§ THE EARL OF LIVERPOOL had the following Notice on the Paper: To ask His Majesty's Government, whether, in view of the heavy burden which has been placed on the community from increased rates, they would consider the question of appointing a Commission to inquire as to—
- (1) The increased cost of living;
- (2) The urgent necessity of limiting the extent whereby rural areas are absorbed by urban authorities;
- (3) The position from the financial side, especially with reference to the investment of British capital in foreign countries;
§ The noble Earl said: My Lords, those who have asked me to raise this question in your Lordships' House, to-day, have done so because they feel that something should be done as regards the inequality which is apparent in the rating by local authorities. I cannot but think that it is a rather appropriate day on which to raise this Motion, and I am sure many of your Lordships will agree with me on this subject, for down in Kent I sec they had ten degrees of frost, and that must contribute to reducing very much the earning power to pay rates in the county. I am afraid we are in for a very bad time, not only in the South but all over the country. This is no new question, this question of the inequality of rating. As far back as 1906 Lord Haldane, then Mr. Haldane, had a Committee sitting for the reorganisation of His Majesty's Army, and I think Lord Lucan will recollect that on that Committee there was raised one point, and a very big point, about the question of the production of food. It was urged that everything should be done to stop the migration of the rural population into the towns. It was also pointed out by the Chairman himself, Mr. Haldane, that there was a great tendency on the part of all Government Ministries to place further burdens on the local authorities, and that at some time or other there would have to be some kind of review into the basis on which the burden was put upon those authorities.
§ Well, that is thirty-two years ago, and if it was necessary to do so then how much more necessary is it to do so now, when I notice that the expenditure by local authorities has increased from £555,000,000 in 1920 to £2,000,000,000 at the end of 1937. The individual contributes his share from two sources—that which he earns and any savings and investments he may have, and if those two sources are reduced in any way he has necessarily less with which to discharge his liability for the rates. I have in my hand papers showing that the cost of 1011 living—not only food, but other commodities also—has increased from the March quarter, 1936, to the December quarter of last year by no less than 33 per cent. I do not propose to go into detail upon that, it would only bore your Lordships, but I have taken the figure from authoritative sources and this large increase is a very serious matter to the community at large, and especially in agricultural counties. Not only has the cost of those commodities largely increased, but all the commodities which are necessary in industry have gone up likewise.
§ I will pass from that to the main respects in which the budgets of county councils have been so largely increased in the last few years. I was a member of a deputation which went to the Minister of Education not very long ago to point out the hardships which we had to face as an agricultural county owing to the new Education Act. I went away somewhat disheartened, though I frankly say we were most courteously received, and if I had been the Minister myself I could have given no other answer than that which he gave. He could not possibly distinguish between one county and another. But the fact remains that if we are going to keep the population in the rural areas at all it means a very heavy burden on agricultural counties. The Minister on that occasion gave us the figure of 480 as the economic unit for a senior school. Where the population is sparse and distances are great it would be absolutely impossible to build those schools on an economic basis. Distances would prevent it, and other things too. In this case I must take my own County—one of the administrative Counties of Lincolnshire, Kesteven. On an economic basis we should require for that County only four senior schools, but to carry out the Act on the proper basis and keep the population on the land we want twelve, and that would cost a county with 112,800 inhabitants a sum of £400,000. I am quite aware that a very large proportion of that would come back in grants from the Education Department, but at the same time it is a very heavy burden to bear. I hope the noble Earl who leads the House will not think for one moment that I am finding fault. Parliament in its wisdom or unwisdom passed that Bill, and we have to bear it.
1012§ I will come to another expensive item —the roads. Here again I quote my own County. A penny rate yields £1,833. We have about 1,600 miles of all classes of roads and we get from the Minister of Transport 60 per cent. for first-class roads, 50 per cent. for second-class roads, and nothing for district roads except for improvements. In Bedfordshire, which has nearly the same population, a penny rate produces £6,600 and that County has 1,300 miles of road to maintain. In Lincolnshire we have a good deal of the Great North Road, which earns 100 per cent. but we have also some very tiresome roads which take the whole of the holiday traffic from Birmingham and Leicester to the coast, and those roads have to be kept in very good condition to carry that traffic, and, as a corridor county (because it amounts to that), the burden is extremely heavy on the rates. There are of course other things which build up this large budget of the county council. The increase in the cost of living, 33 per cent., of course affects all the articles which have to be provided for public assistance and mental hospitals, but as regards the question of public assistance, I do not propose to deal with that at all. I do not see how you can get much further there.
