Lords Sitting of 8 December 1925

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
ROADS AND STREETS IN POLICE BURGHS (SCOTLAND) BILL.
Brought from the Commons, read 1a, and to be printed.
CIRCUIT COURTS AND CRIMINAL PROCEDURE (SCOTLAND) BILL. [H.L.]
Returned from the Commons, with Amendments.

BUSINESS OF THE HOUSE.
VISCOUNT HALDANE: My Lords, may I ask the noble Marquess the Leader of the House whether he can give us any forecast as to when the Irish Bill is likely to be taken? I understand it is passing through the other House during the next day or so, and, as the Government wish to dispose of the matter quickly, it may be well that we should look a little ahead and see what can be done.
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, I understand, through the usual channels, that the Government in another place are proposing to suspend the Standing Orders and pass the Irish Bill through all its stages to-day. Your Lordships are aware that there is a special reason for this despatch into which I need not go at the moment. In this event the Bill will be in your Lordships' House this evening before dinner, or to-morrow when we meet. In either case I am anxious to follow the example of the House of Commons and pass the Bill through all its stages in one day if your Lordships are willing. With that object I shall place upon the Paper a Notice asking your Lordships to suspend the Standing Order, and if the Bill reaches us tomorrow I shall ask your Lordships to agree to it to-morrow.
EARL BEAUCHAMP: My Lords, may I suggest to the noble Marquess that it might be as well if the Bill took precedence of other Orders to-morrow?
THE MARQUESS OF SALISBURY: If your Lordships wish that, no doubt it can be done. Otherwise it would come in its place at the end of the Orders. If the Leader of the Opposition and the noble Earl wish, it might be taken first and I will gee that the necessary Motion is put upon the Paper. I understand that this is the wish of noble Lords.
VISCOUNT HALDANE: Yes.

HORLEY AND DISTRICT ELECTRICITY SPECIAL ORDER, 1925.
THE FIRST COMMISSIONER OF WORKS (VISCOUNT PEEL): My Lords, I beg to move the Motion which appears in my name on the Paper.
Moved, That the Special Order which was presented on the 15th day of July last be approved.—(Viscount peel.)
THE EARL OF CLARENDON THE EARL OF CLARENDON had given Notice to move, as an Amendment, to leave out all the words after "That" and to insert "having regard to the decision of a Select Committee of this House upon the Horley District Gas Company (Electricity Supply) Bill [H.L.] the Special Order be not approved." The noble Earl said: My Lords, in rising to move the Amendment which stands in my name upon the Paper. I think I should explain to your Lordships why it is that I am asking your Lordships to follow the course that; is there outlined. I appear before your Lordships to-day, not as a member of His Majesty's present Administration, but as Chairman of the Select. Committee that heard both these cases and gave the Horley Gas Company their Bill. "Before I go any further I ought to give your Lordships, quite briefly, the history of this case. The Order has appeared under somewhat unusual circumstances, and it raises important considerations of procedure and policy. I will give your Lordships the history of the case and I ask you to reject the Order.
Two applications were made. First there was this Order promoted by a small electricity company in the district of Horley, and in the second place there was a Bill presented by the Horley Gas Company, whose application was heard, as I have explained to your Lordships,
1166
by a Select Committee of your Lordships' House. I may say that the Gas Company is an undertaking of some years' standing and has carried on its operations most successfully, so far as the supply of gas is concerned, in the district of Horley. The Gas Company were obliged to adopt the procedure of promoting a Bill for the simple reason that the new Electricity (Supply) Act was not upon the Statute Book and they were unable to avail themselves of its provisions. They accordingly followed the course which had been sanctioned by Parliament. The Electricity Company was formed and application was made for support after it had been made known that the Horley Gas Company intended to promote their Bill, and the Gas Company, in September, 1924, informed their opponents of this fact when their opponents were asking for subscriptions to their company. The Electricity Commissioners were informed of the promotion of this Bill so long ago as July, 1924. A copy of the Bill was handed to them at the same time as it was deposited in the Parliament Office so that the Commissioners might know of the intended promotion and follow the usual course, which was to defer consideration of the Order until Parliament had considered the Gas Company's Bill.
The Gas Company objected to the Order, but they were not heard by the Commissioners in support of their objection. The Commissioners granted the Order and forwarded it to the Minister of Transport for confirmation; and I should like to read to you Lordships a quotation from a member of the Commons Committee when the Bill was being considered there. He used the following words:
"There seems to be a contest here between the Electricity Commissioners and the Houses of Parliament as to who shall be able to decide between these two competing authorities on this particular Bill."
The Gas Company's Bill originated in your Lordships' House. It was considered by a Select Committee consisting of Lord Lovelace, Lord Lilford, Lord Erskine, Lord Hindlip and myself JS Chairman. Our hearing was a most exhaustive one and lasted four days. The Committee heard not only the representatives of the Electricity Commissioners but also the representatives of the Minister of Transport, and after

1167
a hearing which, as I say, lasted four days, they gave the Horley Gas Company their Bill.
I should like to quote to your Lordships quite briefly some of the advantages which the Gas Company claim for their Bill. In the first place, the Bill seeks to supply a materially larger area than does the Order. During the time when the Bill was being considered the manager of a neighbouring electricity undertaking intimated to the promoters of the Horley Gas Company's Bill that he would ask them, if the Bill went through, to supply that undertaking—namely, the Crawley undertaking—with electricity in bulk up to a maximum of 120,000 units per annum. Other advantages are as follows: (1), capital would be much more easily and more cheaply raised, as it would be raised under the Auction Clause, as required by the Standing Orders; (2), dividends would be limited; (3), cheaper electricity could be provided for these reasons: it would be generated very largely by utilising the waste heat resulting from the process of gas manufacture until such time as a bulk supply could be granted, the overhead charges would be spread over the two undertakings and only a portion of the administrative and executive charges would be charged to the electricity undertaking; (4) the same offices and showrooms would be available for both undertakings; and (5) very little increase in the staff of workmen would be needed. Further, the Gas Company would begin electricity business with an established clientèle, repeated interference with roads would be avoided and there would also be an absence of speculation.
With regard to the Electricity Order, I venture to suggest that it possesses none of those advantages. The authorised capital of the electricity company is £20,000 and it transpired that the consulting engineer had guaranteed of this amount a total of £5,000 on the understanding that he was to secure a management agreement for seven years. At the inquiry which was conducted by the House of Commons Committee, both these, schemes were examined and after a hearing lasting for three days the Horley Gas Company's Bill was rejected. In view of the course which I am asking your Lordships to take this afternoon, I
1168
think I should give you a few more facts regarding the proceedings before the House of Commons Committee. Under the Standing Order of Parliament, No. 106 of your Lordships' House, the Minister reports to Parliament upon the powers which are sought and that Report stands referred to the Committee appointed to hear the Bill. The Minister also has to perform a judicial function on every Order which is sent him, and that power is granted under the new Electricity (Supply) Act, 1925. If a memorial is lodged by any of the opponents, the Minister has to direct an inquiry to be held. But the terms of the Minister's Report undoubtedly indicated a desire, on his part, so far as we can judge words, that the Committee should uphold the Commissioners' Order. Whether this Report did or did not influence the Committee it is impossible to say, but I venture to suggest that there was an absence of that judicial spirit in which the Minister himself would have desired that anybody who held an inquiry should approach the subject.
The Gas Company very naturally felt that they were placed at a great disadvantage by the terms of the Minister's Report and felt that no good purpose could be served by their appearing upon their memorial and being heard. I might point out that the Gas Company have, therefore, been precluded from stating their case before either of the two subordinate tribunals and feel that they have no alternative but to concentrate upon this appeal to your Lordships. Although the Minister reported to Parliament that the Commissioners were satisfied with the practicability of the technical scheme as submitted by the Electricity Company and the promoters informed the House of Commons Committee that they had explored in vain the possibility of a bulk supply, the promoters at the last moment threw over the scheme which had been approved by the Electricity Commissioners and submitted a proposal for a bulk supply with the County of London Electricity Supply Company.
The nearest main of the County of London Electricity Supply Company is eleven miles away, and further power would be necessary if at any time it should be found possible to bring a supply of electricity to Horley. If bulk supply is a practical scheme now surely

1169
it was so when the Commissioners approved the original scheme. If that was so, they would undoubtedly not have sanctioned a local and separate generating station. Assuming that a bulk supply was practicable, why does the confirmed Order retain its original form and say nothing about bulk supply? I think it is pertinent to ask this question: Who are the real promoters and under which scheme is the district of Horley to procure its supply of electricity? Is it to be under some bulk supply, or is it to be under a scheme confirmed by the Minister, abandoned by the promoters of the Order and condemned by the Committee over which I had the honour to preside? I might point out that the Horley Gas Company, if they had secured power under the Bill, would have given a supply of electricity to the district within one year of the passing of their Bill—a condition which the Committee imposed. They would have utilised the method of waste heat until such time as they would have been able to supply the district with a bulk supply.
I think I need only give one more fact. The engineer of the promoters of the Electricity Order, who appeared before our Committee in March, told us when he was cross-examined that he had explored in vain the securing of a bulk supply, and he used every means in his power to defend the local generating scheme, as the only alternative. In his evidence before the Committee in the House of Commons it transpired that in January, 1925, he had commenced pourparlers with the County of London Electricity Supply Company. It also transpired later on that those preliminary arrangements had reached a more or less tangible form when he was actually giving evidence before our Committee, and only a fortnight after we had disposed of the question and granted the Horley Gas Company their Bill, a provisional arrangement was entered into that the County of London Electricity Supply Company should undertake to support the promoters before the House of Commons Committee and should continue to support them in asking for any further powers which they sought. I do not know whether your Lordships feel the same as I do, but I submit that this want of frankness on the part of the promoters' engineer is hardly consonant with the best Committee Room
1170
tactics. I submit that the Committee had a light to expect to be treated with more frankness by this gentleman when he appeared before us.
There is one final point, if this Order is agreed to I think it will be assumed by outside sources that your Lordships agree with the policy upon which the Electricity Commissioners' policy is based. Your Lordships are probably aware that under the new Electricity Supply Act, 1925, statutory gas companies? are now empowered to apply for Orders to supply electricity, and I think they will certainly wish to know how they stand under this procedure. Gas companies have a right, I think, to expect that whatever undertakings they place before Committees, or before the Electricity Commissioners, should be considered on their merits as business propositions. I venture to suggest, that the only safeguard in regard to these matters consists in allowing Parliament to retain control over the granting of Orders, and if your Lordships to-day reject this Order I can give an undertaking, on behalf of the Gas Company, that they will promote a Bill on the same lines next Session.
Amendment moved—
Leave out all the words after ("That") and insert ("having regard to the decision of a Select committee of this House upon the Horley District Gas Company (Electricity Supply) Bill [H.L.] the Special Order be not approved.")—(The Earl of Clarendon.)
LORD GAINFORD: My Lords, I think I can throw a little light on some of the questions addressed to the House by the noble Earl, but I think I ought to draw attention to this extraordinary fact, that the Minister of Transport, in support of the course which has been taken by Viscount Peel in moving the confirmation of this Order, is being to-day opposed by another Minister of the Crown, the Parliamentary Under-Secretary of State for the Dominions. I believe such a course is quite unprecedented in your Lordships' House—the course, I mean, of one Minister opposing the recommendation of another Minister.
THE MARQUESS OF SALISBURY: May I interrupt the noble Lord, as this really touches my responsibility? The fact is that my noble friend Lord Clarendon was appointed by your Lordships Chairman of this Private Bill Committee, and he

