Clause 9.—(RATING OF INDUSTRIAL AND FREIGHT-TRANSPORT HEREDITAMENTS.)

HC Deb 06 May 1958 vol 587 cc1039-93

3.45 p.m.

Mr. Bottomley

I beg to move, in page 10, line 8, to leave out "fraction of".

The Chairman

All the Amendments on Clause 9 may be taken together.

Mr. Bottomley

I agree, Sir Charles, that all these Amendments may be taken together, as they are concerned with the rerating of industry.

Having noted that, in the last Division, there were 100 abstentions on the Government side, I am quite sure that, on the question of the rerating of industry, on which I know that some hon. Gentlemen have had telegrams from their local authorities in support of these Amendments, they will, therefore, consider doing so, or, like their other hon. Friends, refrain from voting.

When we debated this proposal for a 100 per cent. increase in the rerating of industry, on Second Reading, the Parliamentary Secretary accused me of not fully putting all the arguments forward in support of our proposal. I told the hon. Gentleman then that my job was to highlight the main proposal that we had to make, and that it was for my hon. Friends on this side to develop the arguments. It is true that the points were not developed fully, and the hon. Member for East Bournemouth and Christchurch (Mr. N. Nicolson) referred to it in the course of his speech. I could not understand why, in Committee, the Parliamentary Secretary should say that we debated the matter ad nauseam. As a matter of fact, we did not debate it fully in Committee, because on Clause 1, when we were hoping to have a full discussion on the block grant, we were guillotined by the Government, and, to get some reasonable discussion of the remainder of the Bill, we agreed to a timetable.

The timetable made it difficult for us to debate the rerating of industry as we would have desired. However, in Committee, we made our point of view known, and I am to re-emphasise it this afternoon. The truth is that the Government do not want much discussion of this subject. As in the Budget, in which they looked after their friends by helping them with the new Profits Tax, in this case their desire is to help their supporters in industry who are able to pay their fair share of rates.

Hon. Members on this side have urged the rerating of industry fully to 100 per cent. for a long time, and, indeed, they have been supported by hon. Gentlemen opposite. My hon. Friend the Member for Acton (Mr. Sparks) will remember that in 1956 he brought forward a Bill for a rerating of industry, and the Government were defeated. Therefore, a majority of hon. Members of the House in a debate on this subject clearly showed that they wanted the rerating of industry fully to 100 per cent. That is the reason why the Government have made some advance, putting up the rate from 25 to 50 per cent.

This would bring in about £30 million a year, the Minister told us, but the local authorities will not get that. The Treasury has seen to that, and will take £20 million of it. The Government ignore the fact that by their inept handling of local authority matters they made a mess of the rerating proposals. They brought forward a proposal which amounted to a 20 per cent. derating of commercial property, by which the local authorities would have lost about £30 million a year. The Government ought to accept the responsibility, and not place burdens on the local authorities, for policies operated because of national considerations.

So far from the local authorities getting the £10 million about which the right hon. Member for Blackpool, North (Sir T. Low) talked, they will find themselves in a worse position as a result of the Government's handling of local authority finance. Proposals for the 100 per cent. rerating of industry have been rejected several times by the Government, who say that it will be a burden upon industry. The fact is that most industries are making very fine profits. It is not a burden upon such industries to pay their fair share of the rates. The Minister also said that 100 per cent. rerating would mean an increase in the cost of living and, therefore, of the burdens upon industry, but the Government have not produced any evidence in support of that contention.

I have done a little research, and all I can find is that there was a committee, the Balfour Committee on Trade and Industry, which came to the conclusion that the cost to industry of paying its fair share of the rates would mean 0.55 per cent. upon the cost of production. If the Minister has up-to-date figures we shall be impressed with them. The fact is that the addition to the cost of production is very small. Industry has already a high cost of production because it is carried on in a haphazard way. Many firms manufacture the same article, and overlap and compete with each other. There is great expenditure upon unnecessary advertising and there is the cost of the middlemen. The Government ought to give their attention to those factors if they want to bring down the cost of industrial production.

We are facing very serious economic difficulty now. The Government will not face up to the question of costs of production, but are trying to take it out of the busmen. Many of my hon. Friends will remember that in 1926 the miners were the object of attack. We are all delighted this afternoon to see the right hon. Member for Woodford (Sir W. Churchill) here. I am reminded of Professor Keynes' book. "The Economic Consequences of Mr. Churchill". In it, Professor Keynes said that "the attack on the miners was a beginning. They were the ones to be sacrificed in order to bring about more stability, as affecting the gold standard."

It was an attempt to bring an end to an inflationary situation by attacking the workers, and in the wrong direction. The attack should be concentrated against industrialists, who are not producing as they should. Although they are not very efficient, profits have soared ahead of wages for the last two years. I am not trying to balance wages and profits. The first call on industry should be the wellbeing of the industry and the profits should be ploughed back.

If industry were efficiently organised it could stop much of the inflation that now goes on. Mr. Seymour Melman, an American who has recently made a tour of Western Europe, has reported that the inflationary tendency was caused as to 80 per cent. by inefficient industrial organisation and as to 20 per cent. by wage increases. In spite of this situation industry continues to make good profits.

For all these reasons we say that it ought to be fully rated so that it could participate fully in the work of local authorities and take an interest in local government. In my own constituency a progressive industrialist said a week or two ago, "The local authority does not do enough for us". I replied that if he paid his full contribution to local rates he could participate in local affairs as part of a powerful group of electors. Industry benefits much more largely than do shopkeepers or householders. The police do more work for industrial establishments than they do in looking after householders. In many cases the sanitation and other services are much more expensive because of the needs of industry. If industry does not pay full rates it is not fair to other ratepayers.

The Government are going ahead with provision for mental health. In these days a number of physical wrecks are turned out from factories, and the mental welfare services will have to look after them. This burden falls upon the local authorities. Industry ought also to pay its fair share to the local authority for the fire service.

When the derating Act was introduced in 1929, by a Conservative Government, we were in a period of economic depression. The Government of the day thought that by introducing that Act they would assist employment and increase exports, which were as vital then as they are now and would thus get us the raw materials to keep employment going. In January, 1929, the year when that Act was introduced, there were 1,146,000 unemployed, or 12½ per cent. of the employed population. In 1932, the unemployment figure had risen to 2,885,000, or 22½ per cent.

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

No doubt the right hon. Gentleman remembers that at that time a Labour Government were in power.

Mr. Bottomley

A Labour Government were in control for a brief period. The Bill was a Conservative Bill and there was widespread unemployment. The Labour Government were in power in 1929 with a pistol at their head, being kept in office by the combined efforts of Conservatives and Liberals. They were never able to put their policy into operation. Before they could do so, they were thrown out.

The Chairman

Did they do all this under the Bill?

4.0 p.m.

Mr. Bottomley

I was tempted, Sir Charles. I am very glad that you afforded me the opportunity to reply. I will keep to the Amendment. I dislike getting out of order, particularly when you are in the Chair and are so kind to us. I merely hope that your rebuff went not only to me, but to the hon. Member.

In 1932, in spite of the derating Act, the unemployment figures went up to 2,885,000, representing 22½ per cent. of the working population. What about exports? Derating was introduced to boost our exports. In 1929, when the Act came into being, our exports were running at the rate of £729 million a year, but by 1938 they had fallen to £471 million.

The only way to tackle the urgent problem of inflation, unemployment and exports, which concerns us all, is not by derating industry but by making industry pay its full share. The way to tackle the real problem is through controlled investment, proper distribution of raw materials, long-term trade agreements, distribution of industry and economic planning. If industry is compelled to pay 100 per cent. rates it can get relief from other forms of taxation, and that is the way it should get it.

On Second Reading, the Parliamentary Secretary—I was surprised that he should argue this—said he was concerned about the rising cost of living—although the Government have done nothing to stop it—and stated that, in the main, the industries which would be heavily hit by rerating would be those concerned with food products. That comes ill from the Parliamentary Secretary, particularly when Government policy has been responsible for sending up food prices to a level 45 per cent. higher than under the Labour Government, and this has been at a time when import prices have declined, some by as much as 10 per cent.

When leading his party into battle just before he became Prime Minister, the right hon. Member for Woodford said that a Government would be judged according to the effect of its programme upon rising costs and prices. The public have given their answer at Kelvingrove and Rochdale and in the municipal elections. The Government refuse to rerate industry at 100 per cent.; we accuse them of giving a hidden subsidy to industry. Householders and shopkeepers are subsidising prosperous industries. This is an injustice to ratepayers who have to contribute their full share.

This morning I spoke to an official from my home town who said that rerating of industry would bring in for his borough £321,665, which was equal to a reduction in the rate of 3s. 8d. in the £. This is something which would help to bring down the cost of living. It is true that some industries are in difficulties; we cannot deny that. However, to the extent that they are in difficulties not of their own making, and to the extent that they are essential to the national economy, the Government have a responsibility to do something for them, but they should not pass the burden on to the local authorities, because it is not a local authority responsibility.

What the Government are anxious to do is consistent with what they have done ever since derating was introduced. As soon as it was introduced, the Dr. Charles Hill of that day issued a Press statement, which was widely circulated. It said: It will be well for our friends to remember that the main policy of the Government for the permanent relief of productive industry is the great scheme of derating. We plead for the small shopkeeper and the householder, for their need is greater.

Mr. John Diamond (Gloucester)

I am anxious to support the Amendment. This matter was touched upon during Second Reading, and I intervened on two occasions to obtain the necessary information relating to it.

The argument for rerating does not require to be put. What is required is the argument against full rerating. The argument that everybody should pay their full share does not require to be made. If a certain category is not required to pay its full share, then that argument should be put.

The Government are saying that industry, more or less alone, should not be required to pay its share of rates like the rest of us do. Why is that so? Now that we are reviewing the matter, why do the Government say that industry can afford only to double its present contribution of a quarter instead of multiplying it by four and paying an equal share with the rest of us? That is a very interesting question, and the Government have given their answer to it.

The matter was first raised during the Second Reading debate, and the Minister then dealt with it. He said: In the present economic circumstances, and remembering the effect of costs on exports, the Government decided that rerating to 50 per cent. constituted as heavy an addition to overheads as industry could safely be required to bear. I know not what the right hon. Gentleman meant when he said "in the present economic circumstances". I assume he referred to the economic circumstances existing after six years of Conservative Government. Those are the economic circumstances which existed at the time the speech was made.

From my own knowledge—which is never adequate, but is some guide; I am sure that the Committee has never yet refused to listen to someone who happens to have personal experience—of about 500 firms, it seemed to me that that statement was not borne out by the facts. It seemed to me at that time that if a firm did a turnover of about £1 million, the full cost of rerating—that is to say, with a rise from the 50 per cent. to the 100 per cent.—would be about £5,000. That was my personal impression at that time, namely, that a cost of a half of 1 per cent. of the turnover would be what the Amendment asks for and what the Government are refusing.

Therefore, shortly afterwards I intervened and asked the Minister: What proportion of manufacturing costs over the country does it amount to? I asked what the addition to overheads to which he had just referred would be. The Minister replied: I have worked out all these things. We are grateful that the Minister has the information. We shall now no longer be told that the information is not available. The Minister has done his homework and the information is available.

However, the Minister then proceeded to give me a typical ministerial reply. He said: I would remind the hon. Gentleman that one must think not only of the prosperous industries, but also of the struggling industries. One must also bear in mind that within an industry there may be individual firms doing well and individual firms which are finding it hard to keep going."—[OFFICIAL REPORT, 9th December, 1957; Vol. 579, c. 910–11.] That is as vague and as uninformative an answer as one would expect from the Government Front Bench. Incidentally, what an argument that is in terms of efficiency, that one cannot introduce something because, although there are many prosperous firms, there are some firms which are not doing so well!

That is as far as I was able to go with the Minister in getting information which is absolutely essential to enable the Committee to come to a conclusion on the matter, information which the Minister, knowing it to be essential, had carefully worked out. There was, however, a light on the horizon, for later in the same speech the Minister said: If hon. Members will allow me to continue, they will find that my hon. Friend the Parliamentary Secretary will be able to deal with all their questions at the end of the debate."—[OFFICIIAL REPORT, 9th December, 1957; Vol. 579. c. 918.] You know me to be a patient man, Sir Charles. I listened with great interest to every speech in the debate. Next day came the time for the Parliamentary Secretary to reply. Here was the opportunity for which we had all been waiting, the opportunity of getting the information relating to the cost of full rerating in relation to overheads which the Minister had worked out. That did not seem to he forthcoming, so I again intervened. I said: The Minister yesterday gave us an undertaking that the hon. Member, in replying, would answer our questions. The question I now wish to ask him is that which I asked his right hon. Friend yesterday. How much is involved? What is the cost of rerating fully, as opposed to 50 per cent., either per £ of sales or in terms of the profit of the industry in question? The Parliamentary Secretary replied. Here at last, we thought, we were to get the full information which the right hon. Gentleman had promised and for which he had had 24 hours to prepare his reply. Here is the illuminating answer: As my right hon. Friend said when he dealt with the hon. Member's intervention yesterday, the percentage which full rerating would bear to industrial costs would vary widely from industry to industry and also from firm to firm. As I said before, the industry which would find complete rerating the biggest burden would be that of food manufacture. It would be such a burden that almost inevitably it would be reflected in prices."—[OFFICIAL REPORT, 10th December 1957; Vol. 579, c. 1195.] Thus, we have precisely no information at all, except the Minister's first statement that industry could not bear it because of exports and because of the addition to overhead expenses, and the Parliamentary Secretary's addition that the foodstuffs industry would be particularly hit.

