HL Deb 15 December 1927 vol 69 cc1035-56

Order of the Day for the Second Reading read.


My Lords, this is a Bill which has been rendered necessary by certain scandals in the administration of local affairs with which, of course, your Lordships are very familiar. It applies to all local authorities who are the subject of audit by the public auditors, provided by the system in this country; that is to say, it applies to an local authorities except provincial boroughs, and even to them in respect of education and housing. These local authorities to which the Bill applies have great authority and great power, but they are in a position of trust. They are trustees to administer their affairs according to law. There is only one power in this country which is omnipotent, and that is Parliament. Every other minor authority must administer the law according as Parliament provides it, and I need not say that these local authorities are not exempt from this obligation.

The matter which we have had to complain of is that in a certain number of cases—not a very large number—local authorities have assumed authority to administer their funds, and the control of the funds entrusted to them, not according to law but according to what they conceive to be the wishes of the localities in which they live. They are bound, of course, to pay the greatest deference to their constituents, but they are not entitled to act contrary to the law. The system which prevails in this country, in order to prevent authorities from spending money illegally, is the system of public auditors, which has been in existence for some hundred years. These public officials are quite independent, and not subject to the control of any political Minister. Their duty, as your Lordships know, is to examine the accounts of local authorities, to see whether the funds over which they have control have been administered legally and accurately, and in the event of their finding that there has been an inaccuracy, or an illegality, to hold those people responsible who actually carried out the payments in this irregular manner. That is the law as it exists. They surcharge those who are responsible.

As I have said, there have been a certain number of local authorities who have deliberately defied what they know to be the law, in order to carry out the policy which they prefer in these matters. I am not going to weary your Lordships this evening with the citation of examples, all the more because everybody is very familiar with them, and especially with the case of Poplar, which has been very much in the public eye and in the public mouth in reference to these particular irregularities. There were several cases of irregularity connected with Poplar. One, for example, was the payment of wages to their servants far above what had been agreed upon by the general body of local authorities in London, who had acted in communication with and with the assent of the local trade unions, whose business it was to represent the trades in this matter. The result was that as the cost of living fell, the Poplar authority was paying wages in the case of men 40 per cent. higher than the approved rates, and in the case of women very nearly 80 per cent. higher.

I do not suppose there is any member of your Lordships' House, wherever he may sit and whatever opinions he possesses, who will not agree that irregularity of the kind I am speaking of must be corrected. The auditors, of course, surcharged the Poplar authorities, and surcharged a certain number of other authorities who acted in a somewhat similar manner. They were perfectly right in so doing. At the present moment there is an appeal, of course, from the decision of the auditors. Appeal is not very satisfactory, and I will explain in a moment the changes which the present Bill suggests, but the question I would like to ask your Lordships is this: What happens when an auditor surcharges a local authority? What happens is by no means effective. These cases to which I am referring, and to which I ventured to apply the term defiance of the law, have reference to very large sums of money, and the only remedy which we possess against a local authority which is the subject of a surcharge of an auditor, is to proceed personally against the members of the local authority who are in default. The only remedy is to distrain upon their goods, if they will not pay. It is no use to distrain upon their goods, because they do not possess effects which are sufficient, or anything like sufficient, to meet the particular demand upon them. It is quite true that under the law, if the distraint in these particular cases is not sufficient, they may be sent to prison, but your Lordships are aware that that kind of remedy is very unsatisfactory. We do not desire to send people to prison for those reasons, and it does not succeed, because they earn a certain amount of public sympathy and the proper deterrent ends of justice are frustrated. Therefore there is an evident call for some change in the law.

It is for these reasons that I have the honour to ask your Lordships to read this Bill a second time. It is a Bill which deals entirely with details. There is no great principle involved in it. It is designed merely to make more effective the remedies which all must admit are required in order to correct these irregularities. The Bill begins by making a distinction between a surcharge of £500 or over and a surcharge of less than £500 against the members of a recalcitrant authority. In the case where the sum is less than £500, broadly speaking the present system is allowed to continue, but where it is £500 or over then, if the surcharge is made, it involves disqualification of the offending member of the local authority for a period of five years. Observe that that is a much better remedy really than the old remedy of distraint and, possibly, imprisonment. This, disqualification for five years is to make the punishment fit the crime. If a man shows by his acts that he is not willing to obey the law as a public official the proper remedy is to say that he shall not be a public official; that is a thoroughly suitable answer. Moreover, it is not only a suitable answer, but it is a very effective answer. These gentlemen who are tempted to defy the law dread the power which this Bill will give to disqualify them from holding office for a period of years. And therefore, without being at all vindictive, this remedy is an effective remedy.

