am not sure that that is not what the Government want. The whole object of the operation seems to be to make rates an issue of local government affairs, as they were in the 'thirties.

I have some doubts about the first of the contingencies with which the Amendment will deal. There is no doubt that the Government regard the block grant as an economy measure. Some local authorities are more economy-conscious than others. That being so, the block grant will have the effect of making the provision of various local authority services, not only the education service, unequal throughout the country. It will increase the disparity and reverse the process which has been going on since before the war.

There is any amount of evidence that the Government regard this as an economy measure. The Minister has said that local government members are highly responsible men and women—but he did not say that in the Second Reading debate. He then said that many people who are concerned with educational administration are interested in education only if they get a percentage grant. In other words, they are not responsible at all; they are irresponsible people.

It follows that, if large numbers of people concerned with educational administration are interested only if they receive a percentage grant, the abolition of the percentage grant and the introduction of the block grant will cause them to be no longer interested in educational progress. In that case, the Minister stands condemned out of his own mouth. The effect of the block grant will be to make educational provision scrappy and uneven. The hon. and gallant Member for Nottingham, Central (Lieut.-Colonel Cordeaux), in an often-quoted letter to local teachers, said: There can be no doubt that the adoption of the block grant will effect very great economy …"—[OFFICIAL REPORT, Standing Committee D, 4th February, 1958; c. 100.] If that is so, since some local authorities are more economy-conscious than others, the provision of educational facilities will be better in some areas than in others.

Reference has been made to the famous speech of the Minister of Education in the Second Reading debate.

Mr. Ede

It was not famous; it was notorious.

Mr. Short

Perhaps I should say, the "infamous" speech of the Minister of Education. He held up, as one of the virtues of the block grant, the fact that local authorities could save a great deal of money by not appointing 400 or 500 teachers.

The Times said: The only justification for the Bill is that it would reduce taxes and put up rates. The more economy-conscious local authorities will fall far behind the rest of the country in educational provision if they operate under the block grant system. I believe that some financial inducement should be given to them to spend a great deal. But that brings us back to advocating a percentage grant all over again.

I do not think that the Amendment is sufficient of itself. There should be an addition, which would make it necessary that help should be given to a local authority only if it falls below the requisite standard of educational provision through no fault of its own. If some provision such as that could be added, I am sure that the Amendment would command the support of all hon. Members. I appeal to the Minister to think about the question and to see whether something can be done on those lines later.

Mrs. Slater

I do not want to keep the Committee for more than a minute, but I would like to say that I sat through the Committee stage of the Bill and heard all the arguments which the Minister put up in defence of it and I was shocked to hear his new argument this afternoon that education and health did not develop in the period from 1931 to 1939 because of the percentage grant and that other services which did not have the percentage grant did advance. That is an appalling argument to put up, even at this late stage of our discussions.

The right hon. Gentleman surely knows that in that period many local authorities had to meet great expenditure in public assistance and other essential matters. Many local authorities in industrial areas had to meet large bills and demands which fell upon them because of the vast amount of unemployment and poverty. At the same time, in those days of very great difficulties, they did something to improve their education and health services, and they did it in spite of Tory opposition on local authorities at that time.

I am sure that the right hon. Gentleman will regret having brought in that argument at this late stage as a reason why we should vote against the Amendment.

Mr. H. Brooke

The hon. Member did not quite represent my argument correctly. I may have given an incorrect figure off the cuff to the right hon. Member for Llanelly (Mr. J. Griffiths) when I was speaking about the growth of expenditure during the 'thirties. The hon. Lady will appreciate that the amount of unemployment in 1939, which might have affected local expenditure, was a great deal less than it was in 1931.

Mrs. Slater

But it was only towards the end of 1939 that things began to improve, because a war was approaching. The right hon. Gentleman talked about the years from 1931 to 1939. It is no good his trying to evade the argument that he put up.

Another argument which we are almost tired of hearing is the one about public opinion. The right hon. Gentleman seems to think that public opinion can make a local authority spend money on education. Even if it is aroused, however, it cannot make a local authority spend money if that authority has not the necessary wherewithal, either from its rates or from a Government grant.

Yet another argument is that there is no need to provide that a local authority should get special grants in special circumstances. If we are going back to the argument about unemployment, I can think of local authorities in whose areas there was such a great deal of unemployment that they dare not risk putting up their rates because of the difficulty people would have to pay them. Because of that fear, they were forced to reduce expenditure upon education, health and other services. In setting his head against the Amendment, the right hon. Gentleman is failing to provide for the needs of the situation, and I hope that the Committee, including hon. Members opposite who have spoken in favour of it, will vote for the Amendment.

Question put, That those words be there inserted:—

The Committee divided: Ayes 175, Noes 214.

Hayman, F. H.	McKay, John (Wallsend)	Ross, William
Henderson, Rt. Hn. A. (Rwly Regis)	McLeavy, Frank	Shinwell, Rt. Hon. E.
Hewitson, Capt. M.	Mallalieu, J. P. W. (Huddertsfd, E.)	Silverman, Julius (Aston)
Hobson, C. R. (Keighley)	Mellish, R. J.	Silverman, Sydney (Nelson)
Holman, P.	Messer, Sir F.	Simmons, C. J. (Brierley Hill)
Houghton, Douglas	Mitchison, G. R.	Slater, Mrs. H. (Stoke, N.)
Howell, Charles (Perry Barr)	Moody, A. S.	Slater, J. (Sedgefield)
Howell, Denis (All Saints)	Morris, Percy (Swansea, W.)	Sorensen, R. W.
Hughes, Cledwyn (Anglesey)	Morrison,Rt.Hn.Herbert(Lewis'm,S.)	Soskice, Rt. Hon. Sir Frank
Hughes, Hector (Aberdeen, N.)	Mort, D. L.	Sparks, J. A.
Hunter, A. E.	Moss, R.	Stewart, Michael (Fulham)
Hynd, H. (Accrington)	Moyle, A.	Stonehouse, John
Hynd, J. B. (Attercliffe)	Noel-Baker, Francis (Swindon)	Stones, W. (Consett)
Irvine, A. J. (Edge Hill)	Noel-Baker, Rt. Hon. P. (Derby, S.)	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Irving, Sydney (Dartford)	Oliver, G. H.	Swingler, S. T.
Isaacs, Rt. Hon. G. A.	Oram, A. E.	Sylvester, G. O.
Janner, B.	Orbach, M.	Taylor, Bernard (Mansfield)
Jenkins, Roy (Stechford)	Padley, W. E.	Taylor, John (West Lothian)
Johnson, James (Rugby)	Paget, R. T.	Thomas, George (Cardiff)
Jones, Rt. Hon. A.Creech(Wakefield)	Palmer, A. M. F.	Thornton, E.
Jones, David (The Hartlepools)	Panned, Charles (Leeds, W.)	Tomney, F.
Jones, Jack (Rotherham)	Parker, J.	Ungoed-Thomas, Sir Lynn
Jones, J. Idwal (Wrexham)	Paton, John	Viant, S. P.
Jones, T. W. (Merioneth)	Pearson, A.	Watkins, T. E.
Kenyon, C.	Peart, T. F.	Weitzman, D.
Key, Rt. Hon. C. W.	Pentland, N.	Wells, Percy (Faversham)
King, Dr. H. M.	Popplewell, E.	West, D. G.
Lawson, G. M.	Prentice, R. E.	Wheeldon, W. E.
Ledger, R. J.	Price, J. T. (Westhoughton)	Willey, Frederick
Lee, Miss Jennie (Cannock)	Price, Philips (Gloucestershire, W.)	Williams, Rev. Llywelyn (Ab'tillery)
Lever, Harold (Cheetham)	Probert, A. R.	Williams, Rt. Hon. T. (Don Valley)
Lipton, Marcus	Proctor, W. T.	Willis, Eustace (Edinburgh, E.)
Logan, D. G.	Randall, H. E.	Winterbottom, Richard
Mabon, Dr. J. Dickson	Redhead, E. C.	Yates, V. (Ladywood)
McCann, J.	Robens, Rt. Hon. A.	Younger, Rt. Hon. K.
MacColl, J. E.	Roberts, Goronwy (Caernarvon)	Zilliacus, K.
McGhee, H. G.	Robinson, Kenneth (St. Pancras, N.)
McInnes, J.	Rogers, George (Kensington, N.)	TELLERS FOR THE AYES:
		Mr. Short and Mr. Deer.

NOES
Agnew, Sir Peter	D'Avigdor-Goldsmid, Sir Henry	Hill, Mrs. E. (Wythenshawe)
Aitken, W. T.	Deedes, W. F.	Hirst, Geoffrey
Amory, Rt. Hn. Heathcoat (Tiverton)	Dodds-Parker, A. D.	Holland-Martin, C. J.
Arbuthnot, John	Doughty, C. J. A.	Hornby, R. P.
Armstrong, C. W.	du Cann, E. D. L.	Horobin, Sir Ian
Astor, Hon. J. J.	Dugdale, Rt. Hn. Sir T. (Richmond)	Horsbrugh, Rt. Hon. Dame Florence
Atkins, H. E.	Duncan, Sir James	Howard, Gerald (Cambridgeshire)
Baldock, Lt.-Cmdr, J. M.	Duthie, W. S.	Howard, Hon. Grenville (St. Ives)
Balniel, Lord	Eden, J. B. (Bournemouth, West)	Howard, John (Test)
Barlow, Sir John	Elliott,R.W. (Ne'castle upon Tyne,N.)	Hughes Hallett, Vice-Admiral J.
Barter, John	Emmet, Hon. Mrs. Evelyn	Hurd, A. R.
Baxter, Sir Beverley	Errington, Sir Eric	Hutchison, Sir James (Scotstoun)
Beamish, Col. Tufton	Farey-Jones, F. W.	Hylton-Foster, Rt. Hon. Sir Harry
Bell, Ronald (Bucks, S.)	Finlay, Graeme	Iremonger, T. L.
Bevins, J. R (Toxteth)	Fisher, Nigel	Jenkins, Robert (Dulwich)
Bidgood, J. C.	Fletcher-Cooke, C.	Johnson, Dr. Donald (Carlisle)
Bingham, R. M.	Foster, John	Johnson, Eric (Blackley)
Bishop, F. P.	Fraser, Hon. Hugh (Stone)	Jones, Rt. Hon. Aubrey (Hall Green)
Black, C. W.	Freeth, Denzil	Joseph, Sir Keith
Body, R. F.	Gammans, Lady	Joynson-Hicks, Hon. Sir Lancelot
Bossom, Sir Alfred	Garner-Evans, E. H.	Keegan, D.
Boyd-Carpenter, Rt. Hon. J. A.	Gibson-Watt, D.	Kerby, Capt. H. B.
Boyle, Sir Edward	Glover, D.	Kershaw, J. A.
Brooke, Rt. Hon. Henry	Glyn, Col. Richard H.	Kirk, P. M.
Brooman-White, R. C.	Godber, J. B.	Lagden, G. W.
Bullus, Wing Commander E. E.	Gough, C. F. H.	Lambton, Viscount
Burden, F. F. A.	Gower, H. R.	Langford-Holt, J. A.
Butler, Rt. Hn. R. A.(Saffron Walden)	Graham, Sir Fergus	Leather, E. H. C.
Carr, Robert	Grant-Ferris, Wg Cdr. R. (Nantwich)	Leavey, J. A.
Cary, Sir Robert	Green, A.	Legge-Bourke, Maj. E. A. H.
Channon, Sir Henry	Grimston, Hon. John (St. Albans)	Legh, Hon. Peter (Petersfield)
Chichester-Clark, R.	Gurden, Harold	Lindsay, Hon. James (Devon, N.)
Conant, Maj. Sir Roger	Hall, John (Wycombe)	Linstead, Sir H. N.
Cooke, Robert	Harris, Reader (Heston)	Lloyd, Maj. Sir Guy (Renfrew, E.)
Cooper-Key, E. M.	Harrison, A. B. C. (Maldon)	Longden, Gilbert
Cordeaux, Lt.-Col. J. K.	Harrison, Col. J. H. (Eye)	Low, Rt. Hon. Sir Toby
Corfield, Capt. F. V.	Harvey, Sir Arthur Vere (Macclesf'd)	Lucas, P. B. (Brentford & Chiswick)
Craddock, Beresford (Spelthorne)	Harvey, John (Walthamstow, E.)	Lucas-Tooth, Sir Hugh
Crosthwaite-Eyre, Col. O. E.	Hay, John	McAdden, S. J.
Crowder, Sir John (Finchley)	Heath, Rt. Hon. E. R. G.	Macdonald, Sir Peter
Cunningham, Knox	Hesketh, R. F.	Mackeson, Brig. Sir Harry
Currie, G. B. H.	Hicks-Beach, Maj. W. W.	McKibbin, Alan

Mr. Mitchison

I beg to move, in page 2, line 16, at the end to insert: and increased or decreased in accordance with the Schedule (Increase or Decrease of General Grants) to this Act.

The Deputy-Chairman (Sir Gordon Touche)

I think it would be convenient to discuss with this Amendment the new Schedule, "Increase or decrease of general grants."

Mr. Mitchison

The Schedule appears on page 2008 of the Notice Paper.

We have now left any question of the total amount of general grant and, as I see it, we have left any question of the form of a grant, be it block or percentage. We have come now to the question of what should be distributed by way of general grant to each local authority. This Amendment relates to variations between one local authority and another, between one recipient of a general grant and another.

All through the proceedings on this Bill, I have become increasingly conscious of the fact, as I think have many other hon. Members, that it does not touch one fundamental difficulty appertaining to the nature of the grant which always existed, and that is that although we can control the amount of grant going to local authorities, and although we are all anxious that local authorities should do their job in their own way, the intentions of Parliament can be frustrated completely by local authorities who, as it were, choose to "dig in their toes" in certain respects.

I have in mind, for instance, the local authority which is so determined at all costs to reduce the rates that it not only makes progress impossible in these services but even makes their proper continuance impossible. What can we do about that? A grant will be made towards all these services, and if the authority succeeds in reducing the total expenditure, that reduction will be so much saved out of the rates. In the same way, if the authority enlarged its activities and did its job rather better than some neighbouring authority, under this system at any rate—perhaps I was wrong in saying that we had entirely left this question—that increase will have to come out of the rates.

It therefore seems to me that it is on the rate-borne expenditure of local authorities that the distinction between the good and the bad authority or between the best and the good authority will depend. I am drawing no distinction between one form of expenditure and another but, taking it as a whole, that is necessarily the picture under the Bill.

With that in mind, the Amendment proposes some variations in the general grant. It proposes them by reference to matters as they were a couple of years before. It is always easier, and in the long run has broadly the same effect, to take two years before rather than the immediately preceding year, because the figures will have been ascertained in reference to two years before.

If a local authority increases its rate-borne expenditure as between two years before and the time we are considering, it seems to me that it is more likely to have done its job and, equally, that it will be in more need of assistance. It is right, other things being equal, that this authority should get an increase in the general grant corresponding to its increase in rate-borne expenditure.

