HC Deb 08 March 1963 vol 673 cc827-70

Order for Second Reading read.

11.6 a.m.

Mr. Rupert Speir (Hexham)

I beg to move, That the Bill be now read a Second time.

From its Title the Bill may appear to be somewhat dull and humdrum, but I think that the more hon. Members study it the more interesting they will find it. The Bill is a very mixed bag—a most miscellaneous of miscellaneous provisions Bills. The Press have already given it some nicknames. A "parish pump Bill" one paper called it. A "rag bag Bill" was another name. A "wasps to wells Bill" was said by a third paper. I call it a housemaid's Bill, because it tidies up so many loose ends in local government.

The Bill sets out to remove a great deal of red tape and to abolish much to-ing and fro-ing between local authorities and Government Departments in Whitehall. In short, the Bill should make local government a bit more local. The Bill applies to all kinds of local authorities, from the London County Council to parish councils. I do not think that anyone would deny that it would give councils a little more scope and provide them with a little more initiative and discretion.

I would add that that view is confirmed, I believe, by my hon. Friend's Department, the Ministry of Housing and Local Government, which has told me that if the Bill is accepted by the House—to use the exact words—it will cut out a mass of unproductive paper work both in local authorities themselves and in Whitehall. That view has also been expressed by the National Association of Parish Councils in a letter which I received from the secretary of that association. Wishing the Bill well, he said: Now that we have had an opportunity of examining the published version of your Bill I should like to say that we support it with pleasure because we believe it will do something to confer initiative on local authorities and will eliminate a large quantity of red tape. In other words, we would expect it to channel funds now consumed in procedural correspondence into useful fields of work and will, therefore, enable ratepayers to get better value for their money. This is not the first Private Member's Bill that I have had the privilege of sponsoring in the House. The other Measures, acceptable as they have been, in particular the Litter Act and the Noise Abatement Act, did, nevertheless, seek to impose restrictions on the public. They curbed people's liberty. I regretted that because, by and large, I should prefer to set people free. I am glad that, on the contrary, this Bill seeks to set people free—free to do certain reasonable, commonsense things which at present they are either not allowed to do at all, or else they have to obtain the Minister's special sanction before they can do them. It has been well and truly said that common sense is not very common. In fact, I think that it is all too rare.

I am glad to emphasise that the Bill lays no new duties on local authorities and gives no new powers over the public. I realise only too well that at present local government expenditure is undergoing rigorous scrutiny. The burden of the rates is very heavy, and as a ratepayer both in the north of England and in London I sympathise with the desire to keep rates down. I am, therefore, glad to be able to say—I understand that this is the view of the Ministry of Housing and Local Government—that for the most part the Bill will not involve extra expenditure by local authorities, and that where it makes some small extra expenditure possible adequate safeguards are provided to prevent misuse.

As will be readily apparent, the Bill is largely an amending Measure, and for this reason its wording is often somewhat complicated. Perhaps on this account I ought to give a rather more detailed account of the Clauses than would perhaps otherwise be reasonable on Second Reading. I suggest that Clauses 2, 5, 6 and 7 are the most important and useful ones, and I propose to say something about them.

In passing, I think I ought to warn hon. Members that Clause 1 is not the gay, spendthrift Clause which it might appear at first sight, nor is it a very novel one. It will authorise a local authority to pay expenses incurred by members attending conferences, but, by and large, it simply puts on a proper footing what is already being done by a roundabout and cumbersome procedure. Furthermore, the power given under the Clause will be controlled and curtailed very strictly by regulations made by the Minister. This will not only limit the amount of the allowances to be paid to people attending conferences, but will restrict the number of members allowed to go to any one conference. Again, I am advised that the Clause should involve little or no increase in expenditure and it will, in fact, save some administrative costs. Therefore, I think that hon. Members will agree that it would be quite unreasonable to label it as anything in the way of a squandermaniac's charter.

Clause 2 I regard as an eminently sensible one. It contains a provision which is long overdue. In fact, the Clause is designed to meet the very point which my hon. Friend the Member for Stroud (Mr. Kershaw) had in mind when, last Session and again earlier this Session, he introduced his Local Government Act, 1948 (Amendment) Bill. The point is that Section 136 of the Local Government Act, 1948, enables a local authority to contribute, with the Minister's consent, to bodies providing services for the benefit of its area or its inhabitants. But this useful power may at present be exercised only where the activities in question are carried out in the actual areas—that is, within the territory—of the local authority which wants to make the contribution.

It often happens that the organisation concerned, be it a voluntary body running a convalescent home or a local museum or an old people's workshop, is serving the needs of several local authorities, and in the case of, say, a market town situated in an urban district it may well be that it will be serving the interests and the welfare of many people living in the surrounding rural districts. Even if this is so, only the urban district may contribute as the premises concerned are situated in its territory. Rural districts would often like to contribute, but at present, as the law stands, they are unable to do so. The Clause simply removes this unreasonable limitation, and I hope that this will give pleasure and satisfaction to my hon. Friend the Member for Stroud.

I hope, too, that the House will think that Clause 5 is another reasonable, commonsense provision. It will allow local authorities a little more scope and a little more in the way of initiative. In fact, I hope it will get rid of a few local government cobwebs. It provides that a general power shall be given to local authorities to incur minor expenditure for the benefit of the area or its inhabitants. In case any hon. Member should think that this is, again, licensing squander-mania, I would emphasise that the expenditure for this purpose will be limited in the case of a parish council to one-fifth of a 1d. rate and to a 1d. rate for all other local authorities.

I suggest that this is a very modest figure when it is compared with the right of local authorities to subscribe up to a 6d. rate for supporting the arts of music and drama, a 3d. rate which health resorts may now spend on advertising their attractions, the 2d. rate which local authorities may spend for making good losses on allotments, or the 2d. rate which Scottish local authorities—the Bill refers only to England and Wales—have been allowed to spend for a far wider number of purposes for a long time past. If Aberdeen is allowed to spend up to a 2d. rate for these purposes, I do not see why places like Abingdon should not be allowed to spend up to a 1d. rate.

Nevertheless, seeing that this power to spend money is at the unfettered discretion of the local authority and it will not be necessary to obtain the Minister's consent, the Clause is made subject to certain very definite safeguards. In particular, I point out that the power may not be exercised to circumvent a refusal of ministerial consent, nor can it be used to avoid any other restriction under any other power.

For what purposes, then, could this power be used? The answer is that it could be used for purposes which I think every hon. Member will accept are desirable, but which at present, in certain cases, the Minister cannot even sanction. Examples would be the fencing off of dangerous places such as old wells or disused canals, the erection of warning signs, life-saving patrols or remedial work following floods and gales, or repairs to village war memorials and crosses. I am sure that the House will agree that there is nothing very reckless about this proposal, and that it really would be penny-wise and pound-foolish to refuse to allow local authorities to undertake these trivial but nevertheless, at times, very useful tasks.

Clause 6 deals with another and quite different suggestion, namely, that local authorities should be allowed to issue bonds. This is in addition to their rights of raising money by mortgage or by the issue of stock. Bonds are considered to be a convenient and popular method of borrowing. They can be issued, so to speak, across the counter by the local authority concerned. They are likely to attract local investors. Already, 150 local authorities have been authorised by special Acts to issue bonds. A recent example was the Derbyshire County Council, which succeeded in attracting £2¾ million in one month by the issue of such bonds. I understand that the Association of Municipal Corporations is keen for this power to be extended. The proposal is to extend it to all local authorities other than parish councils.

Mr. Ronald Bell (Buckinghamshire, South)

I am not sure whether I heard my hon. Friend correctly. Did he say that this power already existed for some local authorities?

Mr. Speir

Yes. It has already been obtained by 150 local authorities under special Acts and is working well. The right to issue these bonds is governed by conditions laid down in the First Schedule and will also be governed in greater detail by regulations laid down by the Minister.

Clause 7 is another Clause which could be helpful in the right circum- stances. It was a long Clause, partly because it is full of safeguards, and it must appear somewhat complicated. It only extends a power, which already exists in certain circumstances, for local authorities to suspend sinking funds for the repayment of loans in the case of undertakings which are revenue-producing. This qualification is important; the undertakings must be revenue-producing. In these cases, the suspension of a sinking fund is limited to a maximum of five years.

Clause 7 would extend the existing power of local authorities to other purposes to be specified by the Minister. In particular, I have in mind city centre development schemes, development schemes for urban clearance and renewal or development schemes for the reception of overspill. The Clause would enable the Minister to prescribe in regulations the exact purposes to which it should apply. Clearly, there would be no justification for suspending loan charges unless the scheme eventually was revenue-producing and profit-making. As I see it, the proper test in all cases is whether, after an initial un-remunerative period whilst the land is being cleared and the buildings, whatever they may be, are being erected, the expenditure can eventually be expected to yield revenue or to lead to a capital receipt by the sale of land.

