HL Deb 14 July 1910 vol 5 cc1058-71

LORD BELPER rose to move to resolve, That it is desirable that a Joint Committee of both Houses of Parliament be appointed to inquire into the application of the provisions contained in the Local Government Acts, 1888 and 1894, relating to financial adjustments consequent on the alteration of the boundaries of a local government area or on an alteration in the constitution or status of the governing body of a local government area, and to report to the House if they are of opinion that any amendments in such provisions are desirable.

The noble Lord said: My Lords, in moving the Motion of which I have given notice I must admit that the question with which it deals is one of the most important which could be brought before the House, especially as regards local government, and that it has been for the last few years surrounded with difficulties. In those circumstances I confess I feel that it would have been of greater advantage if some member of this House of greater authority than myself could have brought forward this Motion. But the reason I have ventured to put it on the Paper is that I have been requested by the unanimous resolution of the County Councils Association to bring forward this question in your Lordships' House without delay. They feel that it is of such extreme importance that an attempted solution of it ought not to be deferred to any later period.

I have no wish to take up the time of the House at any length, but I think it is due to your Lordships that I should attempt, as concisely and as clearly as I can, to point out what the present position with regard to these financial adjustments is and to make some case for the remedy which I propose. Going back to 1888, when the measure of local government was carried which effected a revolution in county government, it may be remembered that there were necessary provisions in that Act dealing with the financial arrangements arising out of the change brought about by the Act itself. Section 32 of that Act applied to adjustments of urban and rural districts, and it also applied to adjustments between county councils and county boroughs. This section, I think it must be recognised, was inserted for the purpose of providing that neither a county nor a borough should be placed in a worse financial position by reason of the clauses of the Act. That section specially set out that an equitable adjustment with regard to the matters referred to and also with regard to other financial arrangements should be come to, either by agreement or by the Commissioners appointed for the purpose. The section appointed Commissioners for this particular purpose, and gave them the widest possible powers with regard to the settlement and determination of such questions as should be referred to them. The section went on to say that this settlement and determination should be on such terms and in such manner as the Commissioners, in their absolute discretion, might think just and fit with regard to any matters referred to them, and also with regard to such other matters as in their judgment were incident thereto. It it impossible to conceive much wider powers than were given to the Commissioners by that section, and I think it is clear that the Act laid down that these matters should be settled by an equitable adjustment.

It will probably be within the remembrance of most members of this House that the late Lord Derby was appointed President of that Commission, and, acting under the powers that were given them, the Commission proceeded to adjudicate in all the questions between the county boroughs and the counties. For that purpose they had cases argued before them, and gave their decisions. I am very conversant with the matters which were referred to this Commission because it so happened that, owing to a change of officials in my county, I was the person in the county who knew, perhaps, more about the council's financial affairs than anyone else, and it fell to my lot to argue one of the first cases before the Commission with regard to the adjustment of the finances between my county and a county borough within the county. I may mention that the noble Lord whom I saw in his place a few minutes ago, Lord Eversley, sat as Chairman of the Commission on that day. I do not wish to enter into any details with regard to that; but let me say that those decisions which were given by the Commission not only settled matters between the counties and county boroughs for the time, but for a large number of years afterwards they were accepted unchallenged as the authoritative decisions with regard to the difficult financial matters which were laid before that Commission.

But in 1907 this state of things was rudely disturbed. What was called the Hartlepool case, which was decided by the House of Lords, on appeal, entirely upset the decisions which for something like eighteen years had been accepted as recognised interpretations of the financial clauses of the Act of 1888. In the Hartlepool case it was held that when a new county borough is created by the separation of the borough from the county, the financial adjustment between the borough and the county does not include compensation for the loss of the contributing area. The decision rested, no doubt, on the wording of the Local Government Act. I understand that the expression "compensation" does not appear in those sections, and that the decision of the House of Lords, which overruled the previous decisions, turned on that point. It was held that an adjustment does not necessarily mean compensation, and that if the Legislature had intended it, it would have put it in perfectly clear language. I have not the slightest intention either of discussing, or in any way criticising, the Judicial decision of the House of Lords. Certainly this would not be the place to do it even if I so desired; but it is not at all necessary for my purpose.