1171
has a loyalty to your Lordships which he is bound to observe to the best of his ability. I am pronouncing no opinion whatever upon the merits of the case. My noble friend, with this obligation upon him, in the summer approached me when he knew that there might be some friction with the Ministry of Transport, and asked me what course he ought to pursue. I felt bound to say that, in the interests of the judicial procedure of your Lordships' House, he was obliged to speak as Chairman of the Committee over which he presided, but that it was, of course, quite understood that he did not speak as a member of the Government.
LORD GAINFORD: Of course, I accept the explanation of the noble Marquess. I am a comparatively new member of your Lordships' House, but the practice in another place, of which I was for long a member, was different. It was usual there for another member of the Committee to voice the opinion of the Committee, if it were thought necessary, rather than show a division among the members of the Government. But let that point go. What is really of importance is this: What is the best thing to be done for a particular community who are very anxious to secure electric light and electric power? I do not want for a, moment to suggest that the noble Earl who has moved the Amendment is actuated by anything like obstructive tactics—far from it. Nobody could have presented the case for the Gas Company in a clearer or more forcible way than he has done this afternoon. But I want to point out that the Gas Company's Bill is now dead. The other proposal, this Order, is before your Lordship's House, has passed all the tribunals which Parliament has appointed for the consideration of a matter of this kind, and, having passed the House of Common's Committee, comes up for ratification here; and within six months, if this Order is passed, the people in this locality will not only have a bulk supply of electric light and electric power, but will be in a very much better position than they possibly could be if your Lordships accepted the Amendment which has been suggested.
In that ease the noble Earl has promised that another Bill will be brought, in next year in order to deal with this subject de novo. That means
1172
that the whole of the expense which has been incurred by the people in this locality, some in favour of an electric supply company, others in favour of a small gas company, would be incurred again, and then possibly the matter may be once more deferred. On the other hand, in the event of the noble Viscount's Motion being accepted the population will be able to secure their electric light on the cheapest terms available, and the supply will be of a very satisfactory kind. The natural inclination of us all must be to support the tribunal of the House which has apparently investigated these things. But it should be pointed out that in March last there were two private enterprise concerns—and do not let us trouble about which had priority in promoting this particular proposal of a generating station in Horley. It is not that question that is of importance, it is a question of which is the better proposal—the one which was before your Lordships' Committee last March, or the much larger one which came before the House of Commons Committee two months later.
In March last there were these two comparatively small bodies in the Horley district, one composed of a number of gentlemen who had subscribed £10,000 to put up a generating station in order that their homes might be adequately lighted, and the other, the Gas Company, who, having failed to supply a satisfactory gas to the community, said: "We will put up a generating station of our own, so that we may replace by electricity the gas which we formerly supplied to our customers." But during that period the Barking station came on the scene. The Barking station, I submit, is one of the finest stations in the world. It was opened by His Majesty the King not very long ago, and it produces electric power to the extent of 100,000 kilowatts at its 800,000 h.p. station.
That station has now got vast mains—not, as the noble Earl said, within eleven miles of the Horley district, but within four miles of the area of supply. It is quite true that if you draw a line to the far end of the area you can reach the eleven miles, but within the next few weeks an Order will be secured for the County of London authority to continue its main up to the very area of the Horley district. There is no difficulty

1173
whatever now in continuing the mains—as they will be continued—to the Merstham district, which is immediately on the north, and another area which they intend to supply on the north-east. The House of Commons had before it this proposal of a bulk supply for this community instead of the comparatively small generating station which was going to be erected at Horley.
I venture to suggest that this Order will enable the promoters to become distributors. Instead of generating electricity they will become distributors of a bulk supply provided for them by the Barking station. The distributors cannot be asked an absurdly high price by the County of London Company, because the Electricity Commissioners can control that price, and can say what is a fair price for the County of London Company to charge. The consumers of the district can also apply to the Electricity Commissioners every three years to have the price which they are charged revised. If this proposal were accepted the community would have no generating station in its midst, with a factory chimney and the consumption of coal there, but would get the electricity as cheaply as it can possibly be generated in this country. It will be an abundant and reliable supply, and in the event of any factories or workshops being put up in that district, instead of requiring extensions of the Gas Company's plant, their bulk supply will always be there ready to hand and will be the cheapest possible supply that can be secured to those factories. It seems to me that your Lordships have merely to decide what is really in the interests of the community which these two rival concerns desire to serve. I think there ought to be only one answer.
In defending the cause of the Gas Company the noble Earl suggested that no useful purpose would be served by the Gas Company appearing before the tribunal of inquiry which the Minister of Transport was obliged to set up. They did not appear. They had every opportunity of appearing. They were invited to appear, but for reasons of their own they did not.
THE EARL OF CLARENDON: The noble Lord will forgive me for interrupting him, but I would point out that the Gas
1174
Company had already secured their Bill at the hands of your Lordships' Committee in this House, and that is the reason why they did not appear.
LORD GAINFORD: I said they had their reasons for not appearing. But I will explain to your Lordships that the circumstances are different Your Lordships' Committee had not before them the considerations in connection with this bulk supply at all.
THE EARL OF DONOUGHMORE: There was no bulk supply or generating station in the Order.
LORD GAINFORD: The bulk supply has been arranged—
THE EARL OF CLARENDON: Yes; but the point is that it is not in the Order. The original Order is for a local generating supply scheme.
VISCOUNT PEEL: I will deal with that. There is a perfect answer.
LORD GAINFORD: There is some little technical point as to what is in the Order and what is not in it; but the fact; remains that there is a bulk supply available to the community if they like to take it and if your Lordships care to enable the community to have it. My point is that this supply will be an efficient and adequate supply, and that the Gas Company in not appearing before the tribunal in June last put itself really out of court, lint it is not upon those technicalities that I ask your Lordships to support the Government in the action they have taken. It is because I am satisfied in my own mind that the community will best be served by having a bulk supply available which will meet all the necessities, not only of the present day but for years to come.
VISCOUNT HALDANE: My Lords, we are all disposed in this House to agree, when we can, with the noble Earl who has moved this Amendment. But neither our regard for him nor the mere technicalities of the order in which Bills and schemes have passed ought to move us in this matter. The whole question is whether the bulk supply scheme is not by far the best for this particular locality in Surrey. To confine it to a small local company supplying gas as well as electricity is to

1175
leave it exposed to the very thing of which it has been the policy of successive Governments to get rid. These Governments have laid down that electricity supplies in bulk under such large schemes as the one at Barking are preferable in every respect to the smaller schemes—preferable in cheapness, because the price is controlled, preferable in quality because the system is a well-thought out one applicable in various directions, and preferable in that it all goes towards the unification of the system under which light, heat and power are to be produced. I have no wish to take up your Lordships' time. This is a question which has come, up before and will come up again; but I cannot have any opinion in this matter except that the proposal of the Government is very much the best on the merits. Whether there are minor questions about the Order which have come up here from decisions of the Committee, I do not think it worth considering. We have to consider the substance of the matter.
EARL RUSSELL: My Lords, you have been reassured by the noble Marquess opposite as to any division in the Government. You have listened to speeches on the one side and on the other, and I am rather wondering whether on the whole the same effect has been produced in the minds of your Lordships as on mine. I am sorry not to agree with my noble and learned Leader, but I see no reason why we should not imitate the excellent example of the Benches opposite. What is it that we really have here? We have a company which, as the noble Lord, Lord Gainford, said, had collected £10,000 from the neighbourhood to light their own homes. That was a very fine example, but I understood from the noble Earl's exposition that £5,000 out of that £10,000 was in consideration of a service agreement by the engineers and not so much connected with anybody's home. I should be glad if the noble Viscount who represents the Ministry of Transport would tell us, when he comes to reply, whether it is or is not the fact that the contemplated Gas Company's Bill does supply a larger distinct than the Order, and whether it is true that the Order merely picks out, as I understand, the "plum" of the district and leaves the outlying people unsupplied. If that is so, I do not see how, on the whole, it would
1176
be an advantage to Horley to have a smaller Order.
On the question which the noble Lord below me raised as to the bulk supply, the noble Viscount, Lord Peel, says that there is a complete answer to that; but I do not understand why we are to be told that we are to approve of an Order providing for a generating station and are to have it understood in some way that that means a bulk supply. That seems to me to be a very excellent reason for rejecting the Order in the form in which it is before us because, as I understand it, the Order we have before us to-day makes it perfectly clear that it does not contemplate a bulk supply, and I do not think we ought to pass it under the impression that it means something else.
Then there is this further question. The noble Lord who supported this Order, and who spoke second, said that it had gone through all the stages which Parliament had provided and that it now merely came to your Lordships for confirmation. That is rather to suggest that Parliament is to be bound to confirm, without examination and consideration, any Order which comes before it. I think it is very important that Parliament should retain the power of saying in special circumstances that it is not prepared to confirm an Order where the circumstances are peculiar. In this case they certainly do seem to be peculiar. There seem to have been changes of front on the part of the promoters of this electricity undertaking and there seems to have been a decision of your Lordships' Committee, after a careful hearing, in favour of the Gas Company I hope that your Lordships to-day will at any rate assert the fact that the ultimate control rests with Parliament, by not passing this Order which has been prepared, not by any Parliamentary body but merely by those bodies to whom Parliament has delegated the business of examining these things in the first place and bringing them up in a complete form. I trust your Lordships will agree that the arguments of the noble Earl who moved the Amendment are really unanswerable and have not been answered.
LORD HINDLIP: My Lords, as a member of the Committee, may I be allowed, in supporting my noble colleague Lord Clarendon in his Motion, to assure your Lordships that we were all abso-

1177
lutely unanimous in the consideration of this Bill when it came before your Lordships' Committee. As far as I can gather, there are only two objections raised this afternoon. One was raised by Lord Gainford on the ground of expense. But had it not been for the opposition, surely the Gas Company would have had their Bill and by next June they would have been supplying electricity, as the noble Earl, Lord Clarendon, has already told your Lordships. The other point was raised by the, noble and learned Viscount opposite and was as to the bulk supply. This bulk supply is, of course, something new to anything we heard during the Committee stage. But as far as I can see there is no earthly reason, why, if your Lordships prefer a bulk supply, that bulk supply should not be given through the Gas Company instead of through the Electricity Company.
The noble Lord, Lord Gainford, said the Gas Company was a minute company. I think I might retort by saying that the Electricity Company is almost a microscopical one. I see no great advantage in the argument of the bulk supply, and if my memory serves me aright—I am fairly certain it does—as has already been pointed out by the noble Earl, Lord Russell, the area under the Order is considerably smaller than the area under the Gas Company. It seems to me that if you pass the Order of the Ministry of Transport you will be depriving, at any rate for some time, a large number of the inhabitants of that part of the world of any possibility of obtaining electricity. Another point that has occurred to me—I do not know if your Lordships will agree with me—is this, that in this matter the Department has been rather apt to consider themselves in a position to usurp the powers of Parliament, certainly the powers of this House, which I am sure your Lordships are very jealous to preserve.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE): My Lords, I am sure we are all very grateful to the noble Marquess who leads the House for the explanation which he has given. It has enabled us to enjoy the sight of two colleagues speaking on opposite sides. I am sure the position was made quite clear, but I should, of course, have regretted very much if the practice of
1178
your Lordships' House had made it impossible for the Chairman of a Committee to explain the action of a Committee of your Lordships. At the same time, I confess that I do not think I have ever approached any debate in your Lordships' House in which I felt more puzzled than I am by the issues now before us. The Affirmative Order system is one which, I know, we all desire to encourage. At the same time it has this disadvantage compared with the Private Bill system: Under the Private Bill system rival schemes come before your Lordships under a Bill, and you have to judge between individual members of your Lordships' House responsible for the schemes. But in these Affirmative Resolutions the Government move, and are forced, therefore, to take one side or the other, or at any rate the Department represented takes one side or the other, and we are in a difficulty—which some of us perhaps feel more than noble Lords opposite—in voting upon the question, because if we happen to disagree with the Government Department we have to go into the Lobby against the Government. I appreciate, that noble Lords opposite will find that easier than we do, and perhaps my noble friend behind me will find it easier than some of us do.
I think that some of the conduct of this Order has been very unfortunate. It is most unfortunate that the Ministry of Transport did not invite the Gas Company to appear before them at an earlier stage. My noble friend Lord Gainford referred to the fact that they were invited. Yes, but in this way. Your Lordships are aware that there are two inquiries, one before the Electricity Commissioners, and one before the Ministry of Transport. In this case the inquiry could be held before the Electricity Commissioners, and in that case it takes place before the inquiry by the Committee of your Lordships' House. Acting entirely in their discretion, the Electricity Commissioners did not decide to call upon the Gas Company to appear before them. Then came the decision of the Committee.
VISCOUNT PEEL: My Lords, I am sorry to interrupt my noble friend, but I do so because what he has just said may give a false impression. The noble

