IMPERIAL AND LOCAL FINANCE.

HL Deb 01 March 1911 vol 7 cc217-34

THE EARL OF DUNMORE rose to ask His Majesty's Government whether they adhere to the pledge given by them in this House on the 13th July, 1910, that the Government, if in power, would during the present year make an attempt to deal with the whole subject of the financial relations between the Imperial Exchequer and local authorities; and whether it is the intention of His Majesty's Government to withhold from local authorities half the net proceeds of the Land Values Taxation to which they are entitled under the express provisions of Section. 91 of the Finance (1909–1910) Act, 1910; and to move for Papers.

The noble Earl said: My Lords, your Lordships will remember that last July a pledge was given to us in this House by the noble Earl the Leader of the House that the whole question of local taxation would be dealt with by His Majesty's Government during the present year provided that the same Government found themselves in office. The noble Earl, as representing the then Government, said— I can say quite definitely that if we find ourselves next year in the position of advising the Crown we shall make an attempt to deal with the whole of this subject. The noble Earl can take it from me that that is so. Of course, whether it might he possible to conclude the whole subject during the compass of a single session I cannot say, but we shall certainly make the attempt.

The noble Earl not only gave us this definite assurance that the Government would deal with the readjustment of the onerous burdens now falling on the ratepayers, but he also claimed some credit to the Government in the fact that one-half of the yield of the Land Values Duties was to go to the local authorities. In fact, two pledges were made by His Majesty's Government to the ratepayers of this country. The first pledge was that one-half of these Land Taxes was to be allocated to the local authorities. The second pledge was that the Government would deal with the whole question of local taxation during the present year.

The reason I have brought forward this subject is that from discussions which have recently taken place in the House of Commons I fear there is reason to believe that, in spite of the pledge given to us by the noble Earl opposite, no practical steps are to be taken to readjust the financial relations between the Imperial Exchequer and the local authorities during the present year; and, further, despite the promises made by the Government which have since been enshrined in that Act of Parliament known as the "People's Budget," that the people as represented by the local authorities are still to be denuded of their share of these Land Taxes. I do not propose to go into a detailed account of the many grievances under which the ratepayers of this country suffer. I dealt with this last year, and to enter into detail now would only be going over old ground again. The reality of those grievances and the urgent necessity of readjusting the burden of taxation have been admitted over and over again As recently as February 20 of this year Mr. Lloyd George stated, in another place, that— as long as the Chancellor of the Exchequer has not a final re-arrangement of the relations between local and Imperial finance, it will be, ruinous both to the local and Imperial Exchequer.

Whatever may be the effect on Imperial finance—and I think the Chancellor's words are justified—it certainly is true as regards local finance.

Every year since the passing of the Local Government Act in 1888 the position of the local authorities has become more difficult owing to the ever-increasing burdens thrown on them by Parliament and the effect of legislation on the revenues which were assigned to them. If we take the case of London alone, we find a net additional expenditure since April, 1904, of £680,000 a year after deducting all Government grants. This vast annual expenditure is entirely due to new national duties or to the further development of old duties. Then, again, we find that, in spite of this great increase in the expenditure forced on local authorities by Parliament, the direct effect of much of the legislation of recent years has been to deprive local authorities of the benefits to which they were previously entitled. As I have already stated, I am not going to weary the House by entering into a lot of detail, but, if your Lordships will permit me, I will give one example, very briefly, to show the way in which local authorities have been treated financially by the present Government. Under the Licensing Act of 1904 a Unionist Government for the first time secured for the community the monopoly value of new licences. It provided that just as local authorities benefited by the License Duties on licensed premises in their districts, so they should benefit by the amount exacted in payment of monopoly value on every new public-house. Then came along the Liberal Government and with their Budget they laid hands—I might say greedy hands—on this new source of revenue, and claimed the whole of it for the Imperial Exchequer. Another effect of that same Budget was to greatly decrease the assessable value of licensed premises, thereby decreasing the annual revenue which local authorities derive in rates from that source of revenue. Although this has affected London perhaps in a greater degree than the rest of the country, and although as a member of the London County Council I am naturally interested in London's case, I have not risen to present the case for London. I have brought forward this Motion in the interests of the ratepayers of England, Wales, and my own country, Scotland, who I think will probably have a great deal to say in regard to this question.

