Lords Sitting of 15 March 1937

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
Several Lords—Took the Oath.

KINGSTON-UPON-HULL PROVISIONAL ORDER BILL.
Brought from the Commons; read 1a; to be printed, and referred to the Examiners.

LOCAL GOVERNMENT (FINANCIAL PROVISIONS) BILL.
Order of the Day for the Second Reading read.
VISCOUNT GAGE: My Lords, this is a Bill of many technicalities but one of great importance as it deals with the distribution of some £46,000,000 of Exchequer money. It arises in the natural course of events from the passing of the Local Government Act, 1929. Your Lordships may remember that there were many important reforms introduced at that time; for instance, there was the derating of trade premises and the transfer of certain services from the district councils to the county councils; and those reforms alone would have necessitated some alteration in the financial machinery of local government. But, at the same time, it was also decided to abolish the percentage grant system. It was felt that the handing over by the Exchequer of large sums of money to the local authorities in exact proportion to their expenditure was unfair, because it obviously resulted in the richer authorities receiving more than the poorer authorities, although the needs of those poorer authorities were obviously much greater. It also resulted in a good deal of unnecessary interference by State Departments with the local authorities. It was, therefore, decided to replace this system by another whereby grants should be made on a scientific basis, taking into consideration the needs of each authority.
Therefore the Government were obviously confronted with two questions—

657
firstly, what was the total sum to be divided up? and, secondly, how was this distribution to be carried out? To answer the first question a calculation was made of the total losses which would result from the derating of trade premises and from the loss of these percentage grants, and to that was added some new money which represented in part what it is estimated would have been the contribution from the Exchequer had the old system been in force for the period of years under consideration, and, in addition, some new money towards future expenditure. These three sums constituted the total pool to be divided. Then, as to the question how this money should be distributed on the new scientific basis, use was made of a formula which allowed for various factors such as unemployment, number of children under five, rateables value and so forth. But it was found that had this new system been put into force straight away the change would have been so abrupt that the finances of local authorities would have been rather dislocated. It was therefore decided to bring in the new system gradually by laying down in advance certain dates on which successively larger proportions of the pool should be distributed on the new formula. These dates were 1933, 1937, 1942, and 1947. The intervening periods were known as the first, second, third, fourth and fifth grant periods. In the first and second periods the grant was one-third on the formula basis and two-thirds on the old basis; in the third period two-thirds on the formula basis and one-third on the old basis; in the fourth period three-quarters on the new basis and one quarter on the old basis, and at the end of twenty years the whole would be distributed on the new formula basis.
Then there was a further provision made which is of importance because it has materially affected the Bill which is before your Lordships' House. It was held that as this system of formula grants was new and untried it was only right that there should be a review made at some appropriate time during this interim period to see how the scheme was actually working out in practice. It was decided that this review should be made towards the end of the second grant period, which is the time at which we have now arrived. We are therefore starting the third grant period with the results before us of a very careful investigation carried out by the
658
Ministry of Health in consultation with the local authorities, and I perhaps might now say a word about the results of that inquiry. In the first place I think I can claim that the system on the whole was found to be working successfully. Some people at the outset of the scheme were, naturally I think, somewhat alarmed at the rather formidable appearance of the formula. They were somewhat doubtful as to whether a system which seemed to have strayed from a treatise on the higher mathematics was really a suitable medium for dealing with human problems that were always changing and were very often distressing. But, on the whole, I am glad to say they have been proved to have been mistaken. Indeed, several of those who were most critical at the beginning have since confessed that they have been converted, and that, moreover, after the experience of a very testing period during which the scheme has been operating.
Some very remarkable changes have taken place since 1929. There have been a very great slump and a partial recovery. There have been great movements of the population, and there have been two quinquennial valuations. It can be readily understood, I think, that as a result of that investigation the Committee found it necessary to make some minor recommendations in regard to some suggested alterations. These recommendations have been embodied in the Bill. In addition new money to the extent of some £5,000,000 has been added from the Exchequer in accordance with the arrangements made at the time of the passing of the original Act. I should like to explain that this is the total of the new money although it does not appear to be so. The figure in the Bill is the result of some readjustments made following the passing of some other legislation. Your Lordships will see that the poorer districts gain not only by reason of the larger pool on which they can claim, but also because their proportionate share of this pool will be greater. There are, as we all know, schools of thought that believe that some of the local burdens should be shared on a national basis. We have gone so far in meeting this point of view that under our arrangements no less than 65 per cent. of the expenditure of some authorities will come from the Exchequer. My right