I assume—and I hope that I am right in assuming—that we shall hear nothing about the extravagance of local authorities, because that story has been so completely upset by one Royal Commission and Departmental Committee after another that I need hardly go through it again. There is no question nowadays of extravagance by local authorities, and if some hon. Member or some person or some newspaper picks on a particular incident, it is bound to be a trivial matter, under modern conditions, and one which, though it may provide a little sensation, does not affect the general principle at all. The last case is that of the Edwards Committee which went very carefully into this and came to the conclusion that there was no evidence of extravagance. In that respect it followed a whole series of other inquiries.

7.15 p.m.

I therefore put that aside and, putting it aside, I come to the conclusion that an increase in rate-borne expenditure is, on the face of it, a reason for increasing the local authority's grant. There is a converse case. If the resources of a local authority are decreasing, it may be in increasing difficulty. Just as an increase in rate-borne expenditure seems to be a reason for increasing the grant, so an increase in the product of a penny rate seems to be a reason for decreasing the grant. An increase in rate-borne expenditure is a reason for increasing the grant, as is a decrease in the resources of the authority through the product of a penny rate; that, too, is a reason for increasing the grant. I hope that I have made the position clear in the minds of those hon. Members who think it worthwhile to listen to these matters.

That being the position, the Amendment says that in considering the general grant for any local authority during the year a factor or multiple shall be applied which will increase the grant in proportion to the increase in rateable expenditure and decrease it in proportion to the increase in the rate poundage. That is set out in the Amendment in the form of a fraction, and I hope that it is clear.

There is one exception. It seems to me reasonable not to take account of small variations, and if the fraction approaches unity—that is to say, if there is very little change in these two factors considered together—it is hardly worth while making an increase or decrease in the general grant payable to the authorities. Accordingly, the Amendment goes on to provide that if the fraction approaches unity by a percentage to be prescribed by the Minister—if it is within that percentage—there shall be no change. If, on the other hand, it is outwith that percentage, there shall be a change. The increase or decrease does not apply to quite minor variations which might well have no particular significance and may be more or less accidental from year to year.

The object of the Amendment is to deal as best we can with the rate-borne expenditure of these local authorities. We cannot confine it to the relevant expenditure because that would result only in artificial shifts by a local authority from one type of expenditure to another. We are simply taking the rate-borne expenditure as an indication, if the expenditure increases, that the local authority requires to spend more money and accordingly does so. We are by no means dictating to local authorities. I want to make it clear that we are not dictating to them. All we are doing is providing that they shall not receive the same grant when they cut expenditure, whether they cut it for good or sufficient reasons or because they are not doing their job properly and are not being sufficiently progressive. We are allowing the compensating factor of difficulties which are not the fault of the local authority because the penny rate product is falling. We are, in fact, allowing for the difficulties of a local authority with, for instance, a decreasing population.

I have done my best to make myself clear. It is not really a complicated Amendment, though it looks a little difficult. I found it very much easier to understand what I was doing when I wrote it out on a sheet of paper than I have found it to explain to the Committee. However, there is no inherent complication in it and I see no reason whatever for supposing that any difficulty of mine in expounding it would correspond with any difficulty in administration or in its understanding by such wise and learned people as those who act as treasurers for local authorities and the councils and their advisers who deal with these matters.

I hope, therefore, that the Minister and the Parliamentary Secretary will accept the Amendment as a way of dealing with the difficulty of the local authority which has exceptional needs or has an exceptionally good idea of progress and, conversely, with the local authority which has an exceptionally bad idea of progress. If they do not do that, I hope they will tell us how else they propose to meet what is an inherent difficulty in the Bill and, I am afraid, an inherent difficulty in this form of grant; that is, that at the end of the day the real decision on what amount has to be fixed, on how many steps forward can be taken, will depend not on the grant at all but on the local authority and its rate-borne expenditure, with all the fatal temptation to cut the rates at all costs that that sometimes involves.

I would say to those of us who are interested in any of these services that it is not so much the competition between education and child care, between Part III assistance and fire services, that bothers me; it is the competition between each and everyone of those services, and the man whose only idea about local government finance is to cut the rates at all costs and penalise any services which appear to cost anything.

Dr. King

I support the Amendment moved so lucidly by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). I do so with trepidation because I fear that my explanation may baffle the Committee and detract from the clear explanation which my hon. and learned Friend has given.

The Schedule makes use of two rather frightening expressions—"appropriate year" and "standard year". The appropriate year is the year in respect of which the grant is under discussion and is being fixed, and the standard year is two years previously. What my hon. and learned Friend seeks to do by the Amendment is to relate the year in respect of which the grant is under consideration with the year two years previously.

I have looked very closely at the Amendment. I think it is an exceedingly fair one. In it my hon. and learned Friend seeks to deal justly with the Government on the one hand—it is very noble for a Member of the Opposition to be looking after the interests of the Government—and with the local authority on the other hand. As my hon. and learned Friend pointed out, it also seeks to give some credit, some financial benefit, to the progressive authority, because one of the norms which he uses in judging the fitness of an authority for some enhanced benefit from the Government is what it has been doing with its own money, with its own rate-borne expenditure.

The Amendment seeks on one hand to make the Government bear some rightful proportion of increased local government expenditure; on the other hand, it seeks to cut down the amount that it asks the Government to give, because it argues that a local authority benefits from the ever-increasing product of a penny rate. Therefore, if a local authority is spending more money next year, that is a burden upon every ratepayer, but it is a burden which is diminished in so far as the produce of a penny rate is increased.

As I read the Amendment, it takes the product of a penny rate for the standard year and for the appropriate year, and it makes a fraction of these in such a way as to reduce the main fraction which will be applied when working out the grant. For example, if the product of a penny rate in the standard year could be represented by 10 and the product of a penny rate in the appropriate year could be represented by 11, by this formula the local authority, when working out what extra grant it should receive, would find its claim for increased grant reduced by one-eleventh.

The rate-borne expenditure for the two years, the standard year and the appropriate year, are similarly made into a fraction, and if the rate-borne expenditure has gone up the Amendment makes the Government increase their own grant accordingly. The rate-borne expenditure is increased; it is right that the Government should shoulder some portion of the extra financial burden. However, to make that a really fair share, the fraction is, so to speak, discounted by what has happened to the product of a penny rate. The increase in that product actually lessens the real burden on the local authority.

If, then, in the case which I have mentioned, the rate-borne expenditure also went up in the proportion of 11:10, the fact that the product of a penny rate had gone up in the same proportion, 11:10, would make the resultant fraction 11/10 x 10/11, which is unity. In other words, if the rate-borne expenditure has increased only in the same proportion as the product of a penny rate has increased, the local authority has no moral claim on the Government for extra grant. If, on the other hand, when the Government weigh up by what amount the rate-borne expenditure has increased they find that the increase in the product of a penny rate is much less than that, then the resultant fraction will be greater than unity, and the local authority, if the Amendment is carried, will have a claim on the Government for a further adjustment of its grant.

It seems to me that, while it is exceedingly difficult, perhaps, to explain in words, the proposal is an exceedingly simple one. It tries to be fair to the Government at the same time as it is being fair to local authorities. I hope that the Minister will accept the Amendment.

Mr. Bevins

The hon. and learned Member for Kettering (Mr. Mitchison) explained the Amendment and the related new Schedule with such clarity and lucidity that I cannot help feeling that in the process of doing so he may unwittingly have concealed from the Committee certain principles underlying the Amendment which I rather doubt are acceptable to this side of the Committee.

The hon. and learned Gentleman said that if there was a decrease in the product of a penny rate, that in itself would constitute, within the confines of this idea, a reason for the payment of a larger general grant. He knows that in many cases, especially where a local authority currently attracts an equalisation grant, or will attract in future a rate deficiency grant, that element in the idea which he has put before the Committee is already taken into account.

7.30 p.m.

Mr. Mitchison

I entirely accept what the Parliamentary Secretary has said, and I am grateful to him for saying it, but there is a complete difference between what is proposed here and a rate deficiency grant. The rate deficiency grant works in relation to a general average all over the country, but this proposal does not. It relates simply to the local authority in question.

Mr. Bevins

I entirely agree that the aims of the rate deficiency grant and the general grant are different. But the broad effect of the Amendment, as I understand it, is to make sure that if the percentage by which the weight of any local authority's expenditure in terms of rate poundage has gone up or down in the grant year compared with the burden two years previously is more than a certain percentage, then its general grant should be correspondingly raised or decreased. For this purpose the rate poundage burden is found for each of the two years concerned by dividing the expenditure as ascertained for the purpose of rate deficiency grant purposes by the product of a penny rate for the year. So the rate poundage burden is the net expenditure expressed in terms of rate poundage falling to be met out of rates and rate deficiency grant, where a rate deficiency grant is payable.

I thought that the hon. and learned Gentleman and his hon. Friend the Member for Southampton, Itchen (Dr. King) put up a very plausible case for the notion in the Amendment and in the new Clause. The broad argument, I think, was that the general grant distribution may not satisfactorily reflect the needs of a local authority, and that where it is found that rate burdens are increasing by more than, as it were, a marginal amount, then the general grant should be adjusted by paying more to authorities with increasing rate burdens and paying less to those with reducing rate burdens.

There is in the view of my right hon. Friend and myself one quite decisive objection to this idea. To begin with, it undoubtedly reintroduces the expenditure of a particular local authority as an element in the grant calculations. Perhaps I may illustrate that by giving an over-simplified version of the sort of thing that might happen under the proposed arrangement. Suppose that in the basic year, 1959, the expenditure of a local authority is £1 million and that the product of a penny rate is £5,000. In that case, the rate poundage of the local authority would be, I think, 16s. 8d. in the £. Disregarding revaluation and all that it involves, suppose that two years later, in 1961, the expenditure of that local authority had risen from £1 million to £1,200,000. Suppose that the product of a penny rate was still the same, namely, £5,000. In that event, the rate poundage would rise, not because of a change in rateable values, but because of the increased expenditure, from 16s. 8d. in the £ to 20s.

In pursuance of the hon. and learned Gentleman's argument, we should then consider the appropriate fraction, which would be 20s. over 16s. 8d. I do not know whether my arithmetic is exact, but I think that it is near enough for these purposes. There would be an addition of 20 per cent. The appropriate fraction expressed as a percentage would no longer be 100 per cent., but 120 per cent. Suppose that the prescribed margin over which the Government had decided to pay was 5 per cent., which would be a reasonable figure. In that case, I think I am right in saying that the local authority would be entitled to an increase in its general grant of the difference between 100 per cent.—that would be the prescribed figure—and the new percentage of 120 per cent.

What does that mean? It means that the Government would be committing themselves to paying a more substantial general grant in that class of case simply because the expenditure of the local authority had risen. With the greatest good will in the world to the hon. and learned Gentleman, there is no earthly difference between that proposition and the system of percentage grants from which my right hon. Friend is trying to escape. I am sure that the hon. and learned Gentleman understands that very well, and that was why I said that I thought he presented the case with great plausibility, but with a certain amount of unwitting concealment.

The Amendment would have another effect. The deliberate decision of Parliament as to the level of the general grant in relation to local government needs as a whole would be frustrated. At the time of fixing the general grant order a review, as the Committee knows, will have been made of likely developments in services, and a decision will have been taken with Parliamentary approval about the Exchequer aid towards the services concerned. But under this Amendment the grant might be increased on account of expenditure on services with which the general grant is not concerned at all or by reason of additional rate burdens which Parliament may have decided should reasonably be borne by local authorities as their contribution towards the cost of developing services.

There is one final point that I ought to make. If the idea behind the Amendment were accepted by the Committee, when in due time we come to 1961 and to the period of revaluation, which obviously will substantially increase the product of the penny rate and, therefore, reduce the rate poundage compared with 1959, then the appropriate fraction which is embodied in the new Clause would be completely valueless. At that time it would not be a question of a gentle increase or decrease in the rateable value of any particular local authority. In all probability, there would be substantial increases in the product of a penny rate.

Mr. J. A. Sparks (Acton)

On what basis does the hon. Gentleman assume that there will be substantial increases?

Mr. Bevins

The hon. Gentleman is as knowledgeable as I am in rating and valuation matters. It is a pretty fair conjecture, whatever may happen when the next revaluation takes place, that, somewhere or other, there will be increases in rateable values. It is because of that that the appropriate fraction would go by the board. It will be completely inappropriate at that time because of shifts in the levels of rateable values.

Putting the matter quite shortly, the Amendment is not acceptable to my right hon. Friend because it introduces into the general grant distribution considerations which have nothing at all to do with some of the services to which the grant relates. However, more important still, it reintroduces expenditure as an element in the grant calculations. That is something that we as a Government are seeking to avoid.

Mr. Mitchison

May I, first, thank the hon. Gentleman for the very clear way in which he put his objections and for the courteous way in which he treated what I felt was a rather confused exposition of the intention of the Amendment.

I want to take his three points quite shortly. The second one of them was that this relates to rateborne expenditure in general and not to rateborne expenditure on the relevant services. I agree, and I say that the reason for that was that if one relates it to anything else one will encourage shifts of expenditure by the local authority from one group of rate-borne expenditure to another.

Moreover, I think it is right on the principle that we are trying to carry out, because what I am trying to deal with in the case of a well-intentioned authority—if I may draw an artificially sharp line—is an increasing need and, therefore, an increasing expenditure, and, in the case of a not so well-intentioned authority, an attempt to reduce the rates of a perfectly general character—the man who says "My only policy on the council is to cut the rates", and there are such people. It is right to relate it to rateborne expenditure as a whole.

Secondly, I take the last of the hon. Gentleman's points, which was about the position in 1961–62 and onwards when the revaluation of houses will make a difference one way or the other to the penny rate product. Frankly, I am not bothering so much about what is going to happen then, for two reasons: first of all, if the hon. Gentleman will allow me to say so, I do not think his Government will be there, and we may have to look at all this again; but apart from that, and in view of the very friendly reply that he made to me, there is another reason. I cannot conceive of any Government leaving the rate structure as it is at present for the year 1961–62 and onwards. Therefore, as indeed the hon. Gentleman and his right hon. Friend have themselves done in some parts of this Bill, I did not intend to look ahead quite as far as that. The hon. Gentleman will remember that there is a similar provision in another part of the Bill, introduced by the Government themselves. They stop at the introduction of the 1961–62 lists.

Now I come to the first point. I can assure the hon. Gentleman that I was not being disingenuous. I did not think that he failed to see that this bore a considerable resemblance to a percentage grant. I was trying to help him. He and his right hon. Friend get so terrified whenever anybody tells them that something or another is a percentage grant, that that is the whole end of the matter and they turn it down. The Minister has already turned down—or the Committee has—one thing which looked like a percentage grant for a quite minor and, I believe, useful purpose. I did not want this to be turned down on the ground that I put it forward as a percentage grant.

Of course, it bears some resemblance to a percentage grant, because the amount that the local authority is going to get will depend to some extent on the amount that it spends. But surely it is reasonable to use that in the form of an adjustment as between one local authority and another, for it certainly does leave the Government with one of their principal objects in the Bill, which was that the Treasury should know its commitments beforehand—if I may put it unkindly, that it should be able to cut expenditure in certain fields. It does not affect the prescribed aggregate. It only affects distribution as between one local authority and another, and in that form at any rate it seems to me to give the encouragement to the good authority and the discouragement to an authority for being bad, which is not really unreasonable in these days. How far that can be carried out is another matter, but this is purely financial business.