What I want to ascertain, if I can, is whether the pledges made by His Majesty's Government to the ratepayers of the United Kingdom are going to be redeemed. The last settlement of this question took place in 1888, when the Local Government Act was passed. Certain revenues were then assigned to meet certain services in place of the old system of direct grants in aid. It was admitted recently by the Financial Secretary to the Treasury that these assigned revenues had not expanded as they ought to have done to meet the growing cost of services of a national character such as education and the relief of the poor. At the same time the Financial Secretary attempted to find some shelter for His Majesty's Government in the fact that many of these burdens under which the ratepayers now suffer were not the result of any action of a Liberal Government, but were due to the administration and legislation of a Conservative Government. Mr. Hob-house quoted in support of his argument various measures of social legislation passed by the late Unionist Government. I am glad to find a Radical Minister paying this tribute to the social legislation of a Conservative Government. I am certainly not going to combat his assertion, because in my opinion it is quite immaterial to the question I am discussing. But I might point out, in passing, that the late Unionist Government, in laying these burdens on the ratepayers, did at any rate make some restitution—not sufficient, but they did make some restitution—to the local authorities in respect of these burdens, and the present Government have entirely failed to do so. Anyhow, social legislation has got to be paid for, and what we are concerned with is not as to what Government passed these measures, but as to what Government is going to remedy the injustice of the incidence of the cost thereof.

I assert that a Unionist Government would have dealt with this matter. A Liberal Government have pledged themselves to do so, but are showing distinct signs of postponing to an indefinite future the carrying out of their pledges. I think the ratepayers will have every reason to doubt the good faith of the present Government when they read the recent speeches of Mr. Lloyd George and Mr. Hobhouse in the House of Commons. On the Amendment moved to the Address by Mr. Hayes Fisher on February 13, Mr. Hobhouse, replying for the Government, gave us to understand that what the Government meant by the pledges that they gave was not to deal with this question of local taxation at all this year, but to appoint a Committee to find out how they ought to deal with it. This is apparently, as far as I can find out, the interpretation which the Government now put on the assurances given us by the noble Earl opposite and by Mr. Lloyd George. I can undertake to say that that is not the interpretation that was placed on their words by the ratepayers of the country, not one of whom doubted that His Majesty's Government had pledged themselves to bring in some definite scheme to deal with this question of local taxation during the present year.

To turn to another matter. This apparently is not the only pledge which is to be broken. A statement was recently made by the Financial Secretary to the Treasury in the House of Commons from which I infer that the section in the Finance Act of 1909–10 allocating to local authorities one-half of the proceeds of the Duties on Land Values is now to be repealed. When the Budget of 1909 was first introduced it contained no provision for helping local authorities from this source of revenue, but so great was the hostility shown by local authorities throughout the country to this portion of the Budget that the Chancellor of the Exchequer was forced to climb down and to promise local authorities one-half of these taxes. To put it quite plainly, the Chancellor of the Exchequer had to make certain of receiving sufficient support in the country for his Budget. Therefore he made this definite promise to the local authorities, which has since been embodied in Section 91 of the Finance Act. After a General Election, resulting, as your Lordships will remember, in the loss of, I think, over 100 seats to the Government supporters, that Budget was passed through the House of Commons in circumstances which it is needless to discuss now. The point is that ever since this bargain was struck between the Chancellor of the Exchequer on the one side and the local ratepayers on the other, the Chancellor of the Exchequer has been trying to rid himself of his responsibility in this matter. I think many noble Lords on this side of the House are with me when I say that we are not opposed to a local community deriving its fair share of the increased value of land in urban districts, recognising that part of that increment value may be due to the presence and expenditure of that community. That probably was only partially recognised by the Chancellor of the Exchequer in allocating one-half of the Land Taxes to the local authorities. Now in claiming the whole of these taxes for the Imperial Exchequer the Government have got rid of the only shred of principle on which these taxes can he defended.