As examples of the circumstances in which this power should be applied, I refer to the proposals that were made a few years ago for the redevelopment of the area in Cambridge known as the Lion Yard area. The scheme was dropped but I understand that the interest charges alone would have added 1s. 6d. to the rates for the City of Cambridge during the period when the scheme was producing no income.

My neighbouring City of Newcastle is merely one of the large corporations which has announced recently that permission to adopt a scheme of the kind outlined in the Clause would greatly help its central development and would enable work on it to start immediately. Councillor Fletcher, chairman of the Finance Committee of Newcastle Corporation, is reported in The Journal of 28th February as saying that a "loan with its moratorium would be a vital contribution towards the making of a more beautiful city and a big contribution towards helping the unemployed. I hope, therefore, that this proposal may commend itself to the House.

I need not detain the House by giving a detailed account of the effects of all the remaining Clauses. Clause 8, however, seeks to extend the use of capital funds to the education service. This is because the need for excluding them has disappeared with the absorption in 1959 of the education grant into the general grant. Clause 9 would authorise local authorities to apply unexpended balances of loans in ways for which, at present, they require the Minister's consent. In practice, however, this consent is invariably given fairly well automatically. This general consent would save time, typing, paper and general expenses both for the local authority and for my hon. Friend's Department.

Clause 10 would give a similar relaxation of control over the use of capital money received as a result of a boundary alteration. This provision will assume greater importance as the work of the Local Government Commission and of county reviews proceeds. Whilst there is no new provision for grant under the Bill, any increase in expenditure under its provisions would attract rate deficiency grant—that is, for those local authorities which are entitled to such grant. I think I am safe in saving, however, that the amount involved would be very small. This is covered by Clause 12.

That is about the long and the short of the Bill. I admit that I should like to have done a bit more tidying-up, amending and spring cleaning. In particular, I have a soft corner in my heart for parish councils and I should like to have done a little more to help them. One must, however, remember that parish councils vary very much in size, in quality and in other ways and that this is a Private Member's Bill with all the limitations that that entails.

To sum up, members of local authorities do an immense amount of unpaid voluntary work. For their labours, they receive all too little thanks and all too much ingratitude: in fact, they receive more kicks and criticism than Members of the House of Commons. It is my hope that the Bill will make life just a little easier for local authorities, for their councillors and for their officials.

I realise that the Bill is capable of misunderstanding and even of misrepresentation, but I do not think that any hon. Member could suggest that its provisions contain a great wind of change. I will be more than content if the Bill is allowed to generate a little gentle breeze which may disturb a few local government cobwebs and remove a little dust.

11.30 a.m.

Mr. Ronald Bell (Buckinghamshire, South)

I should like to start by congratulating my hon. Friend the Member for Hexham (Mr. Speir) on his continued good fortune in all sorts of ballots. He is indeed a fertile father of Bills and, what is more important, I find myself in general agreement with the legislative proposals which from time to time he puts forward. He now has a quite remarkable record in the bringing forward of Private Members' Bills and Motions. One remembers that the ancient Romans esteemed good luck to be one of the positive virtues. Certainly, upon that basis my hon. Friend is a very virtuous man.

I am sorry that my hon. Friend seems to be so alarmed by that phrase that he appears to be about to leave us. I do not propose to take an attitude to the Bill he has now put before us widely different from that which I have taken to those which he has put before us on previous occasions, but I should like to address to the House, for his comment later, some remarks of an interrogative character, and also to say a few words on the general import of the Bill.

As my hon. Friend will be the first to recognise, the Bill is a collection of various small points, small, that is, in their ambit, although each may be important in its own sphere. It therefore will be no reflection on my hon. Friend, and I think that it will plainly be not very far from the truth, if I suggest that a Ministry, the Ministry of Housing and Local Government, has had some knowledge of what my hon. Friend has in mind. The Bill's drafting is inevitably somewhat complicated, and it may be that my hon. Friend has had some help with that, too.

I also observe that the Bill will need a Money Resolution; that is to say, it will need money. Having read through the Bill carefully, I see no reference to the National Land Fund or the Wheat Fund, or any of those other admirable sources of money. I take no offence at that, but since my hon. Friend is not relying on funds of that kind, he is obviously hoping for collaboration from the Front Bench at a later stage.

All this in itself is either admirable or neutral, but it bears out the general comment which I want to make on the Bill—that one must look at it a little carefully, not in any attitude of hostility, but because it seems to have had a Departmental inspiration and to be designed to save a certain amount of work in the Department. This ties up well enough with the anxiety which we all feel to cut down on staff of public Departments and to cut down expenditure which can be avoided and generally to make more efficient and keep up the machine of Government.

When one is doing that, especially when one is doing it in a Bill which gathers together rather a large number of detailed proposals, it is especially the duty of Parliament to scrutinise the proposals carefully to see that none of the checks, none of the superior discretions which Parliament has deliberately written into previous legislation, is being dismantled solely in the interests of administrative convenience and perhaps without regard to the hesitations which influenced Parliament on the previous occasions.

For example, my hon. Friend referred to the consents of the Minister or Ministers—because more than one Ministry is sometimes concerned—as being granted pretty well automatically, which means that they are usually, but not always, granted. It is the rare occasions when they are not granted which are the justification for Parliament saying in previous Acts that such expenditure should not be incurred without the scrutiny of the Ministry. It may be that, with the passage of time and the change of circumstances, we ought to reconsider those things and say that the permission is withheld so extremely rarely and the consequences of an error in any case so relatively unimportant, that we should simplify the procedure and give local authorities an unsupervised discretion.

But we ought to look at that, and I am sure that my hon. Friend will not think it churlish of me or other hon. Members, if, either on Second Reading or later in Committee, we probe these matters carefully, because that is our duty on a purely detailed Bill of this kind.

After those preliminary and quite general remarks, I should like to say a few words about some of the Clauses. My hon. Friend dealt with Clause 1 a little briefly, saying only that this was no spendthrift Clause, but was only a way of doing directly what had previously been done by a somewhat roundabout procedure. I am not sure that the word "roundabout" is altogether happy in this context. We might be getting a little near to the truth of the matter when we say that visits to seaside conferences ought to be carefully watched.

One must not feel a spoilsport about this. People do a good deal of work in local authorities voluntarily and without any reward in the sense that councillors even more than Members of Parliament get kicks without hicks. Being a member of a local authority is a thankless job. I have had a small experience of it. Those who engage in the business of the central Government get a certain amount of esteem for what they do, which may or may not be deserved, but those engaged in local authority work are rather inclined to quarrel with their neighbours. The last thing one wants to do is to say that there shall be no perquisites to the work for local authorities.

Having said that, I must go on to say that I am a little worried about the frequency of these conferences and delegations and visits, and that this is something which we have to scrutinise. My hon. Friend said that it was all right because there would be some control by regulations. I should like to stop there and ask him whether that was not lifting the veil a little. Has he had an assurance about this? Has be been collaborating with a member of the Government in preparing the Bill? Was he foreshadowing something which the Parliamentary Secretary will tell us later?

Mr. Speir

There has been some collusion.

Mr. Bell

In words which will be familiar to the Parliamentary Secretary as to me, I hope that that collusion has stopped short of connivance and being accessory to. No doubt the Parliamentary Secretary will enlarge on that, because it is not really the kind of thing on which he can rely in framing legislation, or we can rely on it only to a modified extent. I think that I am right in saying that the regulation-making power is not in this Bill, but comes under other legislation.

Mr. Speir

As I understand, if the Clause were accepted new regulations would be laid by the Minister, but there are certain regulations in existence which limit members of councils going to conferences to 50s. a day subsistence allowance and travelling expenses, and provides that not more than two Members of any council should go to any one conference.

Mr. Bell

I am obliged to my hon. Friend. The point is that the power to make regulations is not contained in this Bill, but is in other legislation.

My hon. Friend has assured us that there will be control of the allowance paid to a member of a local authority going to one of these conferences, and control of the number of members going to such a conference. I think that broadly speaking that has been the position up to now. What is left, and the point I am on, is that there is not really any control of the number of conferences to which representatives of a local authority may go. I do not know whether this is going into the regulations. I do not think that this control exists at the moment. I can see considerable difficulties in trying to put something like this in regulations, but if we are to pass Clause 1, some thought must be given to their being some element of control somewhere as to the number of these operations.

These suspicions, if they may be suspicions, will be misplaced and unworthy in respect of most local authorities, but one has to legislate for everybody, and there can be abuses. I think that here and there, from time to time, there have been abuses of this business of the conference jaunt, and I am saying that if we are to short-circuit the existing method of going to the Minister and allow local authorities to do this direct and without his permission, we have to add a third element to the existing two elements of control.