What I want to point out is that the effect of that decision was to absolutely upset all the interpretations of the law that had been accepted for this large number of years, and that while it upset the law as it stood, it put nothing in its place on which anybody could rely. From that moment, therefore, the question of the financial arrangements between the counties and county boroughs was almost in a state of chaos. The state of the case was this. These decisions having been set aside, there was no power of getting an authoritative decision on this subject. The only way, in cases of extension of boroughs, in which a decision could be obtained was by bringing the matter before a Private Bill Committee, with the knowledge that the decision given by that Committee must be an uncertain one, and that the decision so given would settle nothing for the future. The result was that you had a state of things which made it imperative on every county authority whose county was being attacked by a borough wishing to make an extension to contest that case.

Within a very short time there were some important applications for extensions of borough boundaries. In 1908 the county borough of Manchester, the county borough of Blackburn, and the county borough of Burnley promoted Bills for the extension of their areas. There was a rather interesting discussion in the other House of Parliament with regard to one of those Bills—I think it was the Blackburn Bill—and in the course of that discussion it was proved that a serious state of things had arisen with regard to these financial arrangements between the counties and the county boroughs. It was shown that in many cases the decisions given by Committees were totally different in one case from another. I think with regard to those three Bills, which were before Parliament at the same moment, different decisions had been given concerning them; and in this House it was arranged that compensation on certain terms should be given in those three cases, the result being that the Bills were subsequently withdrawn. Is it possible to conceive any more unsatisfactory position for these large local bodies to be placed in than to be forced to spend a large sum of money in contesting cases; to have no chance of being able to rely that the decisions given, even if they were fair, would stand; and to feel that when the next Bill came forward a totally different decision would very likely be given?

Let me quote the remarks of a gentleman who was in a position which enabled him to speak without being supposed to be a partisan on either side. Mr. Emmott, Chairman of Ways and Means, said that— In his opinion the question was so difficult that he thought the Local Government Board ought to give a lead to the House in this matter. If new legislation was required to settle the difficulty, it was for them to introduce it. If it could be settled in some way without legislation they should consider the question most carefully, so that when some other opportunity arose they would be prepared to advise the House upon it. Then he went on to say— There was one other reason why the matter should be settled. Since the decision of the House of Lords every administrative county council must, of necessity, oppose every extension of boroughs or urban districts, and surely it was desirable in the highest degree that such a cause of friction should be removed from our local government. Those remarks were made two years ago, and precisely the same state of things exists at the present moment, although, perhaps, the position is a still more acute one from the fact that there are more important Bills being brought forward this year. I do not for a moment mean to say that last year was a year in which it would have been possible for the Government or anybody else to have got a solution of this question. The whole time of both Houses was occupied with the most important financial and constitutional matters, and the atmosphere of either House probably did not lend itself to the settlement of a difficult question like this on reasonable lines. But this year, again, there are three boroughs—Birmingham, Bath, and Reading—one of them one of the largest in the United Kingdom, proposing to enlarge their boundaries, and it seems that it is time that some steps should be taken to try and arrive at a solution of this question on reasonable and equitable lines, and on lines which might be acceptable as trying to do equity and fairness both to the boroughs and to the counties.