Perhaps I am premature in my deductions as to the intentions of His Majesty's Government, but their action in regard to the allocation of these moneys is certainly calculated to breed distrust of their good faith. Let me follow out the transactions in chronological order. In April, 1909, the Land Taxes were introduced and were to be entirely for the benefit of the Imperial Exchequer. In June, 1909, after pressure from the representatives of the ratepayers, one-half of these taxes was allocated to the local authorities. In the beginning of 1910 representations began. coming in from the local authorities in regard to the shortage in the yield from the beer and spirit duties—what is generally known as the whisky money. That same year the Chancellor of the Exchequer, with a great show of generosity, promised to compensate the local authorities for this shortage, which was almost entirely due to the Government's legislation, but in doing this he proposed to impound for that year one-half of the Land Taxes to which the local authorities were already legally entitled as a set-off against the compensation he was going to give them on account of the shortage in the whisky money. Then we come to June 30 last year, when the Chancellor of the Exchequer made his Budget statement for 1910–11. In making that statement he announced the intention of the Government to remove the pauper disqualification for an old age pension imposed under their Act of 1908. He did not propose to make this relief as a free gift to the local authorities. It would reduce to some extent the poor rate. Therefore he told the local authorities that they would have to pay just so much as the rates were relieved by—in his own words, not a penny more; and that the Imperial Exchequer would bear all the rest of the cost.

We now come to the latest stage in this comedy. Section 91 of the Finance Act of 1909–10 provides for the payment of half of the net proceeds of the duties on Land Values to the local authorities. That Act became law last year. During the past week the House of Commons has been engaged in discussing important parts of last year's Budget which were hung up by the Government in order to fight a General Election just before Christmas. In consequence of this a new Money Bill has just made its appearance. The Government, with some sarcasm, have christened it the "Revenue Bill." I think the local authorities when they have studied Clause 10 might be excused if they called it the "Revenue Grabbing Bill." Clause 10 is very important, and I propose to give your Lordships its exact words— Section 91 of the principal Act, which provides for the payment of half the proceeds of the duties on Land Values for the benefit of local authorities, shall cease to have effect, and shall be deemed never to have had effect.

The clause is short. I cannot say, from the point of view of the local authorities, that it is sweet. Not only do the Government propose to take back what they have promised, and promised in an Act of Parliament, but they go on to provide that the promise shall be deemed never to have had any effect. I think the representatives of the ratepayers in this country will be inclined to ask, When is a promise not a promise?—a conundrum the solution of which I will leave to His Majesty's Ministers in this House.

The Financial Secretary to the Treasury, Mr. Hobhouse, speaking in the House of Commons on February 20, attempted to justify the Government's action by informing the House that they were giving relief to the local bodies in another form by taking over the whole of the cost of the pauper pensions. With a skill I cannot but envy. Mr. Hobhouse has drawn up a profit and loss account, and has shown a balance on the whole transaction in favour of the local authorities to the amount of £40,000 a year. I want, if your Lordships. will permit me, to briefly examine the methods by which Mr. Hobhouse has so ingeniously produced this credit balance. He has, first of all, included in his calculations the compensation paid to the local authorities for the shortage in the Beer and Spirit Duties—a shortage which is entirely due to the Government's legislation, a fact which I think I am justified in saying the Government have admitted because they have stereotyped the amount to be paid under that head to the local authorities at the year 1908–9, which is a period before their recent penal taxation so seriously decreased the yield from this branch of revenue. Mr. Hobhouse then went on to assert that the Old Age Pension Act and the removal of the pauper disqualification, the whole cost of which is to be borne by the Imperial Exchequer, will represent a further contribution to the local bodies of £1.500,000 a year. I had always understood that the Old Age Pension Act was but one step, the first step, towards that further assistance from the Imperial Exchequer in aid of the poor rate which was so strongly recommended by the Royal Commission on Local Taxation. It does not take the form of a direct grant, but is in effect a partial transfer of part of the service of Poor-law relief from the local authorities to the State. It has nothing whatever to do with the Land Taxes, which are derived from purely local sources. There is no justification for earmarking any part of the resources of that taxation towards making up any deficiency in Imperial subventions.