If the Government will not give us the information, we have to do the best we can in preparing the information ourselves. It is with diffidence that I submit to the Committee such information as exists; no doubt the Minister or the Parliamentary Secretary will tell me whether I am wrong. My right hon. Friend the Member for Rochester and Chatham (Mr. Bottomley) referred to the Balfour Committee. I have gone back to the same period, because I do not think that we can leave the matter without these figures, especially in the light of the rather suspicious circumstances in which the Government are hedging and dodging so violently to avoid giving us the most essential and relevant information.

An industrial survey of the Lancashire area was carried out by Manchester University, and an article was published in the Financial Circular in June, 1933, by Mr. D. N. Chester. This is reported in a book issued under the auspices of the Institute of Municipal Treasurers and Accountants, in May, 1945, priced 7s. 6d. Mr. Chester reported on a number of firms in Lancashire. This is not countrywide, but it is an indication. He found that the cost of full rating in 1927, before derating was introduced, was one-half of 1 per cent. on the selling price for the average cotton firm. On an average of three foodstuffs firms—biscuits, preserves and flour—the average was 0.4 per cent. For the cotton firm, it was 0.5 per cent., and. for the foodstuffs firm, 0.4 per cent.

That was published in 1945 long before the world knew that the House would be honoured by the present Parliamentary Secretary becoming a Member and giving us this all important information, and it therefore could not have been published with that end in view. It was a fairly objective statement, and it does not tally with what the Parliamentary Secretary said in winding up the Second Reading debate.

4.15 p.m.

There are three general conclusions which Mr. Chester drew about the value of derating in 1933, some years after derating had had time to have an effect. He said that for those industries in which the value of production either remained constant or increased, the derating relief was in the nature of a pure gift. That is how he described it in 1933. To those whose production went down, he said, it could not have been any help at all. They were losing production, losing employment, and losing wealth. But for those where production remained constant, derating was a pure gift.

The example which he gave—and I shall refer to this again later—was that of motor cars. He said: The motor car industry in recent years has shown considerable expansion and for this reason the example cannot be regarded as an exception. In 1927, rates expressed as a percentage of selling price were 0.165 per cent. Owing to the double effect of derating and increasing output, this fell to 0.0224 per cent. in 1930. In other words, the rates on a £200 car were reduced from 6s. 7d. to 11d. Full rating on a £200 car was 6s. 7d. This is the export industry which the Minister said could not possibly survive the heavy burden. This is why a revolution is now taking place in Coventry through the fear that when a Socialist Government are re-elected and full re-rating is introduced, the whole of the motor car industry will collapse, because a £200 car will have 6s. 7d. added to its selling price.

Those are the figures for 1933. I will not leave them there, but will go on to more up-to-date times shortly, but those are the points made in Mr. Chester's paper. He was not the only gentleman to undertake a review of derating figures at that time. There was a Mr. E. C. Fairchild, Ph.D., D.Lit., who undertook a research into the same topic and reported in the same book under the same auspices of the Institute of Municipal Treasurers and Accountants.

He drew the conclusion that for a Lancashire mill at which he had looked the full cost of rating as a percentage on the selling price was one-half of 1 per cent. If I may, I will summarise the period around 1933 and the conclusions drawn before I come to the present. As my right hon. Friend the Member for Rochester and Chatham said, the Balfour Committee gave the full cost of rating as one-half of 1 per cent. Mr. Chester said that the full cost of rating for cotton firms was one-half of 1 per cent. and for foodstuffs firms slightly less. Mr. Fairchild said that the full cost of rating on Lancashire mills was one-half of 1 per cent. In short, a figure emerged from the researches of everybody who looked into the matter showing that, by and large, the cost of full rating was one-half of 1 per cent.

We have to bring the matter up to date as far as we can, because the Minister and the Parliamentary Secretary dodged the issue and refused to give the information on Second Reading. The figures which I give may not be wholly accurate but if they are not, the Minister and the Parliamentary Secretary are to blame, because we can do only the best we can if they refuse to help us.

If we look at the annual Abstract of Statistics, we find that the total value of production for 1955 is £22,800 million. We can, therefore, assume that in 1956 it was about £24,000 million, because it was rising. Thus, the value of industrial production of the country was £24,000 million. Those are the industries which are described as all-census industries and are the industries affected by the Amendment.

What is the burden of full rerating? In the Explanatory Memorandum of the Bill, to which the Minister referred, we are told that the cost of rerating from one-quarter to one-half is about £30 million. It therefore follows that the cost of rerating from 50 per cent. to 100 per cent. is about another £60 million. That is the amount of further revenue which local authorities would be likely to receive if the Amendment were accepted.

Mr. Cooper

That is an illusion under which hon. Members of the Labour Party have been suffering for years. They would not receive that amount at all; they would receive about 20 per cent. of it, because rates are a charge against Income Tax. For such reasons as that, the revenue would be less.

Mr. Diamond

I am grateful to the hon. Member, who always manages to be helpful in his interventions. If he gives me a figure one-third as high as that which I am giving, then the charge on industry about which we are talking will be three times lower than the figure which I have put forward.

Mr. Cooper

No.

Mr. Diamond

If the hon. Member will follow my arithmetic a little, and not interrupt so quickly, it will save him another embarrassment.

Mr. Cooper

The amount of rating is a charge against Income Tax. It therefore follows that industry would have had to sustain that charge in the first place.

Mr. Diamond

It always comes as a revelation to a chartered accountant to be told that rates are a charge against Income Tax. I am grateful to the hon. Member for telling me.

I am being much fairer to the Committee than the hon. Member is, because I am dealing with the cost as a percentage of production, because there were two legs to the argument put forward by the Minister: first, the cost of overheads; and, secondly, the argument that these firms could not bear the burden of re-rating, meaning that they would have no profit left if this horrible Amendment were accepted.

Let me continue, if I may, with the argument which I was putting to the Committee—the revised, up-to-date version of this one-half of 1 per cent. On the best information which we have available, £30 million is said by the Minister, by the Treasury, and by those who signed the Bill to be the extra revenue likely to be received from re-rating industry from one-quarter to one-half. If we rerate industry from a half to a whole, therefore, a further £60 million, approximately, will be available.

I know that that is overstating it slightly, because the £30 million is a little more than a quarter, but it does not matter for this purpose; we can well afford in this argument to give every possible advantage in the figures to the Government because they make nonsense of the Government's argument, however much we help them with the figures.

What is £60 million as a proportion of £24,000 million? It is an easy sum to do, and the answer is one-quarter of 1 per cent. Let us see how that ties in with the 1933 figures. In 1933, all the investigations showed that the cost of full rating was one-half of 1 per cent. of the sales price. The Amendment which we propose is rerating of a further 50 per cent., and that is one-quarter of 1 per cent. according to these figures in the Abstract of Statistics. In short, it is precisely the same proportion today as it was in 1933, as one would have expected; everything has remained in the same proportion.

The information which the Government Front Bench refused to give on Second Reading tlerefore turns out, as far as one can see, to be that this burden on industry and on exports would amount to a further one-quarter of 1 per cent. or ½d. in the £ under the Amendment.

Let us look at the motor car industry. A motor car is today sold at £500 excluding Purchase Tax; that is the cost of a small car, excluding Purchase Tax, for export purposes. I refer to the car on which we do so well with our exports. Under the proposal, that car would cost not £500 but £501 or, if the hon. Member for Ilford, South (Mr. Cooper) wishes me to be absolutely accurate—and I fear another interruption it I am not—the figure is £501 0s. 10d. That will be the effect on the motor car industry and on exports of full rerating such as we propose.

Can it be said, therefore, that it is anything other than utter nonsense for the Government to say that industry cannot afford this? The Government have dodged the issue from the beginning up to this point and I hope that they will dodge it no longer. All the inquiries which we have made have shown what we suspected—that the figure is so low as to be negligible, that it will have a negligible effect on exports and that it will have a negligible effect on profits. Converted into terms of profits, it would be about 6d. in the £; that would come off the dividends of shareholders, after taking tax into account.

In those circumstances, the Government must withdraw the argument that industry cannot afford full rerating, even after six years of Conservative Government.

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

The subject of rerating is not new to the Committee. Hon. Members will recollect that it was about two years ago that my hon. Friend the Member for Acton (Mr. Sparks) moved the Second Reading of a Bill on the subject, which was ultimately rejected, and that, apart from that, a number of Questions have been asked about the subject over the past few years.

That is not surprising, because the subject is of immense importance to local authorities. Ever since 1929 they have been agitating against the derating provisions. Their protests have been continuous. What is more, those protests have not been confined to members of the Labour Party or councils controlled by members of the Labour Party. I know from personal experience that the Birmingham City Council, even when it was controlled by members of the Conservative Party, after due consideration and after an examination of such facts as were available, came to the conclusion that it was the duty of the Corporation to make a protest to the Government of the day against the continued derating of industry. I think that what the Birmingham City Council did in those days was also done by a good many other councils in the country, both Labour and Conservative.

Why were those protests made? They were made not only because local authorities were losing financially, but because it was obvious to the ordinary citizen in the street, who knew practically nothing about the finance concerned, that there was an injustice in one section of the ratepayers paying 5s. in the £, as it were, while the occupants of dwelling-houses or small shopkeepers had to pay the full 20s. That unfairness and injustice was obvious to them and that is why they made their protests, both individually and collectively through the councils. This injustice is to be continued in this Bill.

4.30 p.m.

It is an injustice. Despite what some members of the Government have said from time to time, that derating would be permanent, nevertheless that injustice is so great that the Government themselves now propose, not, of course, full rating, but a partial rerating of industry. They have given way to the extent of saying to industry, "You shall be rated now at 10s. in the £ instead of at 5s., as previously."

Thirty years ago, when the House discussed the original derating provisions, almost the sole reason given for them was the state of industry in those days. Speeches were made pointing to the depression, to the difficulties of our industries at home and in exporting. I am not going today to argue whether derating in 1929 was justified. Let us assume it was justified in those days. Whatever was the basis for derating in 1929 it certainly cannot be the basis today. As my hon. Friend the Member for Gloucester (Mr. Diamond) has conclusively shown, industry no longer needs derating because of the state of its finances, its profits and its dividends.

I shall certainly not attempt to cover the ground my hon. Friend has so well covered today, but it does seem absurd for the Government to contend, or attempt to contend, that industry does need derating today. The two figures quoted already by my hon. Friend illustrating the burden which industry will bear after rerating at 50 per cent. and in relation to the prosperity of the country lead one to the conclusion, if one considers them rationally and fairly, that there is no justification at all for allowing industry to continue under a system of derating. I think that the Government themselves, in their heart and mind, realise they cannot seriously put forward that contention.

The Minister of Housing and Local Government attempted, in a sentence or two, in the Second Reading debate, to justify the proposals before us today, and he said that the share borne by industry in 1959 and 1960, that is, when the Bill comes into operation for the first time, would be about three times as big as it was two years ago. The share will certainly be bigger, but in part that will be due to revaluation, and industry is not the only section of ratepayers to have had to contend with revaluation. As tenants of dwelling-houses or as shopkeepers we have all had to take our part in revaluation. What is more, it ought to be remembered that there was no revaluation from 1934 until a couple of years ago.

In so far as the increased costs to industry are related to rerating, I would point out that those extra costs merely reflect the fact that for thirty years industry has paid very little at all, and if, upon a section of the ratepayers which has escaped its dues for so long, is put a burden approximating to a fair one, then, obviously, that will be a rather heavier one than that section expected. For thirty years industry has been relieved of millions of pounds and escaped paying as what properly it should have paid. So long as rates remain the basis of local government finance there is no justification at all, in my opinion, for allowing industry to escape full 100 per cent. rating.

I call the attention of the Committee to the differences in the actions taken by this Government in the payment of subsidies. After all, this derating is a subsidy to industry. Why should the Government pay this subsidy completely irrespective of need, as they have been doing and as they propose to do? I want for a moment to contrast the action they are asking the Committee today to endorse with the action they have taken in housing subsidies. We have had quite a number of Government statements on housing subsidies and I want to refer to one or two of them.

The present Minister of Defence, when he was Minister of Housing and Local Government, announced the abolition of housing subsidies for general purposes and he was quite sure then that there was no justification for paying subsidies to tenants of municipal houses. He chastised local authority tenants for the rent relief they were given, and he spoke of the continued misuse of public money."—[OFFICIAL REPORT, 27th October, 1955; Vol. 545, c. 378.] That applied equally to subsidies to industry.

The right hon. Gentleman quoted the earnings of municipal tenants as being on the average £11 a week, and he said that one-third of the people had television licences. The inference wlich the right hon. Gentleman obviously intended us to draw was that if one had a television licence there was no justification at all for being paid a subsidy for a municipal rent. He also contrasted the average wage of the tenants drawing £11 a week with their rent, saying that they had £11 a week, on the one hand, and were paying, on the other, rent of 9s. or 10s. a week.