As I have said, there are not a large number of cases which we have in view. I think, if I am rightly advised, of the few cases of this magnitude which have been the subject of appeal during the last five years, only twelve, so far as the appeals to the Ministry are concerned, and five others, appeals to the High Court, come within this description of a defiance of the law to which I have alluded. Under the present law the appeal against the auditor's decision lies, at the option of the appellant, either to the Minister or the High Court; but, as we are going to enact, if your Lordships are willing to do so, that a finding against a member of a local authority is to involve disqualification, we think that it would be much better that such a decision on appeal should rest in the High Court, not in a political Minister, who might be the subject of criticism by his political opponents that he had not acted fairly in the matter.

That is the first important distinction which I should like your Lordships to bear in mind. There is another improvement in the matter of appeal. At present, if the appeal lies to the Minister, he has the power, even if he finds that an irregularity has been committed, to dispense with the penalty. But if the appeal goes to the High Court there is no power to dispense with the penalty. It was thought until quite recently that even in that case, even where the High Court found against the appellant, the Minister might intervene and say: "Notwithstanding the fact that you have been condemned by the High Court, yet because you acted, as you thought, reasonably, or because you acted under a misapprehension of what the law really is, I, the Minister, in my discretion will dispense with the consequences." But that turned out not to be the case, and in one of the appeals which were brought—in the case of Poplar—the Court found that the Minister had no such power. Now we propose to deal with all those difficulties, and in every case, whether the appeal is to the Minister or to the High Court—whether, that is to say, the cases are below £500 or above it—we give power to the tribunal, whichever it may be, to dispense with the consequences, to remit the disqualification, to let the man off the sum of money which would be exactable, or diminish the sum of money which would be exactable. A perfectly free hand is given to the tribunal, provided only that they find that the man acted, as he thought, reasonably or under a misapprehension. That is the improvement which this Bill proposes.

Another difficulty arises in the present law. Where an appeal is taken to the Minister, not to the High Court—as I have pointed out, under the present law the appellant may choose—and where, in the course of the proceedings, the Minister finds that a difficult point of law arises, he has no power to state a case for the decision of the High Court. That is obviously a blemish in the present law, and that also is remedied. The Minister can state a case on a point of law when the matter is being heard before him. Not only may he state a case, but, as is usual in this kind of provisions, if the High Court intervenes—the High Court may move in the matter—and directs him to state a case, he must do so. There is one other little matter in this respect which I should like to mention to your Lordships. I said just now that there had been a mistake on the part of the Ministry of Health in their apprehension of the law. They thought they had power to discharge the liabilities of the appellant where they thought fit even when the appeal had been brought in the High Court. There were certain such cases which took place before the decision in February of this year under which that view turned out to be an error. It is necessary, of course, to deal with those particular cases and there is a special provision in the Bill that in these particular cases, notwithstanding that the Minister was under a mistake, ex post facto it shall be put right and these people shall be relieved.

Lastly, the practice in respect of these appeals is that appeals to the Minister—that is, appeals as they will be in future—in respect of small sums of money are decided without a personal hearing by the appellant. That also is not consonant with our modern view. If a man appeals he ought to be heard. Therefore there is a provision that where he appeals to the Minister he shall always have a personal hearing by some official appointed by the Minister for the purpose. I do not think I need trouble your Lordships with any more detail. There are special provisions, machinery provisions as to costs, which are not the costs of these appeals, with which I need not trouble you. Broadly, I hope I have conveyed to your Lordships the general purpose of the Bill. It is to remedy the lack of power which at present resides in the State to see that local authorities do not misuse their powers by spending the public money contrary to the law. It has been found in practice that the existing remedies do not carry that into effect, and that even when they are applied it is found that they do not act as a deterrent and that, consequently, contrary to the wishes of Parliament, these irregularities continue.