It was in those circumstances that I placed this Motion on the Paper some days ago, and I should like to call the attention of the House to the circumstances in which I was asked to move it. No doubt there is considerable excitement about some of the important Bills that are before the other House, especially the Birmingham Bill, and it has been suggested in the newspapers that in moving this Resolution I and other members of the County Councils Association were trying to use our influence on one side—namely, against the Birmingham extension. Let me say that, as far as this Motion goes, it is moved in an absolutely non-contentious spirit. It was entirely in that spirit that the County Councils Association asked me to move it. I will explain the origin of the Motion. The County Councils Association had a very important meeting some weeks ago with regard to these questions—not only the extension question, but also the question of financial adjustments, which has reached such an acute stage. That meeting was attended by gentlemen and officials who probably knew more than any men in the country the past history of this matter, and who were thoroughly imbued with the necessity of its being settled on reasonable lines as soon as possible. After a very interesting discussion, a unanimous resolution was come to by the County Councils Association asking myself and another member of the association in the other House of Parliament to put this Motion on the Paper at once, in order that it might not be allowed to go over until it was too late, and until these other Bills might have reached a stage when it would be impossible to deal with this question.

That was the history of the Motion which I placed on the Paper in the first instance. It afterwards came before the Executive of the County Councils Association. The Executive confirmed the resolution, and especially asked that this Motion should not be mixed up in any way with any of the schemes before Parliament with regard to extension, but should be treated in an entirely non-contentious spirit with a desire to arrive at a solution which would be fair and equitable to all parties. I have ventured to explain that because I think it is important that it should be made clear that, whatever negotiations may have been going on between the parties to these Bills, neither I nor anybody concerned with this Motion have had anything to do with them whatever. I have probably said enough to make out a case for the appointment of a Joint Committee to see whether they cannot arrive at some authoritative decision with regard to the future of this difficult financial question. Let me say, with regard to my Motion, that our object was to make the reference as wide as possible and to include in it not only counties and county boroughs, not only urban and rural districts, but also any authorities which might, owing to the circumstances and the enlargement of their areas, be changing the status of local government. For instance, an urban district might be changed into a borough.

I have specially avoided referring to particular cases which might come before this Committee, because it seems to me that if one refers to a case as an important one which must come before such a Committee for their decision, it might then be taken that there are not other cases of equal importance. Therefore it is much better to leave the Resolution in the terms in which it stands, referring to all financial adjustments. If the few remarks I have made commend themselves to the House as making out a case for this inquiry, I hope you will accept the Motion. But, more than all, I trust that I may hope to receive the support of the Government, without whose assistance such an important matter as this is not likely to be able to be brought to a satisfactory solution. It is my hope that whatever Committee should be appointed should be a strong Committee, not only for the purpose of dealing in the way suggested in the Motion with the difficult matters before them, but also, when they have come to a decision, to enable them to commend that decision to both Houses of Parliament; and if, by bringing forward this Motion in the imperfect manner I have done, I am able to make a first step, at all events, towards a settlement of this question, which has given rise to such serious difficulties with regard to local government, I shall be only too amply rewarded; and I am sure those who are interested in local government would be greatly satisfied if we could get this Joint Committee. I beg to move the. Motion which stands in my name.

Moved to resolve, That it is desirable that a Joint Committee of both Houses of Parliament be appointed to inquire into the application of the provisions contained in the Local Government Acts, 1888 and 1894, relating to financial adjustments consequent on the alteration of the boundaries of a local government area or on an alteration in the constitution or status of the governing body of a local government area, and to report to the House if they are of opinion that any amendments in such provisions are desirable.—(Lord Belper.)

*LORD NEWLANDS rose to move, as am Amendment to Lord BELPER'S Motion, after "1894" to insert "and the Local Government (Scotland) Acts, 1889 and 1894." The noble Lord said: My Lords, I need hardly say that my Amendment is is no way hostile to the Motion of my noble friend, and I have reason to believe that my noble friend will gladly accept the Amendment. Its only object is to enlarge the scope of the proposed inquiry by the Joint Committee so as to include Scotland. Exactly the same difficulties have occurred in Scotland, and it is at the unanimous request of the County Council of Lanarkshire, a large division of which I represented in the House of Commons for twenty years, that I urge the inclusion of Scotland within the scope of the Joint Committee's inquiry. The facts of the situation have been so well and so clearly put before your Lordships by my noble friend Lord Belper that I need not recapitulate them. I will only add that, as far as I am concerned and as far as Lanarkshire is concerned, we are taking action not because of any specific case, but on the broadest of broad grounds—because of the general situation, which has become absolutely intolerable. I have reason to know that, at any rate in Scotland, both burgh authorities and county authorities would prefer almost any really definite principle, even if they did not absolutely approve of it, rather than the present condition of uncertainty, which gives rise to an enormous amount of absolutely useless but very expensive litigation. I beg to move.