Why do not the Government adopt a similar line of reasoning today? Why do not they say to industry, "Here are the profits you are making and you are paying only a small portion of those profits in rates"? That does not bring in the question of the making of profits at all and does not pay regard to the prosperity of industry which has been in evidence during the last few years and which continues today. Instead of that, the Government say to industry, "You have been paying only 5s. in the £ for thirty years. We will make it 10s." If they had adopted, on this Bill, the reasoning they adopted about municipal tenants we should have had quite a different proposal today.

The right hon. Gentleman also said that reliefs should be given only to those who needed them and only for so long as they did need them. If that was good reasoning then, why should it not be applied to industry today? Does industry need the relief? My hon. Friend the Member for Gloucester has shown that it does not. If it did need relief, it is my contention that it should be given not at the expense of the local authorities but at the expense of the Exchequer.

There is, in derating, no discrimination between an industry which is prosperous and an industry in a poor condition. That does not matter at all. The subsidy is paid. This Government's policy apparently is to distribute rate subsidies ad lib to industry whether poor or prosperous, yet, at the same time, the Government object to any idea of paying a rent subsidy to municipal tenants who happen to possess television sets.

I cannot reconcile the two attitudes, and I believe, as do my hon. Friends, that there is no justification whatever today for this continued derating of industry. If industry can show a need, let it be met in the proper way. Whatever else happens, local authorities ought not to be penalised and made to do without what has been regarded traditionally as their basic source of income. There is no other source of income available to them which can be regarded as a free source, that is, a source they can themselves determine, and how it shall be used.

For these reasons, and others that I could give, I support the Amendment very strongly indeed, because I believe that there are no grounds whatever today for allowing industry to escape its full share of rating.

Mr. Cooper

I have a great deal of sympathy with this Amendment. When I was a member of Ilford Borough Council, some years ago, and Chairman of its Legal and Parliamentary Committee, we made representations to our then Member of Parliament to see whether a revision of the 1929 Act could be brought about. I think that in due time industry will have to bear its full share of rates, but whether the present is the right time for that is, of course, open to argument.

I find it somewhat difficult to associate the arguments advanced today by right hon. and hon. Gentlemen opposite with their lack of action from 1945 until 1951. From 1945 until 1950 they had an overwhelming majority in the House of Commons and they could have done, as they did in many things, exactly what they pleased, yet not one move was made to rectify what today they regard as one of the great evils of our time. The hon. Gentleman the Member for Birmingham, Small Heath (Mr. Wheeldon) talks about industry not paying its full share to the Exchequer either locally or nationally, but completely overlooks the enormous payments through taxation, including Profits Tax, which industry makes to the Exchequer, and which very largely goes towards supporting the Welfare State.

Right hon. and hon. Gentlemen opposite really must remember that the strength and wealth of the country depend upon efficient and prosperous industry and that there is no other source from which our wealth comes. By virtue of a very high, penal and swingeing taxation since the end of the war, industry has found it very difficult to accumulate the capital necessary to re-equip itself and to keep itself going in the face of very severe overseas competition. There is no argument against that.

Hon. Members opposite talk about the high level of profits in the country, but what they do is generalise, and that is a very bad thing. Of course, there are some industries which are very profitable indeed, and there are firms in those industries which are leaders in those industries not only here but all over the world, and who do a tremendous job for the country. Equally, there are a large number of businesses, small businesses, sometimes employing as few as 20 or 30 people, which for one reason or another—changing times and conditions—are having a thin time, and have had a thin time for a very great number of years.

Within the last few weeks hon. Gentlemen opposite have raised Questions about industries in their own divisions. The hon. Gentleman the Member for Eton and Slough (Mr. Brockway), whom I see in his place, had a Question on this very subject today. It is the small industries, employing a few people, which will be affected by a severe increase in rates at present. Because of the credit squeeze, high rates of interest and a high level of taxation they are unable to accumulate the capital that they need. At present, therefore, it is necessary to restrict the amount of expenditure which they must necessarily incur to the lowest possible level.

4.45 p.m.

It is really unfair of the hon. Member for Gloucester (Mr. Diamond), for whom I have great personal regard, to create the impression that rerating of industry would provide the local authorities with an additional £60 million a year. He knows perfectly well that it will do no such thing. For the reasons I gave in an intervention, the £60 million extra which industry will pay out to the local authorities—or rather, it is assumed will be paid to the local authorities—would be a direct loss to the Exchequer by virtue of the loss in Profits Tax and Income Tax.

The Exchequer will not willingly give up approximately £40 million a year revenue. It is quite obvious, therefore, that it would seek to recoup itself in precisely the same way as is to be done under the present proposals. Under the present proposals the loss to the Exchequer will be about £30 million, but local authorities, by way of improvements in existing grants, will benefit to the extent of £10 million, not the £30 million, the gross sum they would receive.

Mr. J. A. Sparks (Acton)

I do not think that the hon. Member is quite correct there. The increased rates payable by industry under the Bill will be equivalent to £30 million. That means. in effect, that industry will be able to claim the tax allowance on that sum and the Treasury will lose approximately 8s. 6d. in every £. So, in fact, it will not be £30 million, but in the region of £12 million or £13 million.

Mr. Cooper

The hon. Member is quite wrong. It will certainly lose 30 million times 8s. 6d., but it will also lose the revenue from Profits Tax on distributed profits and undistributed profits at the appropriate rate.

Let us not argue one way or the other for the sake of £1 million on either side. The point I am trying to get into the heads of hon. Members opposite is that the £30 million which industry will pay to local authorities by way of increased rates under the proposals in the Bill will not be the net sum it will have to spend by virtue of the change in the grant by which the Exchequer will recoup itself for its loss in Income and Profits Tax.

Mr. Diamond

Does the hon. Member really think that he is entitled to anticipate his right hon. Friend's next Budget statement but one?

Mr. Cooper

I do not think that I am doing anything like that. I have been a Member of the House long enough to realise that Chancellors of the Exchequer do not give up £30 million or £40 million without a fight. I just cannot believe that if the Opposition's Amendment were accepted the loss in Income Tax and Profits Tax, which would be about £40 million out of £60 million, would be a direct gain to local authorities. The hon. Member knows perfectly well that that would not be so.

Dr. Horace King (Southampton Itchen)

The hon. Member is a very fair-minded man and I am sure that he would not wish to mislead the Committee. May I put to him what his own Government have said in the White Paper about the £30 million which has come in as a result of rerating? The estimated product of rerating is of the order of £30 million a year of which about half will be at the expense of the Exchequer. So, even the case of the Government is that rerating will cost the Exchequer only half the amount involved.

Mr. Cooper

That is what I have been saying. I have expressly said, let us not argue with each other over £1 million on either side. It is an estimate. The sole point I am making is that this £60 million will not be a net gain to local authorities.

We have been told that industry is not paying it fair share of the burden of local expenditure and that it receives a lot of services for which, financially, it makes no contribution. To an extent that is true, but I think it also fair to point out that the majority of the larger firms provide their own internal fire services, their own internal first-aid and, in many cases, doctor and medical service. [HON. MEMBERS: "Oh."] Oh, yes, also very large sections of industry finance, either directly or indirectly, technological schools and further education services out of the produce of their industry.

In pointing out one side of the argument, it is fair to point out what industry does on another side. I think that in due time the rerating of industry must proceed until it is 100 per cent., but at present the proposals of the Government are fair and reasonable.

Mr. A. Fenner Brockway (Eton and Slough)

The hon. Member for Ilford, South (Mr. Cooper) has warned us against generalising. If I may say so, his own speech seemed to be an example of generalising almost from the first sentence to the last. I do not intend to follow his example in that respect.

I intend to particularise because I represent in this Committee a population which reflected the need for derating in 1929 and which also reflects the need for rerating now. In 1929, there were great depressed areas in many parts of the country. In South Wales, there were 75 per cent. unemployed and in valleys like the Rhondda and Merthyr one could scarcely find a young person. In Glasgow, and in the shipbuilding areas of Newcastle and Belfast, and in the textile industry of Lancashire, we had the same depression. People poured out of those areas to the newly developing towns. They came to Coventry, with its motor car and engineering industries. They came to Luton, with its similar industries. They came to the town of Slough, which had the first trading estate; 30 per cent. of the population of that town came from the depressed areas.

I think that there was a case in 1929, in attempting to meet the depression, for giving industries in expanding towns, which were providing for the unemployed population from other parts of the country, the opportunity to develop. But there is another side to that picture, to which reference is very rarely made in this Chamber. We had these new expanding towns concentrating over a very short period of years expenses in public services which, in other places, were borne over a long period of years. The growth of population meant that there was heavy expenditure on roads, houses, lighting and, perhaps particularly, upon drainage.

In Slough, with our expanding population, there was a period when, in wet weather, sewage seeped into the streets. Only by the expenditure of a vast sum of money were we able to establish a drainage system which was able to meet the influx of the population. Under those conditions the derating which it was desirable to give in the period of depression became a burden upon the town when depression had passed, because of the heavy cost of public services with that expanding population.

I want to illustrate this from the actual figures relating to Slough. The total rateable value is £1,375,000. The rateable value of its industrial premises is more than half that total, £764,000. Under derating, that has meant that we have lost £573,000 each year in rates, 42 per cent. of the total rateable value of the borough. Even under the new Bill, lifting the rating to 50 per cent., we shall still be losing £382,000 by derating. While derating might have been justified in the depression years, at present it is only a subsidy to the industrialists at the expense of the householders and shopkeepers.

I want to make a plea on behalf of those who are serving on local authorities. The policy of the Government is making their task absolutely impossible. With the high interest rates, with the loss of housing subsidies, their position is now intolerable. In Slough, the rates are 21s. 8d. in the £, of which 15s. 4d. is the county share. The excusing of the industrialists of 50 per cent, of what they should be paying in rates means that the rate for Slough itself is 2s. 3d. above what it should be.

5.0 p.m.

I make a plea, from my own experience on behalf of members of local authorities left in the absolutely impossible financial position in which the Government have left them. This 50 per cent. derating of industrial premises means they are faced with problems that they cannot possibly tackle. There are the problems facing the members of tenancy and housing committees; the problems of housing lists; the appalling need of people living in overcrowded conditions and in poverty, for whom houses simply cannot be built because the local authorities have not the necessary financial resources.

The members of these local authorities are doing a magnificent service to the country. They are doing it voluntarily, but the Government are placing an impossible burden on them. They often have to face the abuse and obloquy which really should be turned on the Government, because the financial difficulties in which the Government have placed them mean that they are not able to meet public needs. To allow the local authorities to have this 50 per cent. rateable value upon industrial premises, from which the industrialists are now excused, would be some relief to those authorities in their present difficulties, and it is for that reason I urge the Committee to accept the Amendment.

The Temporary Chairman (Mr. H. Hynd)

Dr. King.

Mr. Douglas Glover (Ormskirk)

On a point of order, Mr. Hynd. Two hon. Members on this side were standing up.

The Temporary Chairman

I did not observe them. Dr. King.

Dr. King

When the hon. Member for Ilford, South (Mr. Cooper) began to speak, I thought that he intended to join my hon. Friends in pleading with the Government to accept the Amendment. Any Conservative who is interested in local government, and many hon. Members opposite are, especially those who, like the hon. Member for Ilford, graduated to this House from local government, must realise that the plea that we are making to ease the burden on local authorities is a weighty one.

Before making a few comments on the Amendment I want to take up two things said by the hon. Member. He seemed to suggest that we were attacking industry on moral grounds, and pointed out in defence of industry that industry is already a considerable taxpayer. No one on this side questions that, but the ratepayer is also a taxpayer, and even the Government's own White Paper admits that the ratepayer, apart from the burden he carries as such, is bearing, year by year, a tremendous load of national taxation. Therefore, the moral issue we place before the Committee is that industry, like the domestic ratepayer, ought to bear its fair share of both forms of taxation.

The hon. Member also said that the speech of my hon. Friend the Member for Gloucester (Mr. Diamond) was wrong because the figures were inaccurate and that any differences involved were trivial. Let us be quite clear what is involved in the Amendment. According to the Government's own figures, the proposed 25 per cent. rerating involves a sum of £30 million. According to the Government's own White Paper, they will lose in national taxation of industry half of that sum—£15 million. To make quite sure of losing nothing, they steal from the local authorities another £5 million. They take £20 million out of the £30 million, leaving the local authorities with only £10 million.

If, instead of the 25 per cent. rerating, we went for full rerating, the amount involved would be roughly £90 million. The Government might then argue that they were losing £45 million and, being the Government they are, would then steal £60 million. That would still leave £30 million to distribute among the local authorities. Therefore, even accepting the Government's own case—which no one on this side accepts, because we regard even the taking from local authorities of £20 million of the £30 million new income as a wrong act of the Government—but even on the Government's own basis of calculation, on the one hand, and of Government policy, on the other, what we are now discussing is whether local authorities shall get £30 million or £10 million out of rerating. Therefore, this debate is by no means a quibble about a minor detail of figures between hon. Members on this side and the hon. Member for Ilford, South.

I find, and I am sure that I carry the Committee with me here, that every local authority is concerned about the increasing burden of rates. Every worker in local government is also a ratepayer. Every worker in local government is in close touch with his constituents, and no one can fail to be uneasy about the growing resistance of ratepayers to paying more and more in rates. One of the fears which I have voiced in my own local authority is that there may yet grow up in this country a negative, anti-ratepaying party something like the Poujadist Party, in France.