7.45 p.m.

It seems to me to do that, and, on the other side of the picture, it meets the difficulties of one local authority as against another. I do not for a moment say that it is the last word, that somebody could not think up a better one, but I do regard it as a distinct weakness in the Bill that it fails completely to deal with the "cut the rates at all costs" man and the "cut the rates at all costs" local authority, both of which exist. We are, I hope, all concerned in this Committee to get these relevant services properly dealt with by local authorities. The great fault of the Bill is that it does not do it. The form of the block grant, as it is colloquially called, has not got that effect. The old percentage grant, no doubt, did have it.

If we are taking away the old percentage grant and introducing the block grant, we must meet the difficulty of coping with the backwood authority, and equally the local authority which has difficulties which are really not its own fault. Therefore, while I would not put this forward as the last word—and I doubt if the last word could be produced in a matter of this sort or anywhere except by the Minister because it is a complicated matter—I still think that it clearly raises a point of principle upon which I believe we are right, that we have got to deal with this question.

I believe that the Government are fundamentally wrong and that much of the damage that I foresee in the working out of this grant system will arise from this matter—the "cut the rate" backward authority and the lack of encouragement for the good authority which is more concerned with a healthy city than with high rents. Right hon. and hon. Gentlemen opposite will recognise those words. They come from the first volume of Garvin's "Life of Joseph Chamberlain", in the days when Joseph Chamberlain really was the Radical mayor of Birmingham and did a lot of good.

Mr. Bevins

I do not wish to delay the Committee, but I wonder if the hon. and learned Gentleman would be good enough to say why he takes the view that this Amendment would not increase the aggregate of the general grant. Certainly my reading of Clause 1, as amended, together with the new Schedule, would certainly allow an increase in the aggregate amount of the general grant. Has the hon. and learned Gentleman given any thought to it?

Mr. Mitchison

I certainly have. If I have made a drafting mistake, I would at once say that I do not claim to be infallible in these matters, but if the hon. Gentleman will look at the Bill he will see that the words in the proposed Amendment in page 2, line 16, come at the end of subsection (2) and are preceded by another adjective, "reduced"— reduced, if it is so prescribed, by the product for the area of the authority of a rate of such sum in the pound as may be prescribed and then come the words of the Amendment: and increased or decreased in accordance with the Schedule … and so on. The words reduced … by the product for the area of the authority must relate to the individual general grants—that is to say, to the general grant payable to a recipient authority for any year in line 7. I think it is quite clear that it refers to that and does not refer to the prescribed aggregate. I do not think there can be any doubt about it.

Mr. Bevins

I very much agree with the hon. and learned Gentleman so far as he goes. I agree that those words in Clause 1 refer to the distribution of the aggregate. But what is causing me some anxiety is that if one read that in association with the Second Schedule it might lead to a very different result.

If, for the sake of argument, there were a 10 per cent. increase in the general level of expenditure of local government during this period of two years, and practically no change in the level of rateable values, I should have thought that the effect of the new Schedule would have been to increase the aggregate of the general grant and would have led to some adjustment.

Mr. Mitchison

I merely say to the hon. Gentleman, since we are in Committee, that that is exactly one of the matters which his right hon. Friend has to consider in prescribing the general aggregate. The very first of them is: the latest information available to him of the rate of relevant expenditure". It is quite true that that is only relevant expenditure and leaves out the remainder of the expenditure, but it is quite clearly a thing which must be considered in any fixing of the prescribed aggregate, and even if it were not in exactly that language in the Bill it would have to be provided somehow or other.

Question put, That those words be there inserted:—

The Committee divided: Ayes 159, Noes 199.

Division No. 107.]	AYES	[6.59 p.m.
Ainsley, J. W.	Castle, Mrs. B. A.	Ede, Rt. Hon. J. C.
Albu, A. H.	Champion, A. J.	Edelman, M.
Allaun, Frank (Salford, E.)	Chapman, W. D.	Edwards, Rt. Hon. John (Brighouse)
Allen, Arthur (Bosworth)	Chetwynd, G. R.	Edwards, Robert (Bilston)
Allen, Scholefield (Crewe)	Clunie, J,	Evans, Albert (Islington, S.W.)
Awbery, S. S.	Coldrick, W.	Evans, Edward (Lowestoft)
Bacon, Miss Alice	Collick, P. H. (Birkenhead)	Finch, H. J.
Bellenger, Rt. Hon. F. J.	Collins, V. J.(Shoreditch & Finsbury)	Fletcher, Eric
Benson, Sir George	Corbet, Mrs. Freda	Foot, D. M.
Beswick, Frank	Cove, W. G.	Gaitskell, Rt. Hon. H. T. N.
Bevan, Rt. Hon. A. (Ebbw Vale)	Craddock, George (Bradford, S.)	Gibson, C. W.
Boardman, H.	Cronin, J. D.	Gordon Walker, Rt. Hon. P. C.
Bottomley, Rt. Hon. A. G.	Crossman, R. H. S.	Grenfell, Rt. Hon. D. R.
Bowden, H. W. (Leicester, S.W.)	Dalton, R. Hon. H.	Grey, C. F.
Bowles, F. G.	Darling, George (Hillsborough)	Griffiths, David (Rother Valley)
Brockway, A. F.	Davies, Ernest (Enfield, E.)	Griffiths, Rt. Hon. James (Llanelly)
Broughton, Dr. A. D. D.	Davies, Stephen (Merthyr)	Griffiths, William (Exchange)
Brown, Rt. Hon. George (Belper)	Delargy, H. J.	Hall, Rt. Hn. Glenvil (Colne Valley)
Burke, W. A.	Diamond, John	Hamilton, W. W.
Butler, Herbert (Hackney, C.)	Donnelly, D. L.	Harrison, J. (Nottingham, N.)
Callaghan, L. J.	Dye, S.	Hastings, S.
Hayman, F. H.	McKay, John (Wallsend)	Ross, William
Henderson, Rt. Hn. A. (Rwly Regis)	McLeavy, Frank	Shinwell, Rt. Hon. E.
Hewitson, Capt. M.	Mallalieu, J. P. W. (Huddertsfd, E.)	Silverman, Julius (Aston)
Hobson, C. R. (Keighley)	Mellish, R. J.	Silverman, Sydney (Nelson)
Holman, P.	Messer, Sir F.	Simmons, C. J. (Brierley Hill)
Houghton, Douglas	Mitchison, G. R.	Slater, Mrs. H. (Stoke, N.)
Howell, Charles (Perry Barr)	Moody, A. S.	Slater, J. (Sedgefield)
Howell, Denis (All Saints)	Morris, Percy (Swansea, W.)	Sorensen, R. W.
Hughes, Cledwyn (Anglesey)	Morrison,Rt.Hn.Herbert(Lewis'm,S.)	Soskice, Rt. Hon. Sir Frank
Hughes, Hector (Aberdeen, N.)	Mort, D. L.	Sparks, J. A.
Hunter, A. E.	Moss, R.	Stewart, Michael (Fulham)
Hynd, H. (Accrington)	Moyle, A.	Stonehouse, John
Hynd, J. B. (Attercliffe)	Noel-Baker, Francis (Swindon)	Stones, W. (Consett)
Irvine, A. J. (Edge Hill)	Noel-Baker, Rt. Hon. P. (Derby, S.)	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Irving, Sydney (Dartford)	Oliver, G. H.	Swingler, S. T.
Isaacs, Rt. Hon. G. A.	Oram, A. E.	Sylvester, G. O.
Janner, B.	Orbach, M.	Taylor, Bernard (Mansfield)
Jenkins, Roy (Stechford)	Padley, W. E.	Taylor, John (West Lothian)
Johnson, James (Rugby)	Paget, R. T.	Thomas, George (Cardiff)
Jones, Rt. Hon. A.Creech(Wakefield)	Palmer, A. M. F.	Thornton, E.
Jones, David (The Hartlepools)	Panned, Charles (Leeds, W.)	Tomney, F.
Jones, Jack (Rotherham)	Parker, J.	Ungoed-Thomas, Sir Lynn
Jones, J. Idwal (Wrexham)	Paton, John	Viant, S. P.
Jones, T. W. (Merioneth)	Pearson, A.	Watkins, T. E.
Kenyon, C.	Peart, T. F.	Weitzman, D.
Key, Rt. Hon. C. W.	Pentland, N.	Wells, Percy (Faversham)
King, Dr. H. M.	Popplewell, E.	West, D. G.
Lawson, G. M.	Prentice, R. E.	Wheeldon, W. E.
Ledger, R. J.	Price, J. T. (Westhoughton)	Willey, Frederick
Lee, Miss Jennie (Cannock)	Price, Philips (Gloucestershire, W.)	Williams, Rev. Llywelyn (Ab'tillery)
Lever, Harold (Cheetham)	Probert, A. R.	Williams, Rt. Hon. T. (Don Valley)
Lipton, Marcus	Proctor, W. T.	Willis, Eustace (Edinburgh, E.)
Logan, D. G.	Randall, H. E.	Winterbottom, Richard
Mabon, Dr. J. Dickson	Redhead, E. C.	Yates, V. (Ladywood)
McCann, J.	Robens, Rt. Hon. A.	Younger, Rt. Hon. K.
MacColl, J. E.	Roberts, Goronwy (Caernarvon)	Zilliacus, K.
McGhee, H. G.	Robinson, Kenneth (St. Pancras, N.)
McInnes, J.	Rogers, George (Kensington, N.)	TELLERS FOR THE AYES:
		Mr. Short and Mr. Deer.
NOES
Agnew, Sir Peter	D'Avigdor-Goldsmid, Sir Henry	Hill, Mrs. E. (Wythenshawe)
Aitken, W. T.	Deedes, W. F.	Hirst, Geoffrey
Amory, Rt. Hn. Heathcoat (Tiverton)	Dodds-Parker, A. D.	Holland-Martin, C. J.
Arbuthnot, John	Doughty, C. J. A.	Hornby, R. P.
Armstrong, C. W.	du Cann, E. D. L.	Horobin, Sir Ian
Astor, Hon. J. J.	Dugdale, Rt. Hn. Sir T. (Richmond)	Horsbrugh, Rt. Hon. Dame Florence
Atkins, H. E.	Duncan, Sir James	Howard, Gerald (Cambridgeshire)
Baldock, Lt.-Cmdr, J. M.	Duthie, W. S.	Howard, Hon. Grenville (St. Ives)
Balniel, Lord	Eden, J. B. (Bournemouth, West)	Howard, John (Test)
Barlow, Sir John	Elliott,R.W. (Ne'castle upon Tyne,N.)	Hughes Hallett, Vice-Admiral J.
Barter, John	Emmet, Hon. Mrs. Evelyn	Hurd, A. R.
Baxter, Sir Beverley	Errington, Sir Eric	Hutchison, Sir James (Scotstoun)
Beamish, Col. Tufton	Farey-Jones, F. W.	Hylton-Foster, Rt. Hon. Sir Harry
Bell, Ronald (Bucks, S.)	Finlay, Graeme	Iremonger, T. L.
Bevins, J. R (Toxteth)	Fisher, Nigel	Jenkins, Robert (Dulwich)
Bidgood, J. C.	Fletcher-Cooke, C.	Johnson, Dr. Donald (Carlisle)
Bingham, R. M.	Foster, John	Johnson, Eric (Blackley)
Bishop, F. P.	Fraser, Hon. Hugh (Stone)	Jones, Rt. Hon. Aubrey (Hall Green)
Black, C. W.	Freeth, Denzil	Joseph, Sir Keith
Body, R. F.	Gammans, Lady	Joynson-Hicks, Hon. Sir Lancelot
Bossom, Sir Alfred	Garner-Evans, E. H.	Keegan, D.
Boyd-Carpenter, Rt. Hon. J. A.	Gibson-Watt, D.	Kerby, Capt. H. B.
Boyle, Sir Edward	Glover, D.	Kershaw, J. A.
Brooke, Rt. Hon. Henry	Glyn, Col. Richard H.	Kirk, P. M.
Brooman-White, R. C.	Godber, J. B.	Lagden, G. W.
Bullus, Wing Commander E. E.	Gough, C. F. H.	Lambton, Viscount
Burden, F. F. A.	Gower, H. R.	Langford-Holt, J. A.
Butler, Rt. Hn. R. A.(Saffron Walden)	Graham, Sir Fergus	Leather, E. H. C.
Carr, Robert	Grant-Ferris, Wg Cdr. R. (Nantwich)	Leavey, J. A.
Cary, Sir Robert	Green, A.	Legge-Bourke, Maj. E. A. H.
Channon, Sir Henry	Grimston, Hon. John (St. Albans)	Legh, Hon. Peter (Petersfield)
Chichester-Clark, R.	Gurden, Harold	Lindsay, Hon. James (Devon, N.)
Conant, Maj. Sir Roger	Hall, John (Wycombe)	Linstead, Sir H. N.
Cooke, Robert	Harris, Reader (Heston)	Lloyd, Maj. Sir Guy (Renfrew, E.)
Cooper-Key, E. M.	Harrison, A. B. C. (Maldon)	Longden, Gilbert
Cordeaux, Lt.-Col. J. K.	Harrison, Col. J. H. (Eye)	Low, Rt. Hon. Sir Toby
Corfield, Capt. F. V.	Harvey, Sir Arthur Vere (Macclesf'd)	Lucas, P. B. (Brentford & Chiswick)
Craddock, Beresford (Spelthorne)	Harvey, John (Walthamstow, E.)	Lucas-Tooth, Sir Hugh
Crosthwaite-Eyre, Col. O. E.	Hay, John	McAdden, S. J.
Crowder, Sir John (Finchley)	Heath, Rt. Hon. E. R. G.	Macdonald, Sir Peter
Cunningham, Knox	Hesketh, R. F.	Mackeson, Brig. Sir Harry
Currie, G. B. H.	Hicks-Beach, Maj. W. W.	McKibbin, Alan
Mackie, J. H. (Galloway)	Pitman, I. J.	Stoddart-Scott, Col. Sir Malcolm
Maclean, Sir Fitzroy (Lancaster)	Pitt, Miss E. M.	Storey, S.
Macleod, Rt. Hn. Iain (Enfield, W.)	Powell, J. Enoch	Stuart, Rt. Hon. James (Moray)
Macmillan, Rt. Hn. Harold (Bromley)	Price, David (Eastleigh)	Studholme, Sir Henry
Macmillan, Maurice (Halifax)	Price, Henry (Lewisham, W.)	Summers, Sir Spencer
Maddan, Martin	Prior-Palmer, Brig. O. L.	Taylor, Sir Charles (Eastbourne)
Manningham-Buller, Rt. Hn. Sir R.	Ramsden, J. E.	Teeling, W.
Marlowe, A. A. H.	Rawlinson, Peter	Thomas, P. J. M. (Conway)
Marshall, Douglas	Redmayne, M.	Thompson, Kenneth (Walton)
Maudling, Rt. Hon. R.	Remnant, Hon. P.	Thorneycroft, Rt. Hon. P.
Mawby, R. L.	Ridsdale, J. E.	Thornton-Kemsley, Sir Colin
Maydon, Lt.-Comdr. S. L. C.	Rippon, A. G. F.	Tiley, A. (Bradford, W.)
Milligan, Rt. Hon. W. R.	Roberts, Sir Peter (Heeley)	Turton, Rt. Hon. R. H.
Molson, Rt. Hon. Hugh	Robinson, Sir Roland (Blackpool, S.)	Vane, W. M. F.
Morrison, John (Salisbury)	Robson Brown, Sir William	Vickers, Miss Joan
Nabarro, G. D. N.	Rodgers, John (Sevenoaks)	Wakefield, Edward (Derbyshire, W.)
Nairn, D. L. S.	Roper, Sir Harold	Wakefield, Sir Wavell (St. M'lebone)
Neave, Airey	Ropner, Col. Sir Leonard	Walker-Smith, Rt. Hon. Derek
Nicolson, N. (B'n'm'th, E. & Chr'ch)	Russell, R. S.	Wall, Patrick
Noble, Comdr. Rt. Hon. Allan	Scott-Miller, Cmdr. R.	Watkinson, Rt. Hon. Harold
Oakshott, H. D.	Sharples, R. C.	Webbe, Sir H.
O'Neill, Hn. Phelim(Co. Antrim, N.)	Smithers, Peter (Winchester)	Williams, R. Dudley (Exeter)
Orr, Capt. L. P. S.	Smyth, Brig. Sir John (Norwood)	Wills, G. (Bridgwater)
Orr-Ewing, Charles Ian (Hendon, N.)	Soames, Rt. Hon. Christopher	Wilson, Geoffrey (Truro)
Page, R. G.	Spearman, Sir Alexander	Wood, Hon. R.
Pannell, N. A. (Kirkdale)
Peel, W. J.	Speir, R. M.	Woollam, John Victor
Peyton, J. W. W.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)	Yates, William (The Wrekin)
Pickthorn, K. W. M.	Stanley, Capt. Hon. Richard
Pike, Miss Mervyn	Steward, Harold (Stookport, S.)	TELLERS FOR THE NOES:
Pilkington, Capt. R. A.	Steward, Sir William(Woolwich, W.)	Mr. Bryan and Mr. Hughes-Young.