Though it is a little complicated in explanation it is really a very simple Bill. We apply the penalty of disqualification rather than the other; but we hedge it round with new provisions as to appeal so as to safeguard those who are affected by this new provision from the possibility of injustice. I hope your Lordships will agree with His Majesty's Government that this is a very moderate and very well considered measure, that its provisions are adapted to the particular mischief which they have to meet, and that you will be good enough to give the Bill a Second Reading. I beg to move.

Moved, That the Bill be now read 2a.—(The Marquess of Salisbury.)


My Lords, the hour is late but this Bill which the noble Marquess has described as a simple Bill and also a well-considered Bill—I am afraid I do not agree with the adjective—is, as a matter of fact, a very important and far-reaching Bill, or may be, in its consequences. Therefore, I do not think I need apologise for occupying a few minutes of your Lordships' time in trying to put before you some considerations which we, on this Bench, have in mind in opposing the Bill. The truth is that this Bill raises questions—and I think I can say this without the slightest incursion into the hyperbolical—of fundamental constitutional importance. It is a Bill which I think I shall be able to show is unfair in some respects and very undemocratic. If I can substantiate those contentions, as I think I can, then it is unfortunate that it has to be considered at such a late hour and under these conditions. However, I will not say any more about that. I am sorry the noble and learned Lord, Lord Carson, has gone because I think we should probably again have been able to welcome a speech from him in this regard had he been here. All I say is, and I think there will be general agreement about this, that in so far as I have represented the position correctly, if there is not much time or good opportunity to consider this Bill it is not the fault of the Opposition.

The noble Marquess began by saying that many things have happened which he thought were very wrong and that this Bill was necessary. But I should like to make it clear at the outset that this is not the right way of dealing with any matters which ought to be dealt with. Personally, I think there has been a great deal of exaggeration about such matters; but where there are really gross and flagrant cases, or if, indeed, cases of corruption and matters like that are to be considered, they are different and could be dealt with by better methods than these. This is a piecemal kind of legislation of the worst description. Why did not the Government take a broader view? The whole question of the relations between the national Government and local government wants overhauling. This really is only part of the problem. Great financial adjustments are needed and ought to take place as between the Exchequer and the local authorities. Everybody knows that this is so but nothing is done. If something were done to deal with those matters most of the difficulties of which the noble Marquess has spoken would not have arisen.

Then, as regards the district auditors themselves, about whom I shall have something to say in a moment, this is not the way to deal with their functions. Changes are needed in the whole system, including new and much better definitions of their duties and powers. As a matter of fact, this Bill does not really relate in words to the powers of the district auditors, but in effect and in practice it will enormously increase their powers to the detriment, as I hold and as I think I can show, of the good working of our local authorities. Who are these district auditors? They are men, officials, appointed by the Minister of Health. They are not responsible to any public body, so far as I know. They are not under the purview of Parliament. The noble Marquess said a great deal about Parliament being paramount and Parliament being supreme, but I believe I am correct in saying that not even a question can be asked in another place specifically about a district auditor. If that is so, and that is my information, it is a very remarkable state of things. Of course I am not attacking these indi- viduals personally at all, but in that public sense surely they are irresponsible persons. Yet they can surcharge simply on their own judgment, and if that is upheld the Bill fixes new and very serious penalties in regard to what may be sincere differences of opinion about such a question, for instance, as a reasonable rate of wage.

The noble Marquess in the very early stage of his speech, and again and again, referred to the law. He said that if persons defy the law and break the law this, that and the other ought to be done. One of the difficulties about these very complex matters is this. Nobody knows exactly what the law is. That is one of the troubles, as I shall show your Lordships. The noble Marquess was really putting the case far too high, if I may say so with respect, from his point of view when he was so emphatic about the law. It was a perfectly single thing, almost like something you can prove. But that is not the position. What does this Bill do? The noble Marquess explained clearly the penalties, but I do not think he quite brought out the difference between the very serious penalties which this Bill may impose on councillors or guardians who are surcharged and the position as it has been hitherto. The noble Marquess says: "Hitherto you can only distrain and cannot get enough money that way, or you can send to prison." Some people prefer to go to prison in a good cause and, therefore, the law, as he suggested, could be defied. But under this Bill an amount for which the member of a local authority is surcharged becomes a civil debt and the man can be made bankrupt. Many local councillors no doubt would be made bankrupt, because as a rule they are not well-to-do people. That is a very serious matter. It is a fundamental change. That is quite apart from the fact that if the surcharge is for £500 a member of a local authority may be disqualified from sitting for five years—that is a long time—and if he has been made bankrupt, which he may have been, and has not been discharged, he might be disqualified for an even longer period.