1179
Earl suggested that the Gas Company were not invited to go before the Electricity Commissioners on the first inquiry. I think your Lordships could necessarily gather from that that their case had not been considered. That is not so. They sent in full documents on the subject, and they were entitled to appear if they had wanted to do so, and they did not. I think I am entitled to put that right.
THE EARL OF DONOUGHMORE: I am not arguing the matter of procedure with the noble Viscount or the Department he represents. My impression was that it was the other way. I had been given to understand that the initiative lay with the Electricity Commissioners, and not with the parties themselves. At any rate, in appearing before me, the parties said in a tone of grievance that they were not summoned before the Electricity Commissioners, though I admit, and the Memorandum makes it quite clear, that their ease on paper was heard. But they were not heard in person.
VISCOUNT PEEL: No, but they could have been had they liked.
THE EARL OF DONOUGHMORE: Their impression is that they could not. After the decision of the Committee—I am talking now solely in point of time—the second inquiry (the Ministry of Transport inquiry as opposed to the Electricity Commissioners' inquiry) invited the Gas Company to come and state their case, but the Gas Company, I think rightly, said they would not, because they had had a decision of the Committee of your Lordships' House, and the Ministry of Transport is not a Court of Appeal from a Committee of your Lordships' House. I think the Gas Company were right in refusing to take any further part, relying on the protection they would receive from your Lordships as a result of this debate. That being so, I think it is very unfortunate that the Ministry of Transport did not hear the Gas Company at an earlier stage. It gives the impression that the Ministry of Transport have been partisans all through. That being so, I sincerely hope that the noble Marquess will not think it necessary to put on the Government Tellers in favour of the Motion before us, if we, unfortunately, as I believe, have to come to a decision on this matter.
1180
Therefore I desire to make a suggestion. I agree, of course, with my noble friend Lord Gainford. Our cardinal desire is to do the best we can for Horley, but I think it would be very unfortunate if this Order was forced through to-day, in view of its history from the beginning. I think, too, that it would be equally unfortunate if a direct negative were carried. Primarily, of course, this is a disagreement between a Committee of your Lordships' House and the Ministry of Transport, but a much more important matter than that, as the debate has made clear, is that it is a disagreement between the two Houses of Parliament. My noble friend Lord Clarendon pledged himself, in the event of this Order being refused, that the Gas Company would reintroduce their Bill. I understand that under the Standing Orders the proper notices for the Bill have already been given with a view to its deposit on December 17, the usual date. My noble friend also tells me that the Bill is already in print.
I would like to suggest that this Motion should be withdrawn to-day, and that your Lordships should allow the question of the disagreement between the two Houses to be decided in the only way that it can be decided—namely, by referring this Order and the Bill, when introduced, to a Joint Committee of the two Houses when we meet in the early spring. I would, of course, undertake that everything that I can do shall be done to bring that inquiry on as early as possible. I am very reluctant to make this suggestion for two reasons. I feel that it will increase the expense in a matter which is not a very great one from the point of view of bulk in comparison with the schemes that are considered by your Lordships, though it is of great importance to the parties immediately concerned. I am also very reluctant to make the suggestion because it means some delay. But, after all, it is better to have a little delay and to come to the best solution in the end.
I am sorry that my noble friend who represents the Ministry of Transport has not yet addressed us, because I was hoping to receive some enlightenment from him. We have heard a great deal about bulk supply. I would point out that this Order contains authority for setting up a small generating station. I

1181
am unable to reconcile that proposal with what I am told the real proposal is—namely, to get a big bulk supply from the Barking generating station, if this scheme is to go on surely it is better to go on in its real form and not in its wrong form. That qualifies, I hope, the disadvantage of delay. I make the suggestion in the interests of peace and with the desire of reaching the best possible solution on behalf of Horley. On the other hand, if it is not accepted and the Ministry of Transport remain of the same mind as they have always been in this matter, then I can only say that I have heard no reason which makes me think that the Committee decided wrongly last, year and I shall support the noble Earl, Lord Clarendon, in the matter.
VISCOUNT PEEL: My Lords, I will deal as rapidly as I can with this matter because there is other business on the Paper which must be dealt with. I do not suppose that the promoters of the Bill by the Gas Company, or the promoters of the Special Order, ever imagined that it would threaten to produce a schism on the Government Bench or effect a formidable split in the serried ranks of the Party opposite. Unfortunately this has happened, and it partly arises from the fact of this double procedure; this procedure by Bill and procedure by Special Order. The Gas Company adopted the procedure by Bill; the Electricity Company desired to proceed by Special Order.
Let me say just what happened. It has been recited already, and I only do so in order to get on with the business quickly. The Bill was passed by a Committee of this House over which the noble Earl, Lord Clarendon, presided, but it was rejected by the Committee of another place. What was the action as regards the Bill taken by the Minister of Transport? I think the noble Earl, Lord Donoughmore, made some suggestion that he had not exercised the full judicial wisdom which he is supposed to exercise. The Minister of Transport reported, as he was bound to do, to both Committees, to the Committee of your Lordships' House and to the Committee of the other House. It was a perfectly fair and judicial Report, and no one who reads it can impugn its judicial quality in the slightest degree. But it produced different effects in each House; or rather, I suppose I ought not
1182
to suggest that a Committee of another place is influenced by the Report of a Minister. What happened was this: the Bill was dead.
Concurrently with this Bill there was a Special Order brought before the Electricity Commissioners in February last. The noble Earl, Lord Donoughmore, says there was no opportunity for the Gas Company to make their views heard before the Commissioners, and it is quite true that the Commissioners did not at that time, although it was perfectly within their discretion, order an inquiry. But that does not affect the position of the Gas Company; and on two grounds. The Gas Company sent their case by documents to the Special Commissioners. They were fully considered; it was not until after full consideration of these points had been given by the Special Commissioners that the Provisional Order was made. But there, is this further point. It was absolutely in the power of the Gas Company, if they chose, to ask that an inquiry should be held. They did not ask for an inquiry. I do net criticise their action, but they cannot now come and criticise the Commissioners when they could, if they chose, have asked for an inquiry themselves. That Order was not confirmed.
When the Bill was dead, the Minister of Transport decided again that he would have an inquiry. It was intimated to him that the Gas Company did not want to appear before the inquiry, but he did not wish to take any advantage of statements of that kind, and therefore a letter was written from the Ministry of Transport to the Gas Company asking if they wished to appear. They were perfectly able to appear. I do not criticise their reasons for not appearing. I only say that they did not appear, and therefore they cannot argue now as to the action of the Commissioners when they had full opportunity of placing their whole case before them if they chose to do so. Throughout the Commissioners themselves and the Minister of Transport seem to me to have acted with perfect fairness and with a perfect observance of the judicial position in which they were placed.
Before I consider what would be the result of following the advice given by the noble Earl, Lord Donoughmore, let me deal with one or two incidental points

1183
upon which some criticism has been made. It has been said: What are these people doing? In their Order they are to set up an electricity undertaking of their own, a generating supply. What are they going to do? They are going to take the bulk supply from some other company. Yes, of course, they are going to take bulk supply from some other company if they can get it more cheaply; but these critics have completely misunderstood, or have incorrectly read, what the Order is. It does not say they must set up a generating station. It gives them power. It is purely permissive, and, therefore, there really is nothing whatever in the point that these people are departing in any way from their Order. And not only that. They could not under the Order set up a generating station, because, under Clause 11, before they set up such a generating station they have to go before the Electricity Commissioners and see if they have a right to do so. That, I think, entirely disposes of that criticism.
There is another point about capital. I have heard some rather critical opinions as to the amount of the capital involved. It is said it is only £20,000. What a miserable amount of capital! But you do not want to subscribe more capital than is wanted, and this is not a company which is being subscribed to by people who do not live in the area and who want to exploit the area. This capital is subscribed by the people in the area themselves, many of them small and poor people, and it is not right to sneer at a company of this kind because it has only £20,000 of capital. It is a great effort on the part of these people to produce electricity for themselves. There is no reason why they should not have their own company, or why they should be bound to take it from the Gas Company, whose business is not to supply electricity and whose gas is not always satisfactory to the inhabitants of the district.
So much for these two points. I did not want to go into the full details of the matter before your Lordships. I think the only question that remains concerns the result that would follow if your Lordships postponed or threw out this proposal. My noble friend the Chairman of Committees had made the suggestion
1184
that this Order should be withdrawn or rejected and that two Bills should be promoted next year.
THE EARL OF DONOUGHMORE: I am sorry if I did not make myself clear. I suggested that my noble friend should not press this Order now. It could remain on the Paper, and the Order, together with the Bill, could be referred to a Joint Committee.
VISCOUNT PEEL: When?
THE EARL OF DONOUGHMORE: Early next Session. My noble friend Lord Clarendon made it clear that the Gas Company are prepared to re-promote their Bill. I was able to add to that information the fact that I know that they have given their notice and, in accordance with the ordinary procedure, they would deposit their Bill on December 17 for next Session. My proposal was that this Bill which will be introduced formally into your Lordships' House on the first or second day of our meeting next Session, should be referred at once to a. Committee along with this Order as competing schemes.
VISCOUNT PEEL: This particular Order?
THE EARL OF DONOUGHMORE: Yes, assuming that this Order represents the scheme of the Ministry of Transport, which I doubt.
VISCOUNT PEEL: My noble friend says that he doubts that this scheme represents the view of the Minister of Transport. I am here to say that it does, and I think that, as I represent the Ministry of Transport, my word will be accepted. But I am going to ask your Lordships not to take any such course, but to pass this Order, if you are willing to do so, at once. Why should these people be delayed in getting their electricity in their own place? I understand that within six months, and probably still sooner, the necessary conductors can be laid down and these people will then enjoy their electricity. After all, both companies have not too much money, and I think that it is very hard indeed on this other Electricity Company that they should have to wait and to spend more money after this matter has come up to

1185
your Lordships' House. I should like to add one further point which has not been mentioned through the whole discussion I think your Lordships always pay a good deal of attention to the wishes of councillors in these matters. The Reigate District Council has given its assent to the electricity scheme, so that you not only have the Electricity Company, but also a public authority in the area supporting their scheme. I ask your Lordships, therefore, to support the public authority, to support the company and not to allow this delay of months which must: necessarily ensue if the whole matter is put off to be dealt with next Session. I trust that your Lordships will support the Order.
THE EARL OF CLARENDON: My Lords, I am afraid that, in spite of my noble friend's appeal, I must press this matter to a Division.
THE MARQUESS OF SALISBURY: My Lords, I am very reluctant indeed that your Lordships' House should be in any way hurried in a decision of this kind. So far as I am concerned, and the Government which I have the honour to represent, we shall naturally, in a Division, support my noble friend Lord Peel, who represents the Ministry of Transport. He has a responsibility thrown upon him as representing that Department of the Government, and he has discharged that responsibility. It is no use saying that my noble friend ought or ought not to have accepted the particular decision of your Lordships' Committee, because an obligation is thrown upon the Ministry of Transport to arrive at an independent conclusion upon the facts which may be submitted to them. That does not, of course, control your Lordships as a House, and, if this matter comes to a Division, undoubtedly your Lordships will decide as you think best after having heard the debate. But it does control the action of His Majesty's Government, who, of course, will support the Department of the Government whose responsibility is involved.
On the other hand, I do admit that the issues which have been submitted to us have not been very clear. There has been a certain vagueness about various matters which have been put before us—as to whether the parties have had a full opportunity of being heard, as to what
1186
precisely the Order contains, and as to various other facts. I am in your Lordships' hands entirely in this matter. If there were any desire to have a little more time, certainly I should not stand in the way of it. I think perhaps it is possible that a few days' consideration might enable us to arrive at a clearer conclusion as to what ought to be done than we could reach if we decided now. It may be thought a strong measure for me to make this suggestion, but I always feel myself, in matters of this kind, under a very special responsibility. We are a judicial body in this matter, although a Department of the Government is involved, and it is very hard on private rights if by any undue precipitancy they are overridden without due consideration.
I am led specially to make this observation by this fact. The Order was referred, under the Standing Orders of your Lordships' House, to a Special Orders Committee, the very Committee which we set up here and which marks a new procedure in your Lordships' House. They considered this very Order, and their finding, as it stands upon the Orders of the House, is not very guiding. The Report is as follows:

HORLEY DISTRICT ELECTRICITY SPECIAL ORDER, 1925.
"Report from the Special Orders Committee that no petition has been presented praying to be heard against the Special Order, but that in the case of the Holley District Gas Company there were special reasons why a petition was not presented against the Special Order: read and ordered to lie on the Table."
Except that they say that there were special reasons why the Gas Company did not petition, no guidance is given to your Lordships as to what course you should take. My noble friend the Chairman of Committees has, of course, explained that the reason why no petition was presented was that this Company considered that as they had laid their ease fully before the Private Bill Committee it was not necessary to say it all over again.
But that does leave an uncomfortable feeling with all of us that we have not had the guidance from the Special Orders Committee which at any rate, had hoped we should always have. I am not criticising the Committee, but that is the position in -which we stand. That adds

1187
to my desire not, if I may use so colloquial an expression, to rush your Lordships if there is any desire in any quarter of the House to have a little more time. If the matter goes to a Division of course His Majesty's Government will support the Ministry of Transport, and I hope that my friends will do the same, but if there is any desire to have an adjournment, in order that a little further consideration may be given to the matter, I shall not resist it.
LORD PARMOOR: My Lords, I should like to say one word in answer to the noble Marquess the Leader of the House, especially as in the old days I was very much concerned with what he calls the judicial side of the House as regards inquiries before Committees. For my part I think we should meet in accepting the suggestion of the Lord Chairman. That not only provides for delay, but it allows the whole judicial atmosphere to be reinstated on a proper basis. We get, rid of suggestions on the one side or the other. I do not know whether it is in order for the Lord Chairman to propose what he has brought before us as an Amendment in order that we should not only have delay but also put the matter to be decided upon a true judicial basis.
THE MARQUESS OF SALISBURY: I suggest to the noble and learned Lord that it would be much easier to decide upon the Lord Chairman's suggestion if we had a day or two in which to consider it.
LORD PARMOOR: To that I make no objection at all, but it did appear to me that the Lord Chairman's suggestion was a solution on a judicial basis. Whether it should be moved to-day, or at a future time, is a matter for the Leader of the House.
EARL BEAUCHAMP: My Lords, I have very much pleasure in responding to the practical invitation of the Leader of the House to move the adjournment of the debate for a few days. I will move it for whatever length of time is thought to be desirable—for a few days or till this day week. I agree that there is difficulty in a matter of this kind. Nobody likes to vote against a Department of the Government, and still less against a Committee of this House, who
1188
have heard the matter at great sacrifice of time and convenience, and it is a general rule of your Lordships' House to support your Committees. Still more it is our rule to support the Lord Chairman. Indeed, it is quite unknown to me that a suggestion made by our Lord Chairman should not be accepted at once, and generally, by the House. The noble Marquess has suggested a little delay to enable us to come to an agreement, and I am very glad to adopt his suggestion. I move that the debate be adjourned till this day week.
Moved, That the debate be adjourned until Tuesday next.—(Earl Beauchamp.)
On Question, Motion agreed to, and debate adjourned accordingly.

WORKMEN'S COMPENSATION BILL. [H.L.]
House in Committee (according to Order) on re-commitment of the Bill: Amendments proposed by the Joint Committee on Consolidation Bills made.

RATING AND VALUATION BILL.
Order of the Day for the Second Reading read.
THE MARQUESS OF SALISBURY: My Lords, I am very sorry to have to trouble your Lordships at, I am afraid, some length, in laying before you the provisions of a most complicated and technical Bill, and I can only ask your indulgence if I do not make it as clear as I desire to make it. Let me ask the House, in the first place, to lay aside a great deal of the prejudice which may have been excited in your Lordships' minds by certain of the provisions of the Bill as first presented to Parliament, because, in the course of its passage through another place, it has received a great deal of amendment. For example, all mention of special provisions for London has disappeared from the Bill, and railways and special properties are no longer dealt with. There is no absolute and complete break with the local knowledge of parochial organisation, and the connection with the Inland Revenue is completely done away with. There is no question of that any longer. These very important changes have been made in the

1189
Bill before it reaches your Lordships, and therefore I ask you to approach it with a completely unprejudiced mind, so far as those considerations are concerned.
The general defence of this Bill is that the present rating system is lacking in simplicity, does not promote uniformity, and closes the road absolutely to future local government reform. The changes that the Bill proposes are not in the main changes of principle, but changes of machinery—elaborate, intricate, far-reaching changes of machinery—with a view of promoting simplicity and uniformity and the opportunity for reform. As to simplicity, I am not going to trouble your Lordships with many figures, but under the present system there are very nearly 13,000 rural rating authorities.
LORD PARMOOR: Is that parishes?
THE MARQUESS OF SALISBURY: Yes. Under this Bill they will be reduced to about 650. The urban case is not so strong, but the rating authorities will be reduced by one half. Under the new system there will be no reason for the elaborate apportionment of estimates and expenditure amongst this enormous number of small rating authorities. I am informed that, in connection with the charges made for rating purposes, there were no fewer than 200,000 journeys a year which had to be performed by public officials in order to carry them through. All this we hope to simplify, and, perhaps more than anything else, there are provisions to consolidate the rates. Your Lordships are no doubt familiar with the fact that what is called the poor rate and the general district rate reached the rating authority as it were independently, so that there cannot be any proper correlation and co-ordination between them so far as the capacity to bear the burden by the ratepayers is concerned. Then I turn to uniformity. There is a deplorable lack of uniformity under our present system. Under the Bill, however, there will be but one valuation for poor rate and county rate purposes, and there are elaborate provisions by which the practice of assessment committee and assessment committee in the same county may be brought into relation, and, similarly, on a larger scale the practice between county and county assimilated.
That is the general defence of the Bill, and I will now attempt to describe its
1190
actual provisions. The general scaffolding of the English rating system, of course, remains the same. There is to be a valuation, there are to be precepts, rates, assessments, and a final appeal to Quarter Sessions. Those fundamental features remain. But there is a new distribution of function in nearly all these matters in the direction of that very simplification to which I have referred. I say "nearly all these matters," because I think it may be said that, broadly speaking, in precepting there is no change. The same authority whose duty it is to issue precepts now will, broadly speaking, still have that obligation—the county, the board of guardians, and so on.
Now I turn to the main point, rating and valuation. The great change to which the noble and learned Lord has already, in an interjection, referred is the disappearance of the parish as the rating unit. With the parish the overseer disappears. The rating authority in the county boroughs is the county borough; in every other area it is the district, either the urban district or the rural district, and it is never a smaller authority than those. There is a special advantage in having the larger unit in the country districts because, under the present system, there is an uncertainty in the burden which may be thrown upon the individual ratepayer, and it arises in this way. Let us suppose that in a parish some large property becomes unproductive from a rating point of view—some great works, say, become unoccupied and cease to pay rates. That does not change necessarily the apportionment of the rates upon that particular parish, and consequently, under the present system, the deficiency has to be made good by the other ratepayers, and a very heavy burden falls upon them. That will be altered, because we deal with much larger areas. The effect of this putting out of action of particular assessable units is spread over the larger area, and there is no such hardship as I have indicated.
I have said that the parish disappears as the rating unit, and it is true. Nevertheless, it is not true to say that there is a complete loss of touch with parochial local knowledge, because whenever a rating authority is valuing for rating purposes a particular parish then two representatives of the parish are, for

1191
that occasion and for that purpose, added to the authority. That was a change introduced while the Bill was going through another place. It preserves the great advantage of parochial local knowledge, and I am sure your Lordships will think it an improvement in the Bill. Next there is a provision under which there shall be regularity of valuation. At present it is left entirely vague, and there are all sorts of variety of practice. Sometimes valuation has not taken place for any number of years. All that is to be put upon a regular footing. It is to take place quinquennially; not that there is to be a complete recalculation every five years, but every five years the valuation is to be brought up to date. Then there is the great subject of deductions which are made from the gross value in order to find the rateable value. The House is aware that at present those deductions are made within certain limits upon the authority of the local body. Now, by the Bill, they are to be prescribed by Statute. They will be found in a Schedule to the Bill. That is in order to produce the uniformity of which I have spoken.
There is one matter affecting deductions to which I ought to call your Lordships' special attention. As the House is aware, the rateable value of agricultural land is only a quarter of the corresponding value in other hereditaments. Though that applies to agricultural land, it does not apply to the farmhouse. But the question of the farm buildings has arisen, and, in considering that question, the House of Commons came to the conclusion that, as the farm buildings had no object and no value apart from the agricultural land with which they were connected, therefore the valuation of farm buildings ought to follow exactly the same rule as the valuation of agricultural land, and the 75 per cent. deduction is inserted in the case of farm buildings.
I turn now from the rating authority to the assessment authority. Under the present law the assessment area is the union, and the assessment authority is the board of guardians or a committee of the board of guardians. Modifications in that system are introduced into the Bill. In a county borough the county borough council itself is to be the assessment authority. With regard to the rest of the country there are to be schemes which
1192
are to provide areas consisting of one or more districts which will be the new assessment areas. I think it may be said that the general pressure of public opinion has been in the direction of dwelling somewhat upon a smaller number of districts than a larger, and as the intentions of the Government have been explained up to now, they have been rather in the direction of including in these new areas a lesser number of districts than a larger as was at first suggested. The assessment committees in the county boroughs are, as I have explained, to be provided by the county borough councils, but are to consist not merely of county borough councillors. One-fourth of the members of the committee are to be representatives of the boards of guardians concerned.
But there is a further provision, the object being that there should be independence as between the assessing authority and the spending authority. Attention was called to the fact that the county council is a spending authority and that it would not be fair that it should be also the assessing authority. It is for that very reason that the Government have introduced into these committees other elements than the county councillors themselves. As I have said, one-fourth of the members of the committee are to be representatives of boards of guardians; but there is a further and a more far-reaching provision, that one-fifth of the whole body are to be neither guardians nor county councillors but, if I may use the phrase without importing any derogation, outsiders altogether.
EARL RUSSELL: Before the noble Marquess leaves that point, are not these outsiders to be nominated by the county council?
THE MARQUESS OF SALISBURY: I think that is so; still, I do not think the noble Earl must suspect the county councillor of a desire to act unfairly.
EARL RUSSELL: I do not.
THE MARQUESS OF SALISBURY: The great point is that they should not be part of the everyday administration of the county council, that they should be divorced from its ordinary policy and should look at matters with a fresh eye. I do not put it higher than that, and I am obliged to the noble Earl. In other

1193
areas than county boroughs the assessment committee is to be formed by means of schemes which are to include representatives of the rating authorities, representatives of the guardians and representatives of the county councils; it is to be a composite committee of that kind. As your Lordships are aware, the assessment committee is the authority to which the ratepayer turns when he desires to object to a valuation of his property which has been made for rating purposes. It is provided that the ratepayer may object to the draft valuation list or to the current list. He may object at any time and, thereupon, the assessment committee pronounces upon his objection. When the assessment committee has pronounced upon it the decision of the committee is retrospecpective; that is to say, it goes back to the beginning of the period during which the objection is launched.
Under the present system there is an appeal from the assessment committee to Quarter Sessions. That appeal is retained, but in a modified form. Quarter Sessions will still be the appellate authority, but it will be a committee of Quarter Sessions, a committee of justices. Moreover, there is a suggestion in the Bill that the Chairman of this committee of justices should be learned in the law and should not be a pure layman. This committee of justices, presided over, if possible, by a lawyer, will have all the powers of Quarter Sessions in the matter of rating appeals.
EARL RUSSELL: Would the noble Marquess kindly give us the number of the clause?
THE MARQUESS Of SALISBURY: Clauses 31 and 32 in boroughs the Recorder will sit as Quarter Sessions for this purpose and will sit alone. It is also provided, with a view of cheapening the procedure in the interest of the ratepayer, that solicitors as well as counsel should have audience before Quarter Sessions in these matters. Lastly, also with a view of studying the convenience and, if I may say so, the purse of the appealing ratepayer, the committee of Quarter Sessions will move from centre to centre according as it may find occasion. It will be a sort of judicial circuit in miniature bringing justice to
1194
the litigant instead of forcing the litigant always to go himself to the centre to seek justice.
With regard to the provisions for obtaining uniformity in valuation, there is a provision in Clause 18 of the Bill for what are called county valuation committees. Those are committee of the county council with representatives added from the assessment committees of the county. These valuation committees will attempt, by means of conferences and in other ways, to produce uniformity of valuation throughout the county. With one exception they have no actual power. The exception, however, is a very important one, because it consists in a provision under which they have the right to appear before any assessment committee in the county against any assessment and to appear also before Quarter Sessions in any appeal. The same principle is carried one step further. There are to be not only county valuation committees but a Central Valuation Committee sitting, that is to say, in London. This Committee is to be created under a, scheme formulated by the Minister of Health after consultation with the local authorities. This is under Clause 57. They will consist of representatives of the rating authorities, of the county valuation committees and of the assessment committees. These, like the smaller valuation committees, will proceed by way of conferences to try and arrive at uniformity over the whole country. They will make a Report to the Minister, and this Report will be laid before Parliament, as would naturally be expected.
I have something more to say, I am sorry to state, but I have sketched the main outline of the new rating system as we ask your Lordships to enact it. There are, however, two matters, which I may call subsidiary matters, of great importance, to which I must call your attention. There is, first of all, the system of compounding. Under the present law, as your Lordships are aware, in respect of small house property the practice is that the local rating authority should come to an arrangement, subject to certain limitations laid down by law, with the owners of property in the localities as to what allowance should be made in return for the advantage of the rates being collected by the landlord. That is what is called