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

The hon. Gentleman has referred to the conference jaunt and to some members of local authorities living fairly well at various seaside resorts at the expense of the ratepayer. I assure the hon. Gentleman that a maximum of 50s. a day does not allow for much high living. One of the limitations is the amount of money which the individual councillor is prepared to pay out of his own pocket to make it possible to do the job on 50 "bob" a day.

Mr. Bell

The hon. Gentleman must not exaggerate what I said. I hedged it round with the most careful qualifications and said that the majority of these cases are legitimate occasions, and there is no abuse of the procedure. But one has to legislate for everybody, and when dealing with public money and removing, which Clause 1 seeks to do, an existing control by cutting out the Minister, one has to look at the possibility of abuse which is opened up by the proposals here.

I think that either in regulations, or by some amendment to the Bill in Committee, we ought to turn our thoughts to these points. I do not want to carry this any further, and I do not want to exaggerate. Indeed, in opening what I said on this point, I was at pains to pay tribute to the amount of unpaid and somewhat thankless service which is given by members of local authorities.

I find Clause 2 interesting, because I am a little puzzled to know how this has worked in the past. For example, I am a member of the committee of a body called the Commons Open Spaces and Footpaths Preservation Society which does admirable work. It exercises its influence in the areas of most local authorities of a rural character, and even some urban districts, though perhaps not in towns.

This body has been, and still is, almost mainly supported by the subscriptions from local authorities. I listened carefully to what my hon. Friend said about Clause 2. It appeared to me, speaking from experience of the practical cases, that there seemed to exist some sort of discretion along the lines my hon. Friend is seeking to create. I do not know the answer to this. It may be that the Minister of Housing and Local Government has had, and still has, a special dispensing or enlarging power which he has exercised to enable this to go on, but as far as I can see this might be unnecessary.

It is certainly most desirable that this power should exist, otherwise one will get the most absurd anomalies, such as the one mentioned by my hon. Friend, of the old people's home serving both an urban district and the surrounding rural districts. I think that one wants all the authorities concerned to contribute, but perhaps my hon. Friend the Parliamentary Secretary will clear up the doubts I have expressed about this point, which I find puzzling at the moment.

My hon. Friend did not really say anything about Clause 3, but it should be mentioned that this is the one which allows a co-opted member of a committee or some emanation from a local authority to be treated for expense purposes as though he were an elected member. Again, I have no objection on principle to this. I assume, however, that it will be subject to some scrutiny on the part of the Minister. I hope so because, I think that it should be. There must be some limit to it.

Mr. Speir

There is a limit. The person concerned has to be a co-opted member of the committee. This is very useful in the case of members of education or welfare committees, and for doctors and people like that.

Mr. Bell

The Clause refers only to co-opted members of committees, but it would be open to unlimited abuse if there were no scrutiny of it.

Perhaps my hon. Friend can tell me why there should be a special exclusion of Clause 3 from the discretion which otherwise exists to apply the provisions of the Bill to the Scilly Isles. What is special in the Scilly Isles about co-opted members of local authority committees? This is a fascinating point which may have small practical importance, but it is one which my hon. Friend might like to clear up. I hope that he knows the answer.

Mr. Speir

I did once.

Mr. Bell

The next material Clause is Clause 5. I had doubts about this, but my hon. Friend's speech has been very helpful. At first, I could not understand the purposes for which this power might be exercised, because the Clause excludes any purpose for which the local authority is authorised by any other Statute—either unconditionally or subject to any limitation—to contribute money. It is difficult to see what this purpose could be. It cannot refer to the payment of subscriptions to outside bodies, because when the Bill is passed that will be authorised under Clause 2.

This Clause seems to have a very limited scope. My only passing comment is that the words "a local authority" give the Clause a somewhat varying significance. A county council already has such wide statutory powers that the Clause would appear to have very little application to it. A rural or urban district council which comes lower in the scale and has fewer statutory powers would seem to profit much more from the Clause.

I do not know whether the Clause applies to parish councils, although I suppose that it does. If so, it will be a very wide enabling Clause, because it will allow such a council to spend the product of 1d. rate—

Mr. Speir

One-fifth of 1d. rate.

Mr. Bell

I am sorry—one-fifth of 1d. rate on any matter in respect of which it is at present not entitled to spend money.

Mr. Speir

With some safeguards.

Mr. Bell

Yes—with some safeguards. I do not quarrel with that, but the practical effect is one which we can hardly work out in a Second Reading debate. It may become clearer in Committee. But its practical effect is obviously totally different as between a county council, a rural district council and a parish council. It is not very easy to evaluate the differences at this stage.

We must bear in mind the fact that the product of 1d. rate, on which this calculation is based, is a very variable sum, and also that it is about to be trebled. What now appears to be a fairly modest provision will become a very substantial one after April next—a fact which I hope my hon. Friend had in mind in drafting the provision, and one which we must certainly have in mind in Committee.

I am a little worried about Clause 6. I give due weight to what my hon. Friend said as to there being 150 special Acts allowing bonds to be issued. I should like to know whether these are to be bearer bonds or named bonds. My hon. Friend spoke of their sale over the counter. That implies that they are to be bearer bonds. Up to now, regrettably, bearer securities have been subject to the most stringent control under our exchange control legislation, and if a general authority is to be given to local authorities to issue bearer bonds I should like to know how this provision will be co-ordinated and made consistent with the general national policy regarding securities of this character. I put that point forward so that my hon. Friend the Member for Hexham or the Minister will have an opportunity of dealing with it.

It is a major point. If my hon. Friend does not have in mind bearer bonds when he talks of sales over the counter the problem does not arise, but if he does, the matter cannot be dealt with by a Clause in a Bill of this nature, concerning local authorities. This provision could be of rather wide import and I hope that my hon. Friend will see that we are further informed about it.

Clause 7 worries me more than any other. It gives power to suspend sinking funds and to borrow to pay interest. It is true that this power is limited to what are called projects of a "revenue-producing character". I do not see the relevance of the phrase "revenue-producing character" in this context, although there may be one. I cannot see any lesser moral failure in not being able to pay for the time being the interest on something of a revenue-producing character than the interest on something which is not of a revenue-producing character. Perhaps this point will also be cleared up later.

On the surface, there appears to be a valid distinction. It appears to be considered legitimate to borrow to pay the interest on a loan obtained for the purpose of a project which is of a revenue-producing character, or to suspend the sinking fund to do so, but if we look into the question more deeply we begin to see that the phrase "revenue-producing character" is an irrelevance in this case. That is my opinion, as at present advised.

Mr. Speir

Advised by whom?

Mr. Bell

By myself. What better or closer adviser can one have than oneself?

Mr. Anthony Kershaw (Stroud)

And it is cheaper, too.

Mr. Bell

It is only when I am advising myself that that applies.

The principle of borrowing to pay interest is not one that I find very attractive. Here a considerable gulf is fixed between local authority practice and national government practice. It has long been the practice of Her Majesty's Government not to borrow in peacetime for expenditure, whether capital or current. That is absolutely right. The Government sometimes borrow for other people, but not for themselves—except day to day, through Treasury Bills. It is one of the principles upon which we conduct our national accounts that the Government pay for everything out of current revenue. That is right, because the distinction between capital and current expenditure is largely a vulgar error, except in relation to trusts. It is all expenditure.

That principle should also apply in the case of a large local authority. I represent the constituency of South Buckinghamshire. I am glad to say that, for a long time, the Bucks County Council has worked on the principle of meeting its expenses, whether of what is called a capital character or a current character, out of revenue, year by year. If that means raising the rates, why should they not be raised? Year by year, over a period, this makes sense, and it avoids all interest charges. I am sorry to say that this year the council has decided to abandon that practice.

I can appreciate that a smaller authority will be less able to average out the burden from year to year. In its case there is some excuse for borrowing when an exceptionally heavy expenditure has been incurred and the council wants to spread the burden out over a period of years. But that is an operation which should be engaged in sparingly. It should not be the practice of any local authority to be borrowing all the time—on every occasion that it has to incur some fairly substantial capital expenditure. On the whole, these matters average out year by year. It is one thing in one year and another in the next, and it is normally bad practice to proceed by raising money and paying it off over twenty years with interest.

It is a further step beyond that to start borrowing to pay the interest on the loan which has been obtained to carry something out. Anything can be justified, I suppose, in some special circumstances, but I am not very happy about Clause 7, which seems to make this a respectable proposition. But I do not know about that and I would welcome help on it from the Parliamentary Secretary.

If there is taking place a town redevelopment scheme which might involve a rather heavy capital expenditure for what is at the time a not very large authority, one might want to raise money and not pay interest on it for the first few years, until the new ratepayers move in. I can understand that. Is there any difficulty, in fact, in borrowing for town redevelopment the amount of money which is necessary to carry it out and finance it for the first three or four years?