The simple fact is that we had a new assessment less than three years ago. Its effect was to reduce the poundage levied—on paper, at any rate—although the ratepayer was paying more, but so rapid has been the increase in the cost of local government services that already most authorities are now levying almost the same old poundage rate on the new assessment, which means that every ratepayer is paying much more this year than he ever paid before.

I know that a long time ago the Government White Paper argued that the rate burden was not excessive on the ground that taxes had gone up four times as much, which seems a very curious form of logic. Secondly, in that White Paper the Government insulted the intelligence of the British people by saying that the rate burden was not excessive because very few people had gone to gaol for non-payment of rates. In fact, since the war, fewer people have gone to gaol for that reason than ever before, but instead of using that as a tribute to the honesty of the ratepayer, and to the merits of the Welfare State which guarantees social security and, thereby, helps the social conscience, the Government now uses it as an argument to punish the taxpayer for his honesty by robbing him of a very large share of the money that he was to have obtained from rerating.

The financial burden on the local authorities is only beginning. There are still vast social programmes ahead which they cannot escape. The full implementation of the Education Act is only half way through. Anyone who knows his own local authority knows that the capital building programmes are only half way through the education development plans which were adopted in 1945 and 1946. Sooner or later, every local authority will have to carry its share of the cost of the 60,000 new teachers necessary to get school classes to the size laid down in Government regulations. Every local authority has to build many more schools. It has to provide an expanding further education after 15 years of age, and, under Government regulations, it has to provide an extending technical education service and, sooner or later, has to get rid of the slum schools. Education alone is adding, and inevitably continuing to add, to the burden which, somehow or other, local government finance must carry.

We had a reference yesterday to the beginning of the revolution in the care of our old folk, and to the wonderful work being started by welfare committees and various local authorities in that direction. As their pilot schemes really fire the imagination of the people a vastly expanded financial burden will be placed on local authorities in intelligently looking after our old folk.

There are the vast roads programmes which every hon. Member asks the Minister of Transport, year by year, to include in his annual programme, for which the local authorities have to pay. There is the care of the mentally sick. There are the vast housing programmes, even under the Minister's own direction. All these steadily add to the local authorities' financial burdens, and they have therefore, for quite a number of years been asking for some new method of financing local government.

The crudest method is an increase in Government aid but this Bill cuts down Government aid. The simplest method, on which advisory committees have reported favourably, is that of giving the local authorities a little local income tax or, of allowing them after having collected the motor tax, to keep it. Here, however, in this Amendment, is a patently simple way of adding, at one stroke, to their financial resources a minimum sum of about £20 million. Those authorities which are benefiting—I must admit, unlike Blackpool—to the full from partial industrial re-rating, those that are reaping a considerable benefit from the £10 million, have only to do a bit of multiplication to see what they would reap if the Amendment were carried.

Quite frankly, I am one of those who fear that unless we find a new method of helping local government finance, local government itself may break under the strain of the services that it will have to carry during the next ten years. If I have so far said nothing that unanimously carries the support of the Committee, I am sure that I have its unanimous agreement when I say that if local government should break down it would be a great tragedy for democratic government.

I wish to refer now to the two local authorities in which I am interested. The full rerating of industry would benefit the Hampshire County Council by between a 1s. and a 1s. 6d. rate. The full rerating of industry in Southampton would benefit Southampton by between a 1s. 6d. and a 2s. rate. That is a considerable sum. In Hampshire, it is about one-seventh of the rate levied, and in Southampton it must be about one-eighth of the rate levied. Full rerating under the Bill would, therefore, mean to Hampshire and Southampton folk a considerable and immediate alleviation of the rate burden, and a healthy source of finance to enable them to grapple with the heavy financial commitments which still must be met in the years ahead.

I have here the Minister's own hypothetical tables. He is most ingenious in using them. If anyone else uses them, he says that they are hypothetical, but if he himself uses them he regards them as something with which to argue. Hon. Members will remember that yesterday he knocked down the hon. Member for Tynemouth (Dame Irene Ward) with his own hypothetical tables.

Those tables show that partial rerating brought an increase in the product of Hampshire's penny rate of £2,707. Under the Government's proposals, the product of a penny rate in Hampshire is increased by roughly £2,700. The bulk of that increase is the benefit that Hampshire gets from the proposed industrial re-rating, so that, if the Amendment were carried, instead of Hampshire's penny rate product increasing by £2,700 it would increase by about £7,000.

The similar figures for Southampton show that partial industrial rerating brings to the borough treasurer an increased product of a penny rate of £855, and, under the Bill if amended in the way we seek to amend it, the increased product of a penny rate would be £2,500. Therefore, this is no light Amendment. It has something valuable to give to almost every local authority in the country. Indeed, the only local authorities which would not benefit would be those without any industry at all.

I believe that the rate burden is inequitable. It is a historic survival from an old property tax. It weighs most heavily on the man with a large family. It bears no relation to a man's income. A very rich man, if he lives in a certain way, can pay little or no rates. On the other hand, the poor man, if he has a large family, must inevitably pay considerable rates. The poorest in the country are exempt from national taxation, at any rate from national income taxation, but the poorest people in the country have to live somewhere and therefore have to pay rates. The real crushing burden of rates is upon the poorest, on the old-age pensioners, on the people with small fixed incomes. Any move to shift some of the incidence of the cost of local government services from rates to taxes is, in my opinion, a move in the direction of social justice and equity.

5.15 p.m.

Why should we ask industry to bear its fair share of the rates? In spite of those who argue that industry has little connection with local government, industry gains a great deal from local government. Let us be quite clear about that. It has fire protection, the cost of which, as everyone interested in the affairs of his own council knows, is quite considerable. Indeed, the principal service rendered by the fire service to an authority is, I believe, in protecting industries from destruction. Every industry benefits by the roads provided by local authorities. Every industry benefits by the police. I know that the hon. Member for Ilford, South said that progressive industries had their own policemen, their own first-aid boxes and their own fire cover, but heaven help any industry which depended for its welfare, health and the well-being of its factory and workers on the first-aid box, the temporary fire service and the temporary police protection provided within it.

Above all, every industry depends on education. It is the schools of the country which will feed into industry the trained and able young people to build up British industry in the struggle ahead. I hope that industry will never isolate itself from education, We are, indeed, living in a time when progressive and enlightened industrialists are coming into the national education service in all kinds of ways, helping to build up education, because, in the last resort, industry flourishes on the trained and eager young minds and hands of the children. Because industry benefits from education, I believe that it should pay its full share towards it, through both national and local taxation.

Sir Patrick Spens (Kensington, South)

This debate takes me back to the first Parliamentary fight I had in 1929, which some hon. Members will remember as well as I do. The two main points about which we fought in the 1929 Election were the Safeguarding of Industries Bill and the derating proposals which had just come into operation. We lost that fight, and the first Labour Government came in under Mr. MacDonald. They did not interfere in any way at all with derating. As we have heard from the hon. Member for Eton and Slough (Mr. Brockway), the derating Measures, together with the Safeguarding of Industries Act, did the job we wanted them to do. They worked very slowly and disappointingly, but, nevertheless, bit by bit, in the trading estates in various parts of the country, industry got going where it had not been going for many years. Bit by bit, and slowly, men were brought back into employment who had been out of employment for a very long time.

It is heartening to me to hear hon. Members opposite say that, so flourishing is industry under the Conservative Government, there need be no fears whatever about charging industry the full 100 per cent. of rates. I am delighted to hear that said, but, I regret to say, I do not take that view, I believe that a chain, as is often said, depends upon its weakest links. In industry today, we have weak links. It is not the great flourishing businesses, to which the hon. Member for Gloucester (Mr. Diamond) referred, which ought to be taken as the test of whether or not we should rerate to 100 per cent. or less. We must, in this context, consider the smaller businesses which are trying to get going, trying to provide employment for those who want it. We all know perfectly well that, today, in the competitive world conditions to which the hon. Member for Gloucester referred, about which I agree, we cannot afford to put any burden whatever on any unit of industry which may prevent its being able to expand and give employment.

Logically, of course, the case for 100 per cent. rating of industry is absolutely complete, if circumstances remain the same. But we have now to visualise that there are certain places in the country where we want new industries to go. We must, at the same time, take into account the difference, as it appears to a man thinking of setting up a new industry, between an area where he has to pay the full 100 per cent. of rates and an area where he gets a subsidy—it is a subsidy—and has to pay only 50 per cent. of rates. It is an attraction to an employer to go to a place where a concession of that kind is made, whereas, on the other hand, he would have a gamble to face if he had to bear the full burden of rates on his new industry. Testing the matter from that point of view, therefore, one cannot just look at how a local authority would gain and what advantage there would be to local authorities in receiving the extra money. We all realise that there would be a benefit.

We all should like to see education flourish and more money be provided for it. But the very life-blood of our country—the Welfare State, everything—depends upon our being able to keep our industry and our export trade going over the years to come. Nothing matters but that. Everything depends upon it. We cannot, therefore, risk taking any step rashly which might damage our industry and our employment.

As hon. Members have said, we could at once do a great thing for local authorities by giving straight away the 100 per cent., but we might equally damage a certain number of rising industries and a certain number of growing sources of employment. Because the rerating of industry must be done bit by bit and stage by stage, I take the view that Her Majesty's Government are right in doing it by adding, in this Bill, an extra 25 per cent. and not going straight up to the maximum.

Mr. Frederic Harris (Croydon, North-West)

I respect very much the view which my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) has just put to the Committee. I believe it to be reasonably well known among hon. Members that I myself have never agreed with industrial derating. When I say that I have never agreed with it, I mean that to apply to the last ten years or so. As opposed to its purpose and effect in conditions thirty years ago when it was brought in, I feel that, today, it is out-dated and outmoded. I never failed to express that view when I served for some years on the Croydon Borough Council. My view was generally known, and, when the hon. Member for Acton (Mr. Sparks) brought in his Private Member's Bill and it was discussed in the House one Friday, he very kindly asked me to second the Motion, which I was very pleased indeed to do.

Although the view I hold is against my own business interests, I know, taking my own town of Croydon alone, that the cancellation of industrial derating altogther would mean an adjustment of about 9d. in the £ in the rates. One cannot fail to recognise that, in present conditions, this means that the householders and other ratepayers of Croydon are, in effect, subsidising the factories of Croydon which receive the benefit of a certain measure of industrial derating. Although I have expressed that view and put it forward as effectively as I was able on several occasions, I fully appreciate the case which my right hon. and learned Friend the Member for Kensington, South, put to us this evening, that we cannot possibly abolish industrial derating in one fell blow.

Arising primarily, I think, from the discussion in the House to which I referred, the Government eventually decided to take the line which they are now taking, namely to ease down derating by stages. I have come to the conclusion that, quite possibly, they may be correct in that view. I still feel, nevertheless, that we must gradually advance during the years ahead to the stage when industrial derating is right out. Quite definitely, it is outdated and outmoded; it is just a question of time when we reach that ultimate objective. I rather felt that my right hon. and learned Friend took very much the same view.

Sir P. Spens indicated assent.

Mr. Harris

In the years to come, we are bound to reach that stage, and it is just a matter of time. I find it difficult to believe that the 100 per cent. cancellation of derating now would be quite the severe blow that is sometimes suggested, but I quite agree that we cannot really afford to take a risk at the present time.

I have held my present view for some years, but I find it extremely difficult to sit here and listen to some of the speeches made by hon. Members opposite. With all respect to every hon. Member, there is no question but that the Opposition had five years, at least, from 1945 to 1950, to do something about it, and, as my hon. Friend the Member for Ilford, South (Mr. Cooper) quite rightly said, they did just nothing whatever. I agree that, eventually, when the Conservatives were in power, the hon. Member for Acton came along with a very good Bill which was given a very full discussion in the House, but——

Mr. Sparks

Will the hon. Gentleman tell us why his own Government have taken seven years to do something about it?

Mr. Harris

It is fair to say that there was a general review of local government finance in mind, and it was quite understandable that they wished to incorporate this move at the same time in the revision of their local government plan. The answer is that they have done something about it, whereas the Opposition did nothing. They have, at least, eased down derating from 15s. in the £ to 10s. in the £, and, no doubt, they have it in mind, in due time, to ease it down further. Hon. and right hon. Gentlemen opposite on many occasions make powerful speeches about what should or should not be done, and no one can blame hon. Members on this side for feeling a little hot-tempered about these speeches. It is all very fine for the Opposition to talk in that way, but why did they do nothing about it before?

Nevertheless, I hope that the Committee will accept this further discussion in the fair way in which it has been carried on this afternoon. I will not indulge in arguments about the figures. One does not lightly dare to contradict a chartered accountant in these matters. He may be right or wrong, but I do not think it really affects the total issue. Were the Labour Party suddenly to find itself in the extraordinary position of being in control of this country again, would hon. and right hon. Gentlemen opposite suddenly cancel industrial derating in one fell swoop, as one assumes from the views expressed this afternoon they automatically would? We all know that it is quite wrong to suggest that they would.

5.30 p.m.

I do not suppose for one moment that they would do that. It is like many of the things that they said when they were in Opposition. When they got into Government, they did nothing about them. We all know that that is politics and that that is what happens. I do not know if the right hon. and learned Member for Kettering (Mr. Mitchison), when he winds up for the Opposition, would like to tell us whether the Labour Party, should they get into power, will automatically immediately cancel industrial derating. It would be very interesting to know.