I go further than this, and question the accuracy of the balance which has been arrived at by Mr. Hobhouse. Take London as a test case. In consequence of the removal of the pauper disqualification 10,983 paupers came oft the rates since the beginning of the year. Some of these, I believe, have since returned; but, taking this figure as it stands, it represents a saving, in round figures, of some £80.000 a year. Even if we add to this the amount to be paid in compensation for the shortage in the whisky money we only get a further contribution, in round figures, of £47,000 a year, making a total of £127,000 a year. Against this the London ratepayers have sustained a loss of their share of the Land Taxes, which has been estimated at £100,000 a year; and it is important to remember, in estimating the revenue from the Land Taxes, that such revenue would be an increasing one. There is a further loss to the local authorities which the Financial Secretary to the Treasury did not include in his estimate—I refer to the decreased assessable value of licensed premises. This is a very important omission. The loss of assessable value to London under this head is £370,000. This means an annual loss of revenue from local rates of £157,000 a year, including the Metropolitan Water Board rate. If we add the loss of London's share of the Land Taxes we get a total of £257,000 as against a gain of £127,000, showing a. net loss to London, in round figures, of £130,000 a year. Mr. Hobhouse produced a lot of figures and showed a balance in favour of the local authorities throughout the whole of the United Kingdom of £40,000. I have also drawn up a profit and loss account, and I venture to say that my figures are quite correct, and I do not think they will be questioned by any noble Lord on the Government Bench. I have worked out, instead of a balance of £40,000 in favour of the local authorities, that in the case of London alone the balance on the whole transaction is a net loss of £130,000 a year. That, my Lords, is an example of what Mr. Hobhouse has designated a most generous contribution from the Imperial Exchequer to the local authorities.

I wish to be quite fair to His Majesty's Government, but let us look at this from the point of view of the man in the street—the elector who pays rates. Many men supported His Majesty's Government at the General Election in January, 1910, on the promise of receiving some relief from the new Land Taxes pending a final readjustment of the burdens now falling on the ratepayers. His Majesty's Government now come forward and say that they cannot possibly deal with this question of local taxation this year. They also tell the ratepayer that they must retain his share of the Land. Taxes until they do deal with the question. They have got the unfortunate ratepayer both ways. They refuse to legislate for him, and until they do legislate they refuse to pay him what they owe him. I submit that, even in the brief statement I have ventured to make to the House to-day, I have shown that the Government have a case, and a serious case, to answer. The ratepayers have not only got to bear the burdens of purely local administration, but also those additional burdens which Parliament is so ready to place upon them. I may mention, in passing, that Parliament since 1888 has passed over 600 different Acts under which new duties are imposed and new powers conferred on local authorities. The undeniable fact is that the cost of local government has increased, is increasing, and ought to be diminished. I do not think the Government are dealing quite fairly with this grave matter on behalf of the overburdened ratepayers, and I hope that we shall receive some definite assurance this evening that steps will be taken without delay to remedy the undoubted grievances I which exist.

Moved. That there be laid before the House Papers respecting the financial relations between the Imperial Exchequer and local. authorities.—(The Earl of Dunmore.)

THE LORD PRIVY SEAL AND SECRETARY OF STATE FOR INDIA (THE EARL OF CREWE)

My Lords, before I say a word in reply to the speech of the noble Earl, perhaps I may be permitted to allude to the loss which the House has sustained by the death of Lord Wolverhampton in connection with the particular subject which is before us at this moment. When Lord Wolverhampton came to this House he was advanced in years, and his health had suffered, arid we did riot enjoy the advantage of hearing any real specimens of that remarkable eloquence which, at its best, placed him in the very front rank of Parliamentary speakers. On such a subject as this, in which his knowledge was almost unsurpassed, we ought, I think, to pay a tribute to his memory, recognise his loss, and express our sympathy with those who are mourning him.

The noble Earl alluded at the beginning of his speech to some observations of mine made in July of last year, and he, I have no doubt, thinks that I ought to be appearing at this Table attired in a white sheet with a candle in my hand. I must endeavour to make the best case I can, because it is quite true that I did assert on behalf of His Majesty's Government, as my right hon. friend the Chancellor of the Exchequer did in another place, quite categorically that it was our intention to deal, if possible, with the whole of this subject this year. The noble Earl very fairly quoted the whole of my observations on this particular point, including the expression in which I safeguarded what I said. After saying that we were determined to deal with the subject, I added— Whether it might he possible to conclude the whole subject during ff the compass of a single session, I cannot say. That applied, of course, to a clear session, and I most frankly admit that in making that statement when I did I was thinking of a clear session and not of the session which we are now beginning.

It was impossible to foresee in July last that the Constitutional question would swallow up, as it is going to swallow up, practically the whole time of this session. In the month of July I had no hesitation in saying that I, for one, was very hopeful that that question might have been settled in a manner which would not have involved the expenditure of time which it is going to involve during practically the whole, or at any rate a very great part, of the forthcoming session, and the fact that this is so is to me an acute disappointment. But I might point out to noble Lords opposite that, so far as this question is concerned, we are on a par, because even if we were prepared to proceed with the Constitutional question on the lines which they desire instead of upon our lines, if we were going to proceed to discuss as a Government the whole question of the reform of your Lordships' House including the immensely far-reaching subject of the possible application of the principle of the Referendum, if we were going to take that line instead of taking the line of carrying on the Parliament Bill it would be equally impossible for us, in the compass of a single session, to deal by means of a Bill with the relations between Imperial and local finance. Therefore it does not appear to me that there is any subject for recrimination between the two Parties, because when that statement was made and was accepted by noble Lords opposite it was understood that we all hoped to have a clear session in which to deal with it.