It may be said that I am now advocating something which is not very different in character from what is proposed in Clause 7, that is to say, raising initially a capital sum which will finance the interest on the previous loan for the first few years. But the shape in which things are done is not without its importance, and I must confess to a considerable reluctance to a local authority raising a loan to carry out a town centre development and, a year or two later, raising a new loan to pay the interest on the previous loan over a period of years.

I think that on procedural grounds, which here come very close to principles, this is something which we should not encourage local authorities to do. If the Parliamentary Secretary says that under existing legislation concerning local government loans we cannot allow a local authority to leave a margin in its primary loan for a thing like this, then I suppose that one cannot very strongly resist Clause 7, but, as at present advised, by myself, I have these doubts about it.

As to the revenue-producing point, I said earlier that I thought it logically irrelevant. It does not apply, for example, to town centre redevelopment, generally speaking, because I am sure that the words "revenue producing" are not being used here in the sense that ratepayers would be moving in to the development and would join the band of those who pay rates.

Mr. Speir


Mr. Bell

In respect of rents I can understand it, but—I shall be glad to have confirmation on this from the Parliamentary Secretary—it cannot include the prospect of rates being paid. That cannot be part of the meaning of "revenue producing."

Mr. Speir

Or a capital sale.

Mr. Bell

A capital sale and rents certainly, but not the prospect of increased rateable value, which cannot be treated, in my confidant view, as revenue producing, and, therefore, one is thrust back to a very much more normal commercial view of what is revenue producing. That, of course, can be a matter of opinion. What is the criterion to be here?

The words in the Bill relate to a "revenue-producing" development. In the nature of things, I suppose that cannot mean one which is producing revenue at the time, because if that were so there would be not much justification for the power in Clause 7. If it is one of which there is a prospect that it will become revenue producing, then, first, I think, that has to go into the Bill. It is a drafting point and a matter of argument perhaps, but it has to be defined somehow.

Secondly, someone—I suppose that it would be the Minister—would have to exercise a second judgment on this, because one has known of schemes promoted by local authorities, and even by Governments in the past, which were described in the most glowing terms as prospectively revenue producing, but which did not turn out to be so by any means in the end. I do not think that any local authority will embark on the growing of groundnuts in East Africa. That might be outside its scope, but that is not a bad illustration of how something which may be considered to become revenue producing can come badly unstuck.

I am sorry to have made my speech rather a catalogue of points of difficulty, but I am sure that my hon. Friend will appreciate that I am not showing any hostility to his Bill. He has put forward a Bill which is a collection of individual proposals to reform the existing law of local government, each of which is really quite disconnected and separate from all the others. By their detailed character they invite interrogation and scrutiny, and I suppose that in that respect his Bill might be described as one for Committee rather than Second Reading. There are not many questions on general principle that a rise.

In general, I congratulate my hon. Friend on bringing the Bill forward. I am sure that it will be a very useful Bill and I can promise him my help and, I am sure, the enthusiastic help of many hon. Members on both sides of the House in getting busy on his Bill in Committee, changing it almost beyond recognition and making it an even more useful and commendable proposal than it is at present.

12.8 p m.

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

I was wondering which of the other eight Bills on the Order Paper the hon. Member for Buckinghamshire, South (Mr. Ronald Bell) was speaking against. He has made a number of useful comments on this Bill. I should like to add my congratulations to those of the hon. Member for Buckinghamshire, South to the hon. Member for Hexham (Mr. Speir) for bringing forward a Bill of this nature which, in my view, in so far as a Private Member's Bill on this issue can be, will be of considerable use to local authorities of all kinds.

The Bill could clear up quite a number of points which have been worrying some of the local authority associations for many years, and also help from an administrative point of view. I welcome the proposals in the Bill. I can think of one or two points upon which hon. Members might like further elucidation and there are some additions and minor changes which might be suggested during the Committee stage discussions. But, in general, I welcome the Bill and hope that the House will give it a Second Reading.

I was a little concerned at the way in which the hon. Member for Buckinghamshire, South was advancing his arguments about Clause 1. I got the impression that the hon. Gentleman was of theview—no matter what he said about the hard workers, and the kicks and no ha'pence received by individual members of a local authority—that some sort of check should be applied to make sure that local councillors, having discussed local problems in the town hall for a long period, might not spend time discussing the same matters again in conference at a seaside resort—with a resulting waste of considerable sums of the ratepayers' money—and therefore we should look closely at the matter.

It is argued that if the check that the consent of the Minister has to be obtained before delegates may be sent to conferences is removed, it should be replaced by other checks. There are already further checks in existence. For county councils, a vast majority of district councils, and, unfortunately, a growing number of borough councils, the position is that the accounts are subject to a district audit. If a district auditor considered that a council was spending an excessive amount of money in sending too many representatives to conferences or sending representatives to conferences on matters which he considered outside the normal work of the authority, he would have no hesitation in drawing the attention of the council to his point of view. It would be rather unwise on the part of any local authority to persist in that practice, and involve itself in excessive expenditure of that nature, after such an indication from the auditor.

There is a further check that every penny paid by a local authority, whether in respect of travelling expenses, subsistence expenditure or anything else, must be entered in a special book by the clerk of the authority, and the book is available for examination. During the normal office hours any ratepayer may visit the offices of the clerk, or the treasurer's department, or whereever the book may be kept, and demand to inspect it. That is possible under the appropriate provision of the Local Government Act, 1948. In this way a ratepayer can see exactly how much money has been expended and the way in which the expenditure has been occurred. Members of local authorities must remember that this book is bound to be examined. I think that it would be helpful if more people took advantage of this opportunity to look at these books. If they did, the occasional unfortunate episode which occurs when a district auditor has to draw attention to claims made by some person would be less likely to happen, although it is right to say that such things do not happen often.

There is also a check in the sense that the membership of a local authority may be anything from about 12 to 140, and surely it would be very seldom, if ever, that a local authority which was spending money wrongfully, or was spending a lot of money on sending representatives to conferences, would continue to do so without some of the councillors kicking up a public row about it. One cannot accept the idea that even a small council would be able to get away with such a course of conduct for very long without some objection being made and questions being asked. I would go further and say that if there were a council which spent large sums of money and no one raised any question about it the electors could eventually alter the membership of their local authority if they were not satisfied.

Mr. Ronald Bell

Does the hon. Member think there would be any objection by the councillors if the visits to conferences were being shared out fairly among them?

Mr. Reynolds

That is possible, and that is why I say that I think that, were it the case, the area would have the type of local authority it deserved. But in the last resort there is the check exercised by the ratepayers, at least every three years, and so I feel that there are adequate checks and safeguards in this respect.

We trust the elected members of local authorities to spend millions of pounds, on behalf of the ratepayers, on education; on running one-third of the National Health Service; in the provision of well over 2 million houses which have been provided since the end of the war—one could go through the whole range of local authority services involving the expenditure of about £1,600 million every year, and a large amount of capital expenditure as well. That is done with the normal checks and surely those checks are adequate to deal with the comparatively trivial amounts spent on sending a few people to conferences which take place at some of our seaside resorts in the early spring and the late autumn. No one is able to attend a conference at the end of June or July, or over the August Bank Holiday period. The conferences are usually held from Tuesday to Thursday, or Friday, during the colder periods of the early spring and late autumn.

I am in complete agreement with the provisions in Clause 2 about which I do not intend to speak because I notice there is present on the benches opposite another hon. Member who tried during the last Session to promote a Bill of this nature; and no doubt he will have something to say on the subject.

The provision allowing local authorities to issue bonds will, I understand, extend to all local authorities the power which is possessed by many authorities already under the provisions of local Acts. In fact there is a model Clause in existence which may be used by any local authority desirous of using this power. The Clause can be inserted into a local Act. It has appeared about 160 times in legislation approved by this House and so I do not think that it would be questioned. If such power has been secured by means of a model Clause by at least 10 or 15 per cent. of the local authorities, I think that there is a great deal to be said for putting the matter in order and enabling other authorities who desire to do so to make use of that power.

I cannot believe that a large number of authorities would make use of this power. There exist other means of raising money which, in the long run, would prove to be cheaper and more effective; and they might be used by councils for raising money for capital purposes instead of the method of issuing a large number of bonds of what might well be a comparatively small value. While there is money available on the mortgage market in sums from £5,000 upwards at a reasonable rate of interest, that will be taken advantage of by most local authorities under present Government policy. But there may be some local authorities which could use this method with advantage and I believe that they should be given the opportunity to do so.