Mr. Mitchison

I can tell the hon. Gentleman one thing. I am not a Privy Councillor, by the way. We have stated before each General Election what our policy was and if we have succeeded in getting into power we have carried out that policy. It is not we who said that rents would never be allowed to rise and then introduced a Rent Act. It is not we who said, "We will keep prices steady" and subsequently let them shoot up. We have kept our promises.

Mr. Harris

I was apparently under the misunderstanding that we were talking about rating matters. The hon. and learned Member obviously is trying to divert from the point that I was putting. He still does not answer my question and I do not suppose anyone will answer it. It is: will the Opposition make a pledge to the people that if, unfortunately, they are returned to power, they will automatically and immediately cancel industrial derating? Frankly, I do not believe they would.

Therefore, I look upon this further discussion this afternoon as a continuation of the discussion that we had on the Private Member's Bill, which I think lends a lot of power to the decision that the Government have taken. We are going in the right direction. I would have liked our progress to be faster in many respects, but, so far as the views that I have expressed are being carried out, we are making real progress.

Mr. Austen Albu (Edmonton)

I think that the last part of the speech of the hon. Member for Croydon, North-West (Mr. F. Harris) was designed to cover up the fact that he supports the Amendment, although he does not intend to vote for it. It is interesting to note that we have not heard a single argument in support of the continuation of industrial derating in principle. Every hon. Member who has spoken has said that he is entirely opposed to industrial derating in principle. The right hon. and learned Member for Kensington, South (Sir P. Spens) admitted that industrial derating is a subsidy, but he semed to think that it had a discriminatory effect and that the concession of industrial derating was one of the factors which cause a firm to go to one particular area rather than another. It is not discriminatory at all, and it falls, like the rain, on the just and unjust alike.

Sir P. Spens

The hon. Gentleman will remember that when it was brought in it was difficult to find any industry in 1929 which one could confidently say would continue to flourish.

Mr. Albu

It may be that we are now approaching a similar situation. Under those circumstances, I can fully understand why the Government's advisers are unwilling to give up what they consider to be this last straw at which to clutch. I do not think that industry will get into the position in which it was in the early 'thirties or late 'twenties.

When I was listening to the right hon. and learned Member for Kensington, South I could not help thinking that he was not doing justice to what the Chancellor of the Exchequer is doing in offering other types of concessions—for instance, through the Distribution of Industry (Industrial Finance) Bill—to encourage firms to go to areas where there is unemployment. We on this side of the Committee support that Bill. I think that it is a far better method of encourageing industries to go to areas where there is unemployment or to take up factory space in places where industries are collapsing for economical or technical reasons, rather than to give this completely indiscriminatory concession, for that is what it is. In present circumstances, I do not think there is any argument for continuing it at all.

Probably the main reason why hon. Members, like the hon. Members for Croydon, North-West and Ilford, South (Mr. Cooper), who have local government experience, support this Amendment is because, like all of us, they receive letters from ratepayers' associations who strongly object to the fact that, as ratepayers, they are subsidising local industries. In industrial boroughs like my own constituency most of the owners and managers do not reside in the areas in which their firms operate. A large number of the directors, managers and better-paid employees live in other boroughs. Much of the higher-rated property is not in the local authority area in which the firm is. This is an important factor.

The arguments about costs were, I think, fully dealt with by the hon. Member for Gloucester (Mr. Diamond). But, however one looks at it, if one takes the difference between the proportion of the total gross national product of £18,000 million or the final product of manufacturing industry of £7,000 million or £8,000 million, the additional cost of abolishing the derating provisions must be obviously a negligible factor. I do not think it is right to draw a distinction between small struggling firms and big firms. To some extent all firms ought to operate under similar conditions of competition. If they cannot compete under the conditions which society imposes, they ought not to be operating. Small firms presumably have low rates and large firms presumably higher rates.

The argument of the hon. Member for Ilford, South seemed to imply that there was some direct comparison between Income Tax and Profits Tax and rates. Of course, that is nonsense. The rates are a fixed cost on the output, while, of course, taxes do not come into operation until the profits are made. One cannot set the one off against the other in the way that the hon. Member was suggesting. If, in fact, partly as a result of abolishing derating, a firm does not make a profit, then it will not pay Profits Tax. In actual fact, under present conditions, many firms will, of course, continue to make very substantial profits, and the addition of the rate burden will be very small.

Many hon. Members seem to have forgotten what the Bill is about. After all, this is a Local Government Bill, as the hon. Member for Southampton, Itchen (Dr. King) said. We are considering in what way local government can be improved and the Government, in their strange way, think that the Bill will give local authorities greater independence. This is a very extraordinary way of giving greater independence, by refusing one of the few sources of income that they might easily receive. If the Government follow the arguments that they have used throughout the Bill, they should accept the Amendment, if they mean that they are trying to give local authorities greater independence.

We must not forget that when we are arguing about what the effect will be on industry and on the Exchequer. The assumption made by the hon. Member for Ilford, South that the Exchequer will inevitably take back whatever the local authorities may gain is a complete contradiction of the intentions of the Government throughout the Bill. I hope we shall hear some stronger arguments from the Minister than we have heard in the past, but I have no doubt that what we shall hear is that he fully agrees with his hon. Friends in principle and does not intend to accept our Amendment.

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

I hope that it will not inconvenience the Committee if I say a word or two at this stage. We have had a wide ranging debate and some excellent speeches from both sides of the Committee. I very much enjoyed the contribution of the hon. Member for Gloucester (Mr. Diamond), who clearly has done a great deal of research into the statistics associated with this problem, possibly more research than I have done myself. I will come to one or two statistics later.

I was struck with the zealousness of hon. Members opposite in the cause of the abolition of industrial derating because, as my hon. Friend the Member for Croydon, North-West (Mr. Harris) rightly pointed out, they did not display equal zealousness between 1945 and 1951.

There were two or three fallacies which I think coloured a number of the speeches made by hon. Members opposite this afternoon. It has been said by hon. Member after hon. Member that industry is being favoured by the Government and is being subsidised at the expense of the householder, the shopkeeper, and so on. The hon. Member for Eton and Slough (Mr. Brockway) said that it was wrong that industry should be subsidised by the householder. I think that the right hon. Member for Rochester and Chatham (Mr. Bottomley) said that industry, like other ratepayers, should pay its rates in full.

We must consider the facts. While industry is certainly derated to the extent of 50 per cent., all householders are assessed for rating purposes on 1939 values. Therefore, millions of householders are derated, not only by 50 per cent., but in many cases by 60 or 70 per cent. Then there is the question of commercial premises, shops, offices, cinemas, public houses, and so on. They are, again on the basis of present statute law, rated on current values.

Mr. Sparks

Less 20 per cent.

Mr. Bevins

Precisely, their rates are abated by 20 per cent. So there is some measure of derating there.

The second fallacy upon which I should like to comment is the assumption that if this Government or any future Government were to abolish industrial derating hook, line and sinker, local Government in general would benefit to the extent of the increased rerating of industry. No hon. Member who has seriously studied the history of derating really believes that any Government, no matter what its colour, would be content to increase rerating from 25 per cent. to 50 per cent., or from 50 per cent. to 100 per cent., without certain powerful influences in Government demanding that there should be adjustments in Exchequer grants to local authorities.

The third point upon which I should like to comment is the assumption which featured largely in the speech of the hon. Member for Southampton, Itchen (Dr. King), that if only industry were derated, then many local authorities would benefit enormously financially. I do not doubt that there are a considerable number of such cases, but it is only right to remind the Committee that, if we are to consider this matter in proper perspective, the majority of local authorities which would benefit initially by the abolition of industrial derating are those which are situated in heavy industrialised areas.

That is one reason why the abolition of derating is so zealously supported by hon. Members opposite. I do not blame them. But they must remember to take into account and to offset against the increased revenues which would accrue to those local authorities from the abolition of industrial derating, the consequential effects which would inevitably flow to those local authorities' finances through the operation of the rate deficiency grant. If we raise the average rateable value or the income per head of population in these highly industrialised local authorities, quite a considerable number of them which are large beneficiaries of equalisation grants now and may in future be substantial beneficiaries from rate deficiency grants would suffer a reduction in the form of those grants.

5.45 p.m.

Mr. Arthur Moyle (Oldbury and Halesowen)

Apart from the financial arguments that the hon. Gentleman is advancing, is there not something to be said on the political side having regard to the marked decline that we have experienced in the interest of industrialists in local government since the days of derating?

Mr. Bevins

Yes, indeed; I entirely agree. It is very much in the mind of my right hon. Friend that the step which the Government are taking to raise industrial rerating to 50 per cent. will encourage and stimulate many people, on either side of industry, to take a more active participation in local government. I am entirely at one with the hon. Member.

The other comment that I should like to make is upon the tendency, which has shown itself in a number of speeches made in this debate, for hon. Members to indulge in the exercise of showing that certain classes of ratepayers such as industrial ratepayers benefit from certain types of local government services. Exercises of that nature are most unprofitable. We must face the fact that industry, commerce, the householder and all the rest of us have our civic responsibilities in the finencial sense. It is quite absurd to start the argument that people who are childless should be exempt from the education rate or that owner-occupiers should not pay the housing rate, for that is where that line of thought would end.

I should like to give the Committee one or two straight facts which surround this subject. In the year before derating was introduced, industry contributed about 10 per cent. of the rateable values of local government as a whole. Before the revaluation of two years ago, industry's share of the rate burden had fallen to rather more than 4.4 per cent. The actual amount contributed in rates at that time was only £15 million. After revaluation, when industry was assessed to current values but still derated, it contributed 6.27 per cent. of the total rate burden. Now, the effect both of the revaluation and of the 50 per cent. rerating proposed in the Bill means that industry's share of the total rate burden will rise to approximately 12 per cent. and industry will be paying something like £70 million a year in rates.

Therefore, the Committee will see that industry will shortly be paying an increased share of more than 180 per cent. If the proposal embodied in the present group of Amendments were to be accepted and industry were to be wholly rerated, industry's share of the total rate burden would rise to approximately 19.5 per cent. and the total payments would amount to approximately £130 million.

It is only fair that I should point out that industry's share of the total rate burden under our proposed arrangements will be three times what it was in 1955, as recently as three years ago. Commercial premises will be bearing an increased share of the extent of 7 per cent., whereas householders' share of the burden will have fallen by no less than 20 per cent. during the last two or three years.

We on this side entirely agree that it is desirable, as the hon. Member for Edmonton (Mr. Albu) rightly said, to give local authorities a greater sense of financial independence. There is no doubt whatever that the complete re-rating of industry would be a considerable step in that direction. I am, however, sure that my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) was right when he said that we cannot look at this problem in isolation. One cannot look at it simply within the context of the future of local government. We have to consider the economic effects of so serious a step as this.

It has been argued this afternoon that industry is more prosperous than ever before and is certainly prosperous enough to pay full rates. None of my hon. Friends would dissent from that as a generalisation. But especially at a time when the Government are pledged to stabilise the price level, it would be folly to add to industry's burdens. It is quite true, as the hon. Member for Gloucester said, that in many industries the payment of full rates would represent a quite small ratio of the total. Averages, however, as the hon. and learned Member for Kettering (Mr. Mitchison) is fond of pointing out, are perilous things and the incidence of rerating would, as my right hon. Friend said on Second Reading, vary considerably from industry to industry.

I said at the outset that I would try to give the Committee one or two figures. If derating were to be abolished completely, the increase in rates payable by industry would be of the order of £57 million a year. That is the equivalent of a 2 per cent. wage increase over the whole range of manufacturing industry. To look at it another way, it is equivalent to a 2½ per cent. increase in the total import bill of our manufacturing industry.

Mr. Sparks

Surely, the hon. Gentleman is not telling the Committee that industry would have to bear all that burden. Those rate payments are allowable against any taxable surplus. The great majority of concerns have a taxable surplus and they would not need to contribute anything like that amount.

Mr. Bevins

I know. I am looking at this, not from the viewpoint of individual firms, but from the point of view of the nation and of our economy.

These rates have to be paid. Nobody in this Committee could foresee what their economic consequences would be, but they might well lead to rising prices. In certain cases, they might well have a marginal effect on certain export trades, and it is conceivable that they would affect the capital investment of some of the smaller firms. It is certainly the view of my right hon. Frmend that these are not risks which the Government should run at this time, when we recognise that our primary responsibility and task is to stabilise prices.

Before I conclude, I should like to refer to one comment by the right hon. Member for Rochester and Chatham, who opened this debate. The right hon. Member began by saying that his side of the Committee had advocated the rerating of industry for a long time. It is not really a very long time. It is only right to point out that the record of the Labour Party in this respect—I do not mean to be unkind—has been just a little erratic. For example, from 1929, when derating was first introduced, until 1945 the Labour Party was opposed to the derating of industry. Equally, during the Labour Party's period in office from 1945 to 1951, it called an entirely different tune. When in 1948 the right hon. Member for Ebbw Vale (Mr. Bevan) introduced his Local Government Bill—which was one of the major Bills in the last twenty years affecting rating and valuation and the reshaping of our Exchequer grants—he used the expression: "it is difficult to put the eggs back into the shells now." In 1951, the right hon. Member for Bishop Auckland (Mr. Dalton), who obviously knows a good deal about this subject—I have read all his speeches on it—declared that at that time the balance of the argument was against reversing the derating arrangements.