What does this mean when we come down to its practical effect? I say it makes these district auditors most formidable persons because of this fear of financial liability which may end in bankruptcy. It is not so much that perhaps, although I think grave objection can be taken to the actual provisions, as the deterrent effect on the activities of local authorities which this Bill will have. At any rate at the moment I want to emphasise that. These members of local authorities will naturally be very apprehensive in regard to their financial position, because a mistake on their part may land them in bankruptcy. When the noble Marquess says in the last few years there have not been so many cases in which anything serious has happened, that does not cover the effect of this Bill. The effect of this Bill is, if I may use the word, also its potential effect, the effect of terrorism. That may seem a strong word, but it is the best one that comes to my mind. The Bill will act as a kind of campaign of terrorism against certain members of local authorities and they will be held back from doing good things in many cases—good things about which there might be difference of opinion but which cannot be defined as breaking the law. They will be held back from doing those things because of the fear of the provisions of this Bill. I will prove in a moment that that is likely to happen.

The result will be that many good men will refuse to serve on local authorities. This is a very serious point. After all, it is a somewhat thankless task in many respects to serve on local authorities. The work is very hard and often very arduous, and there is no very great inducement. If this kind of thing is going to operate, some men will say: "We certainly are not going to subject ourselves to these fears and possibilities; and whereas we might have served we will not serve." Do your Lordships want that? I am informed that already there are cases of men, desirable representatives on the local authorities of London, who have said that because of this Bill they are not going to stand again; they are not going to expose themselves to these risks and dangers. Do your Lordships want that? It is well known that in some other countries the personnel of the local authorities is not anything like so high as it is in this country. We run a risk under this Bill of distinctly reducing the character and personnel of our local authorities. I think that is a serious matter. Your Lordships will say: "All these things will not happen; this is all exaggeration; it is perfectly clear that nothing of this kind will occur." There is no guarantee of that whatever.

The noble Marquess spoke about the law. Let me carry your minds back to the Cockerton judgment, which is a very relevant matter in this connection. Your Lordships will remember that famous case at the very beginning of this century. It was a case which upset everybody's preconceived ideas as to what could be done, but the judgment was upheld in the Court of Appeal and it really led in no small degree to the Education Act of 1902; and that Act had no small effect in causing the downfall of the Conservative Party later on. Therefore, from a seemingly quite trivial cause, very great results follow. What was the Cockerton judgment? I think we ought to remind ourselves, because it is relevant to-night. The Cockerton judgment, in a word or two, was this. It had to do with the definition of elementary education. For years and years, I think it is correct to say, in elementary schools certain subjects had been taught, such as French, German and chemistry. Mr. Cockerton, who was a district auditor, came to the conclusion that those subjects were not really to be brought within the purview of the word "elementary" and, therefore, he said, the law was being broken and he surcharged. His decision was upheld. It did not matter that it was perfectly good expenditure—expenditure which Parliament wanted. As a matter of fact Parliament passed the 1902 Act to make it legal.

THE MARQUESS OF SALISBURYThat was a case tried in the High Court.


Yes, it went to the Court of Appeal but did not come to your Lordships' House. Just consider the position. This expenditure had been going on, had been sanctioned by the Board of Education through grants; and had been sanctioned in fact by Parliament because money had been voted by Parliament for this education. Could anything be more legitimate and less worthy of the description of illegality and defiance of the law than that? But the expenditure was held to be illegal and men were surcharged. That shows the great uncertainty that exists as to what the law is.


Was anybody punished? Did anybody incur any penalty?