Clause 7 refers to matters which have caused a considerable amount of discussion in local authority circles in the last few years. Its provisions would apply to a local authority with a revenue producing asset—I agree with the point of view of the hon. Member for Buckinghamshire. South on this matter that rate income itself could not be considered a revenue producing asset. The real trouble arises when a central area of redevelopment or a large scheme of one kind or another—multi-storey flats for example—includes commercial and other property being put up by the local authority as part of a large general scheme. The authority has to borrow huge sums of money for the purchase of land and to carry out the demolition of existing property. These sums may run into millions of pounds, and from the day they are borrowed the interest charges have to be paid and under the present circumstances provision must be made for the repayment of the capital sum.

A council may have to bear the interest charges and the redemption of the capital sum for any period up to three or four years before the occupation of the new premises—be they offices, shops, blocks of flats or supermarket, or whatever form of property is provided. There is no income from this property during that time, and so the authority must carry the cost by levying a rate on the inhabitants of the area who will benefit eventually from the development. This is not the way in which the commercial developer operates. He borrows the money in some way or other. I am convinced that, in circumstances of this kind, if the commercial developer has found it convenient to operate in that way, almost certainly it is the best way; and I see no reason why local authorities should not be given freedom to secure money in that way.

The Acton Borough Council, of which I am a member, recently purchased a tam factory—or perhaps I should describe it as a preserve factory—formerly owned by the Co-operative Wholesale Society. People are not eating so much bread and jam in these days, and so the factory was no longer required. The council purchased it for £460,000. I should like to congratulate the Ministry, because we received loan sanction three weeks after the application was submitted. That is the shortest period that I can ever remember elapsing before such sanction was received, especially in respect of a loan for land costing £133,000 an acre for housing purposes. Having received the loan sanction and having paid £460,000 for the property, the council found itself in possession of an empty factory soon to be demolished.

It will be at least two-and-a-half years before the first of the 100-odd flats is erected. In the meantime, the people of Acton have to find £32,000 a year by way of interest and debt charges needed to purchase the site. Next year the charge will be even greater because we shall have to pay interest charges and redemption on the money for the contractors. Probably it will be £45,000, which will be completely unremunerative debt charges on which no income will come to the local authority. The income in future will come from rates and the magnificent annual subsidy from the Exchequer amounting to £200 per flat, so the income can include, not only rents, but large Government subsidies paid to the local authority.

A penny rate in the Borough of Acton in a few weeks' time will produce £27,200, a very substantial sum of money. At present sums of this magnitude have to be found for interest on capital which has been borrowed for central area redevelopment and large housing schemes. In certain circumstances it is exceedingly difficult for local authorities to carry out central area redevelopment. This Clause will make it easier for them and it will give them some advantages which at present are enjoyed by commercial developers. If the commercial developer can do it in this way, I am convinced that the local authority should also be allowed to do it.

I welcome the general provisions of the Bill and I hope that the House will give it a Second Reading. There are one or two points I should like to look at in Committee, but on the whole I think that in a number of small ways it will be of advantage to local authorities of all kinds.

12.21 p.m.

Mr. Anthony Kershaw (Stroud)

I, also, welcome this Bill and hope that it will get a good passage through the House, in particular because, as my hon. Friend the Member for Hexham (Mr. Speir) was kind enough to say, I had—and I still have—a small Bill on the stocks dealing with the same point as is dealt with in Clause 2 of this Bill.

My Bill was introduced last Session and was wandering happily through the jungles of our procedure when it was accidentally shot down by an hon. Friend who thought that he was objecting to the Deer (England and Wales) Bill, which is second on the Orders of the Day for today. My Bill has been revised and again stands on the Order Paper. As the hon. Member for Islington, North (Mr. Reynolds) was kind enough to mention, he is one of its supporters, as, also, is the hon. Member for Hayes and Harlington (Mr. Skeffington), who was present in the Chamber a short time ago.

I feel that I owe to the House a short explanation that I do not think that it will be necessary to go further with that Bill, the Local Government Act, 1948 (Amendment) Bill, because of the provisions of Clause 2 in the Bill which is before the House at present. The object of my Bill is also to cover the subject in Clause 2 of the Bill now before the House and to make it possible for a contribution to be made from one local authority to an enterprise carried on in the geographical area of another authority. Stroud Rural District Council wished to contribute to a blind workshop which was in the Stroud Urban District Council area and such a provision would have made that possible.

I think that that is the answer to my hon. Friend the Member for Buckinghamshire, South (Mr. Ronald Bell), who asked why these contributions had not been possible before. The contributions he had in mind were in respect of an organisation, of which he is a distinguished ornament, whose members ramble in South Buckinghamshire. The local authority is able to contribute to that organisation, although part of its activities are carried on outside the local authority's territory.

Mr. Ronald Bell

It is not the Ramblers' Society, a very admirable society though that is, but the Commons, Open Spaces and Footpaths Preservation Society. That does not ramble. As to activity, I rather wonder how a footpath can be active in a local authority area. That is my philosophical doubt in this matter.

Mr. Kershaw

I am grateful to my hon. Friend for correcting me. I think that his organisation should become active in my constituency, where there are many commons and open spaces, and the problem of avoiding animals on Minchinhampton Common is a real one. This is a serious question, and any expertise and organisation which my hon. Friend can bring to the matter will be warmly welcomed.

The Clause which interests me is Clause 6, which gives power to a local authority to borrow by means of bonds. If the principle is that local authorities, without having to pass a local Act as hitherto, can raise money from their local ratepayers or whoever is interested, and if this is brought into full force by regulations which allow full range to this possibility, I foresee rather interesting developments.

To raise this money the objective will have to be one which will arouse the enthusiasm of local people. There will have to be something which is obviously for the public good and which people feel able to support. I dare say that this power could do a great deal for civic pride and the achievements of local authorities if it could be exercised in a fair and liberal way.

I wonder how far it would be possible to do really interesting things with these bonds. The obvious thing which occurs to one is the question of public halls and local amenities which could be built, financed, or improved as things which everyone in the locality uses. Invariably, in various areas there are features which, perhaps, have an historic interest, but have fallen into disuse. Canals are very expensive to clear or to block up, as the case may be. Local enthusiasm runs high on these matters, as I know in Stroud, where the fate of the Stroud Canal has caused great anxiety and perturbation from time to time.

Would this provision include the raising of money to undertake such works of local amenity? Would it go further? Every authority, not least the one in my area, is anxious about the provision of schools. Some have schools on which a certain amount of money has been raised by private subscription, but which await the approval and a large contribution from the Minister of Education before the work can be started. Will it be possible for a local authority to issue bonds for the erection of schools in its area? I should not have thought that beyond the financial possibilities of such a scheme.

In Stroud, there is a Roman Catholic school which needs £50,000 more than the money which its supporters have at their disposal. It a large and important school which is needed in the district. Would it be possible for the local authority to sponsor the issue of bonds to raise the extra money? Then the project could start straight away. A Church of England school has for some years accumulated an important sum of money and the authorities are very anxious to start the building. I refer to the Tetbury Church of England Primary School. They have a site and a lot of the money, but they have not yet received the consent of the Minister to put the matter in hand because he has yet to supply a large amount of money for the project.

I do not rule out the possibility, either by the sponsorship of the diocesan council or the local authority in that area, of raising enough money to complete that school. Would that be allowed? If so, it would introduce interesting possibilities.

There is not only the question of ordinary schools. In most towns there is an art school and museums which are insufficiently endowed and whose curators are insufficently paid. Would it be possible to issue bonds to raise money for these purposes?

Many towns are most anxious to rebuild their centres, which are choked with traffic, old-fashioned and obviously need rebuilding.

Mr. Ronald Bell

Before my hon. Friend leaves the point of this centre—a purpose for which I can imagine bonds being useful—I hope that he is not suggesting that this would be a reasonable or proper way of going about local government financing, for example, raising bonds for building schools. That is an ordinary recurrent expenditure which ought to be borne out of the rates year by year and not by raising loans. I am sure that my hon. Friend agrees.

Mr. Kershaw

I do not know that there is any rule of principle which ought to be called in here. How the money is raised to build a school which is badly needed is a matter, surely, of financial arrangement, and there is no question of great principle whether the money should come from the rates or from any other funds. I was asking whether money can be raised, under the regulations to be made by the Minister, for such a purpose. Is that the sort of purpose which the regulations will be designed to make possible?

If so, it raises very interesting possibilities. I have in mind not so much schools which are entirely publicly maintained, in respect of which I agree with my hon. Friend the Member for Buckinghamshire, South. It would be difficult to finance a publicly maintained school by means of private subscriptions. I had in mind schools which have already had some elements of private contribution towards them, such as denominational schools which are, as we all know, anxious to press ahead with their plans.