Division No. 108.]	AYES	[7.52 p.m.
Ainsley, J. W.	Hall, Rt. Hn. Glenvil (Colne Valley)	Oliver, G. H.
Albu, A. H.	Hamilton, W. W.	Oram, A. E.
Allaun, Frank (Salford, E.)	Harrison, J. (Nottingham, N.)	Orbach, M.
Allen, Arthur (Bosworth)	Hastings, S.	Padley, W. E.
Allen, Scholefield (Crewe)	Hayman, F. H.	Palmer, A. M. F.
Awbery, S. S.	Henderson, Rt. Hn. A. (Rwly Regis)	Pannell, Charles (Leeds, W.)
Bacon, Miss Alice	Hewitson, Capt. M.	Parker, J.
Benson, Sir George	Hobson, C. R. (Keighley)	Paton, John
Bevan, Rt. Hon. A. (Ebbw Vale)	Holman, P.	Pearson, A.
Boardman, H.	Houghton, Douglas	Peart, T. F.
Bottomley, Rt. Hon. A. G.	Howell, Charles (Perry Barr)	Pentland, N.
Bowden, H. W. (Leicester, S.W.)	Howell, Denis (All Saints)	Popplewell, E.
Bowles, F. G.	Hughes, Cledwyn (Anglesey)	Prentice, R. E.
Brockway, A. F.	Hughes, Emrys (S. Ayrshire)	Price, Philips (Gloucestershire, W.)
Broughton, Dr. A. D. D.	Hughes, Hector (Aberdeen, N.)	Probert, A. R.
Brown, Rt. Hon. George (Belper)	Hunter, A. E.	Proctor, W. T.
Burke, W. A.	Hynd, H. (Accrington)	Randall, H. E.
	Hynd, J. B. (Attercliffe)	Redhead, E. C.
Butler, Herbert (Hackney, C.)	Irvine, A. J. (Edge Hill)	Robens, Rt. Hon. A.
Callaghan, L. J.	Irving, Sydney (Dartford)	Robinson, Kenneth (St. Pancras, N.)
Castle, Mrs. B. A.	Isaacs, Rt. Hon. G. A.	Rogers, George (Kensington, N.)
Champion, A. J.	Janner, B.	Ross, William
Chapman, W. D.	Johnson, James (Rugby)	Shinwell, Rt. Hon. E.
Chetwynd, G. R.	Jones, Rt. Hon. A. Creech(Wakefield)	Silverman, Sydney (Nelson)
Clunie, J.	Jones, David (The Hartlepools)	Simmons, C. J. (Brierley Hill)
Coldrick, W.	Jones, Elwyn (W. Ham, S.)	Slater, Mrs. H. (Stoke, N.)
Collick, P. H. (Birkenhead)	Jones, Jack (Rotherham)	Slater, J. (Sedgefield)
Collins,V.J.(Shoreditch & Finsbury)	Jones, J. Idwal (Wrexham)	Soskice, Rt. Hon. Sir Frank
Corbet, Mrs. Freda	Jones, T. W. (Merioneth)	Sparks, J. A.
Cove, W. G.	Kenyon, C.	Stewart, Michael (Fulham)
Craddock, George (Bradford, S.)	King, Dr. H. M.	Stones, W. (Consett)
Dalton, Rt. Hon. H.	Lawson, G. M.	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Darling, George (Hillsborough)	Ledger, R. J.	Swingler, S. T.
Davies, Ernest (Enfield, E.)	Lee, Miss Jennie (Cannock)
Davies, Stephen (Merthyr)	Lever, Harold (Cheetham)	Sylvester, G. O.
Deer, G.	Lipton, Marcus	Taylor, Bernard (Mansfield)
Delargy, H. J.	Logan, D. G.	Taylor, John (West Lothian)
Diamond, John	Mabon, Dr. J. Dickson	Thomas, George (Cardiff)
Donnelly, D. L.	McCann, J.	Thornton, E.
Dye, S.	MacColl, J. E.	Tomney, F.
Ede, Rt. Hon. J. C.	McGhee, H. G.	Viant, S. P.
Edelman, M.	McInnes, J.	Watkins, T. E.
Edwards, Rt. Hon. John (Brighouse)	McKay, John (Wallsend)	Weitzman, D.
Edwards, Robert (Bilston)	McLeavy, Frank	West, D. G.
Evans, Albert (Islington, S.W.)	Mallalieu, J. P. W. (Huddersfd, E.)	Wheeldon, W. E.
Evans, Edward (Lowestoft)	Messer, Sir F.	Willey, Frederick
Finch, H. J.	Mitchison, G. R.	Williams, Rev. Llywelyn (Ab'tillery)
Fletcher, Eric	Moody, A. S.	Williams, Rt. Hon. T. (Don Valley)
Gibson, C. W.	Morris, Percy (Swansea, W.)	Winterbottom, Richard
Gordon Walker, Rt. Hon. P. C.	Morrison,Rt.Hn.Herbert(Lewis'm,S.)	Yates, V. (Ladywood)
Grenfell, Rt. Hon. D. R.	Mort, D. L.	Younger, Rt. Hon. K.
Grey, C. F.	Moss, R.
Griffiths, David (Rother Valley)	Moyle, A.	TELLERS FOR THE AYES:
Griffiths, Rt. Hon. James (Llanelly)	Mulley, F. W.	Mr. J. T. Price and Mr. Short.
Griffiths, William (Exchange)	Noel-Baker, Rt. Hon. P. (Derby, S.)
NOES
Agnew, Sir Peter	Bullus, Wing Commander E. E.	Duncan, Sir James
Aitken, W. T.	Burden, F. F. A.	Eden, J. B. (Bournemouth, West)
Arbuthnot, John	Butler,Rt. Hn.R.A.(Saffron Walden)	Emmet, Hon. Mrs. Evelyn
Armstrong, C. W.	Carr, Robert	Errington, Sir Eric
Atkins, H. E.	Cary, Sir Robert	Farey-Jones, F. W.
Baldwin, A. E.	Channon, Sir Henry	Finlay, Graeme
Balniel, Lord	Chichester-Clark, R.	Fisher, Nigel
Barlow, Sir John	Conant, Maj. Sir Roger	Freeth, Denzil
Barter, John	Cooke, Robert	Gammans, Lady
Beamish, Col. Tufton	Cooper-Key, E. M.	Garner-Evans, E. H.
Bevins, J. R. (Toxteth)	Cordeaux, Lt.-Col. J. K.	Glover, D.
Bidgood, J. C.	Corfield, Capt. F. V.	Glyn, Col. Richard H.
Biggs-Davison, J. A.	Craddock, Beresford (Spelthorne)	Godber, J. B.
Bingham, R. M.	Crosthwaite-Eyre, Col. O. E.	Goodhart, Philip
Bishop, F. P.	Crowder, Sir John (Finchley)	Gough, C. F. H.
Black, C. W.	Cunningham, Knox	Gower, H. R.
Body, R. F.	Currie, G. B. H.	Graham, Sir Fergus
Bossom, Sir Alfred	D'Avigdor-Goldsmid, Sir Henry	Grant-Ferris, Wg Cdr. R. (Nantwich)
Boyd-Carpenter, Rt. Hon. J. A.	Deedes, W. F.	Green, A.
Boyle, Sir Edward	Doughty, C. J. A.	Grimston, Hon. John (St. Albans)
Brooke, Rt. Hon. Henry	du Cann, E. D. L.	Gurden, Harold
Bryan, P.	Dugdale, Rt. Hn. Sir T. (Richmond)	Hall, John (Wycombe)
Harris, Reader (Heston)	McAdden, S. J.	Robinson, Sir Roland (Blackpool, S.)
Harrison, Col. J. H. (Eye)	Macdonald, Sir Peter	Robson Brown, Sir William
Harvey, Sir Arthur Vere (Macclesf'd)	Mackeson, Brig. Sir Harry	Roper, Sir Harold
Harvey, John (Walthamstow, E.)	McKibbin, Alan	Ropner, Col. Sir Leonard
Hay, John	Mackie, J. H. (Galloway)	Russell, R. S.
Heath, Rt. Hon. E. R. C.	McLaughlin, Mrs. P.	Scott-Miller, Cmdr. R,
Hesketh, R. F.	Macleod, Rt. Hn. Iain (Enfield, W.)	Soames, Rt. Hon. Christopher
Hicks-Beach, Maj. W. W.	Macmillan, Rt. Hn. Harold(Bromley)	Spearman, Sir Alexander
Hill, Mrs. E. (Wythenshawe)	Macmillan, Maurice (Halifax)	Speir, R. M.
Hirst, Geoffrey	Maddan, Martin	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Holland-Martin, C. J.	Manningham-Buller, Rt. Hn. Sir R.	Stanley, Capt. Hon. Richard
Hornby, R. P.	Marlowe, A. A. H.	Stevens, Geoffrey
Horobin, Sir Ian	Marshall, Douglas	Steward, Harold (Stockport, S.)
Horsbrugh, Rt. Hon. Dame Florence	Maudling, Rt. Hon. R.	Steward, Sir William (Woolwich, W.)
Howard, Gerald (Cambridgeshire)	Mawby, R. L.	Stoddart-Soott, Col. Sir Malcolm
Howard, Hon. Greville (St. Ives)	Maydon, Lt.-Comdr. S. L. C.	Storey, S.
Howard, John (Test)	Milligan, Rt. Hon. W. R.	Stuart, Rt. Hon. James (Moray)
Hughes Hallett, Vice-Admiral J.	Molson, Rt. Hon. Hugh	Studholme, Sir Henry
Hughes-Young, M. H. C.	Nabarro, G. D. N.	Summers, Sir Spencer
Hurd, A. R.	Nairn, D. L. S.	Taylor, Sir Charles (Eastbourne)
Hutchison, Sir James (Scotstoun)	Neave, Airey	Teeling, W.
Hylton-Foster, Rt. Hon. Sir Harry	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Thomas, P. J. M. (Conway)
Iremonger, T. L.	Noble, Comdr. Rt. Hon. Allan	Thompson, Kenneth (Walton)
Jenkins, Robert (Dulwich)	Oakshott, H. D.	Thompson, R. (Croydon, S.)
Johnson, Dr. Donald (Carlisle)	O'Neill, Hn. Phelim (Co. Antrim, N.)	Tiley, A. (Bradford, W.)
Johnson, Eric (Blackley)	Orr-Ewing, Charles Ian (Hendon, N.)	Turton, Rt. Hon. R. H.
Jones, Rt. Hon. Aubrey (Hall Green)	Page, R. G.	Vane, W. M. F.
Joynson-Hicks, Hon. Sir Lancelot	Pannell, N. A. (Kirkdale)	Vickers, Miss Joan
Kaberry, D.	Peel, W. J.	Wakefield, Edward (Derbyshire, W.)
Keegan, D.	Peyton, J. W. W.	Wakefield, Sir Wavell (St. M'lebone)
Kerby, Capt. H. B.	Pickthorn, K. W. M.	Walker-Smith, Rt. Hon. Derek
Kershaw, J. A.	Pike, Miss Mervyn	Wall, Patrick
Kirk, P. M.	Pilkington, Capt. R. A.	Ward, Dame Irene (Tynemouth)
Lambton, Viscount	Pitman, I. J.	Watkinson, Rt. Hon. Harold
Langford-Holt, J. A.	Pitt, Miss E. M.	Webbe, Sir H.
Leather, E. H. C.	Powell, J. Enoch	Williams, R. Dudley (Exeter)
Leavey, J. A.	Price, David (Eastleigh)	Wills, G. (Bridgwater)
Legge-Bourke, Maj. E. A. H.	Price, Henry (Lewisham, W.)	Wilson, Geoffrey (Truro)
Legh, Hon. Peter (Petersfield)	Prior-Palmer, Brig. O. L.	Wood, Hon. R.
Lindsay, Hon. James (Devon, N.)	Ramsden, J. E.	Woollam, John Victor
Linstead, Sir H. N.	Rawlinson, Peter	Yates, William (The Wrekin)
Lloyd, Maj. Sir Guy (Renfrew, E.)	Redmayne, M.
Longden, Gilbert	Remnant, Hon. P.	TELLERS FOR THE NOES:
Low, Rt. Hon. Sir Toby	Ridsdale, J. E.	Mr. Brooman-While and
Lucas, P. B. (Brentford & Chiswick)	Rippon, A. G. F.	Mr. Gibson-Watt.
Lucas-Tooth, Sir Hugh	Robert, Sir Peter (Heeley)

8.0 p.m.

Sir T. Low

I beg to move, in page 2, line 16, at the end to insert: Provided that for the year 1961–62 and each subsequent year the amount of the general grant payable to any recipient authority shall not be such that by reason of it a loss, ascertained in the manner set out in section fifteen of this Act, accrues to any rating authority. This Amendment, which seems to us to be very important, seeks to ensure that the Bill, in the way that it divides the general grant amongst the local authorities, does not add to the rate to be collected by any rating authority. It is not designed to ask for any more money in total to be added to the aggregate grants by the Treasury, but is solely concerned with the distribution of the total. The Amendment refers to 1961–62 and the subsequent years. It does not refer to the two earlier years, because these are already covered by the transitional provisions in Clause 15, to which some of my hon. Friends and I have put down an Amendment seeking to make those provisions rather better for the second of the two years.