659
honourable friend maintains, and I think justifiably, that there must be some limit to the extent to which local authorities can draw on national funds and that a degree of local responsibility must he preserved.
I should like to be allowed to give one or two examples of the results of differentiation under the formula between the richer and the poorer authorities. In the case of Bournemouth the amount of Exchequer money distributed represents 94d. per head of population, whereas in the case of Merthyr it represents 558d. and in the case of Cumberland 582d. Calculations have been made as to the proportions in a large number of boroughs and counties and the results have been published in the Report of the investigation. There is not a full list in that Report, but I know that my right honourable friend is very anxious that the fullest information should be available and calculations are in the process of being made for all boroughs and counties.
So far I have been discussing the system of distribution as between the counties and the county boroughs. I think I ought to add a word to explain how within the counties the Exchequer money is divided between the county council and the districts. The principle is that of a simple capitation basis. Half the grand total of the county apportionment is allotted to the districts on the basis of a fixed sum per head of their populations, the balance going to the county councils on the formula basis. But, again, had this principle been carried out at once there would have been dislocation in the finances of the districts, because the loss incurred by the derating of trade premises would have affected the districts very unevenly and would not have been balanced by these capitation grants. Therefore special arrangements were made to assist the districts which were shown to lose by the scheme and for the period of fifteen years contributions are being made to the local authorities, made up partly from the funds of the gaining districts within the county and in part by the Exchequer. These contributions diminish from year to year until at the end of fifteen years they cease altogether. This period of fifteen years is long enough to allow for readjustments to be made in the majority of cases. One of the changes in the Bill is, however, that in certain of
660
the very poorest districts, where it was found that even the annual addition to their expenditure of one-fifteenth was bearing very hardly, the Minister has taken power at his discretion to spread this burden over thirty years—that is to say, twenty-six years from now.
That concludes the rough outline of the Bill. I have not gone into the clauses in great detail, for the simple reason that I think that any Amendment on points of detail would be very likely to raise questions of Privilege. I do not claim for this Bill that it is a kind of universal panacea for all the troubles of local government. I do not claim that it will cure the distress in the distressed areas. But I do claim for it that it is a reform of the first magnitude which has acted and is acting as a great amelioration in these cases. What we are doing in this Bill is to bring it up to date. I think it is customary to conclude by offering to explain any points that may be put. I must confess that I do so in the case of this Bill with some feelings of reserve, but I nevertheless commend the Bill to your Lordships for a Second Reading.
Moved, That the Bill be now read 2a—(Viscount Gage.)
On Question, Bill read 2a, and committed to a Committee of the Whole House.

EMPIRE SETTLEMENT BILL.
Order of the Day for the Third Reading read.
THE FIRST COMMISSIONER OF WORKS (EARL STANHOPE): My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Earl Stanhope.)
VISCOUNT BLEDISLOE: My Lords, as this Bill deals with a subject in which I am intensely interested, and as I was unable to be in my place when the Second Reading was moved nearly a fortnight ago, I would venture to make a few observations upon it. At the same time, I do not propose to occupy more than a few minutes of your Lordships' time, partly because, although I deprecate the reduction in the none too generous Government grant which was provided in the original Empire Settlement Act, 1922, I am conscious that we in this House are powerless