Amendment moved— After ("1894") to insert ("and the Local Government (Scotland) Acts, 1889 and 1894")—(Lord Newlands.)


My Lords, I rise to express the hope that your Lordships will agree to the Motion which has been moved by Lord Belper, as well as to the Amendment of the noble Lord who has just sat down. The fact of the matter is, as I think the noble Lord in introducing the Motion to your Lordships mentioned, that a great change has come over the spirit of affairs owing to the Judicial decisions of your Lordships' House. When the Act of 1888 was passed it was thought that the word "adjustment" between county councils and boroughs, where the latter sought to extend their boundaries, meant compensation for loss of rateable value. The opposite view, however, was held by noble and learned Lords, not only in the case which has been referred to by my noble friend, the Hartlepool case, but also in an earlier case, the Godstone case. Although one of those cases was under Section 32 and the other under Section 62 of the Act of 1888, the principle was the same. It was decided—the judgment was delivered by the noble and learned Lord on the Woolsack—that the word "adjustment" would apply only to existing income, to some source of revenue which existed at the time of the extension of the boundary of the borough and not to any future or problematic increase. The result of that has been that, whenever a borough has come to Parliament to extend its boundaries, it has invariably been met by opposition on the part of the county council, and by a claim for compensation.

In the case of the three Bills to which my noble friend referred—the Burnley, Blackburn and Manchester Bills—a Committee of the House of Commons inserted a clause in the Blackburn Bill providing for compensation, whereas other Committees of the House of Commons refused to insert such a clause in the Manchester and Burnley Bills. The consequence was that when the Blackburn Bill came under the discussion of the Whole House a Motion was made to expunge this clause so as to bring the three Bills into line and under similar conditions. The three Bills then came up to your Lordships' House, and were referred to a Committee under the Chairmanship of my noble friend Lord Donoughmore, and that Committee decided that it was right and just to insert a clause giving compensation in each of these three cases. What happened? The promotors said: "Oh, this is not what we want at all. We will drop our Bill, and come to Parliament next year, or the year after, when perhaps we shall find somebody with a tenderer heart than Lord Donoughmore." The result is that the thing has become a sort of gamble. These great corporations come to Parliament for one purpose or another, and they put in a clause extending their boundary in the hope that Parliament will not insert a compensation clause. If Parliament does put in a compensation clause, they drop the matter and introduce it again in a successive session.

The real hardship is upon the adjoining areas, who must oppose these Bills under existing circumstances. Up to the time of the Judicial decision of your Lordships' House it was customary to have a friendly conference between the two authorities, and in nine cases out of ten a satisfactory arrangement was arrived at. In the present Parliament, in the case of a Bill for the extension of the borough of Eastbourne, rather than enter into a bitter contest the borough of Eastbourne consented to the insertion of certain clauses which have entirely satisfied the surrounding district and the county of Sussex. I entirely approve of the suggestion made by my noble friend that a Joint Committee should be appointed, and that some guiding principles should be laid down so as not to leave the matter to the arbitrary decision of this or that Committee of your Lordships' House.