Both the White Paper on Local Government Finance, Command 209, issued in July last year, and the hypothetical illustrations contained in the White Paper issued by my right hon. Friend in February this year show that a number of local authorities are expected to lose quite substantially because of the way in which my right hon. Friend proposes to work out the general grant. For example, from the first page of Table B of the hypothetical cases, which refers to county borough councils, it appears that Bath, Blackpool, Bournemouth, Brighton and Carlisle were expected to have had to increase their rates by 10d. in the £ if there had been no transitional compensation arrangements.

One odd thing about that White Paper is that it successfully hides the true damage done to us by, first, putting a plus sign where it means that we suffer a loss, and, secondly, by dividing the total damage to us by 10. As hon. Gentlemen on both sides who have studied this Measure will know, in the case of the pluses, but not of the minuses, the proper way to get the true measure of the loss is to multiply by ten.

An increase in the rates of 10d. in the £ is really quite a lot, but there are other authorities whose rates will be increased by twice as much, and one where they will be increased by three times that amount. And I have just found another where they will be increased by four times as much. Among the authorities mentioned in the White Paper, the Committee will have noticed that the largest and best seaside resorts stand out. I shall say one or two things about Blackpool, and, if they catch your eye, Sir Godfrey, some of my hon. Friends will, I know, wish to say one or two things about their constituencies.

I know very well that my right hon. Friend has stressed on a number of occasions that the document to which I refer gives only hypothetical illustrations of what may happen, but I must remind him that this afternoon he found it convenient to use those same hypothetical illustrations to bat my hon. Friend the Member for Tynemouth (Dame Irene Ward) over the head sharply——

Dame Irene Ward

He did not, really.

Sir T. Low

I therefore hope that he will forgive me if I attach more importance to this than just to treat it hypothetically. I know that both my right hon. Friend and my hon. Friend the Parliamentary Secretary have said from time to time that everything depends on the details of the system finally adopted for working out the general grant, and how that will be done in the Order that my right hon. Friend will make. I know, too, that, in one way or another, every one may be affected by the revaluation of house property.

I have those points in mind, but the fact remains that, as the Bill now stands, and I am sure that my right hon. Friend will not deny this, a number of local authorities may, and probably will, lose, and, as a result, will have to increase their rates substantially. That will happen at a time when, because of the Bill, local authorities generally are gaining a total of £10 million, which is an average of 4d. in the £ spread over the country as a whole. It therefore seems to me that something has gone wrong in the method of working out the system for dividing the general grant.

One must ask why there is this discrimination, for discrimination it is, against certain local authorities. During the last nine months, I have tried to find out how any one justifies such a system. Nobody has argued to me nor, I think, to anyone else, that a deliberate policy decision has been taken by my right hon. Friend to add to the rates of particular authorities. I do not think that there has been any deliberate discrimination.

The best answer I have been able to get as to why the authors of this scheme decided upon it is that it seemed to them to give the highest degree of what is called rough justice. It is very rough, Sir Godfrey, and not very just, as I am about to show. Before I deal with the justice angle, however, I hope that if, as I understand, there has been no deliberate decision to discriminate against certain local authorities in this way, my right hon. Friend will agree that, on policy grounds at any rate, he should be seriously concerned with appreciating the way in which this system will work out.

One of the main objects of the Bill is to give to local authorities greater responsibility and power over finance. We on this side have the very fullest confidence in the ability of local authorities to make the right decisions in the light of this extra responsibility. Let us, therefore, see what would happen if the Bill were to go through as now drafted and if the hypothetical case is right.

Let us take, as an example, education, the service referred to most this afternoon and in other discussions on the Bill. I am certain that my own local authority will put into education all the effort that it properly should; that there will be no diminution in that effort, or in the quality of the education, provided the money is available.

While I agree with what my right hon. Friend said earlier this afternoon—that public opinion is important, for it is public opinion that will play a great part in ensuring that education is kept up to those high standards—money is as important. Are the Government really helping to achieve their aim that local authorities, with their extra responsibility and power, should act rightly towards the education and other services? Are the Government really helping by depriving a number of local authorities of substantial moneys, on the basis of which capital programmes and long-term schemes may have been developed?

I have heard my right hon. and hon. Friends say on a number of occasions that it is no part of Government policy to reduce this assistance for education. The hon. and learned Member for Kettering (Mr. Mitchison) quoted some such statement this afternoon. Of course, that is not part of the policy of the Government. We have had that confirmed today, but too often when those statements are made they are made by people thinking globally, thinking of the whole totality of the matter over the country. I want my right hon. Friend to understand that by reducing the amount in this very substantial way to my authority and a number of other authorities, he will, whether he likes it or not, be reducing the assistance given to education.

That is an inescapable fact and I think that it is wholly contrary to the whole idea behind the Bill. It really is not the case, as I understand it, taking the education grant—which is the largest of the existing grants being replaced—that anyone can argue that the education grant system was not fair. The right hon. Member for South Shields (Mr. Ede), whose speeches in Committee I have been reading, as reported in column 197 of the OFFICIAL REPORT of the Standing Committee, took credit to himself for initiating the education grant system in 1944 and said that it was the most fair form of grant in logic and quality.

No one has suggested that seaside or any other local authorities which will be penalised in this way would get too much for education. Nor has it been argued that they would get too much for anything. On policy grounds it will be against the whole intentions of my right hon. Friend and the rest of the Government—intentions with which I am in full agreement, as I believe are all my hon. Friends—if he allows the Bill to go through in such a way that some authorities are substantially penalised.

I come, therefore, to the justice of the matter. I know that there are hon. Members, perhaps some present in this Committee who think that seaside resorts like Blackpool, Bournemouth, Hastings, Southport and Eastbourne, are rich places and that their rates ought to be higher than they are. That view is held, but I think that it is quite wrongly held and I shall explain why. In those resorts there are large numbers of retired people living on their own savings, collected by their hard work and thrift, or the hard work and thrift of their families. There are also a great many people who, by their own efforts, are running small hotels, boarding houses, small shops and other businesses.

Then there are a great many people engaged in the holiday industry or in other industrial activities. There is a higher proportion of retired people living on fixed incomes in those towns than practically anywhere else in the country. I know that my right hon. Friend is very sympathetic towards these people, for when he was Financial Secretary to the Treasury we heard him, as we have heard his successors, introducing reliefs which are helpful to these people. Why should these people be singled out for increases in rates imposed upon them by this Government, of all Governments?

8.15 p.m.

I turn to the actual figures of the sort of rates that are paid in seaside resorts such as my constituency compared with those paid in other places. I do not suppose hon. Members realise that the rate levied per head of the population in Blackpool is very considerably above the average rate per head of the population throughout the country. The average net rate throughout the country is £11 2s. 6d. per head and the rate in Blackpool is £14 1s. 3d. per head. So the rate is already higher than the average. That is one important point I want to put to the Committee.

Another test comes from comparisons made between actual sums paid in rates in any one year by persons living in comparable houses in seaside resorts and elsewhere. I have tried to get some figures with which I wish to trouble the Committee for a moment. The best comparison, to those who did this job for me, seemed to be between the occupants of temporary bungalows which, normally, is the same standard accommodation wherever they might be. I found the following to be the position this year. In St. Helens, which will be quite a big gainer from this Bill, the occupant of a temporary bungalow will be paying in rates this year 11 guineas. In Blackpool, the occupant of a temporary bungalow of the same type will be paying £15 2s. 6d.; in Hastings, £16 4s.; in Southport, £13 3s. 6d.; and, in Brighton, £16 4s.

Mr. J. T. Price

To get the comparison straight, surely the right hon. Member should remember that people who endure the fumes and industrial smoke of St. Helens deserve some compensation as compared with those who enjoy the fresh air in his constituency?

Sir T. Low

The hon. Member is always anticipating what I have in mind. He gets up and says very quickly things which I am about to say. Of course there is that element, but there are also other questions to be considered. Does that element cover the whole of this big difference in the actual rate paid? If it does, does it require a further difference of, say, £1?

A point I have not made, which will be a surprise to hon. Members and was a surprise to me, is that the figures are so different between the person living in Blackpool or another seaside resort and persons living in other places. Despite the fact that the rate per £ is lower than elsewhere, they pay a sum in rates higher than elsewhere. I am sorry that I am taking up so much of the time of the Committee, but I want to deploy the case so that my hon. Friends may have the background.

There is a fairly well-known explanation of why expenditure of seaside resorts is high. During the holiday season there is a tremendous influx of visitors, whether as resident visitors or day trippers. The local authority, responsible for local services, has to provide a number of services for those visitors. For example, the fire service, health service and refuse collection service all have to cater for the full population.

It may interest the Committee to know that the permanent population of Blackpool is just under 150,000. It is on the basis of that permanent population that calculations have to be made under the Bill, but, at the peak of the season, there are more than 400,000 residents and there may be up to 100,000 more people in Blackpool on any day. At seaside resorts there are many other forms of higher expenditure required to provide a high standard of amenity service, but I am not making anything of that argument, or of the argument about sea defence costs, or publicity, in these remarks. However, I do think that these facts clearly establish my case that there really is no valid argument, on grounds of justice, for adding to the rates of seaside resorts.

Mr. Mitchison

I wonder whether the right hon. Gentleman would answer a question which is puzzling me. Clause 15 of the Bill provides that losses for two years certainly, and other years possibly, shall be met by gainers—that they shall pay them. I notice an Amendment in the name of the right hon. Gentleman and his hon. Friends to limit nothing after the first two years. This Amendment deals with the subsequent years, and this Amendment is intended to provide that there shall be no losers at all. Who is to make up the difference between that amount and the amount in the Bill? Is it the Government, or is it the local authorities collectively, other than those which are losers?

Sir T. Low

I thought I made that clear at the beginning, that it was not the Government, it was the local authorities. [HON. MEMBERS: "Ah."] I ask hon. Members of the Committee to be fair about this. Compared with the present, that does not mean other local authorities need lose anything at all, because there is this £10 million extra which is going to local authorities as a whole.

Mr. Sparks

No.

Sir T. Low

The hon. Member shakes his head, but that is what we have been told on a number of occasions, and I must believe what I hear from members of the Government.

Mr. Sparks

Is not the right hon. Member aware that a number of existing grants are to be withdrawn, and that they have to be offset against the £10 million?

Sir T. Low

I realise that there may be one or two small adjustments, and my right hon. Friend will correct me if I have given the wrong figure, but if it is not £10 million it is £9 million. There is a substantial extra amount.

How is this to be done? I was just coming to the question when the hon. and learned Member for Kettering (Mr. Mitchison) interrupted me. In Standing Committee on the Bill my hon. Friend the Member for East Bournemouth and Christchurch (Mr. N. Nicolson) moved a number of Amendments on various details of the grant, the adoption of which would have prevented damage to any local authority, but for reasons which seemed good to him my right hon. Friend refused to accept any of those Amendments.

However, what is clear is that he has certain flexibility in the way he works out the formulae mentioned in the Bill. In particular, there is the rate product reduction which he can put at the right size to achieve his purpose. If the Bill as it stands does not give him the power necessary for this, as this Bill is now recommitted, and there is still a Report stage, I hope that it will be amended to give my right hon. Friend that power if it is necessary. My right hon. Friend has already gone a little way to meet the position by accepting in Standing Committee an Amendment which makes the rate product reduction permissive and not compulsory.

That brings we to the end of my main argument.

Mr. Mitchison

I am sure that we all want to get this clear. I have to look again at Clause 15. It provides that for the first year there shall be total compensation of the losers by the gainers; in the next year, there shall be nine-tenths; and it leaves subsequent years at large. We have been told that the object is to diminish the amount. Am I right in summarising this Amendment in this way: that what this does is to provide that in all the years after the first two the gainers by the Bill shall compensate the losers by the Bill fully?

Sir T. Low

The hon. and learned Gentleman is very skilful in the way he puts things. That would certainly be the effect; but, of course, the other way of doing it, of working this out, would be to get the formulae right from the start, so that in the working out of my right hon. Friend's formulae, in estimating and working out the grants, nobody would lose right from the start. A number of people would gain, but they would not, of course, gain as much as they would if a number of others were to lose.

Mr. Mitchison

There is a simpler way still: withdraw the financial part of the Bill.

Sir T. Low

The hon. and learned Gentleman is so clever—he has made a number of speeches, and has studied this Bill so well—that he may well be right. However, I would conclude this speech, which I did not mean to last anything like as long as it has.

I hope that I have established the case before the Committee that on policy grounds it is most unwise to penalise any local authority by the Bill or to add to its rates or to reduce its services, and that on justice grounds there is no case at all for penalising any local authority, certainly not the seaside resorts. I do ask my right hon. Friend once again to remember that in these seaside resorts there is a large number of retired people, and that this is really not the time, after a number of years of inflation, to add to the burdens of retired people.

Mr. Nigel Nicolson (Bournemouth, East and Christchurch)

My right hon. Friend the Member for Blackpool, North (Sir T. Low) was good enough to say that in the proceedings in Standing Committee on this Bill I drew attention to many of the matters of which he has just reminded this Committee. When I first knew my right hon. Friend he was a brigadier, I was a lieutenant, and our relationship has continued ever since upon that basis. Since the Bill was in Standing Committee I have acquired a leader and he has acquired quite a platoon of followers, as the names appended to this Amendment as shown on the Notice Paper demonstrate.

I proposed these arguments in Standing Committee strongly and sometimes even rather sharply because I felt strongly about them, and, with the exception of my hon. Friend the Member for Harrogate (Mr. Ramsden), I was the only Member of the Standing Committee whose constituency was deeply and adversely affected in the way which my right hon. Friend has just described.

I fear I had no other hon. Members with me on the Committee. In the end, as hon. Members who were present may remember, I was forced to take the drastic, and even dramatic, step of dividing the Committee against my own Government. I received one single vote in support of my Amendment on which I chose to make this demonstration, my own. It seems to me that the purpose of the Report stage of a Bill is twofold: first, to enable us to look at the Bill again in the light of the views expressed and the Amendments made during the Committee stage; secondly, to enable those hon. Members who were not members of the Standing Committee to express in the House their views upon the Bill as it has emerged from the Committee stage.

It is clear that none of my hon. Friends who were members of the Committee could support me because, in the first place, they warmly welcomed the principle of the Bill, as I did, and secondly, because, with the exception of the hon. Member for Harrogate, all other hon. Members of the Committee represented constituencies which benefited from the Bill. It was equally clear that no hon. Gentlemen opposite on the Committee would wish to support me. Whatever personal sympathy they might have felt for my predicament, it would have looked very strange to their constituents, if hon. Gentleman had voted for an increase in Government money to be granted to places like Bournemouth.

8.30 p.m.

Nonetheless, one thing struck me strongly about the attitude of the Opposition. We were confronted daily and almost hourly in the early sittings of the Committee stage by demands from the Opposition that my right hon. Friend the Minister of Housing and Local Government should produce concrete figures which would indicate the likely financial effect of this Bill. My right hon. Friend did so. He produced the document referred to, the hypothetical illustration. From that moment onwards we heard not one single word from the opposite side about the contents of the document for which they had pressed so strongly. [HON. MEMBERS: "Oh."] Why? For the simple reason that it became clear from the hypothetical illustration that the majority of local authorities represented by the Labour Party in this House stood to benefit from the Bill very strongly indeed. It became equally obvious that a large proportion of the authorities which stood to lose by the Bill, and they were not many in total, were represented by hon. Members from this side of the Committee.