No, but the point is this. I am glad my noble friend interjected his question because it enables me to make clear what I think is the great mischief of this Bill. In the end nobody was punished. I dare say in the matter of all these things which I am mentioning that in the end no one would actually be punished, but what I am emphasising is the fear of punishment and the suspense of a thing hanging over a member of the local authority for months. Men will not run such risks. I am going to give a case in point which, I think, will make this quite clear. This case, according to my information, is up-to-date. It occurred in one of the local councils of London in the last two or three months.

This is a council which not very long ago set up an incinerator for dealing with dust and refuse. The work of raking all the refuse out of the carts on to the top and pushing it down the hopper, I believe it is called, is extremely dirty, disagreeable and, I am told, in some respects dangerous work. I have been surprised that you can get men to do it at all. The men doing this work have been receiving the munificent remuneration of £3 3s. a week which, having regard to prices in London, is not high. The council thought, not, I admit, unanimously, but by a majority, that this work ought to be paid for by a slightly higher wage and they therefore proposed the very moderate increase of 1s. 6d. a day. If you take the full working week of six days that would have brought the remuneration up to the princely sum of £3 12s. a week for this extremely objectionable kind of work. What happened? The clerk of the council said: "Oh, but you must be careful, there is the district auditor. Perhaps he will not allow this. If this Bill which is before Parliament is passed you may be surcharged." Actually a deputation from this council went cap in hand to the district auditor to ask him: "Please can we raise the wages of the men doing this kind of work eighteen pence a day?" They asked him whether he would pass it, or whether they would be surcharged if they did it. The district auditor said, No, they could not do it; he would not pass it. They said: "Then can we regrade wages?" He said, No, he would not pass that. Therefore, as I understand it, the proposal has been dropped.

Surely, that is a very unsatisfactory state of things. A local authority, duly elected by the people to carry out a policy, and obviously a perfectly reasonable policy, cannot increase the wages of men doing this kind of work eighteen pence a day because the district auditor says he will surcharge them. It makes these district auditors very formidable persons. They become, without exaggeration, little Mussolinis. Men will not stand that. It is no wonder that men are saying they will not become members of local authorities and will not work under those conditions. I do not think any one of your Lordships would stand it. One effect of this measure will be that public authorities will change their policy, not because under this Bill they will be necessarily punished, but because they might be punished and because they will be living in this state of uncertainty.

I could quote to your Lordships other cases showing how in the past very extraordinary decisions have been given by these district auditors, but I do not wish to speak too long. There was the famous decision, I think it was in the case of the Westminster Council, in which the Council did not accept the lowest tender. The district auditor asked: "Why have you not accepted the lowest tender?" They said: "That is no business of yours, we will not tell you." He surcharged them. It was decided that he was wrong, but fancy a district auditor taking up such a position. There was a case under the Elementary Schools (Provision of Meals) Act, in which the district auditor said that fruit and cod liver oil and extract of malt, which were being given to poor children, did not come within the definition in the Act, and I believe it took the whole weight of one of the biggest local authorities in the country to get that man to agree that fruit might be given, although fruit is held by most medical authorities, indeed I think by nearly all medical authorities, to be a form of food. But the London County Council, because of that decision, had to give up giving children cod liver oil. Another case, which appeals to me because I have had certain financial experience, is that of a local authority which was surcharged because it paid 1¼ per cent. commission. I admit that that is on the high side, but I do not know the circumstances. It does not strike me as outrageous. District auditors do not all give judgments alike. It depends to a great degree on the individual view of the man.

The noble Marquess says these bodies defy the law, but the difficulty is they do not know what the law is. Look at the position. These councils are elected by the ratepayers. They have been constitutionally elected and certainly in such instances as I have cited they ought not to be put in fear of penalties. If the ratepayers are not satisfied with them they can turn them out at the next election. This Bill is really, so far as local authorities are concerned, hamstringing the constitution. That is why I say it is a Bill which may have far-reaching constitutional consequences. There is sufficient protection in many respects under the existing law, and as I have already said, if the Government will deal with these things in a larger way that is something we should be prepared to consider. Let me take the question of wages. It is on the question of wages, I think, that there have been more differences of opinion and more surcharges than in regard to any other matter, although the functions of the district auditors are not confined to wages. We do not know indeed into what realms district auditors may go before long. But in the matter of what wages should be paid to the employees of local authorities we get at the heart of political controversy. It is part of the policy of those who sit on this Bench, part of the policy of the Labour Party, to try to raise the standard of life of the people and we hold that local authorities should be I do not say extravagant.