As the position now stands we arc anxious to make such advance as we can towards dealing with the question. Last year before there was any question of the Dissolution of Parliament, a Committee of Local Government experts had been appointed in order to get together the necessary materials for preparing a measure. Now we propose to proceed further on the same lines. We do not think that it would be advantageous to appoint a further Royal Commission to inquire into the subject. So far as general principles are concerned, they were threshed out, examined, and reported on in the very remarkable Report with which all your Lordships are acquainted of the Commission of 1901. I do not think, as far as the general aspect of the question is concerned, that any improvement could be made upon the Report of that Commission. There are, however, all manner of details which have to be closely considered before it is possible to deal with the whole question, and with that object we propose to appoint a Departmental Committee of a confidential character which will at the same time have the advantage of learning the opinions on the subject of the clerks of county councils and local authorities, as well as those of others. That is the best advance we can make during the present session, and although noble Lords opposite may be prepared to repeat the rather severe strictures of the noble Earl upon our conduct I think that, in their heart of hearts, they will admit that in view of the circumstances of the moment that is as much, from the purely business point of view, that it is possible for us to undertake.

The noble Earl subjected to a close examination the efforts which the Chancellor of the Exchequer has made to deal with the question so far as it is possible to do so under his present finance proposals, and he accused us of a second breach of faith owing to the fact that we were not handing over to the local authorities half the proceeds of the Land Taxes, but instead, as the Chancellor of the Exchequer said, we are relieving them of the cost which in the ordinary course would fall upon them in connection with the removal of the pauper disqualification. The noble Earl brushed all that aside, because he assumed that the cost of the removal of the pauper disqualification would in any case have fallen upon Imperial funds. I really do not know what warrant the noble Earl had for that assumption. It was always assumed—assumed in public, assumed everywhere—that the local authorities would refund to the Imperial Exchequer the sums which they gained by the fact that these old people were no longer set as a burden upon them, and to treat the assumption of that £1,500,000 or £2,000,000 as a pure matter of course and as no real relief to the local authorities is an attitude of mind that I can only qualify as audacious. After all, you have to look at these things in pounds, shillings, and pence, and if, as a matter of fact, the ratepayers are relieved of this sum, as they are going to be, that is a distinct fact which cannot be got over; and it seems to me that the Chancellor of the Exchequer or his representative the Financial Secretary was thoroughly justified in another place in placing that item on the credit side, and the other item, the half-share of the Land Values Duties—that is to say, about £250,000 in the first year and about £300,000 in the second year—on the debit side.

The noble Earl opposite has used a common rhetorical device in speaking of the ratepayer. He speaks of the ratepayer at one time meaning one and the whole body of ratepayers, and at another time he speaks of him and uses figures to support his contention when he only means the London ratepayer. who. I quite admit, does not get the full advantage of this particular transaction. That is a matter for separate argument. London may have a grievance to this extent, that under the Land Tax arrangement London would have profited somewhat more than London will profit under the pauper arrangement. I do not think the grievance is a very substantial one, but so far as it is a grievance for the sake of argument let it be admitted. But, of course, in speaking of the ratepayer you must speak of the whole class of ratepayers all over the country. and consider what the advantage is to them. Unless you are prepared to take the attitude of the noble Earl and treat the £1,500,000, or it may be £2,000,000, of the old age pauper figures as something which the ratepayer would claim in any case from the taxpayer—unless you are prepared to say that, and treating the ratepayers as a whole class, it seems to me that my right hon. friend is entirely justified in saying that the balance on this special arrangement comes out considerably in favour of the ratepayer.