Mr. Dudley Williams (Exeter)

I am following the argument closely. May I point out to my hon. Friend that there are, in fact, a number of constituencies represented by hon. Gentlemen opposite which stand to lose? I am afraid that all those I have seen which stand to lose have not got their representatives in the Committee today.

Mr. A. G. Bottomley (Rochester and Chatham)

If the hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) was not able to be present at all the sittings of the Committee, perhaps he will do hon. Members the honour of reading the OFFICIAL REPORT, when he will find that the document in question was mentioned several times.

Mr. Nicolson

I did not miss one sitting of the Committee, although I may have gone out into the corridor from time to time. The right hon. Gentleman will allow me to say this, that there was very little reference to the contents of the hypothetical illustration.

Mr. Bottomley

It would have been out of order.

Mr. Nicolson

No, I referred to it constantly and our Chairman did not call me to order once. I have made this point because my main attack is clearly, in the terms of this Amendment concentrated on my own Front Bench, and I did not wish to give the impression that I thought all the fault lay on one side. Hon. Gentlemen opposite clearly found there was something strange, even something faintly comic, in the idea that places like Bournemouth, Blackpool, Brighton or Eastbourne could be hard up. They thought of such places in terms of the amenities they found when they went there on holiday. They assumed that such places were rich. They forgot that in a seaside resort it is our duty to conceal our troubles behind a fixed smile of welcome. [HON. MEMBERS: "Hear, hear."] I believe there is a phrase commonly used in Lancashire, "Where's there's muck, there's brass."

Mr. David Griffiths (Rother Valley)

The hon. Gentleman has got it out of its context.

Mr. Nicolson

It may be equally true for the South Coast of England, in a rather more stilted and less expressive style to say, "Where there is sand, there is penury", because it is true that the seaside resorts are picked out by this Bill and put into a category of special disadvantage. I explained during the Committee stage why this was so, and I will not weary this Committee with the reasons once again. It is a fact. Not only are they put at this special disadvantage, but they are almost universally represented by hon. Members who sit on this side of the Committee.

Mr. D. Griffiths

If they are at this disadvantage, why is it that when people have made some wealth in an industrial area they go to Bournemouth, Blackpool or Lytham St. Annes for comfort in their retiring days?

Mr. Nicolson

My right hon. Friend dealt with that very well in his speech just now. He said that these places attract the retired person just as much as they attract the holidaymaker, and it is the retired person upon whom the burden of inflation has fallen most hardly. It is even more inexcusable that those places should be singled out for particularly harsh treatment solely by the method of calculating the formula for the general grant.

This anomaly was recognised as long as ten years ago, and I will read a short extract from a speech made on 18th November, 1948, by the right hon. Member for Ebbw Vale (Mr. Bevan), who was then Minister of Health. During the debate on the then Local Government Bill, he said: Now it is impossible to treat an authority badly; all you can do is to ill-treat a person. … We are primarily concerned with what happens to the individual, and what we should find out, therefore, is whether two citizens of equal substance in different parts of the country have to make an equal contribution for the same local services. … Therefore we take the average rateable value per head of the population and all those below the average attract a share of the block grant."—[OFFICIAL REPORT, 18th November, 1948; Vol. 444, c. 991.] He meant the Exchequer equalisation grant.

What is more, on the very same occasion my own party then in Opposition, moved an Amendment in which they objected to the Bill on the grounds, among others, that the Bill discriminated unfairly between ratepayers in similar economic circumstances. That is precisely what this Bill does. I asked my right hon. Friend whether it was his intention to put this extra burden upon authorities which were already in considerable financial difficulties, whatever impression their outward appearance may have given.

In Committee I suggested to him four methods by which he might remove or lessen the anomaly. I need only list them, without explaining them. The first was that the rate product reduction should be done away with. The second was that if he could not do that, he should take into account the rate deficiency grant when he came to calculate what the rate product reduction should be for any particular authority. The third was that he should allow a special weighting for the influx of the seasonal visitors. Finally—this was the point upon which I felt bound to divide the Committee against my own side—I suggested that there should be no lower limit for qualification for the educational supplementary grant. This last may seem a small point but it made a difference of £45,000 to my local authority, and I know of many other larger authorities where the handicap was even more crippling.

Two concessions only were made in Committee, in response to this appeal. One has been mentioned by my right hon. Friend the Member for Blackpool, North (Sir T. Low). This was to the effect that if the Minister wished to make a rate product deduction he could do so. He was not obliged to. It was no longer obligatory, but was permissive. But that does not satisfy us. What guarantee is there that an authority like mine will not be heavily penalised by the rate product deduction in the same way as is illustrated first in the White Paper on Local Government Finance and, more lately, in the hypothetical example which has been given?

The Parliamentary Secretary to the Ministry of Education was also good enough to accept the suggestion that I made that the educational special grant should be calculated after allowing for all the school children for which the local education authority was financially responsible. Those were welcome moves, but in terms of hard cash the benefit to authorities like mine amounts to a few thousand pounds, in contrast to the hundreds of thousands which some of the larger authorities are losing by the operation of this formula.

My right hon. Friend may answer that nobody can tell who will gain and who will lose, and that we shall be able to deal with the matter only when he lays before the House the order which attaches specific values to the unknown quantities in the formula as it stands. To this I would reply that although we do not yet know the actual values, the Bill nevertheless lays down the proportions in which the money is to be divided. Once those proportions are established by Act of Parliament, nothing can change them, and when we debate the actual amount of money which each authority will receive under the order we shall be told, "You cannot do anything about this. You should have made your protest when the Bill was under discussion." That is why we are making this protest now—before it is too late.

I hope that even if the bold Amendment which my right hon. Friend has put upon the Order Paper cannot be accepted as it stands, it will at least lead my right hon. Friend the Minister to think over these problems again and see whether he cannot make some gesture to us.

Mr. Sparks

I can quite understand hon. Members who come from certain seaside resorts making a protest this evening because the Bill at last ensures that justice is about to be meted out to these areas. If we want to have a clear understanding of the issue that has been put before us we must go back a little way, to the years prior to the last quinquennial valuation. The troubles to which hon. Members opposite have referred this evening arise very largely from the last quinquennial valuation, which found that certain places like Bournemouth and Blackpool were very much under-assessed by comparison with other areas.

At that time, under the equalisation grant paid by the Ministry, quite a considerable amount of money found its way into the pockets of towns like Blackpool and Bournemouth.

Mr. D. Griffiths

And Eastbourne.

Mr. Sparks

While many other local authorities, including my own, received not a penny of equalisation grant, those places were receiving the benefit of the grant, because their assessments were too low. Now the quinquennial valuation has caught up with them. The object of that valuation was to iron out inequalities of assessment between different areas. The determination of the equalisation grant and the provision of the general grant mean that areas which were under-assessed, whose ratepayers were not paying the equivalent value for service that ratepayers in other parts were having to pay, will now be required to pay their correct share; and they find themselves being deprived of what they have hitherto received from the equalisation grant.

8.45 p.m.

Mr. N. Nicolson

The hon. Gentleman is not correct in saying that authorities to which I have referred were previously in receipt of certain equalisation grants. They never were and are not to be now.

Mr. Sparks

That is not true of all seaside authorities. There may be exceptions, but a considerable number of them——

Mr. D. Williams

Tell us the names.

Mr. Sparks

Ask the hon. Member for East Bournemouth and Christchurch (Mr. N. Nicolson).

In any case, their assessments were under-valued. That the hon. Gentleman cannot deny, because if they were not under-assessed before the quinquennial valuation, they would not have a grouse this evening about the withdrawal of the Exchequer equalisation grant proportion. The position is, quite rightly, that the valuations under the last quinquennial valuation have to some extent ironed out these anomalies, but not absolutely, and it affects certain areas which receive a share of the equalisation grant, but will not continue to do so under the provisions of this Bill.

The right hon. Member for Blackpool, North (Sir T. Low) said quite a lot about £10 million more being paid to local authorities. The sum is not £10 million; it is a proportion of £10 million, after making allowance for the grants which will cease altogether. But does not the right hon. Gentleman know that in the first year that £10 million is going to Blackpool, Bournemouth and other such places which will lose by the provisions of this Bill? It will not be until after ten years that the local authorities, unjustly treated in the past by the terms of the equalisation grant, will come into their own, and receive that to which they are entitled and have been entitled for many years.

Sir T. Low

Surely the hon. Gentleman does not desire to misquote me or to give the Committee a wrong idea of what I said. The transitional provisions of Clause 15 ensure that nobody loses for the first year; and no one loses more than 10 per cent. of the general loss during the second year. There is no guarantee about what happens afterwards. If no one loses, if the position is left as it is, there is £10 million, or just short of that figure, for the rest of the authorities.

Mr. Sparks

The right hon. Gentleman has not read the Bill. No one is to gain either.

Sir T. Low

The hon. Gentleman cannot get away with the statement that nobody is to gain. If he will read the hypothetical White Paper, he will realise that an enormous number of people are to gain.

Mr. J. T. Price

Nobody takes that seriously.

Mr. Sparks

That document has nothing to do with the provisions of this Bill. Clause 15 provides that authorities which lose by the operation of this Bill will have that loss made good in the first year and during a period of ten years.

It is admitted that in ten years' time the complete loss will become effective—the hon. Member for Exeter (Mr. Dudley Williams) keeps bobbing up and down like a Jack-in-the-box; I do not know what is the matter with him. So it means that the local authorities who will eventually benefit from this Bill are the authorities who received no advantage from the equalisation grant. Justice is now to be done to those authorities by the provisions of this Bill, but they must wait ten years before they receive their due. In the meantime, the authorities in Bournemouth, Blackpool and elsewhere will for ten years have any losses spread over that period.

Therefore, if the Amendment is carried, it means that hon. Members opposite are trying to maintain the status quo. They seek, in other words, to ensure that the authorities which hitherto have been receiving the whole of the equalisation grant should continue to receive it and the authorities which have not benefited by the equalisation grant shall not in future be allowed to benefit from it.

I believe that the Bill is intended to be fair to all ratepayers wherever they are, whether in Blackpool, Bournemouth, Birmingham, London, or any of our other industrial centres. It is intended to be fair because the quinquennial valuation was designed to weed out from the rating system the gross under-assessments which were to be found in many of the seaside resorts, whereas other authorities, in areas which have been developing industrially over the last twenty years, have in most cases carried high valuations for rating.

The 1956–57 quinquennial valuation created a fair and just basis for the assessment of rates. The authorities which had been under-assessed are inevitably paying more than they did previously, but they cannot object to that because the basis of valuation for rating is now a reasonably fair one. Good luck to them in respect of whatever advantake they enjoyed in the past, but for the future the valuation is a fair one as between authority and authority and ratepayer and ratepayer.

Removing the inequalities meant that under-assessed areas would have to make good the deficiency in their valuations and over-assessed areas would not be reduced in assessment but would carry a fairer and more equal share of the burden of the rate. I do not think that hon. Members opposite have anything to complain about in view of the background of the situation which existed before the quinquennial valuation and the fact that they will be assisted for ten years before the losses about which they now complain finally come into effect.

Mr. E. M. Cooper-Key (Hastings)

I hope that when the hon. Member for Acton (Mr. Sparks) reads his speech in HANSARD tomorrow he will have the grace to blush at the inaccuracies in what he said. I want to place on record that Hastings was certainly not in receipt of the Exchequer equalisation grant. Incidentally, I should like to know of any seaside resort which was in receipt of it at the time.

Briefly and bluntly, the Amendment arises because of the considerable indignation of a number of ratepayers in certain areas who, under the Bill, will be singled out to pay higher rates. The figures indicate that Hastings, for example, will lose about £40,000 a year. These ratepayers are, at the same time, bewildered by the fact that all the areas adversely affected happen to be Tory constituencies while the authorities which come off best are, in many cases, represented by Socialist Members of Parliament.

During the Second Reading I explained the factors involved, and why they operated against the fortunes of South Coast towns in particular. In the Standing Committee, my hon. Friend the Member for East Bournemouth and Christchurch (Mr. N. Nicolson) put our case valiantly, ably and single-handed, and I will not weary the Committee with a repetition of it. I am most grateful for the speech made by the Minister in Committee, in which he clearly recognised that not all coastal towns and seaside resorts are highly prosperous places.

Unfortunately, it is impossible to gauge the effect upon individual local authorities of the proposed grant formula except by applying the figures contained in the hypothetical tables. I do ask the Minister to consider whether these weightings could not be varied in the first general grant order so as to provide a more equitable distribution of the total grant. The loss of grants to coastal resorts, if the figures in the hypothetical illustrations are adhered to, will, in some cases, have serious consequences, particularly to those towns which have not, as yet, fully recovered from the effects of the last war.

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

I sat through 31 sittings of the Standing Committee but, speaking for myself, and, I think, also for a number of my colleagues who were on the Standing Committee, this has been the most enjoyable half-hour that we have had. It has been interesting to listen to hon. Members opposite. Time after time we tempted them to speak in Committee, but they would not. With the exception of the hon. Member for East Bourne-mouth and Christchurch (Mr. N. Nicolson), we could get hardly a word from them. I should add that we also heard from the hon. Member for Crosby (Mr. Page).

Now we hear hon. Members in full cry in defence of their constituencies. We do not blame them for that. We blame them for leaving their protests so late in the day.

Mr. N. Nicolson

I do not know how the hon. Member can make that statement. Not only were references made to this subject in the strongest terms on Second Reading, and even in debates on the original White Paper, but they were made consistently throughout the Committee stage and by letter and interview with the Minister throughout the last year.

Mr. Wheeldon

My reply to the interjection is quite short; it is that it is deeds that count, not words. When I said that their protests were too late, I was referring to the Second Reading, because as far as I can recollect no Conservative Member went into the Lobby against the Bill.

Dame Irene Ward

There was a three-line Whip, but I did not vote.

Mr. Wheeldon

Then my statement is correct. No hon. Member opposite went into the Lobby against the Bill. If there is any ground for the opposition displayed by the right hon. Member for Blackpool, North (Sir T. Low) and his colleagues tonight, it is founded in the terms of the Bill itself, and the opposition should have been expressed on Second Reading and should have been followed by a vote in the Lobby if hon. Members felt so strongly about it. It arises from the decision in the Bill to withhold from local authorities finance to which they are legitimately entitled.

Hon. Members opposite are late in another respect. The right hon. Member for Blackpool referred to temporary bungalows and the difference between a temporary bungalow in Blackpool and one in an industrial centre. Why does this difference exist? Surely it is because his party believes in the present rating system. They employed this formula and this ground for rating in the Rating and Valuation Act, 1925. It has been going on for all those years. As long as the rating system is founded on rental values, we must take into consideration the fact that a temporary bungalow in my constituency, alongside a stinking river, is quite different from a contemporary bungalow on the cliffs at Bournemouth, or elsewhere on the South Coast. As long as we retain the existing rating system we must take those considerations into account.