661
to amplify that grant, and partly because the problem of Empire migration is so inextricably interwoven with that of Empire trade and industry, which some of us will be discussing next Wednesday in the debate on the Motion of my noble friend Viscount Elibank. I should, therefore, prefer to postpone detailed comment on Government policy in that connection until then.
There are, however, two widespread arguments against migration to our Dominions overseas which I desire emphatically to refute, and I take this opportunity of doing so. The first, which was very convincingly dealt with by the right reverend Prelate the Bishop of London during the Second Reading debate, is the alleged inevitability of the decay of our home population and consequent lack of a migrable surplus for overseas settlement. That there should be a present unfortunate trend in that direction is no reason, I would submit, for blandly accepting it as inevitable. Surely to do so is a policy of defeatism and is only presenting to over-populated countries like Germany, Italy and Japan powerful arguments for their constant contention that the British Empire, spread over about a quarter of the globe, is in the territorial sense an incorrigible dog in the manger. Never was it more essential than it is to-day, both for reasons of defence and for the enjoyment and development of our magnificent Imperial heritage, that we should make the basic text of our Empire gospel: "Be fruitful and multiply, and go in and possess the land which by the blessing of a beneficent Providence was given to your fathers."
It may be said that life in flats, facility of pleasure transport and variety of entertainment, coupled with birth control, render a progressive fall in our birth rate inevitable. I, like the right reverend Prelate who addressed you in the debate on the Second Reading, decline to accept such a contention. In my judgment it would be a negation of British statesmanship and indicative of a fateful myopia. Surely the time has come when a definite premium should be placed upon human fertility and the production of sound human stock throughout the British Empire and especially in the homeland. If the form of such premium or premiums be in doubt, the Government might be
662
well advised to set up without delay a Royal Commission to consider and report upon this most vital problem.
The second false argument to which I should like to refer, which is sometimes urged against overseas settlement, especially before popular audiences, is that it is in the nature of banishment: that settlers in our Dominions are unfortunate exiles doomed to a life of hardship, loneliness and discomfort. Nothing can be further from the truth, at least so far as concerns the loyal and lovely Dominion from which I returned some two years ago after representing His late Majesty there. There is indeed no country in the world more conspicuous for its friendly hospitality to British folk of all classes, with its healthy and exceptionally sunny climate, its fertile soil, its magnificent scenery, its excellent sport and, above all, the lovableness of its population belonging to all classes. Incidentally I may also mention, as rendering it peculiarly attractive to those who have had the advantage of a good education, that there is probably no country in the world—at least none with which I am acquainted—where there is a higher average standard of education. I ventured to say with some truth, when commenting upon the grammatical accuracy of conversation that I noticed during the five years that I was in New Zealand, that I never heard anyone leave out an aspirate unless he had come from England. Speaking personally, had I not nowadays unescapable commitments and attachments in this country I should not dream, after five years' experience of New Zealand and her people, of making my future home anywhere else.
I take the opportunity of saying this because nothing distresses me more than to hear it represented to popular audiences that Empire settlement and Empire migration means something in the nature of exile. And finally, my criticism of the reduced Government subsidy for assisting migration is not, I would assure your Lordships, due to any love of subsidies—although there could in my judgment be no more worthy object than assistance to the Fairbridge Farm Schools schemes—but rather to the impression which will be conveyed throughout the world by this Bill that the measure of Great Britain's interest in the development of her Empire is to be gauged by her meagre provision for its encouragement. I do not of course

663
oppose the Bill, but cannot possibly deem its financial scope worthy of a wealthy country, having a glorious heritage for its posterity in the possession of the largest Empire in the world.
LORD BARNBY: My Lords, the intervention we have just heard from the noble Viscount who is a former Governor-General of New Zealand is fortunate and opportune, and naturally he speaks with great authority on this subject. There are other noble Lords who, like myself, had the opportunity during his term as Governor-General of appreciating the consideration which he showed in order to enable us to see under better conditions the advantages of the Dominions. I had the opportunity of addressing a few remarks to your Lordships on the Second Reading of this Bill, and as a result I have had representations from several quarters which encourage me to believe that there is definite interest in the idea of Empire settlement being considered as a possibility for private enterprise instead of its being left to the media which have been employed in the past. The evidences of that definite interest, and the fact that the noble Viscount who has just spoken referred also to the Fairbridge Farm schemes, impel me to say that I hope the noble Earl who will speak on behalf of the Government may find it possible to make some remarks on this question of the possibility of machinery of a private character to supplement or substitute the machinery which has been relied on in the past to encourage the flow of migrants from this country to the different Dominions. I should be glad also if he could give some idea as to the limitations, if any exist, to private efforts to expand the type of procedure which is provided for by the Fairbridge Farm Schools.
EARL STANHOPE: My Lords, I think the whole House will have welcomed the intervention of my noble friend on the Cross Benches (Lord Bledisloe) who speaks with such great authority on these matters. We have missed him a good deal from our House during his absence on other business on behalf of the Empire, but we knew well of his work there, because it was reported frequently in our Press, and we welcomed the great efforts that he was making so successfully on behalf of New Zealand, and the
664
great assistance he was able to give the people of the Dominion, with his very wide knowledge of farming and of agricultural pursuits, which are of such importance to them. I feel sure that my noble friend will agree that, as I said on the Second Reading of the Bill, this is more a matter for the Dominions than for His Majesty's Government in this country. There is no question of any lack of keenness on our part to assist migration to the utmost possible extent, but our difficulty is that the Dominions, as at present advised, are a little doubtful about taking more immigrants until they have settled their own difficulties in regard to unemployment. As soon as matters improve, as I think they are already improving very rapidly, I feel certain that the Dominions will be anxious to welcome more immigrants from this country, and then there will be no question of the effort that will be made by His Majesty's Government—from whatever Party they may be drawn at that moment—to help emigration to the utmost of our ability.
My noble friend behind me (Lord Barnby) I think rather felt, from the remarks I made on the last occasion, that assistance was limited to such movements as the Fairbridge Farm Schools. That is not so. Of course, we are prepared to assist emigrants in paying a part of their passage money and so on, say in assisting such developments as the Fairbridge Farm Schools, or indeed any approved land settlement schemes. But I think I am right in saying that all through our history unassisted emigration has really been a very much bigger factor than assisted emigration. Many people have gone out on their own, and I rejoice that the noble Viscount, Lord Bledisloe, has made it clear that it is very easy to exaggerate hardships in the Dominions. I think it is wise to say that when a man goes out there—or a woman either—he has to put his back into it and to work, and there is no question of being able to go out to a Dominion and pick up gold off the floor, as some people at one time seemed to think was possible. I quite agree with what my noble friend said about the attractions of New Zealand. I think he will realise that I myself have been there when I refer to a place called Whakarewarewa, which I do not think