In 1901 it was estimated by the. Royal Commission that the ratepayer had a grievance as against the taxpayer to the tune of about £2,500,000. I do not propose to go into any examination of those figures, but what I think we can venture to say is that this present allocation for this year is an attempt to reduce the grievance of the ratepayer, although we frankly admit that it does not go the whole way, or anything like the whole way. towards a complete settlement of the question. When the noble Earl went on to say that it was an agreed matter that the proceeds of the Land Taxes ought to be the exclusive property of the ratepayer, he was, I think, entering upon very controversial ground. It is, no doubt, sometimes argued that the particular gain in the way of increment which the land owner receives is due to the exertions of those in the immediate district, and that therefore if the tax is to be imposed at all that they should receive the benefit. But we all know that, as a matter of fact, that is by no means invariably true. There are a great many cases in which it is the precise opposite of truth. There is no need to multiply instances. In the county in which I live—in Cheshire—there are quarters where land has appreciated to an enormous extent and become. extremely valuable owing to the fact that people who carry on business in Lancashire in some cases, and in other cases in Staffordshire, have chosen to occupy the more attractive portion of Cheshire as a residential quarter. It is impossible to say, whatever your views may be about increment taxes, that those particular increments are due to the exertion of the local authority in the particular district.

I could go further. There are many such cases round London. There are other cases where the increment is due to the exertions and to the business enterprise of a railway company. I suppose in strict justice, if justice in such things were possible, or strict equity, the proceeds ought to go to the shareholders of the railway company; but, as we know, it is impossible to enter into minutiœ of that kind. I merely quote this instance to show that we and a good many others are not prepared to admit the dictum which the noble Earl laid down with so much certainty—that it was a matter of general agreement that the proceeds of the increment tax ought to go to the local authority immediately concerned. That is, in our view, a justification of the course which my right hon. friend has taken in this year ear-marking these taxes for the general purse instead of handing them over to the local authorities. I do not know that any useful purpose would be served by my entering further into the whole subject. I quite admit that the arrangement for this year is, and must be a provisional arrangement, for the reasons which I have endeavoured to explain; but it must not be supposed that we do not recognise to the full quite as much as noble Lords opposite, the importance and urgency of the whole question, including, among other things, the question of areas. This is a very difficult question and one which we must all admit is in a condition of no little confusion. It will be a long and a serious matter to get it put thoroughly right, but I hope that the steps we are taking will do something towards that, and that when we have cleared away these larger obstructive questions we may be in a position finally to deal with it.

THE MARQUESS OF LANSDOWNE

My Lords, I rise at once to express my concurrence and that of my friends who sit near me in what was said by the noble Earl as to the loss which this House has sustained by the death of Lord Wolverhampton. Lord Wolverhampton came to this House at a time when he no longer possessed those brilliant Parliamentary qualities which earned for him such well-deserved reputation in the House of Commons; but for all that there was not one of us who did not feel that his presence added distinction to this Assembly. We sincerely respected him, and we listened with attention to any words that fell from him in the course of debate. We desire to join our sympathy with that which the noble Earl has expressed for those who are mourning for him.

With regard to the matter which my noble friend behind me has brought before the House in a speech, if I may be permitted to say so, of very great clearness and ability, I desire to say a few words only. It is hardly unfair to say that there really is no defence to the charge which my noble friend has brought against His Majesty's Government. There is a plea for extenuating circumstances, but no real defence as to the facts. I do not suppose that in the history of Parliament more categorical pledges or distinct undertakings were ever given than the undertaking given, on the one hand. by the Chancellor of the Exchequer in the House of Commons, and, on the other, by the noble Earl speaking from his place in this House. The noble Earl chooses his words carefully, and he told us definitely—that was the word he used—that this question would be dealt with during the next session of Parliament; and the Chancellor of the Exchequer added to that an assurance that the question should not only be dealt with but dealt with thoroughly.

What is the noble Earl's explanation? He tells us that in the month of July the Constitutional Conference was sitting, and that he was at that time so hopeful of the result that lie was able to announce arrangements founded upon the assumption that this year we should have what he described, as a clear session. I was one of those who shared to some extent the hopes of the noble Earl—and I desire to be careful in anything that I say not to add to the unauthorised statements which have lately appeared in reference to what happened, or what did not happen, at the Conference—but I cannot say that I ever felt so absolutely sanguine of the result of our deliberations that I should have thought myself at liberty to allot Parliamentary time twelve months ahead in the confident belief that the discussions of the Conference were bound to clear away the whole of the great Constitutional difficulties which had been remitted to our consideration. The noble Earl must not be surprised if, in these circumstances, a very considerable feeling of irritation—I would almost say exasperation—has been produced in the minds of the local authorities who were encouraged to look forward to this relief. I think I correctly describe what took place in the House of Commons last year when I say that there was nothing that went so far towards smoothing the passage of the Land Taxes through that House as the assurance that half the proceeds of those taxes was to go into the pockets of the local authorities. For these Land Taxes were the invention of the local authorities; they had their origin, I fancy, with some Scottish local authorities with which my noble friend behind me is familiar; and it was the assurance that part of the spoils at any rate, was to go into the pockets of the local authorities that placated a good many of the opponents of the Chancellor of the Exchequer's proposal.