I was referring to the replanning of town centres. This is a matter which encourages civic pride in every town which has had the forethought to prepare plans, and I suppose that in every case the implementation of the plans is being held up, or the plans are having to be put into operation only bit by bit, because of financial stringency. If the citizens of any area decide that they want to get on with replanning the civic centre, will it be possible under the regulations for the necessary money to be raised by bonds? A local authority can make much quicker progress in that way than by proceeding step by step.

Will the regulations permit a general power, such as exists in American cities, to provide sums to beautify towns generally? I suppose that, like all financial administration, this needs to be well controlled. Will these bonds be issued for the greater prosperity, happiness and glory of the town concerned, or will they be specifically related to a project which is put before the ratepayers when the bonds are sold?

It is certain that it will be necessary to encourage the local enthusiasm of citizens in order to sell these bonds. I have made this point already, but I make it again to emphasise that the size and character of local organisation will be very important. As the hon. Member for Islington, North said, we are not very likely to see county councils using this method of raising money. It is very unlikely that all the citizens of a county would consider that their interests were sufficiently engaged that they wished to contribute to one objective. Perhaps a bridge across an estuary, or some such project, would involve the interests of a number of local authorities, and it is unlikely that any one local authority would be willing to contribute towards that sort of project.

Mr. Speir

Derbyshire has already done it and has raised £2¾ million.

Mr. Kershaw

The point which I make is that, in general, it will be necessary that local citizens should have enthusiasm for the project which is put before them. If they are to have enthusiasm, then I feel that smaller local authorities are much more able to encourage this enthusiasm among their ratepayers than are large local authorities. To carry the matter to an extreme to illustrate the point, it is unlikely that the London County Council could find so many supporters of a single project that it would wish to undertake the project by private financing. On the other hand, a smaller and possibly rather isolated authority with responsibility only for one market town would find it not at all difficult to encourage the enthusiasm of its ratepayers in a project to improve the market place, or the centre of the town, or to beautify the town hall.

The size of the local authority in the future is, therefore, very important to this Clause, and in my opinion the smaller local authorities ought to be preserved, for they would have a greater opportunity of taking advantage of this Clause than would the much large authorities. That is only one reason why I believe that smaller local authorities in the country ought not to be submerged by being merged into larger authorities.

The Bill has the general support of hon. Members who have spoken. I have this morning received a letter from the County Councils' Association, which also supports the Bill. I am confident that local authorities generally in the country will feel that it gives a greater elasticity to local government and that it will enable them to undertake work which hitherto they have wanted to do, but could not do. I very much hope that the House will give the Bill a Second Reading.

12.37 p.m.

Mr. Michael Stewart (Fulham)

I congratulate the hon. Member for Hexham (Mr. Speir) on his Bill. It deserved, I think, a welcome a little less pernickety and cantankerous than that which was given it by the hon. Member for Buckinghamshire, South (Mr. Ronald Bell).

Mr. Ronald Bell

Pernickety, perhaps, but not cantankerous.

Mr. Stewart

That is a matter of judgment. In any case, it was pernickety.

The hon. Member for Hexham said that it was not a Bill which would involve local authorities in greater expenditure. That is true. But undoubtedly he will agree that it is a Bill which would empower them to some extent to engage in greater expenditure, and it might indicate a certain degree of courage on his part to put forward a Bill of this kind at this juncture. But I do not regard that as a condemnation of a Bill which gives local authorities in certain directions greater powers to spend than they have at present.

Against this one must set the small but not insignificant point that the Bill will save both local and central government a certain amount of unnecessary time and expenditure on correspondence spending 6d. in order to make sure that 3d. is not improperly spent. Whenever we can do that it is an advantage.

But there is a larger issue involved which comes out, I think, when one compares the differing views expressed by the hon. Member for Buckinghamshire, South and my hon. Friend the Member for Islington, North (Mr. Reynolds) about councillors going to conferences. I suppose that we could imagine a council which set to work to use its enlarged powers under the Bill to see that every councillor went to as many conferences as possible, though I am bound to say that attending the jubilee conference of, say, the Public Cleansing Institution would not be my idea of Sybaritic enjoyment. One can imagine a council doing that, but such imagination bears very little relation to what, in fact, happens or is likely to happen.

I would point out that there are two main ways of preventing improper or extravagant expenditure by local authorities. One is restrictions imposed by Statute and enforced by the Minister or by the mechanism of audit. The other is the operation of public opinion in the locality. It is much healthier to rely on the latter wherever we can. If we take the view that it is our business in the House constantly to devise safeguards to ensure that no local authority could ever be extravagant, then the public in the localities will feel, when it comes to local elections, that there is nothing much for them to do about it.

I would rather see the powers which the Minister has over local authority expenditure relaxed somewhat, so that increasingly the public in the locality may say whether they want the rates spent, for example, on repairing the war memorial or any of the other purposes which has been mentioned. If councillors are attending conferences with what some ratepayers consider to be excessive frequency, we need not fear that that fact will escape comment in the local paper or in local conversations. The behaviour of councillors is usually subject to much more bitter and much sharper scrutiny than the behaviour of Members of Parliament.

Therefore, I welcome Clauses 1 and 2, which clear away certain unnecessary restrictions. However, there is one point about Clause 1 which I should like the promoter to consider in Committee. In page 2, line 5, there is this phrase: a body of which the objects are wholly or partly political". Is there already any legal definition of what these words in a Statute mean? Is the Association of Municipal Corporations a body whose— objects are wholly or partly political I should have thought that in the correct use of the word "political" it is. It discusses matters which are political in the proper sense of the word. More- over, it expresses policies from time to time.

Not long ago, the Association expressed views on the London Government Bill which were agreeable to the present Government. If the Association had expressed views hostile to the present Government, everybody would have said indignantly, "But this is party politics". Since the Association has agreed with the present Government, comment of that kind has not been so sharp. I do not object to a body like that expressing views on policy, but I should have thought that that makes it a body whose objects in the ordinary sense of the word are partly political.

I should have said that the same is true of the Town and Country Planning Association. Nobody would conceivably describe that as a partisan body, but it is a body which considers public affairs and from time to time makes statements expressing the view that this course rather than that should be pursued. That is the proper meaning in the English language of the word "political". Action of that kind is political action, but it is not bodies of that type which the hon. Member for Hexham wants to rule out. He wants to rule out bodies which can definitely be said to be partisan, which not only express views from time to time on certain subjects, but which pursue a coherent and consistent line of policy allied with one particular philosophy rather than another. I think that the word "partisan" rather than "political" is what is wanted, but the point needs to be examined in Committee.

Mr. Ronald Bell

I am glad that the hon. Gentleman has raised this point, because I wanted to raise it in my speech but thought that I had talked for long enough. Would not the hon. Gentleman agree that even the word "partisan" will not do, because "partisan" does not apply only to political parties? The Town and Country Planning Association is a propagandist body. It is a political body. It is partisan in the sense that it is designed to advance a particular point of view. Would not the hon. Gentleman agree with me, therefore, that what my hon. Friend the Member for Hexham (Mr. Speir) very properly has in mind is an objective which simply cannot be attained by the drafting of an Act of Parliament?

Mr. Stewart

I am not sure about that. The Workers' Educational Association describes itself on its notepaper as "non-party political". It would be absurd for such a body to describe itself as non-political, but the phrase "nonparty political" describes it very well. I do not know whether that will stand up to Parliamentary draftsmanship. However, this point can be left until we are in Committee. I am not happy about the present wording.

I turn to Clause 5. Nobody need fear extravagant expenditure under this head, because the objects for which this new power can be used are stringently limited. There cannot, if I understand it rightly, be any object on which a council today either must or may spend money. Councils have to find fresh fields all the time. The hon. Member for Buckinghamshire, South was a little worried about this Clause, because he thought it would mean more to a parish council than to a county council.

Mr. Ronald Bell

I am sorry to interrupt the hon. Gentleman again. I was not so much worried about it. I explained the difficulty of assessing it, except after fairly prolonged examination, because it obviously means three wholly different things according to whether a county, a rural district or a parish is being dealt with. I am not worried about it. I merely find it a little difficult to assess it.

Mr. Stewart

Similarly, when the Bill to abolish slavery in the British Dominions was introduced in the House of Commons, many years ago, its effect was very different on people who were slaves than on people who were already free. That is really the nature of the hon. Gentleman's point. He pointed out that some councils already have powers so wide that this will give them nothing. Others have powers so limited that this will give them a little more. This is in the nature of every liberating measure. Even when all the evaluation has been done, it will be quite clear at the end that there is not the slightest danger of local authorities being enabled to engage in extravagant or foolish expenditure as a result of the Clause.