Although the party opposite has now come down in support of the abolition of derating of industry as a whole, I still wonder, like some of my hon. Friends on this side, whether given the opportunity members of the party opposite would be quite so radical as they have pretended this afternoon.

Mr. G. R. Mitchison (Kettering)

I agree with the Parliamentary Secretary in one or two respects. First, I agree with him that when considering contributions to rates we only get ourselves into endless trouble and confuse the whole issue if we try to measure the extent of the contributions by the extent of the use which a particular contributor makes of the various services, whether fire extinction or education. One must, therefore, proceed on another basis. That other basis, I suggest, is that units, whether individuals or corporations, must contribute in proportion to their resources the value of the hereditament or the profits, all the old standards we know, towards the expenditure of the local community. That is the real basis for the matter.

It is quite true that at present there are anomalies. The individual householder pays on the basis of a modified pre-war valuation, but, as the law now stands, he will have to pay on current values for the year 1961–62 and there- after. The industrialist gets a concession of 20 per cent., unless the Bill is modified, and shops and offices get a concession of 20 per cent.

Let us deal, first, with the argument about the Treasury. When the shops and offices concession was made, the exact opposite happened. The local authorities lost a considerable sum of money and came to the Treasury and said, "You will gain it, because now they will not be able to deduct so much for rates from their trading profits. What about helping us?" The Treasury did not help. There was a Tory Government in office. It was they who were responsible for the concession and it was they who were responsible for the adjustment as between the ratepayer and the taxpayer and they left the ratepayer to carry the lot. More than half that concesson inured not for the benefit of shops, but for the benefit of offices, and the Prudential and other insurance companies and joint stock banks were helped at the expense of the ordinary domestic householder and ratepayer.

That is that side of the picture. It does not by any means follow that the Treasury is entitled to do the exact opposite now and every time in the future, and, whenever a concession is made in favour of local authorities, to take its full whack, and more than its full whack, out of it, as it is doing out of the £30 million or so which is the subject matter of the concession in the Bill. Therefore, what we are talking about is a concession of about, let us say, £60 million, which is about double the shops concession, towards the finances of local authorities out of industry.

6.0 p.m.

I trust that the Committee will bear in mind that the rerating of industry was made at a time of exceptional difficulty, and for the specific reason that industry could not get along without it. That was the one and only reason adduced at the time for making it, and a corresponding concession was given to local authorities, which we need not go into now. Therefore, it was as true then as it is admittedly true now, to say that, on principle, there is no possible case for the derating of industry. That was admitted by the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) and by other hon. Members opposite. There is no doubt about it.

The question now is whether there is any other reason why we should not go the whole hog in this matter. I want to get out of the way a bit of the usual last line of Tory defence. When the party opposite finds itself in an indefensible position it goes back and says, "Well, you did not do what you are asking us to do now." If that will not work, it tries another line. It gets hold of the last Labour Party pamphlet and picks in it any holes it can. It is an infallible sign that the Tory Party has a weak case to answer, and knows it. So we have had it again this time.

I do not think that there is much use in all these niceties, but if we are going into them at all, let us have them straight. Some hon. Gentlemen opposite forget that there was a war, and they treat the post-war Labour Government as if there had not been a war. We had our hands fairly full between 1945 and 1951, and it is only when right hon. and hon. Gentlemen opposite have been in Government for some time that they start to complain that we did not do enough. Yet their complaint at the time was that we did much too much. If we had tried to do all the things they now suggest we might have done at the time, we would indeed have had our hands full.

Mr. Cooper

They did the wrong things.

Mr. Mitchison

I hear the hon. Member for Ilford, South (Mr. Cooper) say that we did the wrong things. My point is that we did what we thought necessary for the country after a war. No doubt the hon. Gentleman, and many of his hon. Friends, deeply regret the existence of the Welfare State and would prefer to go back to the kind of years after the 1914–18 war, when a Coalition Government made a fine mess of things.

Broadly speaking, we did what we thought right and what the country thought right, and what I believe, in his heart of hearts, the hon. Gentleman and others opposite know was right and was immediately necessary. For six years we did not deal with the matter, nor for six years did hon. Gentlemen opposite deal with the matter, and it is only now, after more than the time we were in power, that they talk in this way.

Let us see what will happen. It is said that industry cannot bear it. It is said that industry contains some small firms which will go to the wall. Who else pays rates? What about the individual householder? Those who are so solicitous for these small, struggling firms seem to forget that rates are quite a considerable and a rising part of the budget of the ordinary domestic householder and, further, that about their worst fault, as a tax, is that they come down on the small man far more than they do on the large man. If these people would extend to the ordinary domestic householder the solicitude they show so readily to industry, I believe that they would be doing very much more towards an equitable system of local taxation, and in the long run very much more for the good of the country.

What nonsense it is. The hon. Gentleman told us it would amount to a 2 per cent. wages increase. That is one way of putting it, but I have been looking at the National Income and Expenditure statistics for 1957. It so happens that the amount involved would also be about 2 per cent. of the net—after taxation and everything else—profits of companies. Therefore, it is nonsense to say that industry cannot carry this at the moment.

As my hon. Friend the Member for Gloucester (Mr. Diamond) pointed out, we have asked time and time again for the figures, all of which the right hon. Gentleman told us he had worked out and none of which he has vouchsafed to us. So we must take the figures we have been given from an older source, which all point the same way, to about one-half of 1 per cent. of turnover. How many industrial firms will be broken by charges of that order? What difference will it make to them compared to the differences which the financial policy of the Government have made to industry in the country? They would prefer to pay their full share of rates if only they could gat back to cheap money, instead of what they are paying now, under Tory financial policy.

Again, let us look at the effects of all this on the local authorities. What we are considering now are local authorities who are struggling along in the face of rising difficulties because of what this Government have done. The Government have taken away from them the housing subsidies. The Government have doubled, and more than doubled, the cost of their borrowing. The Government, here, there and in every way, as in the example I gave just now, have whittled money away from them, and, while talking of the help that they are to give to local authorities and the value they set upon their activities, have told them, as we heard yesterday from the right hon. Gentleman, that in the long run it all depends on their getting together, showing the right spirit, sporting I suppose the old municipal tie, and carrying on broke to the world, made so by a Tory Government. And then they refuse to put this concession into the Bill.

Then it is said, "We cannot do it at once." There are other Clauses in this Bill. For instance, there is the one about the gainers and the losers, which provides for a most elaborate system of gradation. If the right hon. Gentleman and his hon. Friends were prepared to say that the case is unanswerable, that there own supporters tell them so, that they are prepared to do it but not quite yet, and to put into their Bill an arrangement for providing the first 25 per cent. next year and the remaining 25 per cent. in the years after, there would be nothing left between us. We do not insist that the thing should be done at one fell swoop. That is the effect of these Amendments, but it is a small difference between doing that and doing it in one year or two.

In answer to the hon. Gentleman the Member for Croydon, North-West (Mr. F. Harris), let me tell him this. We carry out our promises and we shall do it. Let me also tell him that until we know the extent of the economic mess with which we shall be left by the Government we are not prepared to go into pledges about a question of a year or two on one fiscal measure. No Opposition, if it consisted of sane, prudent and sensible people, as we on this side of the Committee claim to be, could conceivably give such a pledge.

Mr. C. W. Gibson (Clapham) rose——

Mr. Mitchison

I do not wish in any way to discourage anybody, but we have been quite a time on this Amendment and we have other matters to deal with.

Mr. Gibson

I want to make only one or two brief points. The first is that I thought the argument of the Parliamentary Secretary, that to restrict the rate charge on industry to 50 per cent. would have some effect in stabilising prices, was about the most fantastic thing I have heard in the House of Commons. The second is that the right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) seemed to think that derating of industry in 1939 was done to help employment. I remember it as he does, and I remember the fights we had publicly about this proposition of the then Government.

There were other things which the Government of that day did. They raided the Road Fund, and the Minister who was responsible for it is now one of the most revered Members of this House. He reduced the rate on industry to 25 per cent. because it was said that this would increase employment, whereas for the next three or four years we had the worst slump and the worst unemployment we have had in the history of this country.

Sir P. Spens

Under a Labour Government.

Hon. Members

A minority Government.

Mr. Gibson

I have in more than one debate in the House of Commons remarked that the Tory Party seem to have a penchant for twisting history, for stretching it. To suggest that the slumps of the 'thirties were due to the Labour Government is utter nonsense.

Sir P. Spens

I did not say that. The hon. Gentleman remembers as well as I do that the figures of unemployment went up during 1929 and 1930 while the Labour Government were in power, and it was not until there was a Coalition Government that they came down.

The Temporary Chairman (Mr. H. Hynd)

Order, order.

Mr. Gibson

I beg your pardon, Mr. Hynd. I was drawn off the track.

The argument that we must not rerate industry a full 100 per cent., to save unemployment, is utter nonsense if one reads history. It has never been fair on the ordinary householders of this country. When industry was derated in 1929 that did not cut the cost of running local authority services. Somebody had to meet that.

As a then very young member of the London County Council, I knew what troubles the Tory Party were having in London in raising rates. Our costs were reduced because industry had a reduction of 75 per cent. in its rates. The cost remained, and indeed went up, and somebody had to pay, so the burden was put on the ordinary householders, where it has been ever since. In fact, what has been happening is that industry has been subsidised for all those years at the expense of the ordinary ratepayer in the ordinary small house in the back street.

This Government have made it worse by recently taking 20 per cent. of the rateable values off shops and business premises. That also has been shoved on to the shoulders of the ordinary householders. I want to put in a plea for the man who pays the rates, the man who cannot dodge paying his rates, the man who cannot put them in as a business expense but has to pay as soon as the demand note comes along or with his weekly rent.

It is about time the House of Commons thought a little more about the charges which the ordinary householders have to meet in order that our local services may be run and may be improved and may be used to make the towns and cities fit places for good citizens to live in.

6.15 p.m.

Even the circumstances which the right hon. and learned Member for Kensington, South (Sir P. Spens) referred to have now completely disappeared; we are not in a slump, although we are getting perilously near it. All the signs are there, as they were in 1929. But the fact is that industry is well able to bear the burden of a 100 per cent. charge for rates, and it is right and proper that it should do so. If the Government really want to help local authorities—and I sometimes have my doubts about that—they will rerate industry to the full 100 per cent.

I would like to suggest other ways in which they could help local authorities to raise their rates and lift the burden from the shoulders of the ordinary householder. They could do so by fixing land values. I have no doubt that I should be pulled up for being out of order if I went further into that question, since it has nothing to do with the Bill, but I think that we shall have to come to it one day.

In present circumstances, the fair and just thing to do for the millions of ordinary people who pay their rates month by month, quarter by quarter, or in their weekly rents, would be to place upon industry the full share of the rates which it bore before 1929 and in respect of which it has been subsidised by the ordinary people ever since. The Amendment will have that effect, and because it has that effect I hope the Committee will accept it.

Mr. Sparks

I would not have sought to rise at this stage had it not been for the fact that I have sat here practically all through the debate, while other Members who have come into the Chamber after me have been called. I have no complaint about that, but I feel that I am entitled to stand upon my rights and make a contribution to the debate.

I was sorry that the Parliamentary Secretary did not pay more regard to the burden which ordinary householders in industrial areas are having to share. He tried to convince the Committee that the ordinary householder is not having to bear any extra burden as a result of the fact that industry at the moment pays only 25 per cent. of its rateable value.

That is absolutely untrue. Industry creates a great demand upon the the services of local authorities, and that demand has to be met, in the main, by the ordinary citizens and householders who, at the moment, are facing great problems because of rising rates and prices. At present we see the attempt being made to restrict wage levels while the cost of living proceeds to rise. The problem of this burden upon ordinary householders deserve attention from the Committee, and in my opinion the only adequate way in which that attention can be given is by the adoption of the Amendment.

The Parliamentary Secretary gave a rather wrong impression about the effect of the proposals in the Bill to rerate industry to 50 per cent. as against 25 per cent., of its net annual value. I do not say that he did so deliberately, but he quoted certain figures. The Bill proposes to increase the payment of industrial rates from 25 per cent. to 50 per cent. of the net annual value, or, in other words, to provide an increased rate revenue of £30 million. The Parliamentary Secretary did not say that of that £30 million the Government will take away £20 million. He very conveniently left that out. Local authorities will benefit not by an additional £30 million but only by less than £10 million.

If the Government propose to increase industrial rating from 25 per cent. to 50 per cent. of the net annual value, I claim that the ordinary householders in industrial areas are entitled to receive the benefit of the whole of that rate income. What the Government are really doing is making a profit out of the proposal. They are taking back £20 million to themselves. The £30 million additional revenue which industry will pay by way of rates is allowable against taxable surpluses, and most of these industrial ratepayers are making a very good taxable surplus, so that of the additional £30 million being provided in rates the Treasury will lose, by way of tax allowance, about £13½ million a year. But they are taking back £20 million, so that they are making a profit of £6½ million for themselves. The Parliamentary Secretary did not tell us that. He hid that, and gave the impression that the whole of the £30 million would go to local authorities and would help to relieve the ordinary ratepayer.

My constituency is very badly hit by industrial derating. In the past twenty or thirty years industry there has grown rapidly, and it is now one of the most intense industrial concentrations in the country. What do we find there? We find that the drainage and sewage system are quite inadequate to cope with the increased effluent caused very largely by this intense industrial development. We are faced with the problem of having completely to reorganise the drainage system, and it has been estimated that this will cost the ratepayers, who are mainly householders, 2s. 6d. in the £—and that estimate was based upon the financing of the scheme before the interest rates soared to their present level of 6½ per cent.