I also welcome the remarks which I understood the noble Lord to make in moving the Motion. I did not follow him, I am afraid, quite as closely as. I should have wished, but I welcome the observation which I think he made that the Motion was not conceived in view of the Bills which have been brought before Parliament in the present session. There are some very important Bills. The Birmingham Bill has been mentioned. Perhaps that is the most important one of all, and I must say I should not like to see any of these measures, upon which considerable sums of money have been spent and to which much Parliamentary time will be devoted—I should not like to think that all that money and time would be wasted because a Motion might be made that the Bills should be postponed until this Joint Committee has reported and some legislation has taken place upon that Report. Therefore I hope, if His Majesty's Government agree to the appointment of this Joint Committee, that it will be on the understanding that it is not to interfere with the measures which are before Parliament in the present session. They may go on and be considered on their merits, and, of course, it will be open for Parliament hereafter to say, if they choose, that any general legislation which may be passed in a subsequent session shall be retrospective and embrace the measures which were before Parliament in the year 1910. If these are the principles on which my noble friend proposes the Resolution they have my hearty support.


I think I ought to explain that there was no intention of mixing up the case of Birmingham in this Motion. The reason the Motion was brought forward at as early a date as possible was that we felt, if such important Bills were to be brought forward this session with regard to the extension of boundaries, that any general law which was agreed upon deciding upon a principle with regard to adjustments ought to refer to those Bills as well as to others that will be passed hereafter.


My Lords, several noble Lords who have intervened in this debate having referred to the small part I have taken in this question, I feel it my duty to ask your Lordships to be patient with me for two or three minutes while I supplement what has been said with reference to what happened in the case of the Manchester, Burnley, and Blackburn Bills two years ago. As the noble Earl the Chairman of Committees reminded your Lordships, we were fortunate in having all these three Bills before us, and, as the result of very exhaustive inquiry, we came to the conclusion—I confess with some little hesitation on my part at the time, though as the result of subsequent inquiry I am now satisfied that our decision was correct, but with no hesitation whatever on the part of the other four members of the Committee—to insert a clause which restored the position of affairs to that which obtained before the decision of your Lordships' House, sitting judicially, in the year 1907, a decision which I desire to speak of with the greatest respect, though I confess that from the point of view of justice it inspires very little respect. We did feel that the case, on the merits, was conclusively made out, and that where a borough takes out the cream of a county as far as rateable value is concerned and at the same time practically takes away none or few of the liabilities which still remain on the county rates, compensation should be given to the county.

All that I need do in this connection is to mention two cases—the case of one of the Bills that came before us, and a case that was quoted before my Committee. The difficulty arises mainly, I think, over the upkeep of roads, which, in a county like Lancashire certainly, are almost entirely used for traffic between the boroughs, and towards the upkeep of which the boroughs make no contribution. Had the Manchester Bill been passed in the form in which it came to us, six per cent of the rateable value would have been taken away from the Hundred concerned, and only one per cent of the roads. But a much more extreme instance might have arisen in the case of Blackpool if the decision of your Lordships' House had been given a good many years before it was given. In the case of Blackpool forty-five per cent of the rateable value was taken away, but only two per cent of the roads; and it is obvious that very great injustice would have been done if compensation had not been paid in the peculiar circumstances of that case. I therefore desire to support the Motion of my noble friend below the Gangway. It is obviously desirable that some general rule should be reached which should act automatically in all cases of borough extension, of which we have many every session, and which I have no doubt will not diminish in number. In fact, if the Joint Committee should be successful in drafting a model clause which could be embodied in the Standing Orders of your Lordships' House, I am sure that decision would be very warmly received by everybody concerned, for it would lighten the work in the Committee-rooms upstairs and result in doing justice to many parties who at present feel very great doubt as to whether they will receive justice in cases in which they are interested.


My Lords, I regret that owing to indisposition my noble friend who takes charge of local government business in this House is not able to be here to-day, but I am not sorry to have an opportunity of saying a word on this question, because I entirely realise the far-reaching importance which attaches to it, as was explained by my noble friend who introduced this Motion. Perhaps he will allow me to congratulate him upon having abstained altogether from importing any kind of prejudice into his argument. The subject is one which has aroused, as we all know, a great deal of feeling; and I am glad to have observed that in the debate generally the same note which was set by my noble friend opposite has been maintained. This question as to whether, when an alteration takes place in a local government area under the Acts, compensation should be payable for loss of rateable value, is, of course, in the strictest sense a vexed question, and the decisions which have been given by your Lordships sitting judicially upon it have undoubtedly caused a state of confusion in the Committee-rooms, to which attention was called by my noble friend the Lord Chairman, and on those grounds it certainly is desirable that we should attempt to arrive at some fair and authoritative opinion on the subject.