Clause 6 embodies a principle which I should like to see very generally followed. If there is any power which certain local authorities have had for some time by virtue of local Acts and experience has shown that this power has been used by the local authority to the public advantage and to the satisfaction of its citizens, one should normally conclude that it would be a good thing to make that power a general power of local authorities. I am always in favour, wherever possible, of increasing local powers. Where there is the lesson of experience to draw on and when it can be said explicitly that it is a power which exists and has been widely used in certain cases, the burden of proof is on those who say that it ought not to be extended.

I am not sure that I altogether followed the argument of the hon. Member for Stroud (Mr. Kershaw) on this Clause. As I understand it, there is nothing in the Clause which would enable a local authority to do by means of loan anything which it cannot at present do by means of loan. Whether it were going to build a school or anything else, if the project today requires loan sanction it will still require loan sanction when the Clause is law. The only thing the Clause gives the authority is a different way of raising the money. Nor would it always occur that the bonds would be used for a specific project. I think that could be done, but as I understand it this could be used simply as an alternative to raising the money in more orthodox ways.

I suppose a local authority could, if it wished, when it was going to put out a bond issue, say to the public, "One of the reasons why we need to borrow money at all is A, B or C," and then list the things. That would mean something, clearly and patently, to the citizens. I remember once having explained to me the way in which new schools are built in the city of New Orleans. The authorities begin by having a referendum of the ratepayers to ascertain whether the local school board should be allowed to raise a loan for the purpose of building a school. In that referendum there are varying numbers of votes for the citizens according to the amount of rateable property they own. It is up to the local teachers' association to conduct propaganda during the referendum to persuade citizens to vote, "Yes". If the referendum is successful, the council then has power to issue bonds to build a school and the teachers' organisations are supposed to go into battle again to help sell the bonds to the public. The marvel to me was that they managed to erect a considerable number of quite good schools.

Nothing as complicated as that is proposed here. Nor, as far as I can see from anything in the Bll, could these be Premium Bonds. If they could, it would add a certain amount of spice to the proceedings. In general, I welcome the provision, because borrowing by local authorities is a very important part of local government finance and one which is very little understood by the public at large. It is possible that the employment of this method would increase the number of people with some understanding of how a local authority has to run its affairs, and that would be to the public advantage.

On Clause 7, I agree entirely with the point made by my hon. Friend the Member for Islington, North. I believe I am right in saying that local authorities can already use this financial procedure for certain purposes but that the number of such purposes is very limited. A spokesman of the Ministry told local authorities some little while ago that the Government hoped to extend it to development of city centres when a convenient legislative opportunity arrived, as it has now arrived. The overwhelming argument is that advanced by my hon. Friend the Member for Islington, North, that we know very well that this is the way that the private developer does it.

This seems to me to be an altogether admirable Bill and, although I have no doubt that some alterations will be made in Committee, I hope that it will have a speedy and successful passage.

12.50 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. F. V. Corfield)

I wish to begin by adding my congratulations to those expressed to my hon. Friend the Member for Hexham (Mr. Speir) for introducing the Bill and for the manner in which he did it. If the House does eventually pass it it will be a worthy partner of the Litter Act and the Noise Abatement Act, both of which my hon. Friend has successfully brought to the Statute Book.

This Bill is a miscellaneous Measure, and, perhaps inevitably, it covers a wide field of amendments and extensions of existing provisions. No doubt modest in itself, it seems that the Bill is generally welcomed by the House and I believe that it will be generally welcomed by those concerned with local government. My hon. Friend modestly said that he had not put into motion a wind of change, but he hoped that he had started a slight breeze. Certainly the breeze is in the right direction.

The Bill does a lot towards removing what in many cases have gone on being regarded as pettifogging controls, often costly in time and temper, and sometimes in administrative expense out of all proportion to any savings that might have been effected. The Measure is fundamental to making local government more local and, as the hon. Member for Fulham (Mr. M. Stewart) pointed out, the real health of local government must depend on the basic control coming from the electorate rather than on the House of Commons being too fussy in relatively minor matters.

As my hon. Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) went through the Bill, I might take his remarks as the framework on which to hang my own and also to comment on matters raised by other hon. Members. I would remind the House, regarding Clause 1, of the limitations in the existing Local Government Act, 1933, and the London Government Act, 1939, on the type of conferences to which members of local authorities can be sent at the expense of their local authorities. The limitation is that the conferences must be called by bodies entirely composed of local authorities. As soon as a conference is either convened by an outside body or even includes outside bodies among those convening it, this rules out the power of the local authority to underwrite these expenses. I am sure that we should all regard that in this day and age as somewhat absurd, because we have seen in recent years an enormous extension of intelligent and worthy bodies taking an interest, and often conducting research, in the services for which local government is responsible.

It would seem absurd that we should go on with this old rule which in a way cuts off from sources of contact which could be useful people who are intimately involved in these services and keenly interested in giving good services to the public. Perhaps I could best illustrate this by citing one or two of the well-known organisations which have been excluded but which would be included under the Bill. In housing, for example, there is the Institute of Housing, the Housing Centre Trust and the National Housing and Town Planning Council. In planning there is the Town Planning Institute and the Town and Country Planning Association. There are many others and there is a long list of most respectable bodies concerned with health and welfare—and if a conference of the Institute of Public Cleansing or of the Institute of Burial and Cremation Administration does not offer an exactly riotous weekend, I am sure that these are important matters for local government.

Moist people who have studied this problem agree that the whole problem of councillors' expenses throws up some extremely difficulty questions of balance. So often we find—apart from the obvious occasional abuse—that there will be conferences which are the subject of violent differences of opinion as to whether or not councils should be represented. But there is the other side of the coin when one comes to apply regulations which must be drafted in a general way to a particular case and when the result may appear utterly absurd. It is sensible, therefore, that we should allow the widest possible discretionary powers in this matter.

The hon. Member for Fulham considered the implications of the word "political". It crossed my mind that possibly the sort of things to consider are the various trade union and trades disputes Acts in which definitions appear of the "political fund". However, I was glad that he mentioned that the word "political" today is used in a way which often amounts to an abuse of language. I am sure that hon. Members frequently get invitations from bodies which are clearly political but which assure one that they are not political and, in fact, urge one to keep off political subjects when making speeches. To do that is almost impossible, for there is practically no subject which has not in its true sense a political overtone. I find this curious desire to be non-political at least irritating and, sometimes, rather silly.

I welcomed the intervention of my own Member of Parliament, my hon. Friend the Member for Stroud (Mr. Kershaw), in which he made it clear that the sort of bodies he had in mind were the workshops for the blind. My hon. Friend the Member for Buckinghamshire, South was concerned with a different type of organisation. Many local authorities join or pay a subscription to bodies such as the Commons and Open Space Preservation Society and other organisations which may be termed professional bodies because they get some information in return; the local authorities thus receive a service for the expenditure involved.

That is rather like, for example, subscribing to professional journals, and is different from the sort of body or organisation which my hon. Friend the Member for Hexham had in mind. My hon. Friend was thinking of a body which could be said to be serving the public but from which, whatever its geographical disposition outside the boundaries of the particular council, the local authority could nevertheless get value.

Mr. Ronald Bell

Is membership of or subscription to such bodies covered by an existing statutory provision or is it some inherent power in the Ministry to dispense?

Mr. Corfield

There is an inherent power in the various Statutes which cover the functions of local authorities. Under health functions, for example, it would be assumed that local authorities would be able to make contributions to certain bodies providing information; but I put that forward purely tentatively and I should not like it to be taken for granted without further checking on the matter.

Regarding the comments which have been made about Clause 3, one must come back to the fundamental approach to local authorities and realise that they are responsible bodies. I cannot believe that they will pack their committees with co-opted members in order to get a riotous weekend with a Burial and Cremation Society or any others. If we once take that sort of view the whole operation of trying to run local government and putting these sort of powers in their hands is probably wasting their time and the time of everybody else.

Perhaps it would be useful to the House if I sketched shortly the background to the relaxations of Section 228 of the Local Government Act, which enable my right hon. Friend to allow certain of these expenses which hitherto have required some sort of sanction and which in future under this Bill will not require sanction. The House will know that applications for sanction under Section 228 arise from the fact that if the Minister's sanction is given, no action by the district auditor arises. In my Department we have worked out that of the 1,350 applications under Section 228 last year, 90 per cent. would not have been required at all had this Bill been in operation. This gives some measure of the administrative saving, which is relatively modest, but it is the sort of sphere which can gradually get larger and larger until one finds a considerable number of people doing very little else but looking at this type of application.

As for Clause 5, on which inevitably there has been a certain amount of comment, I should remind the House, as did my hon. Friend the Member for Hexham, that there is a similar power in Scotland, with a limit of a 2d. rate rather than a 1d. rate. It is admittedly subject to the consent of the Secretary of State but this, I think, is more attributable to the fact that the power was given 15 years ago and we have moved on since then with our ideas on how many of these things should require the Minister's consent. I can assure those who are a little concerned about the effect that this will have on spending sprees that the Scots have not used an awful lot of money under this power. I think it works out at something like ⅛th of a penny rate rather than a 2d. rate.