1195
the system of compounding. I need not say that the system of compounding is not done away with, but is very much improved. I may remind your Lordships that this system of compounding applies only to hereditaments that are held on less than quarterly tenancies—that is to say, held only for short tenancies.
There are two main provisions. In the first place, there is a compulsory provision dealing with very small property of less than £13 a year value. In that case the rating authority may make compounding compulsory by resolution. Thereupon they treat the owner, as the occupier, and they give him an allowance of ten per cent. That is what is prescribed by Clause 11. There is another, a more general, system of compounding which is voluntary. That applies to all property of less than quarterly tenure. There the allowances are divided into three categories. Where the owner undertakes to take the risk not only of vacant occupation but also of uncollected rates—when he, takes that very considerable risk, the rating authority are allowed to make him an allowance not exceeding fifteen per cent.
EARL RUSSELL: Is he compelled to take that risk in the cases where compounding is compulsory?
THE MARQUESS OF SALISBURY: No. In that case he has to take the risk of uncollected rates, but not of vacant occupation. The voluntary system is one which I am now going to describe to your Lordships. Where the landlord takes the risk of the uncollected rates only, but not of the vacant occupation, he is allowed an allowance not exceeding seven and a half per cent. Finally, if he is merely the agent for the local authority to collect the rates, and does not take any risk either of vacant occupation or uncollected rates, then the allowance is not to exceed five per cent. It was suggested in another place that these substantial allowances to owners were in a large measure passed on to the occupiers, and that, therefore, an occupying owner of this very small property was placed at a disadvantage as compared with the tenant, and very strong pressure was applied to His Majesty's Government in another place to produce some remedy. My right hon. friend the Minister of
1196
Health promised to consider it, and I am here to repeat that promise. I do not think it would be fair to leave the occupying owner without some consideration, and when we come to a further stage of the Bill the Government will have a suggestion to make on this head.
I have one other subsidiary topic to deal with, and that is the hoary question of the rating of machinery. If your Lordships will allow me, in the midst of this terribly dry statement, to indulge in a personal reminiscence, I may observe to your Lordships that when I came into Parliament in 1885 the rating of machinery was already a burning question, and it has remained in exactly the same state as it was in 1855 until this day. But at last, if your Lordships are willing to help, the present Government hope, in the year of grace 1925, to solve the problem. At present there is any amount of variety in the treatment of the rating of machinery according to the union in which the manufacturer happens to live. In some places it is reduced to the lowest minimum, in other places—and indeed the majority of places—there is a tendency not only to rate the standing machinery—the shafting, the lighting, the motive power and all those things that are attached to the edifice—but also to include as much of the process machinery as possible. That is a very natural tendency on the part of the rating authority, which wants to get as much money as it can, and, therefore, desires to assess as widely as it can. The Government have applied themselves to the problem, and they propose to solve it in the simplest possible way by rating all the standing machinery, and not to rate any of the process machinery.
Your Lordships may say: It is all very well to use these wide terms, but what precisely do you mean by them? I have a general notion of what I mean by them—namely, very much that which we should call attached to the edifice when we are speaking of our own fixtures in our own houses. But undoubtedly there is a great element of doubt in certain cases where the two types of machinery meet, as it were, and for that reason it is proposed to create a Committee of five persons, to be set up by the Minister, to lay down in detail the dividing line between these two classes of machinery. Their Report is to be laid before Parliament and your Lord-

1197
ships will have an opportunity of objecting to it if you think fit. But even then a margin of error still remains. What if people cannot agree as to the precise application of the conditions laid down in the Report of this Committee? Then there is a procedure provided that it should be taken before a referee. There is a panel of referees, which is to be nominated by the Lord Chief Justice, and from these referees one will be selected to which the particular issue will be submitted, so that we hope we have stopped that hole. We have laid down the general principle, provided a Committee to give the precise limitation to the general principle and a court of referees to decide in individual cases how this general principle should be, applied. That is Clause 24.
I have now finished this very dull explanation. I have tried to confine within reasonable limits a description of this very intricate Bill. For many years a reform of our rating law has been called for. It is long overdue, and until this is reformed every avenue towards greater reforms in local government is barred. There is no means of dealing with the great problems which await us in the reform of local government until local finance has been placed upon a more regular footing, and it is with the object of achieving this end that the Government have prepared this Bill which I ask your Lordships to read a second time.
Moved, That the Bill be now read 2a.—(The Marquess of Salisbury.)
LORD CARSON: May I ask the noble Marquess whether it is the intention of the Government to refer this Bill to a Select Committee?
THE MARQUESS OF SALISBURY: No. I have received no such suggestion, and I think most of us would be convinced that if it were referred to a Select Committee it would not pass in the present Session of Parliament.
LORD PARMOOR LORD PARMOOR had given Notice to move, as an Amendment, That the Bill be read a second time this day three months. The noble and learned Lord said: My Lords, I am sure we are all grateful to the noble Marquess the Leader of the House for the clear way in which he has stated what is undoubtedly a somewhat complicated problem. At the same time
1198
there are large numbers of your Lordships who, from personal experience in matters of this kind and in local government, know quite well that the complications which appear formidable on paper are quite non-existent when you come to practical business. The complaint I have to make against the Bill is that, instead of following right out to its logical conclusion the Report made in 1901 by the Royal Commission on Local Taxation, it has only followed it up to a certain point, and the whole position appears to me to be altered for the worse because some of the most important provisions—provisions which are essential to make a Bill of this kind of real value—are omitted. Let me say a word or two upon it, particularly in reference to what the noble and learned Lord, Lord Carson, said about a Select Committee, which may be a solution of our difficulties with regard to this Bill.
One of the basic foundations in the Report of the Royal Commission for an improvement in our rating system was that there, should be one valuation for all purposes, whether rating or Income Tax. That no longer finds a place in the Bill at all. Secondly, the Royal Commission on Local Taxation, in making recommendations as regards machinery, made very important recommendations as regards the incidence of local taxation. I am not dealing with the way in which you rate farm buildings or machinery; they are special matters which I will deal with later. The Commissioners pointed out that while the present incidence of rating was maintained it was impossible to arrive at a fair and uniform system applicable to all the varying conditions which apply in the incidence of rating. That, I think, goes to the root of the proposals of this Bill and makes some of them of very little value.
They drew a distinction between services which are onerous and which ought to be national, and services which may be of advantage to particular districts, or particular ratepayers in districts, which were said to be beneficial to those ratepayers and in respect of which local payments ought to provide for the incidental expenses. As regards onerous payments, they included education, police, main roads, and the poor law. They said they were prima facie matters of national concern, and that the

1199
incidence of expense, so far as they were concerned, ought to be regulated not on the principle of benefit received but of ability to pay. That great question, the real question, to my mind, as regards what ought to be a very large measure of relief to the ratepayer, has been entirely omitted and put on one side so far as this Bill is concerned.
I entirely agree with shat was said in another place that the burden of rates is one of the most important considerations as regards many of our industries. I do not deny that for one moment, and it is not difficult, when we come to machinery and farm buildings, to suggest that those who would receive some relief in burdens would get a benefit as regards their business. That is self-evident; but that is only half the story. It is not a question whether machinery or farm buildings ought to have the remission which is suggested but it is whether, looking at the rating system as a whole, the large number of charges now placed upon it ought not to be placed on the national Exchequer. That is the real foundation which has to be laid before there is any great reform of our system of local taxation.
I am coming shortly to what the noble Marquess has told us as regards the provisions of the Bill itself, but let me take the case of machinery. I agree with the noble Marquess that this has been a point of contention for a long time, but the proposals in the Bill as it stands are really the proposals of the Royal Commission of 1901 which, as long ago as 1902, were adopted in Scotland. From that time to this we have been waiting in vain for a similar remission as regards the rating of machinery in this country. If the noble Marquess has in his mind—I have a note of them here—the recommendations of the Royal Commission in 1901 and the actual proposals applied by legislation to Scotland in 1902, he will find that they are in substance the same as the provisions of Schedule III of the present Bill, which deals with the rating of machinery. For my part I think the principle ought always to have been established that machinery which is not used in connection with the premises as such, but which is used for production or in industries carried on for the purposes of production, ought not to be rated for local purposes. There is nothing in this Bill except that which is
1200
to be found in the recommendations of the Royal Commission in 1901, and those recommendations are associated with a new adjustment as between matters to be paid for by rating and matters to be paid for by taxation, and also with the suggestion of new sources of local finance, which find no place in this Bill at all.
I pass on to another point to which the noble Marquess referred. In a very innocent way, if he does not mind my putting it in those words—
THE MARQUESS OF SALISBURY: That is a compliment.
LORD PARMOOR:—he referred to the proposal, which was not in the original Bill but was introduced at a later stage, under which farm buildings were to have the benefit of the three-quarters remission which is given to agricultural land. He knows perfectly well that this was a bargain between the machinery owners on the one side and the agricultural owners on the other, and that through all this series of years, whenever remission was asked for by the machine owners, the agriculturists always objected and said that if advantage was given to the machine owner they must have some compensating advantage in regard to agricultural land. They are given that compensating advantage. It is a bargain, and, I dare say, quite a fair one, between agricultural owners on the one side and machine owners on the other; but it is nothing more than that. Over all these years an attempt has been made to find some basis of bargaining and it has now been arrived at in this form. I believe that the money remitted from these two sources is considerable and I have heard that in some localities it makes a difference of as much as 2s. or 3s. in the rate. But. whatever the remission may be as regards machinery owners or as regards the owners of agricultural estates, the burden will fall on other ratepayers and I think that when you are placing a burden of this sort upon other ratepayers, you ought at the same time to consider whether the ratepayers as a whole might not have been advantaged by bringing in other sources of property to which rates might be attached.
I do not for the moment wish to consider the question of one valuation, but I want to consider the valuation of railways