My noble friend has shown with considerable success that the solatium which is offered to the local authorities is not by any means adequate. I am not sufficiently conversant with the figures to follow that question in detail. I would only point this out, that in a good many of the calculations which I have heard made there seems to be this fallacy. It is assumed that because the old age pensions which will be payable in consequence of the removal of the pauper disqualification represent a certain sum, that sum is the measure of the relief to the ratepayers. That is entirely fallacious. The ratepayers remain saddled with their establishment charges, their fixed charges, and so forth, so that the £1,500,000 assumed by the taxpayers of the country is by no means £1,500,000 put into the pockets of the ratepayers. I must say that to many of us it does seem most unfortunate that this opportunity should have been missed for dealing with a subject which both sides regard as one of the greatest possible urgency. I say we are missing an opportunity because I believe it is a matter of notoriety that His Majesty's Government will probably be in the fortunate position of having a large surplus to dispose of. They might, therefore, have given this much needed relief. We can have no assurance that they will be in an equally fortunate position another year. Nor personally do I derive very much comfort from the announcement that this matter is to be referred to a Departmental Committee. I should, however, like to be assured, if the matter is to go to a Departmental Committee, that the Committee will be instructed to find the means of giving effect to the pledges given by Ministers last year, and that they will not merely be given a roving commission to inquire into a subject which has many ramifications and which lends itself to almost indefinite investigation.

THE EARL OF DUNMORE

I do not wish to detain your Lordships, but I would like to reply to one remark made by the noble Earl who leads the House. The noble Earl complained of my taking the figures of London in order to prove the case as regards the ratepayers of the whole of the country. I strictly stated that 1 was not presenting the case for London. It is true that in dealing with the figures presented to the House of Commons by Mr. Hobhouse I did take the case of London to disprove the balance which Mr. Hobhouse arrived at, but I took the figures for London because I happened to be in a position to obtain those figures with greater accuracy than I could obtain them with regard to the whole country. Mr. Hobhouse claimed a balance in favour of the local authorities throughout the United Kingdom on the whole of this transaction of £40,000 a year. I have shown that, in the ease of London alone, there is a balance on the wrong side against the local authorities of £130,000 a year; and I take it that on that showing it is extremely improbable—in fact, it is impossible—that for the local authorities throughout the United Kingdom there can be any credit balance.

The noble Earl took some exception to my claim that the proceeds of the duties on Land Values should go to the local communities. I gave that as my own opinion. My case was in no way connected with my opinion. My case was that a bargain was struck between the Chancellor of the Exchequer and the ratepayers throughout the country that one-half of the proceeds of the Land Taxes should be paid to the local authorities. If I might put it a little stronger, the Chancellor of the Exchequer, in order to obtain sufficient support for his Budget in the country, made this bargain with the local authorities who were opposed to the Budget in order to get their consent and support. As regards the £1,500,000 which the noble Earl said I had practically given the Government no credit for, I give them full credit for that amount, but I still claim that, taking the effect of all the legislation which has been passed by the present Government and taking the relief afforded to the rates by the £1,500,000, there still remains a great loss to the ratepayers throughout the whole of the country.

It was with great regret and disappointment that I listened to the statement of the noble Earl. The only advance His Majesty's Government can give us is that they are going to appoint another Committee of Inquiry. A Royal Commission, admittedly strong and representative of many different views, sat for some five years inquiring into this same matter. I might remind the House that if the recommendations of the Majority Report had been carried out, there would have been something like £2,500,000 of extra grants for the local authorities; and if the recommendations of the Minority Report had been carried out, there would have been something like £1,500,000 in increased subventions. This was several years ago. The position of local authorities is far worse now than it was then. In these circumstances I am disappointed that His Majesty's Government can find no further help than appointing another Committee to inquire into the matter.

Motion, by leave, withdrawn.