Had hon. Members wished to carry the point further they might well have done so in Standing Committee, because my hon. Friend the Member for Widnes (Mr. MacColl) moved an Amendment at one stage which would have given the Government power to permit local authorities to levy a local income tax. That would, in part, have allowed them to get away from this question of rating, but the Minister opposed that very strongly indeed.

9.0 p.m.

The hon. Member for East Bournemouth and Christchurch referred to the peculiar position of seaside resorts in that their summer and winter populations are widely separated; they have a high population at one period, and a comparatively low one at the other. Does he realise that that disability—and I take it that he claims it as such—occurs, not merely in the seaside resorts but in places like Birmingham?

Every day of the week we have thousands of people coming in from adjoining constituencies, but making practically no contribution at all to the civic life and the civic upkeep of Birmingham. We have to provide the transport, road, fire, health, water and other services for them. We are in the same position. Therefore, the hon. Gentleman cannot claim that as something particularly applicable to seaside resorts like Bournemouth and the rest.

Having failed to take action at the appropriate time, the hon. Gentlemen now, at this late stage, say, "Here are £10 million—take that or, at least, take it in part." From whom are they to take it? From places like mine—Birmingham, Manchester and Liverpool. From the industrial areas which, in the main, have been the biggest losers by the de-rating policy of the Government. We have been losing for years all these millions of pounds—and I do not exaggerate—because of the derating policy, and when, at long last, the Government say, not that we shall have full rating but shall have half rating instead of quarter rating and so stand to gain a little bit, we find Bournemouth, Blackpool, Hastings and the like saying, "We are not going to have it. Take it back."

They will get no support from this side of the Committee for such a contention. The industrial areas have had their derating losses. They have not been compensated in full, and will not be compensated in full even under this Bill. I therefore hope that the Minister will resist this Amendment, as we on this side will resist it. There is neither fairness nor justice in it.

Mr. R. F. Hesketh (Southport)

As one who represents one of the seaside resorts most closely affected by this Amendment. I should like to say, first, that my local authority wholly subscribes to the view that the burden should rest where it can most easily be borne, but we think that the thing has been pushed too far. The disparity is too great. My hon. Friend the Member for East Bournemouth and Christchurch (Mr. N. Nicolson) did valiant work in Committee, and I and other of my hon. Friends were sorry that we were not there to help him. He put forward a number of points that he has mentioned, and I will not repeat, but one thing that he did not put forward was a change in the rate deficiency grant.

I should like to take up one point mentioned by the hon. Member for Acton (Mr. Sparks). I share the view expressed by my hon. Friend the Member for Hastings (Mr. Cooper-Key), that there are very few resorts which would have received the equalisation grant in the past. Be that as it may, what we have to remember is that what has replaced the equalisation grant is the rate deficiency grant, and nobody is suggesting any alteration in that at all. As matters stand, according to the White Paper which was published in February, while the aggregate total to be distributed has been greatly increased, my authority is going down to the tune of £60,000 a year.

I would mention, in passing, that of all the authorities in England, we get 37.5 university awards out of 1,000 in a year as against a national average of 19, and that is one thing that has got to be paid for. There are other things that I might mention as well.

We are told, and it has been said before, that these figures are hypothetical. I can only say that it is very difficult to see how we will get any substantial change in these figures in six months' time unless the basis on which the calculations are made is altered. We have tried some ways, and this is another way.

I am very glad to join with my right hon. Friend in putting forward this alternative proposal, though I think that we do not much mind how it is done so long as it is done.

Mr. Bottomley

Exception has been taken to the suggestion by my hon. Friend the Member for Small Heath (Mr. Wheeldon) that it is late in the day for hon. Members opposite to take an interest in this subject. As a matter of fact, the suggestion is quite true. With the exception of two hon. Members opposite, the hon. Members for Hastings (Mr. Cooper-Key) and for East Bournemouth and Christchurch (Mr. N. Nicolson), who have continually pressed this point, no other hon. Member opposite has been able to put forward a case with the consistency that those two hon. Members have done.

Sir T. Low

That is very unfair.

Mr. Bottomley

If on the Second Reading or in Committee the same kind of attack had been launched as is being launched tonight, the Minister would have been compelled to give greater attention to the matter than he has done.

Sir T. Low

That is much below the standard of fairness which the right hon. Gentleman always observes in his speeches. He knows very well that on Second Reading a small point like this, as it is, will not be made by more than one or two persons. Indeed, if it were, the whole of the Second Reading debate would be spoilt. Will the hon. Gentleman take it from me—I am sure he would not wish to accuse us of telling lies to the Committee—that we first made our protests in September and October last year and we have been protesting constantly ever since?

Mr. I. J. Pitman (Bath)

It has been going on for much longer than that, even before the 1948 equalisation grant was discussed. This question of principle has been put strongly to a succession of Ministers on both sides of the House and to my certain knowledge it is only because of the difficulties of getting called in the debate that it has not been put more frequently tonight.

Mr. Dudley Williams

The right hon. Gentleman should withdraw because there are many Members on this side of the Committee who spoke on this point on Second Reading. He mentioned my hon. Friends the Members for Hastings (Mr. Cooper-Key) and East Bourne-mouth and Christchurch (Mr. N. Nicolson). There is also my hon. Friend the Member for Bournemouth, West (Mr. J. Eden). I too spoke, as did many others.

Mr. Bottomley

I come back to what I said earlier. I would withdraw willingly if there were any reason to do so. I repeat what I said before. Whereas this may have been going on privately between hon. Members and the Minister—which is quite right, and to this extent we give satisfaction to individual constituents—nevertheless not one hon. Member opposite had the courage to do what the hon. Member for Tynemouth (Dame Irene Ward) did, namely to abstain from voting on the matter. To this extent, hon. Gentlemen opposite are being much more eloquent tonight than they have been up to date. There was nothing to stop them putting Questions to the Minister if they wanted to bring it to the attention of the House. I say quite unreservedly that I have nothing to withdraw. In the Committee and in the House, until tonight, we have not had the same pressure upon the Minister to do something. I hope that he will not give in.

First of all, I agree with what the Minister said in Committee, that some seaside resorts are not as well off as they used to be; there have been changes. I am sure that he did not have Blackpool or Southport in mind. I hope he had Sheerness in mind. Sheerness has just had the tragic blow of the closing of the dockyard, which has added to its troubles. I accept what the Minister says, that there are some seaside towns which are suffering.

Let us look at the facts. The plea is that there should be some allowance for these seaside resorts because of the burden of visitors coming to the towns. The seaside towns can put a stop to that themselves. Let them stop advertising and asking visitors to come. The fact is that they want the visitors; they bring great wealth to the towns which hon. Gentlemen represent. For comparison, let us think of a place like Shoreditch in the Metropolitan area. Shoreditch has hundreds and hundreds of visitors who come in every day to the factories, for whom the local ratepayers have to provide all the essential services, without recompense of any kind. Shoreditch and places like that are the ones which have a grievance, if any at all. The seaside towns have the wonderful sea breezes, the most congenial amenities, and a good deal of their services are paid for by the visitors. A great deal of their wealth comes from that source. Really, I think that hon. Gentlemen are asking too much.

The hon. Member for East Bournemouth and Christchurch made a plea for poverty-stricken Bournemouth, where a penny rate produces £14,000. In my constituency, we are lucky if a penny rate produces between £2,000 and £3,000, and this is true of most of the constituencies which my hon. Friends represent. I hope that the Minister will not give way. A moment ago I saw the deputy Chief Whip talking to the right hon. Gentleman the Member for Blackpool, North (Sir T. Low) and his hon. Friend who moved the Amendment. This is a test for them. If they feel as strongly as they suggest, then they should force the Amendment to a Division. Let them not be coerced by the deputy Chief Whip. I hope that the Minister, in his turn, will show the same sound judgment and wisdom that he did in Committee and reject the Amendment.

Dame Irene Ward

I think I should deal with one point made by the right hon. Member for Rochester and Chatham (Mr. Bottomley). It is true that I did not vote on the Second Reading of the Bill even though there was a three-line Whip. I did not do so because it was quite impossible at the early stages of the Bill to know how the new arrangements individually would work out. Part of my approach—I should not call it an objection to the Parliamentary system, because, of course, I believe in our Parliamentary system—was that, on a matter of this kind, I found that, when one tried to acquire a little information as to how one's own constituency would be affected, the Minister was extremely cagey. I believe that he was cagey by design. He was playing the hand in a particular way, which, of course, is very well known to those who occupy Ministerial office.

When one has been in the House of Commons a long time one learns how clever some Ministers can be. That is why sometimes it is most important that hon. Members should withhold their own views, because, of course, nobody would agree with a policy of attack unless it was certain that the attack was necessary. Therefore, though I suspected that perhaps all would not be well with some constituencies, I refrained from voting on Second Reading principally because of the effect that I thought there would be on those living on small fixed incomes. I do not think that it is a good idea to attack hon. Members' motives in that way.

9.15 p.m.

As I say, all Ministers play their hand in the way they think suits them best. Many Ministers play their hand hoping that obvious weaknesses will not emerge till it is too late.

Mr. Sparks

Is the hon. Lady now referring to the Minister in charge of the Bill, namely, the Minister of Housing and Local Government? Has he been deceiving us?

Dame Irene Ward

Did the hon. Gentleman ask whether they have been deceiving me?

Mr. Sparks

Yes.

Dame Irene Ward

I am often deceived by Ministers. I would also say that I do not always disclose my hand. I sometimes deceive Ministers, too. I think that when it comes to a battle between the sexes, women are better at deceiving than men.

Of course, my right hon. Friend fully realised my dilemma when he tried to challenge me on the fact that the County Borough of Tynemouth would gain under the Bill, but the Borough of Whitley Bay would lose. I do not know if my right hon. Friend thought that that would be embarrassing to me, but it is not embarrassing to me in the least. If I could not deal with a point of that kind I should not be worthy of a seat in the House of Commons.

I have been waiting for many years to put this one illustration. I know that my right hon. Friend was trying to give me a sharp rebuke, as the right hon. Member for Blackpool, North (Sir T. Low) said. But, of course, rebukes of that kind simply wash over my head. When I first got into the House of Commons, there was a very serious debate on National Assistance Regulations. I must not develop this argument, because it would be out of order, Sir Charles, but I very well remember being sent for by, as he was then, Mr. Hudson, who was Parliamentary Secretary to the Ministry of Labour. He explained to me that the northern group of Conservative M.P.s must not publish their views on the new National Assistance Regulations—[HON. MEMBERS: "Oh."]—and, when I protested, Mr. Hudson said to me that he would create hell in my division. [HON. MEMBERS: "Oh."] The answer to that was very simple, and I commend it to my right hon. Friend. I said to Mr. Hudson, "Just get on with the job." I say to my right hon. Friend, "Just get on with the job".

If he likes he can come up to Tynemouth to talk there to people on small fixed incomes. I try to have a certain amount of humility, but I am very proud of my constituency; they like me and I like them. I know the Minister will not resent what I am saying now because I rather like having a bat at him. The North Country prefers my kind of temperament to his obstinacy. In the North Country they think my right hon. Friend is an extremely obstinate man. I hope he will not take this amiss. I have had a lot of letters from his constituents thanking me for what I did on behalf of those on small fixed incomes.

Having dealt with the position on Tynemouth and Whitley Bay, if I may I will give my right hon. Friend one other piece of information. When I met a deputation from my teachers very soon after the introduction of the Local Government Bill, he will be interested to know that they were extremely opposed to the Bill because they felt it might place an undue burden on those on small fixed incomes. The North Country is strongly behind me in my campaign on behalf of those on small fixed incomes.

I have yet to hear from my right hon. Friend how it is that from many other seaside resorts Whitley Bay has been selected for this monstrous treatment. There are there above the average number of retired people. They consist mostly of retired bank clerks, postmen, railwaymen and civil servants—those unestablished civil servants to whom the Government do not redeem the pledge made when we were in opposition. I say to my right hon. Friend that they probably trust me more than they trust him. I ask the specific question, "Why has Whitley Bay been selected for this monstrous treatment?" My right hon. Friend certainly has not given us an explanation. I want to reinforce the points made by so many of my right hon. and learned Friends.

To hon. Members opposite I say that I am just as interested in the retired people in black, murky, coalmining and iron and steel areas as the rest. I am not making a particular discrimination, but am speaking of all who live on small fixed incomes. The Prime Minister gave a pledge, but he has always said he found it extremely difficult to help those living on small fixed incomes. I accept that. I fight hard, but I know the difficulty. I ask my right hon. Friend, if he cannot help them, why make the position worse? That is what I want to know. I feel highly indignant. I am not at all satisfied that very much good will accrue from this Local Government Bill.

So often services develop locally because of crusading spirits there. Consider my County Borough of Tynemouth. We came out top county borough for the admirable way in which we managed our loans. We paid less interest on our loans, taking them as a whole, than any other county borough in the country. We have done extremely well. We are one of the best housing authorities in the country. We have a first-class trading estate. I am delighted to know we are to have help under the Bill.

Of course, under Conservative philosophy, though not necessarily under Conservative Ministers, we go from strength to strength. I make a great distinction between Conservative Ministers and Conservative philosophy. There are quite a few Ministers I thould like to change, and I should very much like to change the Minister of Housing and Local Government.

Bearing in mind the pledge of the Prime Minister to try to help those living on small incomes, I support the Amendment. It is for the sake of those living on small fixed incomes that I support the Amendment. They ought not to be called upon to pay more rates. Those living on small fixed incomes in Whitley Bay are not very wealthy people. They are living, or trying to live, on small fixed incomes. I feel highly indignant. If I could think of some new and imaginative way of letting my views and my ideas be known to the Prime Minister, I would follow it. I have already written to him. I do not think he would like to publish the letter I have written.

Mr. Denis Howell (Birmingham, All Saints)

What did the hon. Lady say?

Dame Irene Ward

I support this Amendment, and I think that my right hon. Friend would be wise not to try to crack me on the head, because I am a jolly good cracker back. I see how angry the deputy Chief Whip is becoming.

The Chairman

The Chairman is becoming angry, too.

Dame Irene Ward

Well, Sir Charles, may I just say this about your becoming angry, that perhaps your constituency has not so many on small incomes as mine has? Of course, Sir Charles, there are occasions when I think it is a good thing to stimulate anger in authority, because nothing can hurt Parliament more than to have quiescent people who are not prepared to say what they think in a free country with a free Parliamentary system.

I hope I have contributed some support to the Amendment and that the Minister will feel he can do something about it.

9.30 p.m.

Mr. Ede

I cannot help feeling that some parts of that speech by the hon. Lady the Member for Tynemouth (Dame Irene Ward) would have gone better to music. As one Tyneside Member to another, I congratulate the hon. Lady on her courage in speaking up for a very neglected part of the community. As to her remarks to the Minister, I whole-heartedly agree with them. She has given a character sketch of him far better than has been done even by the Observer, the Sunday Times, or anybody on this side of the Committee. Is not the hon. Lady entitled to say to him: Oh, don't deceive me … How could you treat a poor maiden so"? I have listened to this debate with considerable interest and I am sorry that the hon. Member for East Bournemouth and Christchurch (Mr. N. Nicolson) is not in his place, because I am sure he must be highly gratified tonight by the way in which Member after Member on the opposite side of the Committee has received this straying lamb back into the fold. It will be a great surprise to me, after this, if the hon. Gentleman is not the official candidate for—[An HON. MEMBER: "Blackpool."] Not for Blackpool, but for the constituency he represents at present.