But these were extravagant.


If there were cases in which local authorities were clearly and unmistakably paying wages which could not be reasonably defended they could be dealt with. We want to raise the standard of living of the people and we want to pay good wages. I do not say extravagant wages, but good wages. Can you say in the case of these men working at the incinerator doing that horrible work, that there was anything extravagant in wanting to raise their wages from £3 3S. to £3 12s.? There is nothing extravagant about that, but because the district auditor said the council cannot do it and that they will be surcharged it cannot be done. That is my reply to the noble Marquess.

The position is serious because of this change which is being made—I always speak with great diffidence regarding legal matters because I am not a lawyer—by what I suppose is called case law. A case was heard and came to your Lordships' House in 1925. It had been thought that councils could pay such wages as they thought fit, but it was decided in that case, as I understand it, that that was not really the correct view—that it was really the district auditor who had to decide whether the wages were what he thought reasonable. If that is the correct view of the judgment it clearly makes a material difference. It gives enormous power to these district auditors. Take, for instance, the question of the Burnham scale. There are people who hold that the Burnham scale is too generous. I do not hold that view myself, but that view is taken. I do not say this will happen but I put it forward as an illustration. There is nothing to prevent people, in view of the Cockerton judgment, saying that they think this is too much, that salaries ought not to be paid on that scale and appealing to the Courts. It may be said that that will not happen, but it is all very upsetting. You may have cases where that will happen. The Burnham scale will be defended, no doubt, because it was arrived at after careful inquiry and it is likely to be upheld, but there are other things which would not be upheld.

My summing up of the matter is that the effect of this Bill will be to stop the carrying out in many cases of the proper and legitimate policy of the Party to which I belong. That will be the effect on them because of this fear of the consequences. I say that is not right. If people work hard and get a majority they should not be exposed to a state of things in which they will have no appeal. I will quote something from the Minister of Health. The noble Marquess has spoken about the Minister of Health and has said you can appeal to him. The Minister of Health said Socialists were determined to use local government to advance their theories, and it was his duty to frustrate them. This Bill, in my view, is part of that process of frustration, and there have been other methods of the same kind. I do say, though I do not wish to use any strong language, that we do not think this a fair or a right form of legislation, and I am strongly of opinion, if I may be permitted to roam into the realms of phantasy, that if we should ever have a Labour Government in power in your Lordships' House, and if we introduced an equivalent Bill regarding something affecting vested interests, your Lordships would have something to say of a strong character about a measure of that kind.

My last point has to do with expenditure on education. This is a very important part of local expenditure. The noble Marquess said that this Bill applied to all local authorities except provincial boroughs, but even there I think he said that it applied to education. Take the case of a surcharge in respect of education expenditure of one kind or another. There might be, for instance, a dispute about wages, not necessarily under the Burnham scale but the wages of cleaners, or if certain local authorities lent their schools for political meetings the auditor might say that they must not do so but must charge for the use of the school. If the council refused to do that, difficulty might arise. If the amount of the surcharge is under £500, the appeal, at the option of those surcharged, is to the Minister of Health or to the Court. But, supposing they chose to appeal to the Minister of Health, what does the Minister of Health know about education expenditure? It is no business of his. He has nothing to do with it.

I suggest to your Lordships that here is a possible Amendment, entirely non-controversial, which would improve the Bill, which is helpful and, indeed, necessary to make it a proper Bill. I suggest that in Clause 2, in regard to a matter which comes under the Bill in respect of some surcharge for education expenditure of one kind or another, the appeal, if under £500, should at the option of those surcharged be, not to the Minister of Health, but to the Minister of Education. I should like to ask the noble Marquess whether that point has been considered. He may say that the Minister of Health would confer with the Minister of Education and that it would come to the same thing in the end, but I do not think that this is a satisfactory way of doing business. I feel that appeal ought to be to the Minister of Education, and I cannot see any harm in such an Amendment. It would make the Bill more businesslike and I suggest that such an Amendment, which I will put down for the Committee stage, should be acceded to. I hope this request will be considered by the Government, because I think it is eminently reasonable. I can see no objection to it but considerable advantage in it.