1201
and special property. There again they have a better system in Scotland than we have in England, and the system in Scotland is the one which, if I may say so, ought to be adopted. It is, moreover, a system which in substance was recommended by the Royal Commission in their Report in 1901. What could be more ridiculous than to attempt to rate a railway system by bringing it down to a particular area, whether it is a new assessment area or the old parish, and trying to ascertain what rental would be given by an occupier for an impossible piece of railway separated from the rest? It is ludicrous. The only persons that I ever understood to be inclined to support it were certain persons interested in the intricacies of railway rating, but it really is astonishing that a matter of this kind, a provision so obviously absurd, should not have been put right in a Bill of this character; and it is more remarkable, if I may say so, since the will to do right was with the Government draftsman, for he introduced a provision of a reasonable character but, apparently owing to pressure during the Committee stage of the Bill in the House of Commons—whatever that pressure may have been—this beneficent proposal was thrown on one side and withdrawn from the Bill.
VISCOUNT YOUNGER OF LECKIE: There is going to be another Bill, is there not?
LORD PARMOOR: I am dealing with this Bill as it stands, as a rating Bill. I should like to deal presently with the question of one valuation, which I regard as very important, but I want to deal now, if I may, with the proposals of the Bill as indicated by the noble Marquess the Leader of the House, and I hope that I shall be able to get through with as little trouble as he did. He stated that the Bill was designed towards simplification and, no doubt, there is a strong element of simplification in certain directions. But let us consider a little more closely what he means by this principle of simplification.
I will ask the noble Marquess to follow this test as regards assessment or valuation areas, as they are called. I will take Lancashire, which is a good test. At the present time there are 25 unions in Lancashire—that is to say, there are 25 assessment areas for rating purposes. What
1202
will happen if this Bill passes? It will take out of these areas in various places 17 county boroughs which are at present included in the unions. That leaves no fewer than 24 outside districts which have to be treated in some way or other under the scheme. I cannot imagine a more complicated idea, introduced under the plea of simplification. I think it is quite clear that, in a case of that kind, so far from having simplification as regards assessment or valuation areas, you will have nothing but difficulty and more complication than exists at the present time.
The next point to which the noble Marquess referred has really been immensely exaggerated as regards its influence on our rating machinery as it exists at the present moment. I refer to the parish authority. It really does not matter that you have an overseer and a parish authority; what matters is the assessment committee and the assessment area, and when you talk about abolishing these parish authorities I do not object to that. You do nothing more than take away an officer from a limited district or parish to which all parishioners have access in the first instance, and ascertain how they are rated and whether they are properly assessed. The noble Marquess told us that we should have a reduction from 13,000 to 650. No one knows better than he does as regards the country districts that it is not the overseer or parish which created any difficulties as regards our rating system at all. In my belief whether you have 13,000 or one is practically wholly immaterial as regards our rating machinery and system.
Now the two important authorities to which he has referred are the rating authority and the assessment authority. So far as the rating authority is concerned I think the Bill is a great improvement. The rating authority in the Bill is either the county borough, or rural, or district council area, and I think that is a great improvement. I do not share in the alarm expressed by some people at a similarity between the rating and valuation or spending authorities. I think the suggestion is exaggerated that anything wrong would be done under those circumstances. Then we go from that to the assessment areas. The assessment areas are the really important item in the Bill, and as the assessment areas or assessment bodies stand at the present

1203
time, of course, we have to wait and see what schemes may be made, but as I understand what the noble Marquess says about the assessment areas or authorities, they are to be either county boroughs or areas which are to be provided under some scheme dependent very largely upon the influence of the county councils. Everyone admits that the old assessment bodies in connection with the unions did their work extremely well. At the same time, although it is a mistake to suppose that you will have in all cases simplification, still if you were to have large areas properly constituted as suggested, I say frankly that would be an improvement in rating machinery, although there is a possibility of complications such as I have pointed out in the case of Lancashire. I certainly reserve my opinion. I think the noble Marquess hardly put quite plainly what he called the preceptive process. The change in the Bill I think is quite right. Instead of precepting on totals you come back to rating the ratepayer. Still, that is a matter of extremely small importance. I am talking as one who has been connected with county and guardian assessments, but personally I am glad it should be set right.
The only other point to which the noble Marquess referred was the compounding question. That question is altered for the better by the proposals in the Bill, but it is only an incidental matter. The only question is how far it should be compulsory and how far voluntary, and if it is voluntary what should be the percentage paid to the owner. No one would suggest that a Rating Bill which was to set right the whole machinery of rating areas and valuation in this country, as claimed, is at all necessary to set right a minor point which only affects rating in a minor way and practically to an inconsiderable extent.
I think I have dealt with the matters which the noble Marquess dealt with. That leads me, before I come to the one important point of all, to the consideration whether it would not be wise to have these matters, which are said to be matters of simplification, really gone into and considered by a Select Committee before this Bill is passed. I admit that at this late stage it is difficult to get postponement for such a purpose, but it is much more important in formulating a
1204
scheme of that kind that you should be certain that it is really a simplification and really will be to the advantage of the ratepayers and that these constant complaints which have been going on for years will no longer be heard in future.
That question brings me to what I consider to be the most important omission from the Bill. I think the whole scheme of rating reform is to a large extent invalidated by the omission of the principle of one valuation. When the Bill was introduced into another place there was one valuation of gross value for all purposes, whether local rates or Exchequer Revenue. Surely it seems at first sight almost incredible that a proposal of that kind should have been withdrawn—a proposal which I shall show in a moment has been supported in every independent inquiry into our rating system and one which, if I may quote one or two words of the Minister of Health, had the support of practically all the local authorities in all parts of the country. When I say that, I am aware that the proposals as regards London have also been excluded from the Bill, but I was one of those, and I am one of those, who believe in the London system, and whether it requires reform in certain directions or not it is based on one valuation for all purposes and has received the assent and consent of everyone for the last fifty years. It is admittedly one of the greatest improvements made as regards our rating system in this country.
Let me state how the history of this matter stands. This is what was said in the Report, which I have referred to more than once, of the Royal Commission on Imperial and Local Taxation. We sat for six or seven years, and we had as Chairman a Peer who was known for his great skill in dealing with Committees of this kind, I mean the late Lord Balfour of Burleigh. The Committee recommended that:
"There should be only one valuation authority in each county, and the valuation list of that authority should be the basis on which all rates and taxes for all purposes should be raised."
VISCOUNT YOUNGER OF LECKIE: That is the Scottish system.
LORD PARMOOR: You have been fortunate in Scotland in getting many recom-

1205
mendations of the Royal Commission, which have not been applied in this country. I can only congratulate you. They have been to everyone's advantage in Scotland. Now let us look at what was the next step. There was the Report of the Royal Commission on Income Tax, in 1920, and in it occurred this passage:
"In considering our review of this part of the subject we may refer to the expediency of having one valuation for national mid local purposes in England and Wales, outside the Metropolis."
The words "outside the Metropolis" mean that it is already done in the Metropolis. Therefore, you have to carry outside the Metropolis the same principle of one valuation for all purposes. In the final Report of the Departmental Committee on Local Taxation the matter is again referred to and the principle of one valuation is advocated. And it is not as though we were without experience. The experience in Scotland is specially known to the noble Viscount opposite.
VISCOUNT YOUNGER OF LECKIE: In most cases in Scotland a Government official is the assessor. That makes a very great difference in having the two valuations.
LORD PARMOOR: I am going to refer to that. I entirely agree with the noble Viscount. I think it is a great advantage. It is a great security not only that you have only one valuation, but that that valuation is a right one. Therefore I entirely agree. And that has been our experience in London.
LORD JESSEL: London does not want that system any more.
LORD PARMOOR: I will come also to that. But whether they want it or not, speaking on behalf of the ratepayers and the Income Tax payers, I say without any hesitation that one valuation and one only ought to be applied for all purposes. In order to answer what the noble Lord has said, I will quote in a few moments some words spoken by the Parliamentary Secretary of the Ministry of Health in another place. In London it was said at one time that there was some difficulty under the Rent Restrictions Acts. That was not so at all in my view. A special Act was passed to deal with the matter. It is a matter of a special kind, a sequel of War legis-
1206
lation, which has really nothing to do with the general principles involved.
This is what was said by the Parliamentary Secretary of the Ministry of Health:
"I think it fair to say that apart from the criticism of the hon. Member for Fulham"—
who, I think, is Colonel Vaughan-Morgan—
"and perhaps the criticism of one other authority, there is not a single authority in the country which does not approve of the principle of one valuation for all purposes. We have, for instance, received the approval of the National Conference of Assessment Committees, the Association of Poor Law Unions, the Association of Municipal Corporations, the County Councils Association, the National Federation of Property Owners."
And then he goes on to say—
"The experience of London has justified the proposals which we now make."
Therefore you have a principle accepted as right by every impartial inquiry ever made, and you have the Parliamentary Secretary of the Ministry of Health saying that all those various associations and all the local authorities are in favour of the same principle and that, as regards London, he appeals to its experience.
But he went on to make another reference to London. He said—
"In another communication which we have received from the Metropolitan Boroughs Standing Committee, 1924, it is stated that the system of London has worked well for half a century."
He also said:—
"It will be agreed that having regard to the practical agreement of every one to the principle of one valuation it would be impossible to make any variation of the kind suggested."—
that is, eliminating the one valuation—
"Such a variation would go right against our main proposals."
And so it does. Here was a Bill introduced on the basis of one valuation for all purposes. That principle was supported in every inquiry and by every Commission and Committee, and practically every authority expressed itself in its favour.
Why was it withdrawn? I do not suspect a strong Government like the present being open to pressure upon them to withdraw what they regard as right in a matter of this kind. I do not think that the noble Marquess who introduced

1207
this Bill gave any explanation upon this point. I confess that the withdrawal of this proposal weakens the whole Bill as a scheme for rating reform, and I believe that when objection was taken to this proposal many of those who made the objection were really not aware of the difference between the Surveyor of Taxes and Commissioners of Income Tax, the Commissioners of Income Tax being for the protection of the taxpayer and the Assessor or Surveyor being the Revenue officer. The proposal was simply that he should take his part in assessment. And why not? Supposing you want unification, simplification, how can you find it better than in one valuation which applies to all parts of the country? There seemed to be a fear that the introduction of the influence of the Revenue officer would put up the standard of rating.
VISCOUNT YOUNGER OF LECKIE: He is quite impartial.
LORD PARMOOR: I quite agree with the noble Viscount. He is perfectly impartial. I think the notion that he was going to introduce a somewhat sinister element of a particular kind has no foundation whatever either in the history of this matter or in the position that the Revenue officer holds. Then let us come once more to the principle. Your Lordships will see the definition of gross value in Clause 68. There is nothing very new about it. It says:
"Gross value' means the annual rent which a tenant might reasonably be expected, taking one year with another, to pay for a hereditament if the tenant undertook to pay all usual tenant's rates and taxes …."
Exactly the same definition comes in Income Tax legislation. The term there is "rack rental," but as between rack rental and gross value there is no distinction of principle whatever. Nor has any distinction of principle been found either in Scotland or in London. And yet, for some reason which has not been explained, this basis of one valuation which was introduced into the Bill, which, I think, is the essence of rating reform, has been put on one side during the progress of the Bill through another place.
As the noble Marquess has pointed out, the Bill goes into a lot of detail, with
1208
which, of course, it is impossible to deal on Second Reading. But, as I said at the outset, the objections on principle are the result of not having followed right out the recommendations of the Royal Commission which have been accepted and are in operation in Scotland at the present time, and which would provide a better system of rating on a firmer basis. It is because of these deficiencies that I beg to move that the Bill be read a second time this day three months, although, if I could, I would rather adopt the suggestion made by the noble and learned Lord, Lord Carson, that it be postponed and referred to a Select Committee. I do not know whether I can make that alteration or not; if not, I must move my Amendment in its original form.
Amendment moved—
Leave out the word ("now") and at the end of the Motion insert ("this day three months").—(Lord Parmoor.)
EARL BEAUCHAMP: My Lords, I should like to join in the opening words of the noble and learned Lord who has just sat down and to add my congratulations to those he offered the noble Marquess the Leader of the House on the exceedingly clear way in which he explained this Bill. He spoke, indeed, as if he had spent his whole life in listening to assessment appeals or else in sitting as a member of assessment committees. With regard to the Bill I confess that I feel it loses a great deal of its interest from the great changes which have been made in it since it was first introduced. So many matters of importance and, I might almost say, the only matter of principle have been left out of the Bill in the course of the discussions in another place. The principle of one valuation is one of them, but there were a number of others which have been mentioned in the course of the discussion—for example, the question of Crown property in London and railways. The omission of these things naturally makes the Bill a measure of much less interest than it would have been in other circumstances. All that is really left for your Lordships to do is to discuss a certain number of matters of detail, some of them more important than others.
I look upon this Bill as I suppose it was intended by His Majesty's Government as being a first step towards the