The case, as has been pointed out in debate, is somewhat complicated by the existence in Parliament of the three important Bills to which allusion has been made—those dealing with Birmingham, Bath, and Reading; and I was particularly glad to observe, both from the speech of the noble Lord who introduced the Motion and also from the speech of the Lord Chairman, that there exists a distinct unwillingness to interfere with those Bills, although there is a desire that they should in their ultimate result be made subject to any general principle which is evolved. I was very glad to hear that, because, of course, it might have seemed to be a plausible argument to say that if a Joint Committee is going to sit to consider this whole question these Bills ought to be shelved. It is an argument of the kind which we often hear used, and in some cases with great plausibility. I am very glad, therefore, that it is agreed that a course of that kind would involve real hardship and unfairness to the parties, and that it is not desired that the progress of those Bills should be interfered with. I understand from my right hon. friend the President of the Local Government Board that the authorities of those three city and borough councils are quite willing that a clause should be inserted in their Bills, if they pass, to the effect that if the outcome of the inquiry by the Joint Committee should be to hold that compensation of this kind should be payable, their arrangements should then be subject to such a provision. I think your Lordships wilt agree that this seems fairly to meet the case, and that in agreeing to this proposal the great local authorities involved are showing a reasonable spirit.

His Majesty's Government have, therefore, no hesitation in agreeing to the Motion of my noble friend opposite. And particularly in view of what I have just said about the existing Bills it is extremely important that the Joint Committee should be as strong a one as possible, and also that it should be—and I think it is a subject on which an ideal might be attained—of as far as possible an impartial character. It would be very undesirable that this should degenerate into a sort of tug-of-war between urban and county council interests, and therefore in suggesting the composition of the Joint Committee I am quite sure my right hon. friend will be fully alive to that aspect of the question, and will endeavour to make it as powerful and representative a Committee as possible. I understand that my noble friend the Secretary for Scotland is quite willing to agree to the inclusion of Scotland in the Motion, on the general understanding to which I have already alluded.


My Lords, will you allow me to take this opportunity, for which I have been waiting for some time, to say a few words, not with regard to this particular difficulty, but by way of pointing a moral. The difficulty arose out of a decision of this House in 1907, and, however imperfect that decision may have been, it followed the decision of the House in the year 1904, which left us no alternative but to rule as we did. The point to which I wish to draw attention for a moment is this. The ground upon which I founded my opinion was that no other coherent interpretation of the language used could possibly be put upon it except that which was put upon it in 1904 and again in 1907. Although I do not say it was a fact, I strongly suspect that when the two parties who were quarrelling in this business came to settle the words in Parliament they were both content to accept ambiguous language in the hope that it would turn out to be interpreted in their favour. I am sorry to be obliged to inform your Lordships that this is not an isolated discovery. What is done is this. Each side think that they have a wiser and more skilful draftsman, and when they put up language which will bear one, or the other, or, indeed, no meaning—I am speaking seriously, for sometimes a coherent meaning is very difficult—then they come to the Courts of law and say that His Majesty's Judges and then this House sitting judicially are to find some path of escape. I hope that if a Joint Committee is appointed they will endeavour to select words which will be perfectly plain, so that they may be intelligible to the ordinary person, instead of being the subject of conundrums that are almost insoluble to the piercing intellects of His Majesty's Judges and to the more obtuse intellects that are to be discovered here.

On Question, Amendment agreed to and the Resolution as amended also agreed to: Ordered that a message be sent to the Commons to communicate this Resolution and to desire their concurrence.