I am sorry to have spoken so long. There is a great deal more that I should have liked to say on this important subject, but I will not occupy the time of the House further, particularly as I understand that my noble friend Lord Jessel wishes to speak. We say that this is not a reform Bill, that it is a reactionary measure, that it does not go the right way about things and that it is a punitive Bill. If the hour were not so late and we had not already had a Division recently we should feel it our duty to press this Bill to a vote, but in the circumstances we shall spare your Lordships that trouble. I should like to make it clear, however, that this does not in any way compromise our opinion of the gravity and, indeed—though I do not wish to use strong language—of the iniquity of this Bill. I hope that it will be rejected, but I am afraid that it will not.


My Lords, I shall be very brief in my remarks, because of the lateness of the hour. I was not surprised at the speech of the noble Lord opposite, but I congratulate him on having been much more moderate than usual and having made several good points against this Bill from the point of view of his own Party. I had the pleasure of serving with the noble Lord for a good many years on the Public Accounts Committee in the House of Commons. There was an official there, whom we all respected, called the Controller and Auditor-General, and his functions are very much the same as those of these local auditors. The noble Lord asks to whom these local auditors are responsible, since they are not responsible to the Minister of Health. It is a very good thing that they are not so responsible. They are independent gentlemen of position, who are in no fear of the Minister of Health, who are independent in their views and are not prejudiced by any Party feeling. I suppose they must be removable by somebody, and I presume that, in the same way as Parliament has the right to remove the Controller and Auditor-General, if there is any case of misfeasance on their part Parliament could do the same with the local auditors.

I should like to take one very important point that the noble Lord made. He complained regarding the action of a particular borough council about the wages of certain men employed in a rather distasteful employment. It is very difficult to judge of these cases unless one knows all the details thoroughly, but it did not strike me that these men were getting very bad wages if they received £3 12s. a week, for many skilled artisans right through the country would be very glad of wages like that. One of the cries of the present day is that the men in the sheltered trades in this country are getting very high wages compared with those in the unsheltered trades; and we know that it is upon the work done in the unsheltered trades that much of the prosperity of the country depends. Let us look into this question of wages. There is in London an industrial council which meets to fix by mutual arrangement what the various wages should be in London, and I believe the auditor allows 10 per cent. over the fixed rate if it is necessary in particular boroughs owing to particular circumstances. The noble Lord cannot judge, any more than I can, without hearing the facts of the case, whether these men were properly treated or not.

Let me add that, as regards the auditors, it is quite easy to ask them questions. I have myself known cases in local government where it has been necessary to go to the local auditor and ask whether a certain arrangement would be allowed or not. He has the knowledge, and in any case you can always go to the Ministry of Health and appeal to them. Accordingly there is no real reason why any person should fear to go upon a local authority because he may be surcharged. I have had a good deal of experience in London and I have never known anybody to be deterred from standing for a local authority on account of that fear. It is rather unfortunate that the noble Lord's friends should be deterred, but I do not know why there should be any difficulty or what is their reason. After all, I am sure the noble Lord, who knows accounts pretty well and is a very good business man, though he told us that he was not a lawyer, must know that, when one authority is paying men 10 per cent. over the ordinary wages and in another place 78 per cent. more is being paid, this is not fair either to the mass of the population in the district or to the rest of London. In London our rates up to about 90 per cent. are centralised. Money comes from the richer boroughs, who are very glad to give it because it is the duty of the richer boroughs to help the poorer boroughs, though they have no control over this money. Surely, when the industrial council fixes a rate, no single borough in London has the right to exceed it to such an extent as has been mentioned by the Leader of the House.

I am not going into the Cockerton judgment, which the noble Lord said was partly the cause of the fall of the Conservative Government of the day. Perhaps he is hoping that, through the instrumentality of this Bill, the same fate will attend the present Government, and that we shall see the noble Lord and his colleagues sitting on these Benches. If so he may be congratulated on the fact that this Bill has been introduced by the Government of the day. There is a real need for this Bill and I do not think anybody need be deterred from standing for a local authority by reason of its introduction. I think, too, that great improvement has been made in the Bill since it was introduced in the House of Commons, because when it was introduced there was no right of appeal to the Courts in respect of any less sum than £500. That has been taken out, and everybody is given a right of appeal to the Courts.