1209
reform of the Poor Law. That is a measure which I understand the Government will undertake in the course of next year. It is a necessary reform. And the way in which they approach the matter is by abolishing the work which is done in the direction of assessment by boards of guardians. I confess that I should look with a certain amount of alarm and suspicion upon anything which will add to the work of the county councils. They are overburdened with work at present, and although there are now a certain number of self-sacrificing people who come forward and perform the work of the counties, it is a diminishing class which undertakes it to-day. Up and down the country we shall find it more and more difficult in the coming years to discover people who have time to undertake this work, owing to the increasing burdens which are put upon them and of which this Bill is yet another example. For the moment I do not know that there is any alternative policy. Whether, indeed, it is successful in abolishing so many committees and authorities as the noble Marquess led us to imagine, I am not sure. I think the large number he mentioned included the overseers in the various parishes. I am not perfectly certain that they should be included in quite the same way. The figures, as I make them out are different. There are at the present moment 780 valuation committees or valuation authorities, made up as follows:—Assessment Committees, 670; Metropolitan Boroughs, 28; and county boroughs, 82. Those, of course, remain.
THE MARQUESS OF SALISBURY: I was referring to the local authorities in the parishes.
EARL BEAUCHAMP: I understand. The Metropolitan Boroughs and the county boroughs remain under the Bill. In addition there will be no less than 253 boroughs, 647 rural district councils and 784 urban district councils. Those, I imagine, are the authorities which will be set up under the Bill when once it becomes law. Should that be so, your Lordships will see that the numbers become very considerably increased from what they are at the present time. Most of the matters of detail upon which one may fairly say something have already been referred to, but I will take the rating of machinery. I am not sure on
1210
the whole that this has been dealt with in the most satisfactory way. A distinction is already made between different kinds of machinery; there is the motive machinery on which rates are paid and the process machinery on which they are not paid. There is already, therefore, a certain classification of machinery, and it seems to be possible to make yet another distinction between the classes of machinery and to allow machinery of one kind to go free and another kind to be taxed. Why should not machinery used for the manufacture of beer, machinery for the manufacture of luxuries and machinery of that kind be still taxed? Had it been possible to make a distinction betwen the purposes to which machinery is put, I cannot help thinking that it would have been useful to have allowed machinery of that kind still to bear its burden. When all is said and done, however much you may, quite rightly, exempt certain classes of machinery from paying rates, the rates have to be paid by somebody in the end, and the unfortunate ratepayer certainly deserves every possible sympathy. Machinery used for the purposes of luxury do not seem to me to come into the same class a the others to which I have referred.
In regard to compounding, it is not, I confess, a system which appeals to me, and it seems that in some cases the individual compounded for does not realise the burden upon him. He does not realise sufficiently, even although there is an obligation put upon him in a recent Act of Parliament, how much of the money he pays goes in rates and how much in rent. Therefore, he does not bring to bear upon the question of economy in local expenditure that anxious scrutiny that I should like to see. One of the reasons for the extravagance of a certain number of our local authorities is that under the system of compounding they do not understand how much they are bound to pay. If every person was obliged to pay separately the amount due from him in rates it would go a very long way in the direction of forcing economy upon local authorities.
May I draw your Lordships' attention to the question of Crown property? That, I think, has been taken out of the Bill. In the Standing Committee in another place a clause was carried

1211
against the Government which provided for the rating of Crown property. That, however, has been left out of the Bill, and I think it is only fair to say that up and down the country there is a feeling that Crown property does not bear its fair proportion of rates in this country. People think that they have to pay more because Crown property pays so much less. In view of that, there is a certain amount of discontent with our present system which might well have been got rid of had the clause proposed in the Standing Committee been allowed to remain in the Bill. Another detail to which some reference has been made is the question of how far the same committee will be responsible for assessing and spending. The noble Marquess gave us the composition of the committee and explained that one-fourth of the members were to have no connection with the council.
THE MARQUESS OF SALISBURY: One-fifth.
EARL BEAUCHAMP: I am obliged to the noble Marquess—one-fifth were to have no connection either with the county councils or the boards of guardians. That is an admirable provision, but I am not quite sure that it goes far enough. I am not certain that the influence of the unfortunate payer is brought to bear upon the county councils. One-fifth obviously leaves the majority well in the hands of the committees as they are set up. I am not quite sure either that the inequalities are altogether abolished. The Bill provides that it is always possible that a county borough should be divided into two for these purposes. If it is divided into two and a different principle is applied to the one part of a big county borough from the principle which is applied in another, those inequalities of which we complain so much at the present time will surely still remain. I do not feel sure when you come to the moment of appeals that you will really be able to promote uniformity. Clause 18 is intended to promote uniformity. I do not understand that these committees have any power. All they can do is to fight the assessment committees at Quarter Sessions.
THE MARQUESS OF SALISBURY: They can appear before the assessment committee itself.
EARL BEAUCHAMP: That is perfectly true, but it does not follow that the assessment committee will agree to what they propose, nor that when they appear before Quarter Sessions they will have any overpowering influence in persuading Quarter Sessions to meet their wishes. But it is perfectly true that this matter, and all those other matters to which I have ventured to allude, are really only points of detail, upon which I shall not venture to detain your Lordships any longer at this late hour of the evening. I do not propose to put down, nor do I think any of my noble friends propose to put down, Amendments to the Bill in Committee, but we naturally reserve to ourselves the right to take such action as we think well if Amendments are moved in different quarters of your Lordships' House.
LORD JESSEL: My Lords, I should not have ventured to intervene in this debate had it not been for some references made by the noble Lord opposite in speaking of London. I may remind him that when these resolutions were passed there was no idea of London being in the Bill, and the authorities concerned with London, being quite happy under the present system, passed the resolutions in favour of the Bill. When, however, it came to their knowledge that, without any notice, London, which is set forth as a model to the rest of the country, was to be introduced into the Bill, they reconsidered their decisions, and they came to the conclusion that if any amendments were going to be made London would rather like to have some different system from that of the Metropolitan Valuation Act of 1869. They desired that some improvement should be made.
One of the improvements which they want, and which I think the Metropolitan Standing Joint Committee now wants, is to have two valuations; for this reason: There is a great difficulty in London, because the assessments are based upon the rents. In some parts of London the rents are very heavy, and it is felt that if you value right up to the rents you are doing an injustice to the tenants, because they are not receiving any better service than their neighbours. Therefore the revenue itself is losing, in a way, by the

1213
present system. The assessment authorities do not like to assess right up to the rent, and they have not put on such a high rateable value as otherwise would be put on if there happened to be two valuations. The Minister has promised, when the Bill relating to London is introduced, to consider the question of having two valuations.
The noble and learned Lord opposite seems to me a little dissatisfied, and therefore is moving the rejection of this Bill. Although he has not got the one valuation to which he attached a great deal of importance, he must recognise that in this Bill a great many valuations have been got rid of. There were, as he knows, four or five different rates on a demand note in the county. Now these will, at all events, be simplified, and instead of there being so many rates as there were there will be two rates only.
Another point to which I should like to draw your Lordships' attention is that referred to by the noble Earl opposite in speaking on the question of compounding. It is a great pity that the Act that was introduced to make the landlord say exactly what was paid in rent, and what was paid in rates, has not actually been carried out. It is very difficult to get that Act put into practice. The Act exists, but I am sorry to say it is constantly evaded. The authorities have gone into this matter, and they find it extremely difficult to collect personally from weekly tenants the amount of the rate. It is, in fact, almost impossible to do so. If you consider the salaries that you have to pay to the officers who collect these rates—and you have to have very good men, to pay them highly and, perhaps, to give them a pension—and if you consider also the number of collectors that you must employ to collect from these weekly tenants, you find that you lose a great deal more than you do by the compounding system. I can assure the noble Earl that that matter has been very carefully gone into, and it is felt that on the whole it is cheaper and more efficacious to allow the owners a rebate for collection than to employ so many rate-collectors who, naturally, must be well paid, otherwise they might abuse their trust.
As regards the rating of Crown property, all I can say from our London
1214
experience—and I think that in London we have more Crown property than anywhere else—is that the Treasury meet the various assessment committees in a very generous and fair spirit. There is very little difference of opinion, and on the whole the system works exceedingly well. I have nothing more to say about the Bill. London having been taken out of it, we hope that in the next Session of Parliament the advantages given by this Bill to the rest of the country will be granted to London in the new Bill that has been promised.
EARL RUSSELL: My Lords, the noble Lord below me (Lord Parmoor) dealt so exhaustively, and in such a well-informed manner, with this Bill that I do not propose to follow him into those details upon which he entered, particularly as I am nothing like so well equipped to do so. But I should like to refer to the general principles, which is appropriate to a Second Reading debate. I may say that when this Bill was introduced I welcomed it very much. I thought that we had something for which we had been waiting for a long time—the reduction of a very redundant number of small authorities, which, on the whole, I thought worked very inefficiently—I will not say badly, but at any rate very inefficiently. I thought that a great deal of unnecessary trouble was to be done away with, and that we were going to get a system of one valuation. On those points, I must say I very much welcomed the Bill an d its general principles, but I doubt whether, as has been said, it has been altogether improved in its passage through another place. I understand we have not got here the one gross valuation for all purposes that we have in the London system. That I must say I think is a very great loss, and a cause of inconvenience and expense to everyone concerned.
The, noble Marquess interrupted the noble Earl when be was referring to the reduction in the number of rating authorities. Is it not rather a farce to call a parish a rating authority when all that is done in a parish is something purely arithmetical? The parish receives a demand for a certain sum of money, and it simply has to divide that up among the rateable value and make a rate. You

1215
cannot call that parish a rating authority in any real sense of the word. It is not a valuation authority. As it happens, I have been an overseer myself. I know how clumsily this thing works, and what an absurd number of people you employ for small sums in poor country parishes. I should have thought it were possible, when altering the valuation authorities, to have only one valuation authority in a county. As I understand, counties are to be divided into assessment areas, and there is not to be only one valuation and one rating authority for the whole county. I should have thought that was an unnecessary multiplication of authorities.
With regard to this assessment committee which is to go from place to place, a committee of half a dozen or eight members, with two or three extra members to be added to it for the local district where it sits, will it not happen that the half dozen or so who always sit and know each other will act together? Their minds will work in the same way, and the two unfortunate people who come on here and there will be less and less considered? If that does happen will it not also happen that you will not get the best people to take on the position of these two extras on the committee? If so, it is not a system that is likely to give you any real assistance. You may get local knowledge, but unless considerable attention is paid to it I do not think you will find the best people taking the position of the two extra members on this committee.
There is the other question of the tribunal of appeal. I think the suggestion in the Bill is a Committee of Quarter Sessions, with some one learned in the law at their head, a sort of travelling tribunal of appeal which will probably be convenient and lead to uniformity. But what you have, not done in this Bill, and it really is important, is this: you have not dealt with that hypothethical tenant who has been a trouble to the law for half a century or more, and who has caused more expensive litigation than any other question connected with rating. Why could not the Government, when dealing with valuation and rating, do something to help to define that difficult question? It seems to me rather
1216
dreadful that you should leave this alone when you are trying to improve your system.
I was sorry to hear Earl Beauchamp say that he and his friends did not propose to put down any Amendments to the Bill. This is a complex Bill and presented to your Lordships at a late period of the Session. We are asked to pass it at short notice, and after, necessarily, a very inadequate discussion. After all, the Government might have given us this Bill a little earlier than December. The noble and learned Lord opposite suggested a reference to a Select Committee. I quite follow the Government's natural apprehension that if this Bill went to a Select Committee it might never get out. That is very true, but at the same time how is this House going to be able to exercise properly its function of revision and make this Bill, which is an entirely new departure in the rating system of this country, the best and most successful system which can be made, unless we are given more time or have some more detailed examination by a Committee?
I know the noble Marquess the Leader of the House wishes the Bill to be as good a measure as can be devised, and I recognise that, however much trouble we take, it may be necessary to have an amending measure in two or three years' time. It has come from another place amended up to the last moment in all sorts of ways and we have not had much time to consider it. There is little more time left in the present Session to consider it. If more time can be found for your Lordships to consider the Bill, I hope the Government will try to find it in the interests of good legislation.
THE MARQUESS OF SALISBURY: My Lords, I need not tell your Lordships that the concluding words of the noble Earl who has just spoken appeal very much to me. I have always desired ever since I sat in your Lordships' House, and on whichever side I sat, that there should be more time given to this House to do its work, and I can assure the noble Earl that I use my influence as far as it goes in order to obtain more time. I shall be able to give your Lordships a good many days between the Second Reading and Committee stage of this Bill, but I know that the noble Earl was thinking of a much longer period than that. That, how-