Mr. D. Griffiths

Yes, he has worked his passage.

Mr. Ede

I want to put this question to right hon. and hon. Gentlemen opposite who are supporting this Amendment so vehemently and who, after the speech of the hon. Lady the Member for Tynemouth, will have great difficulty in getting up and withdrawing it after the speech of the Minister. When they saw the way the Committee had been constituted, did any of them go to the Whips and say "You have put an impossible task on the hon. Member for East Bournemouth and Christchurch in leaving him alone to fight this battle about which we feel so keenly and in which"—in the words of the hon. Member for Bath (Mr. Pitman)—"we have been engaged ever since 1948"?

It was one of the most astounding Committees on which I have ever sat. I know that the Association of Local Authorities approached hon. Gentlemen opposite and asked them to put down Amendments so that they could be discussed. I know that such hon. Gentlemen went back to the secretary of the Association and said, "We have seen the Minister and we are not going to put an Amendment down." We had 31 sittings. I have already paid a compliment this evening to my hon. Friend the Member for Birmingham, All Saints (Mr. D. Howell) for the part he played in making us have so many sittings. It is clear tonight that what, at the worst, is a strong minority in the Conservative Party was not represented on that Committee by anyone other than the hon. Member for East Bournemouth and Christchurch.

Sir Roland Robinson (Blackpool, South)

May I interrupt for a moment? The right hon. Gentleman was on the Committee and, as he says, many of us were not, so he must remember that we publicly went on record at that time by putting our names down in support of an Amendment in the name of my hon. Friend the Member for East Bournemouth and Christchurch (Mr. N. Nicolson).

Mr. Ede

Yes, what a good way out—we support him not merely from the support trenches, not merely from reserve, but off the battlefield altogether. They were not even as plucky as the Stanleys at Bosworth Field.

Mr. D. Williams

What else could we do?

Mr. Ede

I am sure that the hon. Gentleman the Member for Exeter (Mr. Dudley Williams) wishes to contribute to this debate if he catches your eye, Sir Charles.

I put this question to him: did any one of the hon. Members who have voiced their indignation tonight go to the Government Whips and say, "The Conservative members of the Committee do not adequately represent the weight of opinion in our party which is in support of the views that have been expressed tonight"?

The Standing Committee was a Committee on which it was quite clear that we could expect nothing from the Minister, because there was to be no great show of independence from his own side of the Committee. On every occasion he lived up to our expectations. Tonight, we see the hollowness of the whole alleged volume of support which was supposed to be behind the Minister every time that he replied in Committee. It is evident that the Bill does not command the support within his party which he said it did, and which was obediently shown by the hon. Members behind him.

When the hon. Member for East Bournemouth and Christchurch took his Division we gave hon. Members opposite every opportunity. We deliberately abstained from voting so that they could show how far they were in support of the views which he had put forward. We had the advantage of having the first hon. Member in alphabetical order of names on the Committee, my hon. Friend the Member for Durham, North-West (Mr. Ainsley). His name was called first, and when he said "No vote", it was open afterwards to any hon. Member opposite to conduct a civil war of his own, knowing that we should not intervene. Nothing was done, but tonight there has been demonstrated the hollowness of the right hon. Gentleman's claim that he has any support in his own party or any enthusiasm for the major project in the Bill.

Mr. H. Brooke

I must join issue with the right hon. Member for South Shields (Mr. Ede). He and I sat through the 31 sittings of the Standing Committee, and I should have thought that he would be the first to agree that nobody could have spoken more persuasively and cogently in the sense of the view which my right hon. Friend the Member for Blackpool, North (Sir T. Low) has put today on behalf of the seaside resorts than did my hon. Friend the Member for East Bournemouth and Christchurch (Mr. N. Nicolson). The views were most capable canvassed in Committee and my hon. Friend had the courage to stand up against all the embattled hosts on both sides of the Committee and to record his vote when he was in a minority of one.

I have no doubt that the Amendment is drafted primarily to benefit the seaside resorts, but it would have much more far-reaching effects which have hardly been mentioned this evening. I assure my right hon. and hon. Friends supporting the Amendment that there is no truth whatever in the allegation that any seaside resorts, Conservative or otherwise, have been picked out for special disadvantage. I further put to them that whatever we do about the rating system, we must have regard primarily to the rateable value of the local authority areas as a whole rather than to the position of any individuals within it.

In fact, there are few local authority areas of any size in the country which do not contain within them inhabitants who are affluent and inhabitants who are poor. If we are to have a rating system—I do not think any hon. Member has suggested at any stage in our proceedings that we should scrap the whole of the rating system—it is impossible to have regard in detail to the individual circumstances of every ratepayer.

The truth is that seaside resorts are popular. They cater for visitors. It is their interest to do so and they arrange their local government services accordingly. I, for one, certainly do not blame them for that. In general, their rate poundages are low. Although this is a starred Amendment which has only just appeared on the Notice Paper, I have taken the trouble to look into the position in each of the boroughs represented by my right hon. and hon. Friends who have put their names to the Amednment.

With the exception of Hastings, whose representative spoke forcibly and well this evening, their rate poundages range from 15s. 6d. to 12s. in the £, which is low in comparison with the average rate poundage of 18s. They have acted absolutely correctly in bringing the position of their boroughs to the notice of the Committee in this connection, but I think that they will not take it amiss if I say that, on the whole, in the matter of the existing rating system they are among the more fortunate rather than unfortunate.

Mr. N. Nicolson

I do not know whether my right hon. Friend's argument is that our ratepayers are, on the whole, less burdened than ratepayers in other parts of the country. Surely the rate poundage which he has quoted is not the true measure. The true measure is the rateable value, and the rate burden per head of the population.

Mr. Brooke

The rateable value is arrived at by estimating the letting value of the property in the town, and the letting value is, in part, at any rate, determined by its general prosperity.

The Amendment assumes that we shall have a change to a general grant system. My right hon. Friend was careful to point out that he was not attacking that at all. Any fundamental change of that kind is bound to result in some authorities getting rather more and some rather less. In fact, the only easy way of preventing that occurring would be by increasing the Exchequer grant until there were no losers at all. My right hon. Friend was meticulous in saying that that was not his intention. The Government have sought for a formula which would be flexible, so that needs can be met from time to time, and which would not seriously distort the existing pattern in such a way as to throw enormous losses upon anybody, or to give anybody quite unjustified gains.

I hope that my right hon. Friend will accept from me that a complete insulation against any loss, such as the Amendment seeks to secure, might well involve continuing a system of Exchequer grants which, as a whole, is less equitable than that which the Bill proposes. The questions which the Government are entitled to ask the Committee to consider are three: first, are the main changes beneficial in themselves; secondly, can they be introduced without violent and quite unjustifiable changes in the rate burden; and, thirdly, are there satisfactory arrangements within the Bill for gradually introducing the financial effect of any changes? In the view of the Government all those questions can be answered in the affirmative. The formula will be flexible enough to avoid violent and unjustifiable changes. The transitional arrangements in Clause 15 provide for gradual introduction.

The effect of the Bill as a whole is to give local authorities an overall gain of a 4d. rate. The precise distribution of that, and of all the Exchequer grants, will depend upon decisions yet to be taken.

9.45 p.m.

Mr. Dudley Williams

There seems to be confusion in the minds of hon. Members about the position after 1961. Am I right in understanding that after 1961 there will be no deficiency made up, and that the full burden will fall on the ratepayers?

Mr. Brooke

My hon. Friend has not got it right. This is a most important point.

After 1961, the future transitional arrangements will depend on regulations yet to be made; in fact, regulations which cannot be made until that time arrives, because it is quite impossible to foresee the effect on the whole financial pattern of the revaluation of house property on the current basis which, under the present law, will then begin to operate. So, in the Bill, in Clause 15, we have provided for what I should say are generous transitional arrangements for the first two years.

Then, to make allowance for this unforeseeable future, we have provided that the Minister can make regulations about any transitional arrangements thereafter. But it is not in the minds of the Government that all transitional arrangements should then stop and nothing whatever be done to temper the wind, or to assist losing authorities after 1961.

As I say, the distribution will depend not only then but in the immediate future, on decisions still to be taken, because all these figures in the formula which have been under discussion are purely hypothetical. The boroughs represented by my right hon. and hon. Friends who support this Amendment are boroughs which, over the first year, will lose nothing, and in the second year an amount equal to a penny rate. I say to my hon. Friend the Member for Southport (Mr. R. F. Hesketh) and others that it is unrealistic for any hon. Member to say, "My borough will lose so many thousands of pounds."

It is quite impossible to say anything of that kind with certainty and any forecast beyond 1961—this was accepted by hon. Members on both sides of the Committee—must be so uncertain as to have no value at all. It is not only the question of reassessment. Also, by then the local government commission will have made progress with its work. There may be boundary changes, there may be all sorts of alterations, and the position then cannot be foreseen.

Changes affecting individual local authorities will result partly from the re-rating of industry by 50 per cent.; partly by the substitution of a general grant for specific grants and partly by the substitution of the new rate deficiency grant for the old Exchequer Equalisation Grant. But this Amendment seeks to ensure that nobody shall suffer any loss by operating solely on the general grant. That leaves me in some uncertainty about how my right hon. and hon. Friends are hoping that it will work. I think that they are trusting that it will be possible so to alter or adjust the weightings in the formula that nobody will lose.

My own view, and that of my advisers, is that it would be impossible; it certainly could not be conjoined with the attempt to make the working of the formula depend on objective factors. A great deal of adjustment solely to fit in with this Amendment would be needed, and, in the process of seeking to ensure that nobody lost, one might easily find oneself being unjust elsewhere.

The other way in which it could be effected would be to step up all the grants to county and county borough councils. If one is to ensure that no county district loses, and one can operate only through the general grant, one has to increase the grant to each county by an amount that will ensure that there is no loss to any county district which will give an uncovenanted benefit to the other county districts which will not be the losers at all. Finally, one could do it by increasing the aggregate of the general grant.

My right hon. Friend has assured the Committee that neither of those last two courses is what is in his mind. Therefore, it is evidently clear that he wishes the Bill to operate by some mysterious way so that this will be purely a redistributive exercise, so that money will be taken away from certain local authorities in order to ensure that the seaside boroughs and the other county boroughs or county districts which may be concerned shall not lose.

Sir Charles Taylor (Eastbourne)

Will my right hon. Friend answer one question? I suppose I ought to know the answer. Can he say whether the regulations to be made by the Minister under Clause 15 will be subject to an affirmative Resolution of the House?

Mr. Brooke

I shall have to look that up. That is not the sort of matter that I carry in my head. I will make sure what the position is.

Sir C. Taylor

Perhaps my right hon. Friend can say whether the regulations will be subject to Parliamentary control.

Mr. Brooke

Certainly. Any hesitation on my part was due to the fact that I did not want to give a wrong answer on the spur of the moment which might mislead my hon. Friend. The regulations will be subject to Parliamentary control.

The manner in which the Government had sought to deal with the matter is to write into the Bill the skeleton of a formula which will be flexible and adjustable when each general grant order is made in the light of the circumstances at the time. Further, as has been acknowledged in Committee, we agreed to amend the provision as to a rate product deduction so as not to oblige the Government to bring forward a general order which included any rate product deduction. Thirdly, we have provided that the transitional arrangements after 1961 shall be arrived at in the light of the conditions at that time when it can clearly be established, as it cannot be now, what will be the effect of revaluation and what will be the effect of changes in boundaries and the like.

That is the manner in which we think we can best do justice to all. I assure my right hon. Friend that, far from there being any malice in my mind or the minds of my colleagues against the seaside resorts which he so admirably represents, we have, on the contrary, sought to ascertain, in Committee, how we can move towards helping them, and we have left the Bill and its general operation in a flexible state so that it is not necessary that dire results, which he fears will follow. In those circumstances, I trust that he will at least grant me this, that the situation is not bound to be as bad as he apprehends.

Mr. Mitchison

I shall not take more than a minute, because one hopes that we may be able to dispose of this extraordinarily foolish affair by 10 o'clock. I note the Government's solution. They have written into the Bill, to use the Minister's words, the skeleton of a formula which will be flexible. The flexible skeleton or the flexible formula—I am not sure which—will, it is suggested, undoubtedly cope with any difficulties. Apparently, all we have to do is to wriggle the skeleton about or turn the formula around and all will be perfect.

What extraordinary nonsense all this is. It just shows the kind of support that the Government have from a dozen of their would-be supporters. Here we have ten or twelve right hon. and hon. Members opposite, representing a bunch of seaside constituencies, saying that the deficiencies of Blackpool ought to be met by the industrial areas.

Sir T. Low

I said nothing of the sort.

Mr. Mitchison

Yes, the right hon. Gentleman did. When I asked him, he told me that the gainers were to pay the losers in all the areas with which the Amendment is concerned. That is exactly what that comes to. A more parish-pump effort and a more barefaced and transparent effort I have never met in my life. What are hon. Members opposite so nervous about? Do they think that in the coming General Election they will lose seats in Blackpool, Hastings and other seaside resorts? This shows how frightened they are of future events.

Sir T. Low

The hon. Member is getting all hot and bothered. He knows perfectly well that neither I nor my hon. Friends have asked for any special extra help beyond what the constituencies are receiving now or any help from any industrial or any other constituency. If the hon. Member would stop this small town lawyer argument he would realise that all we are asking for is that we should not be specially discriminated against and should not suffer a penalty. He knows perfectly well that that is the position.

Mr. Mitchison

My only comment is that that is complete nonsense. I am becoming quite a student of Tory mutinies nowadays. This is exactly like the Margate mutineers against the Rent Act. They will talk and they will talk and they will talk, but at the end of the day they will not divide against the Government. I propose to sit down in a moment in time to give them the opportunity, if they have the courage and if they have the interests of their constituents so wholly at heart, to divide against their own Government. It amuses us on this side of the Committee to see yet one more split in the Tory Party.

Sir T. Low

Before the hon. and learned Member sits down perhaps he might remind the Committee that during the two speeches which opened this discussion he was not present in the Chamber.

As I understand the arguments made in the debate, the Labour Party said with one accord that the rates of the seaside resorts were already too low and ought to be increased. That is their contribution to this discussion and it will be duly noted.

My right hon. Friend made a very clear speech. I am sure that all my hon. Friends will agree with me when I say that I know that he has studied this case very carefully and has been applying his mind to try to solve the problem. He said, first of all, that, despite all the attempts which he had put to his advisers he had been unable to get from his advisers or to devise himself a way of achieving the objects which we had in mind, except for the Clause on transitional provisions which we have yet to reach. [HON. MEMBERS: "Divide."] What I was not clear about, nor were other hon. Members, was exactly what he has in mind about these transitional provisions. [HON. MEMBERS: "Take a vote."] If he thinks that he can achieve my objective or come somewhere near it by the transitional provisions, we are very near to a meeting of minds, and perhaps tomorrow or at a later stage we may be able to make some Amendments and improvements to Clause 15 so that we can assure our constituents that they will not suffer an extra——

It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.

Committee report Progress; to sit again Tomorrow.