We claim that as industry creates considerable local authority expenditure in respect of a wide range of services it should pay its fair proportion of the cost of those services. It should be made quite clear that the Government are not giving away very much to the ordinary ratepayers, especially in the industrial areas. They are making a profit for themselves on the side and hoping that nobody will notice what is going on.

The right hon. and learned Member for Kensington, South (Sir P. Spens) made a case for some division as between young, small and growing industries and well-established industries. He admitted that there were prosperous concerns, such as brewers and tobacco companies, who could well afford to pay 100 per cent. in rates. There is therefore no reason why these large concerns should ride on the shoulders of the young, small and growing industries, although as my hon. Friend the Member for Edmonton (Mr. Albu) said, young and growing industries in the Development Areas are already receiving preference by way of financial assistance from the Government, and they cannot expect it twice over.

If industry were rerated and paying 100 per cent. of the net annual value in a year it would pay approximately £130 million, according to the Parliamentary Secretary. Industry is now making many thousands of millions of pounds in profits, year by year. There never was such a time when profits were so plentiful and so high, and it is absurd to say that if industry were asked to contribute £130 million in rates it would break the back of industrial activity. In fact, industry would not pay £130 million, because that amount would be allowable against any tax surplus, and the net amount would be considerably less.

I am surprised that the Parliamentary Secretary and hon. Members opposite have had so little regard for the ordinary householders in industrial areas, who are struggling against an ever-rising rate burden due to rising costs and prices, which have come about as a result of Government policy. Superimposed upon these burdens are the consequences of the Rent Act, and these people are now having to subsidise the necessary expenditure on social services which in many cases is created by industrial demand. Because of the unfairness of the hon. Member and his hon. Friends towards the householders, and because of his refusal to give ratepayers the complete benefit of rerating industrial properties at 50 per cent. of their net annual value—to say nothing of his refusal to provide that industry shall pay 100 per cent.—I hope that hon. Members on this side of the Committee will divide against the Government proposal and make it clear that we stand for the ordinary householders who are struggling under this increasing rate burden because industry is not paying its fair proportion of the rates.

Mr. Bottomley

Before we finally come to a decision, I would recall to hon. Members opposite who have not been present during this very useful debate that, with the exception of the Minister, not one speaker on either side has said anything against the need to rerate industry to the fullest, and the Minister's case was so weak that I hope that when we go into the Division Lobbies we shall have some support from hon. Members opposite.

6.30 p.m.

Mr. Bevins

I am very sorry to have to rise again, but I really must correct that statement. That is not true. I have listened to every speech made in the Chamber today, and I can pin-point one immediately, that made by my right hon. and learned Friend the Member for Kensington, South (Sir P. Spens), which took the same line as I did.

Mr. Bottomley

With due respect to the right hon. and learned Member for Kensington, South (Sir P. Spens), he was arguing in favour of it, but he said that the time was not now opportune, though he was in favour of it. The Minister did not even say that. His arguments were against the scheme altogether.

Question put, That "fraction of" stand part of the Clause:—

The Committee divided: Ayes 235, Noes 202.

Division No. 109.]	AYES	[3.38 p.m.
	NIL
		TELLERS FOR THE AYES:
		Mr. Awbery and Mr. T. W. Jones.
NOES
Agnew, Sir Peter	Browne, J. Nixon (Craigton)	du Cann, E. D. L.
Aitken, W. T.	Bryan, P.	Dugdale, Rt. Hn. Sir T. (Richmond)
Allan, R. A. (Paddington, S.)	Bullus, Wing Commander E. E.	Duncan, Sir James
Alport, C. J. M.	Butcher, Sir Herbert	Duthie, W. S.
Armstrong, C. W.	Butler, Rt. Hn. R. A. (Saffron Walden)	Eden, J. B. (Bournemouth, West)
Astor, Hon. J. J.	Campbell, Sir David	Elliott,R. W.(New castle upon Tyne,N.)
Atkins, H. E.	Carr, Robert	Emmet, Hon. Mrs. Evelyn
Baldwin, A. E.	Cary, Sir Robert	Errington, Sir Eric
Balniel, Lord	Chichester-Clark, R.	Farey-Jones, F. W.
Barlow, Sir John	Churchill, Rt. Hon. Sir Winston	Fell, A.
Beamish, Col. Tufton	Conant, Maj. Sir Roger	Finlay, Graeme
Bell, Philip (Bolton, E.)	Cooke, Robert	Fletcher-Cooke, C.
Bell, Ronald (Bucks, s.)	Cooper, A. E.	Fort, R.
Bennett, F. M. (Torquay)	Cordeaux, Lt.-Col. J. K.	Fraser, Hon. Hugh (Stone)
Bennett, Dr. Reginald	Corfield, Capt. F. V.	Freeth, Denzil
Bevins, J. R. (Toxteth)	Craddock, Beresford (Spelthorne)	Galbraith, Hon. T. G. D.
Bidgood, J. C.	Crosthwaite-Eyre, Col. A. E.	Gammans, Lady
Biggs-Davison, J. A.	Crowder, Sir John (Finchley)	Garner-Evans, E. H.
Bingham, R. M.	Cunningham, Knox	George, J. C. (Pollok)
Birch, Rt. Hon. Nigel	Dance, J. C. G.	Gibson-Watt, D.
Bossom, Sir Alfred	Davidson, Viscountess	Glover, D.
Boyd-Carpenter, Rt. Hon. J. A.	D'Avigdor-Goldsmid, Sir Henry	Godber, J. B.
Boyle, Sir Edward	Deedes, W. F.	Gough, C. F. H.
Braine, B. R.	Digby, Simon Wingfield	Gower, H. R.
Bromley-Davenport, Lt.-Col. W. H.	Dodds-Parker, A. D.	Graham, Sir Fergus
Brooke, Rt. Hon. Henry	Doughty, C. J. A.	Grant, W. (Woodside)
Brooman-White, R. C.	Drayson, G. B.	Green, A.
Gresham Cooke, R.	Low, Rt. Hon. Sir Toby	Roberts, Sir Peter (Heeley)
Grimston, Hon. John (St. Albans)	Lucas, Sir Jocelyn (Portsmouth, S.)	Robertson, Sir David
Grimston, Sir Robert (Westbury)	Lucas-Tooth, Sir Hugh	Robson Brown, Sir William
Gurden, Harold	Macdonald, Sir Peter	Rodgers, John (Sevenoaks)
Hall, John (Wycombe)	McKibbin, Alan	Roper, Sir Harold
Harris, Frederic (Croydon, N.W.)	Mackie, J. H. (Galloway)	Russell, R. S.
Harris, Reader (Heston)	McLaughlin, Mrs. P.	Scott-Miller, Cmdr. R.
Harrison, A. B. C. (Maldon)	Ma[...]lean, Sir Fitzroy (Lancaster)	Sharples, R. C.
Hay, John	Macmillan,Rt.Hn.Harold(Bromley)	Smithers, Peter (Winchester)
Heald, Rt. Hon. Sir Lionel	Macmillan, Maurice (Halifax)	Smyth, Brig. Sir John (Norwood)
Heath, Rt. Hon. E. R. G.	Macpherson, Niall (Dumfries)	Spearman, Sir Alexander
Henderson-Stewart, Sir James	Maddan, Martin	Speir, R. M.
Hesketh, R. F.	Maitland, Cdr. J. F. W. (Horncastle)	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Hicks-Beach, Maj. W. W.	Manningham-Buller, Rt. Hn. Sir R.	Stanley, Capt. Hon. Richard
Hill, Rt. Hon. Charles (Luton)	Marshall, Douglas	Stevens, Geoffrey
Hill, Mrs. E. (Wythenshawe)	Mathew, R.	Steward, Harold (Stockport, S.)
Hinchingbrooke, Viscount	Maudling, Rt. Hon. R.	Stoddart-Soott, Col. Sir Malcolm
Holland-Martin, C. J.	Mawby, R. L.	Storey, S.
Hope, Lord John	Maydon, Lt.-Comdr. S. L. C.	Summers, Sir Spencer
Hornby, R. P.	Milligan, Rt. Hon. W. R.	Thomas, Leslie (Canterbury)
Horobin, Sir Ian	Moore, Sir Thomas	Thomas, P. J. M. (Conway)
Horsbrugh, Rt. Hon. Dame Florence	Morrison, John (Salisbury)	Thompson, Kenneth (Walton)
Howard, John (Test)	Nabarro, G. D. N.	Thompson, R. (Croydon, S.)
Hughes-Young, M. H. C.	Nairn, D. L. S.	Thorneycroft, Rt. Hon. P.
Hurd, A. R.	Neave, Airey	Tiley, A. (Bradford, W.)
Hutchison, Michael Clark(E'b'gh, S.)	Nicholls, Harmar	Tilney, John (Wavertree)
Hutchison, Sir Ian Clark(E'b'gh, W.)	Nicholson, Sir Godfrey (Farnham)	Turton, Rt. Hon. R. H.
Jenkins, Robert (Dulwich)	Nicolson, N. (B'n'm'th, E. & Chr'ch)	Tweedsmuir, Lady
Jennings, J. C. (Burton)	Nugent, G. R. H.	Vane, W. M. F.
Jennings, Sir Roland (Hallam)	O'Neill, Hn. Phelim (Co. Antrim, N.)	Vickers, Miss Joan
Johnson, Dr. Donald (Carlisle)	Ormsby-Gore, Rt. Hon. W. D.	Wakefield, Edward (Derbyshire, W.)
Joseph, Sir Keith	Orr, Capt. L. P. S.	Wakefield, Sir Wavell (St. M'lebone)
Kaberry, D.	Page, R. G.	Wall, Patrick
Kerby, Capt. H. B.	Pannell, N. A. (Kirkdale)	Watkinson, Rt. Hon. Harold
Kerr, Sir Hamilton	Peel, W. J.	Webbe, Sir H.
Kershaw, J. A.	Peyton, J. W. W.	Whitelaw, W. S. I.
Kimball, M.	Pickthorn, K. W. M.	Williams, Paul (Sunderland, S.)
Kirk, P. M.	Pike, Miss Mervyn	Williams, R. Dudley (Exeter)
Lambton, Viscount	Pitman, I. J.	Wills, G. (Bridgwater)
Lancaster, Col. C. G.	Pitt, Miss E. M.	Wilson, Geoffrey (Truro)
Langford-Holt, J. A.	Powell, J. Enoch	Wood, Hon. R.
Leather, E. H. C.	Price, David (Eastleigh)	Woollam, John Victor
Legge-Bourke, Maj. E. A. H.	Price, Henry (Lewisham, W.)	ates, William (The Wrekin)
Legh, Hon. Peter (Petersfield)	Price, David Eastlelgh
Lindsay, Hon. James (Devon, N.)	Ramsden, J. E.	TELLERS FOR THE NOES:
Linstea[...], Sir H. N.	Redmayne, M.	Mr.Oakshott and
Longden, Gilbert	Renton, D. L. M.	Colonel J. L. M.