1217
ever, I am afraid is beyond my power. The difficulty of legislating under modern conditions is obvious and notorious. The time taken in the House of Commons is so enormous that if legislation is to be got through in a single Session it necessarily leaves us comparatively little time here. I have always held the view, and now I am not speaking as a member of the Government but as a private politician, that legislation ought to be carried on from Session to Session and that to bring it to an end at the Prorogation is a great waste of time. That is not a view which is largely held in the Party to which I belong and I am afraid you must consider it as only a pious opinion.
The noble and learned Lord, Lord Parmoor, has moved the rejection of the Bill, and has done so upon the avowed ground, not of what the Bill contains but what it does not contain. He says that surely the Government, with its big majority, can do as it likes. I am afraid the noble and learned Lord has no experience of being in office with a big majority. If he had he would not talk in that light-hearted way as to what Governments with big majorities can do. Undoubtedly it is necessary when you are dealing with vast subjects such as this not to be discontented because you cannot carry all the reforms you want all at once. The thing cannot be done. You are obliged, when dealing with legislation of this sort, to give up many things which you would wish to have, if you are to save a considerable and important part of the measure; and consequently, as I said at the beginning of my remarks, there have been great changes in the Bill all in the direction of leaving things out.
I take railways merely as an example because the noble and learned Lord mentioned it himself. I do not know whether he is familiar with the clause dealing with railways as it appeared originally in the Bill, but it was an extremely vulnerable clause because of its vagueness, its necessary vagueness, and therefore not easy to get through Parliament. The subject bristles with difficulties. It requires a Session to itself to deal with railway rating, and I am not at all astonished that it was necessary to leave out railways. Then the noble and learned Lord said that we ought to have dealt with the whole question of rating as laid down by the Commission over which Lord
1218
Balfour of Burleigh presided in 1901. That is a vast subject. It could be dealt with, but it could not be dealt with at the same time as the machinery of rating. You must take one or the other first, and the Government, wisely, as I think, took the machinery of rating first.
Then the noble and learned Lord says that the great blemish on the Bill is that the one valuation has disappeared. There is in this country a great jealousy in the localities against any interference by the centre. Local life and local patriotism is to be met with every day, and on the whole it is very valuable. It is the vivid interest in local life which does so much to keep public interest and public service alive, and one of the forms in which it shows itself is great jealousy of interference in local affairs from Whitehall. I share it when I am down in my county, and therefore I am not at all astonished that my hon. friends in another place resented the presence of a Revenue official who was going to interfere, as they thought, with the valuation of property in their localities and to apply London notions and London standards to matters which ought to be dealt with according to the dictates of rural human nature. Accordingly they would not have it, and, though I dare say the noble and learned Lord, finding himself in command for the first time in his life of a large majority, might have forced it through, and perhaps we could have done the same—
LORD PARMOOR: That would be Scottish nature.
THE MARQUESS OF SALISBURY: —that is not a very reasonable method of legislation, and therefore we must be content to pass what is even now a measure of vast importance and huge scope and not try to deal with these other big subjects. I turn to the speech that was made by the noble Earl, Lord Beauchamp. I share with him a certain apprehension that too much work may be thrown by modern legislation upon the county councils. One of these days Parliament will have to consider whether there must not be some new organ of local government, something larger than a county council and less than a Parliament, in order to cope with the kind of devolved work which increases every year. That

1219
is a very big subject, but undoubtedly one of these days it will have to be faced. In the meantime Governments naturally fall back upon the county councils because they are far better equipped than any other subordinate body.
I come next to some observations that were made regarding the rating of machinery. There is, of course, a tendency at first sight to say: Let us get within the scope of rating as much as we can and relieve the other ratepayers. But really that is not a very rational principle. After all, this machinery is used for creating the wealth of the country and one does not want to tax it more than is absolutely fair; and to apply to machinery principles which you would not apply to your own house is not fair. It is perfectly true that your house is rated in the same way as a factory is rated and all the fixtures in the house go to make up the rateable value. In the same way the standing machinery, all the shafting and all the main structural fixtures of the manufactory will be part of the rateable value. But when you come to the process machinery, the kind of thing that you can move about, you might as well have your piano rated or your arm chair. It is as distinct from the standing machinery as the examples which I have given. If you are going to be fair you must apply to machinery the same principle as you apply to any other hereditament in the occupation of any of your Lordships or of any other private individual. The line must be drawn somewhere and, although it is undoubtedly difficult to find the exact place in which to draw it—that is conceded—all the elaborate machinery which I attempted, I am afraid at too great a length, to describe to the House when I spoke before is designed for the very purpose of drawing that line at what seems to be, on the whole, the fairest place.
Something was said about compounding. There is provision in the existing law that upon the demand note there should be a distinction drawn between what proportion is rates and what is rent, and my noble friend Lord Jessel, who spoke just now, told your Lordships that the economy of compounding was so great that it was very difficult to forego it, even with the object which the noble
1220
Earl expressed, and with which I heartily sympathise, of bringing home to the ratepayer the effect of raising the rates, which he otherwise might not understand. As regards Crown property I really need not say a word, because my noble friend Lord Jessel has covered the ground. As a matter of fact, Crown property does accept a voluntary rate, which is arrived at by a conference between the Treasury valuer and the assessment authority in London, and also in the country, and no complaint is made that as a result the Crown property is underrated. Another point was made by the noble Earl, Lord Russell, who said that he did not think that the parochial members added to the rating authority would have any effect and that the permanent members of the rating authority would always decide matters their own way without reference to added members. I am afraid that I do not agree with him.
EARL RUSSELL: I beg the noble Marquess's pardon, but that was not what I meant. I did not in the least mean that they would be overridden. I merely suggested that as six gentlemen would always be acting together it would come more natural for them to act together and the two additional members would not count for much when they came.
THE MARQUESS OF SALISBURY: They would count for a good deal because they would have invaluable local knowledge. They would be the people who would really know, and any amount of acting together would not make up for that. They would say to the others: "If you lived in Slocum Parva you would know more than that; you would realise at once that what we say is true and that you are talking nonsense." Consequently they would have great weight; the possession of actual local knowledge is a tremendous advantage in dealing with these questions. I have to thank your Lordships for the reception of the Bill. I do not know whether the noble and learned Lord proposes to divide. I rather hope that he will not, and I can assure him that there is no desire on my part or on the part of His Majesty's Government to crush out discussion of any part of the Bill. I propose to put the Bill down for the Committee stage for next Monday, giving almost a week's interval between the two stages, and I

1221
hope that the result of the Committee stage may be all that your Lordships may desire.
LORD PARMOOR: My Lords, I do not wish to reply generally to the noble Marquess, although I think I have a right to do so as mover of the Amendment. This Bill was received by me for the first time this morning in the form in which it came out after discussion on Report in another place. To put the Bill down for Committee next Monday would give sufficient time, and I am sure the noble Marquess would give every opportunity which is possible within the limits of the time at his disposal. Accepting as I do his assurance on that point, and this being a very inconvenient time for a Division of the House, I ask permission to withdraw my Amendment.
Amendment, by leave, withdrawn.
On Question, Bill read 2a, and referred to a Committee of the whole House.

PETROLEUM BILL. [H.L.]
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Desborough.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DONOUGHMORE in the Chair.]
Clauses 1 to 7 agreed to.
First Schedule agreed to.

SECOND SCHEDULE.
Provisions of Explosives Act, 1875, incorporated with modifications.
Powers of inspectors.
4. A Government inspector shall have power to make such examination and inquiry as may be necessary to ascertain whether this Act is complied with, and for that purpose,—

(1) he may enter, inspect, and examine at all reasonable times by day any licensed premises, and every part thereof, and any premises in which any petroleum is kept, or is reasonably supposed by him to be kept; and

LORD DESBOROUGH: My Lords, I have two Amendments to propose on behalf of the Home Office, and they will take very little time. The first Amendment is to move, after the first clause of the Second Schedule, which deals with "Regulations as to conveyance by road," to add:
"(2) All regulations made under this section shall be laid before each House of Parliament as soon as may be after they are made, and, if an Address is presented to His Majesty by either House of Parliament within the next subsequent forty days on which that House has sat next after any such regulation is laid before it, praying that the regulation may be annulled, it shall thenceforth be void, but without prejudice to the validity of anything previously done thereunder or to the making of any new regulation."
This will give an opportunity, to those who feel aggrieved by any Regulations which may be proposed by the Minister, of seeing the Regulations and of making some representations with regard to them.
Amendment moved—
Second Schedule, page 6, line 29, at end, insert the said new, paragraph (2).—(Lord Desborough.)
On Question, Amendment agreed to.
LORD DESBOROUGH LORD DESBOROUGH moved, in paragraph (1) of Clause 4, to omit the words "is kept or is reasonably supposed," and to insert "spirit is kept, or is suspected" The noble Lord said: It is felt that the word "petroleum" is rather too wide, and so it is desired to add "spirit" and also the words "or is suspected."
Amendment moved—
Second Schedule, page 8, line 44, leave out from ("petroleum") to ("by") in line 45, and insert ("spirit is kept, or is suspected").—(Lord Desborough.)
On Question, Amendment agreed to.
Second Schedule, as amended, agreed to.
Third Schedule agreed to.

GOVERNMENT OF INDIA (CIVIL SERVICES) BILL. [H.L.]
VISCOUNT LEE OF FAREHAM VISCOUNT LEE OF FAREHAM rose to ask His Majesty's Government what steps are being taken to ensure the passing into law during the present Session of the Government of India (Civil Services) Bill, which has already passed through all its stages in the House of Lords and

1223
is awaiting consideration in the House of Commons; to call attention to the discouragement both to the existing Civil Services in India and to prospective recruits, if there should be any further delay in bringing into effect the safeguards and other benefits provided in the Bill; and to move for Papers.
The noble Viscount said: My Lords, since I placed this Motion on the Paper, indeed within the last few hours, I have received from the Secretary of State for India informal assurances, on behalf not only of himself but of his colleagues in the Government, that they regard this Bill as being of peculiar importance at the present juncture, and have every intention of using every possible effort to pass it into law in the course of the present Session. In those circumstances, and in view of the lateness of the hour, I do not propose to address your Lordships on the subject, and I ask leave to withdraw my Motion.
THE SECRETARY OF STATE FOR INDIA (THE EARL OF BIRKENHEAD): My Lords, before my noble friend asks leave of the House to withdraw, as he has persevered through a long and lively evening in the hope of asking his Question, I will take advantage of the opportunity of saying very briefly what I have to say. The noble Lord is quite right in drawing the assumption that it would be disastrous if this Bill failed to pass through both Houses in the existing Session of Parliament. It would be regarded, and reasonably regarded, by many of those whose good opinion we do well to value, as a breach of faith, and indeed I must admit that I should find myself in a position both of difficulty and embarrassment if it so failed. With the encouragement of my colleagues I have visited most of the chief Universities in England and Scotland, giving assurances to those for whom we were appealing for recruits, that it was the intention of the Government to pass this Bill into law in the course of the present Session. After three discouraging years of recruitment for the Indian Civil Service we have, during the present year, been afforded the prospect of great hopes for the future, and I have no doubt at all that the devoted labours of my noble friend and his Commission, and the campaign, founded upon the result of their exertions, that has been conducted in the Universi-
1224
ties, have been largely responsible for this encouraging and welcome change.
Let me tell your Lordships how the Bill stands. Most unfortunately, a difference of opinion in the Joint Committee delayed this Bill for nearly six weeks. The Joint Committee made recommendations which the Government were unable to accept. The result of the discussions and the postponement which took place involved the loss of nearly six weeks of time, and greatly jeopardised the fortunes of the Bill in getting Parliamentary sanction. But we still have great hopes that the Bill will pass on to the Statute Book. The Second Reading has been commenced, but not yet concluded in the House of Commons, but we hope that on Friday next it will be concluded. In that event the Monday, Tuesday and Wednesday following would be available for its discussion in Committee upstairs.
I cannot doubt that those members of the Party to which I myself belong will appreciate the high Imperial consequences of passing this Bill into law now, and equally I hope that members of the Labour Party will not fail to recall that I inherited the Bill, in all its principal features, from them. I made no addition of any great consequence when I presented it to my colleagues, and it would be true to say that this is the Bill which my predecessor in office, Lord Olivier, recommended to his colleagues, and which I believe had at least received the formal* assent of his colleagues at the time when his Government fell. In those circumstances it does not seem to much to hope that while opportunities of criticism should be taken, at least it will be considered that three days are adequate for the purpose of dealing with the Committee Stage. If we can get the Committee Stage on Wednesday evening there should be no difficulty in taking the Report and Third Reading in the course of the next day or two.
VISCOUNT LEE OF FAREHAM: I beg to thank the noble Earl for the encouraging statement which he has made, and I ask leave to withdraw the Motion on the Paper.
Motion, by Leave, withdrawn.
House adjourned at twenty minutes before eight o'clock.
* This word should be "informal." See columns 1227, 1228 and 1229.