665
anybody can quite say unless he has actually been there, and to what I consider the most beautiful walk in the world, the walk across the mountains to Milford Sound. The possibilities of agriculture both in the North and the South Islands are very considerable. There are several men formerly in my employ who are doing very well out there.
Personally I hope and feel that the time is near when we shall be able to start emigration on a much bigger scale. May I make clear that the only reason why this grant has been cut down is to be found in the sums we have been able to spend since the War. Even in 1927, which was our peak period, we were only able to spend something like £1,280,000. Should we find, as we hope, that emigration starts on a much bigger scale than we have experienced since the War I am quite certain that my right honourable friend the Secretary of State for the Dominions will be only too glad to come to Parliament again and ask for an increase of grant to assist that emigration. It is merely to bring the amount that we have put into the Bill into accordance
666
with the probable need that we have reduced the figure. But there is no question of our desire not to reduce emigration, or to be less keen about it than any previous Government, or than anybody else in your Lordships' House.
My noble friend referred to a Royal Commission on the fall in the birth rate. That, I am afraid, is outside my purview. It is a matter for the Ministry of Health; and I will represent to my right honourable friend what my noble friend has said. It is, as he knows, a very thorny question from many points of view, but I will convey to my right honourable friend what has been said in your Lordships' House to-day and its effect on the question of emigration to the Dominions. I think we are all agreed as to the importance of that matter, particularly in view of the claims made from other parts of the world in regard to the paucity of the population that at present exists outside these islands and yet lives under the British flag.
On Question, Bill read 3a, and passed.
House adjourned at eight minutes before five o'clock.

HOUSE OF LORDS.
[From Minutes of March 15.]

EARL ANNESLEY.
Report made from the Lord Chancellor that Beresford Cecil Bingham Annesley, Earl Annesley in the Peerage of Ireland, has established his succession to the Earldom of Annesley and his right to vote at any Elections of Representative Peers for Ireland which may be held in future under the Statutes in force relating thereto, to the satisfaction of the Lord Chancellor: Read, and ordered to lie on the Table.
Ordered, That the Report of the Lord Chancellor made to the House of Lords this day, that Beresford Cecil Bingham Annesley, Earl Annesley in the Peerage of Ireland, has established his succession to the Earldom of Annesley and his right to vote at any Elections of Representative Peers for Ireland which may be held in future under the Statutes in force relating thereto, to his satisfaction, be sent to the Clerk of the Crown in Ireland, together with a certificate stating that such Report has been made, and that the House has ordered it to be sent to the said Clerk of the Crown in Ireland.

TATTON ESTATE.
Petition for a Bill, together with a copy of the proposed Bill annexed thereto, read, and referred to two Judges of the High Court of Justice in England.
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL.
Reports from His Majesty's Attorney-General received, and ordered to lie on the Table.
ASHDOWN FOREST BILL. [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn. The Order made on the 8th of February last discharged, and Bill committed.
LANCASHIRE ELETRIC POWER BILL.
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn. The Orders made on Wednesday and Thursday last discharged, and Bill committed.