Division No. 110.]	AYES	[6.31 p.m.
Agnew, Sir Peter	Grant, W. (Woodside)	Nabarro, G. D. N.
Aitken, W. T.	Green, A.	Nairn, D. L. S.
Allan, R. A. (Paddington, S.)	Gresham Cooke, R.	Neave, Airey
Alport, C. J. M.	Grimston, Hon. John (St. Albans)	Nicholls, Harmar
Amory, Rt. Hn. Heathcoat (Tiverton)	Grimston, Sir Robert (Westbury)	Nicholson, Sir Godfrey (Farnham)
Arbu[...]hnot, John	Gurden, Harold	Nicolson, N. (B'n'm'[...]h, E. & Chr'ch)
Armstrong, C. W.	Hall, John (Wycombe)	Noble, Comdr. Rt. Hon. Allan
Atkins, H. E.	Harris, Frederic (Croydon, N.W.)	Nugent, G. R. H.
Baldwin, A. E.	Harris, Reader (Heston)	O'Neill, Hn. Phelim (Co. Antrim, N.)
Balniel, Lord	Harrison, Col. J. H. (Eye)	Ormsby-Gore, Rt. Hon. W. D.
Barlow, Sir John	Harvey, Sir Arthur Vere (Macclesf'd)	Orr, Capt. L. P. S.
Barter, John	Hay, John	Page, R. G.
Baxter, Sir Beverley	Heald, Rt. Hon. Sir Lionel	Pannell, N. A. (Kirkdale)
Beamish, Col. Tufton	Heath, Rt. Hon. E. R. G.	Partridge, E,
Bell, Philip (Bol[...]on, E.)	Henderson-Stewart, Sir James	Peel, W. J.
Bell, Ronald (Bucks, S.)	Hesketh, R. F.	Peyton, J. W. W.
Bennett, F. M. (Torquay)	Hicks-Beach, Maj. W. W.	Pickthorn, K. W. M.
Bevins, J. R. (Toxteth)	Hill, Rt. Hon. Charles (Luton)	Pike, Miss Mervyn
Biggs-Davison, J. A.	Hill, Mrs. E. (Wythenshawe)	Pitman, I. J.
Bingham, R. M.	Holland-Martin, C. J.	Pitt, Mitt E. M.
Birch, Rt. Hon. Nigel	Hope, Lord John	Powell, J. Enoch
Bishop, F. P.	Hornby, R. P.	Price, David (Eastleigh)
Body, R. F.	Hornsby-Smith, Miss M. P.	Price, Henry (Lewisham, W.)
Boyd-Carpenter, Rt. Hon. J. A.	Horobin, Sir Ian	Prior-Palmer, Brig. O. L.
Boyle, Sir Edward	Horsbrugh, Rt. Hon. Dame Florence	Ramsden, J. E.
Braine, B. R.	Howard, Gerald (Cambridgeshire)	Rawlinton, Peter
Bromley-Davenport, Lt.-Col, W. H.	Howard, Hon. Greville (St. Ives)	Redmayne, M.
Brooke, Rt. Hon. Henry	Howard, John (Test)	Renton, D. L. M.
Brooman-White, R. C.	Hurd, A. R.	Roberts, Sir Peter (Heeley)
Burden, F. F. A.	Hutchison, Michael Clark(E'b'gh, S.)	Robertson, Sir David
Butcher, Sir Herbert	Hutchison, Sir Ian Clark(E'b'gh, W.)	Robinson, Sir Roland (Blackpool, S.)
Butler, Rt. Hn. R. A. (SaffronWalden)	Hylton-Foster, Rt. Hon. Sir Harry	Robson Brown, Sir William
Campbell, Sir David	Iremonger, T. L.	Rodgers, John (Sevenoaks)
Carr, Robert	Jenkins, Robert (Dulwich)	Roper, Sir Harold
Cary, Sir Robert	Jennings, J. C. (Burton)	Ropner, Col. Sir Leonard
Channon, Sir Henry	Jennings, Sir Roland (Hallam)	Russell, R. S.
Chichester-Clark, R.	Johnson, Dr. Donald (Carlisle)	Scott-Miller, Cmdr. R.
Clarke, Brig. Terence (Portsmth, W.)	Jones, Rt, Hon. Aubrey (Hall Green)	Sharples, R. C.
Conant, Maj. Sir Roger	Joseph, Sir Keith	Shepherd, William
Cooke, Robert	Joynson-Hicks, Hon. Sir Lancelot	Smithers, Peter (Winchester)
Cooper, A. E.	Keegan, D.	Smyth, Brig. Sir John (Norwood)
Cordeaux, Lt.-Col. J. K.	Kerby, Capt. H. B.	Spearman, Sir Alexander
Corfield, Capt. F. V.	Kerr, Sir Hamilton	Speir, R. M.
Craddock, Beresford (Spelthorne)	Kershaw, J. A.	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Crosthwaite-Eyre, Col. A. E.	Kimball, M.	Stanley, Capt. Hon. Richard
Crowder, Sir John (Finchley)	Kirk, P. M.	Stevens, Geoffrey
Cunningham, Knox	Lambton, Viscount	Steward, Harold (Stockport, S.)
Currie, G. B. H.	Lancaster, Col. C. G.	Stoddart-Scott, Col. Sir Malcolm
Dance, J. C. G.	Langford-Holt, J. A.	Stuart, Rt. Hon. James (Moray)
D'Avigdor-Goldsmid, Sir Henry	Leather, E. H. C.	Studholme, Sir Henry
Deedes, W. F.	Leburn, W. G.	Summers, Sir Spencer
Digby, Simon Wingfield	Legge-Bourke, Maj. E. A. H.	Taylor, Sir Charles (Eastbourne)
Dodds-Parker, A. D.	Lennox-Boyd, Rt. Hon. A. T.	Taylor, William (Bradford, N.)
Doughty, C. J. A.	Linstead, Sir H. N.	Tee[...]ing, W.
du Cann, E. D. L.	Lloyd, Maj. Sir Guy (Renfrew, E.)	Thompson, Kenneth (Walton)
Dugdale, Rt. Hn. Sir T. (Richmond)	Low, Rt. Hon. Sir Toby	Thompson, R. (Croydon, S.)
Duncan, Sir James	Lucas, Sir Jocelyn (Portsmouth, S.)	Thorneycroft, Rt. Hon. P.
Duthie, W. S.	Lucas-Tooth, Sir Hugh	Thornton-Kemsley, Sir Colin
Eden, J. B. (Bournemouth, West)	McAdden, S. J.	Tiley, A. (Bradford, W.)
Elliott,R.W.(Ne'castle upon Tyne,N.)	Macdonald, Sir Peter	Tilney, John (Wavertree)
Emmet, Hon. Mrs. Evelyn	McKibbin, Alan	Turton, Rt. Hon. R. H.
Errington, Sir Eric	Mackie, J. H. (Galloway)	Tweedsmuir, Lady
Finlay, Graeme	McLaughlin, Mrs. P.	Vane, W. M. F.
Fletcher-Cooke, C.	Maclean, Sir Fitzroy (Lancaster)	Vickers, Miss Joan
Fort, R.	Macmillan, Maurice (Halifax)	Wakefield, Edward (Derbyshire, W.)
Fraser, Hon. Hugh (Stone)	Macpherson, Niall (Dumfries)	Wakefield, Sir Wavell (St. M'lebone)
Freeth, Denzil	Maddan, Martin	Wall, Patrick
Galbraith, Hon. T. G. D.	Maitland, Cdr. J. F. W. (Horncastle)	Ward, Dame Irene (Tynemouth)
Gammans, Lady	Marlowe, A. A. H.	Watkinson, Rt. Hon. Harold
Garner-Evans, E. H.	Marshall, Douglas	Webbe, Sir H.
George, J. C. (Pollok)	Maudling, Rt. Hon. R.	Whitelaw, W. S. I.
Gibson-Watt, D.	Mawby, R. L.	Williams, Paul (Sunderland, S.)
Glover, D.	Maydon, Lt.-Comdr. S. L. C.	Williams, R. Dudley (Exeter)
Glyn, Col. Richard H.	Medlicott, Sir Frank	Wills, G. (Bridgwater)
Godber, J. B.	Milligan, Rt. Hon. W. R.	Wilson, Geoffrey (Truro)
Goodhart, Philip	Molson, Rt. Hon. Hugh	Wood, Hon. R.
Gough, C. F. H.	Moore, Sir Thomas	Woollam, John Victor
Gower, H. R.	Morrison, John (Salisbury)
Graham, Sir Fergus	Mott-Radclyffe, Sir Charles	TELLERS FOR THE AYES:
		Mr. Legh and Mr. Baryan

NOES
Ainsley, J. W.	Hall, Rt. Hn. Glenvil (Colne Valley)	Oliver, G. H.
Albu, A. H.	Hamilton, W. W.	Orbach, M.
Allen, Scholefield (Crewe)	Hannan, W.	Oswald, T.
Awbery, S. S.	Harrison, J. (Nottingham, N.)	Owen, W. J.
Bacon, Miss Alice	Hastings, S.	Padley, W. E.
Balfour, A.	Hayman, F. H.	Paling, Rt. Hon. W. (Dearne Valley)
Bellenger, Rt. Hon. F. J.	Healey, Denis	Palmer, A. M. F.
Bence, C. R. (Dunbartonshire, E.)	Herbison, Miss M.	Pannell, Charles (Leeds, W.)
Benson, Sir George	Hewitson, Capt. M.	Pargiter, G. A.
Beswick, Frank	Hobson, C. R. (Keighley)	Parker, J.
Bevan, Rt. Hon. A. (Ebbw Vale)	Holman, P.	Parkin, B. T.
Blackburn, F.	Houghton, Douglas	Paton, John
Boardman, H.	Howell, Charles (Perry Barr)	Pearson, A.
Bonham Carter, Mark	Hoy, J. H.	Peart, T. F.
Bottomley, Rt. Hon. A. G.	Hughes, Cledwyn (Anglesey)	Pentland, N.
Bowden, H. W. (Leicester, S.W.)	Hughes, Emrys (S. Ayrshire)	Popplewell, E.
Bowen, E. R. (Cardigan)	Hughes, Hector (Aberdeen, N.)	Price, Philips (Gloucestershire, W.)
Bowles, F. G.	Hunter, A. E.	Probert, A. R.
Boyd, T. C.	Hynd, J. B. (Attercliffe)	Proctor, W. T.
Brockway, A. F.	Irvine, A. J. (Edge Hill)	Randall, H. E.
Broughton, Dr. A. D. D.	Isaacs, Rt. Hon. G. A.	Redhead, E. C.
Brown, Thomas (Ince)	Jay, Rt. Hon. D. P. T.	Reid, William
Burke, W. A.	Jeger, George (Goole)	Robens, Rt. Hon. A.
Burton, Miss F. E.	Jeger, Mrs. Lena(Holbn & St.Pncs,S.)	Roberts, Albert (Normanton)
Butler, Herbert (Hackney, C.)	Jenkins, Roy (Stechford)	Roberts, Goronwy (Caernarvon)
Butler, Mrs. Joyce (Wood Green)	Johnson, James (Rugby)	Robinson, Kenneth (St. Pancras, N.)
Callaghan, L. J.	Jones, Rt. Hon. A.Creech(Wakefield)	Rogers, George (Kensington, N.)
Castle, Mrs. B. A.	Jones, David (The Hartlepools)	Shin well, Rt. Hon. E.
Champion, A. J.	Jones, Elwyn (W. Ham, S.)	Silverman, Julius (Aston)
Chapman, W. D.	Jones, Jack (Rotherham)	Silverman, Sydney (Nelson)
Chetwynd, G. R.	Jones, J. Idwal (Wrexham)	Simmons, C. J. (Brierley Hill)
Clunie, J.	Jones, T. W. (Merioneth)	Slater, Mrs. H. (Stoke, N.)
Coldrick, W.	Kenyon, C.	Slater, J. (Sedgefield)
Collick, P. H. (Birkenhead)	Key, Rt. Hon. C. W.	Sorensen, R. W.
Collins, V. J. (Shoreditch & Finsbury)	King, Dr. H. M.	Soskice, Rt. Hon. Sir Frank
Corbet, Mrs. Freda	Lawson, G. M.	Sparks, J. A.
Cove, W. G.	Lee, Frederick (Newton)	Steele, T.
Craddock, George (Bradford, S.)	Lee, Miss Jennie (Cannock)	Stewart, Michael (Fulham)
Cronin, J. D.	Lever, Harold (Cheetham)	Stones, W. (Consett)
Crossman, R. H. S.	Lewis, Arthur	Strauss, Rt. Hon. George (Vauxhall)
Cullen, Mrs. A.	Lipton, Marcus	Stross,Dr.Barnett(Stoke-on-Trent,C.)
Darling, George (Hillsborough)	Logan, D. G.	Sylvester, G. O.
Davies,Rt.Hon.Clement(Montgomery)	Mabon, Dr. J. Dickson	Taylor, Bernard (Mansfield)
Davies, Ernest (Enfield, E.)	McAlister, Mrs. Mary	Taylor, John (West Lothian)
Davies, Stephen (Merthyr)	McGhee, H. G.	Thomas, George (Cardiff)
Deer, G.	McInnes, J.	Thornton, E.
Delargy, H. J.	McKay, John (Wallsend)	Timmons, J.
Diamond, John	McLeavy, Frank	Ungoed-Thomas, Sir Lynn
Donnelly, D. L.	MacPherson, Malcolm (Stirling)	Viant, S. P.
Dye, S.	Mahon, Simon	Wade, D. W.
Ede, Rt. Hon. J. C.	Mainwaring, W. H.	Watkins, T. E.
Edelman, M.	Mallalieu, E. L. (Brigg)	Weitzman, D.
Edwards, Rt. Hon. John (Brighouse)	Mallalieu, J. P. W. (Huddersfd, E.)	Wells, William (Walsall, N.)
Edwards, R. Hon. Ness (Caerphilly)	Mann, Mrs. Jean	West, D. G.
Edwards, Robert (Bilston)	Marquand, Rt. Hon. H. A.	Wheeldon, W. E.
Edwards, W. J. (Stepney)	Mason, Roy	White, Mrs. Eirene (E. Flint)
Evans, Edward (Lowestoft)	Mellish, R. J.	Willey, Frederick
Finch, H. J.	Messer, Sir F.	Williams, David (Neath)
Fletcher, Eric	Mitchison, G. R.	Williams, Rev. Llywelyn (Ab'tillery)
Fraser, Thomas (Hamilton)	Monslow, W.	Williams, Rt. Hon. T. (Don Valley)
Gaitskell, Rt. Hon. H. T. N.	Moody, A. S.	Wilson, Rt. Hon. Harold (Huyton)
Gibson, C. W.	Morris, Percy (Swansea, W.)	Winterbottom, Richard
Gordon Walker, Rt. Hon. P. C.	Morrison,Rt.Hn.Herbert(Lewis'm,S.)	Woodburn, Rt. Hon. A,
Grenfell, Rt. Hon. D. R.	Mort, D. L.	Woof, R. E.
Grey, C. F.	Moyle, A.	Yates, V. (Ladywood)
Griffiths, David (Rother Valley)	Mulley, F. W.	Zilliacus, K.
Griffiths, Rt. Hon. James (Llanelly)	Noel-Baker, Francis (Swindon)
Grimond, J.	Noel-Baker, Rt. Hon. P. (Derby, S.)	TELLERS FOR THE NOES:
		Mr. Short and Mr. J. T. Price.

Clause ordered to stand part of the Bill.