We should remember also that there are various other existing Statutes under which a local authority is empowered to devote up to a 3d. rate or a 6d. rate. The health resorts, far instance, may vote up to a product of a 3d. rate to advertise the attractions of the resort. Up to a 2d. rate can be devoted to making up the net loss of providing allotments. There are a number of matters of that sort, like the 6d. rate for helping the arts.

The House might be interested to hear the comments of a body which is respon- sible for spending money on the arts. The Arts Council in its 1961–62 Report said: Instead of providing the permissive 6d. rate per annum for the arts the Local Authorities are between them providing a paltry total which amounts to less than one-tenth of a penny rate. Even if they multiplied their contribution by ten forthwith they would still be furnishing no more than a sixth of what they are entitled to provide under the Local Government Act of 1948. Therefore, it does not look from past experience as if this will mean a rush to find out on what a local authority can spend money, although, as the hon. Member for Islington, North (Mr. Reynolds) has said, the product of a penny rate in certain parts of London can be a substantial sum.

Referring to Clause 6, the hon. Member for Fulham intervened to make clear, as is the case, that this is merely another method of borrowing which, as he and the hon. Member for Islington, North pointed out, has been widely used under private Acts and therefore it is a matter on which there is considerable local government experience. As the hon. Member for Fulham said, this is surely a source of experience of which we should make use, and it is sensible that as powers have developed under private Acts we should pick them up and give them general application, as my hon. Friend the Member for Hexham has done. This is a sensible way to approach the matter.

My hon. Friend the Member for Stroud must bear in mind that this will not open the flood-gates on a massive new source of money or that it will provide opportunities for borrowing, whether it be for a village hall or school, outside the realms of functions for which borrowing has been approved by the responsible Ministry. I entirely agree, however, with the hon. Member for Fulham that if on occasion funds for which borrowing can take place can be related to something which excites local public interest this is a good form of advertising the issue of the bonds. It is reasonable to hope that local people will take a special interest for that reason and will prefer to buy a bond rather than to use the Post Office or adopt some other means of saving which might be available.

This is a form of switching the small lender from one type of investment, such as the Post Office or National Savings, to a more local type whether or not there is a label on the bond showing that it is for the hospital fund, the town hall fund, or an education fund, as the case may be.

Mr. Kershaw

Is not my hon. Friend foreshadowing what these regulations will be? This point surely depends on the scope of the regulations, and to say that Clause 6 does not extend the possibilities of raising money is to say that the regulations will strike the Clause pretty well dead.

Mr. Corfield

No. The matter, of course, will be subject to regulations, and the kind of thing that will come into the regulations will be a provision that the bond will have a name upon it and will not be a bearer bond. That is certainly our intention. The bond, however, will be transferable. My hon. Friend will appreciate that when we give a local authority power of this sort, the borrowing power must be looked at in the context of statutory provisions which govern borrowing generally.

I am afraid that I cannot hold out great hope to my hon. Friend that this will bring in a vast new source of lending or borrowing nor, as the hon. Member for Fulham said, will it suddenly make it possible to build schools which have been ruled out by my right hon. Friend the Minister of Education. There may well be other methods which my hon. Friend has in mind and which certain cities have been putting forward, but these have nothing to do with the question of the provisions in Clause 6.

On Clause 7 I was glad that the hon. Member for Islington, North described the advantages which might well accrue where we have either central redevelopment or comprehensive redevelopment generally, and the difficulties which arise under existing powers where there is a relatively long period of completely unproductive expenditure, and not only a period of no income but a period of maximum expenditure as well. This can result over a period of two, three or five years in a heavy increase in rates in order to carry that burden whilst waiting for the income to accrue. I entirely agree that when we call this income-producing we have not in mind the fact that rates will eventually be paid. The intention of the Minister would be to ensure that, in the accepted sense, "income-producing" would mean producing a rent or profit or something of that sort.

But I warn the hon. Gentleman that; as we see it at the moment, straight housing projects would not normally be included because usually most housing authorities have already got a programme and the income from a recently completed project in a sense is helping to finance the "dead" period of the current programme. There may be exceptions, of course. One might have a relatively small local authority—for instance, the Scilly Isles—which probably has no continuous programme and no need for one and where a building a house is rather exceptional, happening only every four or five or even ten years. In those cases there is not this rotation. The same sort of problem arises in central redevelopment, which is something completely on its own. It happens about once in a century and it involves enormous cost.

I hope that I have answered most of the questions that have been posed, particularly those which it is suitable for me to try to answer on behalf of the Government. I join again with other hon. Members in welcoming the Bill, and I hope that the House will give my hon. Friend full support by giving it a Second Reading. I once more congratulate him on a Measure which I believe will be really useful and will, in its way, help the wheels of local administration to go round a little easier than they would do otherwise. That must always be a welcome and useful operation.

1.11 p.m.

Dr. Alan Glyn (Clapham)

I should like to add my tribute to those paid to my hon. Friend the Member for Hexham (Mr. Spier). Now, alongside his work for noise abatement, which has removed a certain amount of noise in my locality, and his Litter Act, which has helped to clean up our streets, I am glad that we have something a little more concrete in allowing a local authority even wider scope for improving amenities.

I was interested to hear my hon. Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) and the hon. Member for Fulham (Mr. M. Stewart) refer to the word "political". I do not think that even if we were to insert the words "party political" this term is really capable of interpretation in a Statute. I was also interested to hear what my hon. Friend the Joint Parliamentary Secretary said about the considerable administrative savings that this Bill will produce by removing the necessity in many cases for a local authority to get loan sanction.

This is a very complex Bill and my hon. Friend the Member for Hexham is to be congratulated on it. Indeed, it seems to go far afield, including, in Clause 13, the whole of the Scilly Isles.

Mr. Speir

If they want it.

Dr. Glyn

Yes, if they want it. The Bill comes at a time when public attention is particularly focused on the revaluation of rating and it will involve expenditure. But I feel that one should learn again from this that it is really up to the local residents and ratepayers to ensure that their local authority has sufficient brake on unnecessary expenditure. As my hon. Friend the Joint Parliamentary Secretary pointed out, one cannot lay down in advance exactly what people will do. We must leave some scope to the local authorities and in the last resort to the local electors.

Clause 7 is an exciting Clause in that it puts local authorities, to some extent, on the same footing as private enterprise, and I feel that it may help not so much the larger local authorities, where there is always a float of money, but perhaps the smaller local authorities in enterprises of a particular nature for perhaps the first time.

A certain amount has been said about trips to the seaside and even trips abroad. Here again, one must trust to the sense of the public. Admittedly, this opens the gate—or legalises, which may be the more correct way of putting it—certain expenditure for councillors and, indeed, for co-opted members and members of the staff. But it really is up to the local authorities to say what is or is not reasonable expenditure.

The hon. Member for Fulham said that sometimes these courses were not particularly pleasurable, but that, perhaps, depends on the seaside resort in which they are held, and not so much on the nature of the subject. One frequently sees councillors who are not all the time in the council chamber, but on the promenade, in the sun. These are things we cannot interfere with in detail.

The question of bonds raises an important and interesting issue, because the average person's investment is usually restricted to things like the Post Office and building societies. One of the advantages of the Bill would be to enable local people to invest in their own councils. Thus, they would have not only an interest as ratepayers but as holders of capital. That would be of great advantage. We must make it clear, however, that if bonds are raised for a particular purpose, such as the improvement of a civic centre, they will stand pari passu with other local government securities and are not secured merely on that unit for which the money is being used. I believe that this will be a really useful advance and encourage people to take a further interest in their local authorities.

My hon. Friend the Member for Stroud (Mr. Kershaw) said that this would possibly be a great help in encouraging civic pride, and I am sure that he is right. There are many societies. In my constituency we have just started the Clapham Society, the desire of which is to maintain and look after some of the local historical monuments. Perhaps this is an activity in which some local authority money may be used so as to improve local amenities. Perhaps a central street or a shopping area or same other project may be improved with great benefit to the local inhabitants.

Mention has been made of education. But I believe that this is not a matter for which the Bill is really fitted, except perhaps for the improvement of halls or amenities of some church schools.

I do not wish to detain the House any longer. I congratulate my hon. Friend the Member for Hexham on a very useful Measure and join with many hon. Members in saying that the correct regulator in these things is not so much the Minister as the ratepayer and the local council. They must exercise some form of responsibility in these things and not have to be controlled centrally by the Government. I believe that the issue of bonds will give greater opportunity for participation by local ratepayers in their own local affairs.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 38 (Committal of Bills).