The noble Lord quoted the Westminster case. I was one of those who, metaphorically, stood in the dock in that case. It was a simple case. There was a contract for gravel and we did not accept the lowest tender because we were not quite so certain as to the ability of the contractor to carry out his tender. We acted on the advice received from our experts. We did not wish to appeal to the Minister, and we preferred to go to the Courts. We went to the Courts and got justice there, and that is the reason that I am glad that the Government changed their minds and made the Courts open to everybody, whether in respect of £500 or a smaller sum. I think the Bill is not going to have the far-reaching effect which the noble Lord supposes, because statistics show that there have been very few of these cases coming before the Minister, or before the Courts. In these extreme cases, however, you must have some power, and this Bill only gives that power. As the noble Marquess the Leader of the House said, it was discovered this year that there was a great flaw in the procedure, that if a man was condemned by the Courts through no fault of his own there was no power for the Minister to remit the penalty. Therefore I am glad that this Bill has been introduced. I do not think it is a matter of great controversy and I congratulate the Government on having found time to pass it through the House of Commons. I hope it will be read a second time to-night.


My Lords, I do not intend to trouble your Lordships at length, but I should like to thank my noble friend Lord Jessel for his very valuable speech. He speaks with much greater practical knowledge of the subject than I do, and I am sure your Lordships heard what he had to say with great satisfaction. It relieves me also from the obligation to deal with the incinerator case. My noble friend pointed out that in London wages are a matter of agreement—of broad agreement between the workers and the local authorities—and in the particular case of Poplar, to which I referred, the local authority insisted upon giving much higher wages than were permitted by that agreement. Nobody can defend that, and I am sure that the noble Lord, Lord Arnold, did not attempt to defend Poplar. It therefore proved our case.

Let me say one word about what the noble Lord said as to local auditors. These district auditors are independent. If they were persistently unreasonable they would be subject to ordinary disciplinary action, but they are, and ought to be, independent. If they make a mistake they are, as I have said, subject to appeal, but I would like to point this out to the noble Lord. For eighty years, during which appeals have been taken from the district auditors to the High Court, the High Court has never found it necessary to impose costs against a district auditor for having acted unreasonably. Even if they were wrong, on which I do not say anything, yet they have been so little wrong that during eighty years no Court of Justice has imposed costs against them. I think that is a test of their impartiality which the noble Lord ought to value. The fact that they are subject to appeal does protect the subject against any injustice, and is the very foundation upon which everything depends in this country. Then the noble Lord said that this Bill was going to be a great deterrent of good public servants from serving on the local authorities, and he quoted a very famous case. My memory does not go back far enough to remember how that case originated, whether in the High Court or before the Minister, but if it originated in the High Court—


It went to the High Court.


Then it is precisely cases of that kind which this Bill will remedy, and the noble Lord did not see that, because under this Bill, where a local public servant does not act unreasonably or acts under misapprehension, there is power, even when the action is condemned by the High Court, to remit the penalty. That has not been so up to now, and that is no doubt the very case which the noble Lord has in mind in the particular famous case which he quoted. If the new Bill, which I am asking your Lordships to read a second time, had been the law then, it would have been possible to remit all the penalties.


The noble Marquess has forgotten the Cockerton case. The objection to Cockerton was that he decided a great question of law and principle, and it took not only litigation but a great Bill on the part of the Conservative Government to put it right.


The broad fact remains that, under this Bill, so long as a local official does not act unreasonably, or even if he acts under a misapprehension, then there is power, which never existed before, for the High Court to remit, if it thinks fit, all the penalties.


That is the uncertainty.


Yes, but observe that up to now there has been no power to cure, and yet the noble Lord gives us no credit for this improvement in the law. I venture to think that my noble friend and myself have established that this amendment to the law will be in the interests of justice, and also in the interests of good government, and I confidently ask your Lordships to read the Bill a second time.

On Question, Bill read 2a, and committed to a Committee of the Whole House.