§ But I will say a word on the question of police, the cost of which has become a very great burden. I saw in the organ of the County Councils' Association that the remark was made that owing to the present mechanical age the burdens are becoming almost intolerable. The police on their part are finding all kinds of new devices to track down criminals, and the cost of these devices must ipso facto fall on the counties concerned. When I discuss the rates I am only speaking of the county rates. A lucky County at present is Surrey. It has the smallest rate of all, but it has a large population and a penny rate produces something over £44,000. There is a good deal of difference between that and the produce of a penny rate in Kesteven. I suppose that Surrey carries out its duties just as efficiently as any other county council, and it is due of course to its very large population and rateable value that the rates are so low.
§ I come now to the question which is a burning one in the counties at present, and that is the everlasting desire of the 1013 boroughs to seize the best parts of the counties for their own purposes. I think a great many of your Lordships will agree that when the boroughs come to your Lordships' House or to another place for Private Bills, a good deal of money is wasted, and the only gainers are the legal profession. I was told by the predecessor of the noble Earl, Lord Onslow, the noble Earl, Lord Donoughmore, that the Parliamentary Bar were lamenting because there were so few local authorities coming to dispute on that particular question, but I am afraid that latterly the number has grown again. I am sure the Lord Chairman guards the interests of the counties very carefully, but I think that in a great many cases—I do not say unfairly—portions of counties are handed over to the boroughs without due consideration being given to the circumstances.
§ I come to the question of investments which, as I have said, are one of the means by which the ratepayer contributes his share of the rates. Has the time not come when the Government of this country should say that British capital is not to go to insolvent countries? It is no good saying, as has been said, that the Foreign Bond Holders' Association are responsible. There are lots of other investments with which the Foreign Bond Holders' Association are not concerned at all. Some of these small people—tradesmen who have retired, small farmers, and so on—see a most attractive investment at 7 per cent.—say, a Greek Refugee Loan. They never look for a moment at what they have to pay for it; they only look at the interest which is coming. They buy it, and what is the result? For a year or so everything goes on all right, and then some day a revolution breaks out, and their shares are clown to 20 or 3o and no dividends are paid at all. We have just had an example of that today. I see there is a revolution in Brazil. A few days ago the whole of the oilfields in Mexico, where there is an enormous amount of British capital invested, were seized. Is it not time something was done in the direction of saying to these countries: "Look here, we have done our best to assist you in the past. It is up to you to pay what you owe us, and not always on all occasions to repudiate.
§ It is for these reasons that I have brought this Motion forward. It has not 1014 been an easy one to put down on paper. My noble friend Lord Stanhope rightly remarked to me that these are very large questions; but I am not here to combat the Government. I am asking the Government for their help, and I hope they will be able to say something that will encourage those who have sent me here to speak to-day. In conclusion, I should like to be allowed to thank the noble Earl who leads the House for the courtesy he has extended to me on every occasion, particularly when I was not able to speak here on March 30, and it would have been very scant courtesy on my part if I had not provided him and Lord De La Warr with the material of my arguments. I beg to move for Papers.
§ LORD BAYFORDMy Lords, I am sure a great many of us will welcome the Motion which the noble Earl has so ably put before us. I rise to support the Motion, but I would ask the noble Earl whether he would consider making the scope of the Commission for which he asks a little broader than the words on the Paper would indicate. I would suggest that he should embody in the instructions to the Commission he proposes the words that already appear in his Motion—that is, to put in at the beginning of the Resolution for the Commission "to consider the heavy burden which has been placed on the community from increased rates." The words would then read:
A Commission to inquire as to—and so on. I would suggest to him that if there is to be an inquiry into this matter at all, it is better that it should be as thorough an inquiry as possible. The change I suggest would give every opportunity to make the inquiry a really thorough one.
- (1) The heavy burden which has been placed on the community from increased rates;
- (2) The increased cost of living;"
I cannot say that I am speaking on this Motion on the instructions of the County Councils' Association, because I do not think they have met since the Motion has been on the Paper, and at all events they have not had an opportunity of considering it. But I have spoken in the course of the last few days to several leading members of the County Councils' Association, and I find general approval of the terms of this Motion, and I may 1015 say on behalf of the Association that they would welcome such an inquiry as is proposed. With regard to one particular point to which the noble Earl referred—namely, the extent to which rural areas are being absorbed by urban authorities—that is a matter which the County Councils' Association have under consideration. A special Committee has been appointed to go into it and is now sitting.
As to the general terms of the Motion, it is generally acknowledged that the increased rates are in a good many ways a danger. They are, though people do not realise it, one of the causes of the increase in the cost of living. The rates, whether they are on houses or on premises, and whether these premises are for manufacture or are shop premises, are part of the overhead charges and, as everyone knows, overhead charges form a not inconsiderable part of the ultimate cost which the consumer has to pay. Therefore it is quite true to say that the increased burden of rates comes, in the shape of increased charges on almost every commodity, eventually out of the pockets of the consumer, whether rich or poor. I am sorry to say that this last year rates have been increasing almost all over the country. If you look at the table of rates charged by local authorities throughout the country you will find that in something like go per cent. of the cases there has been an increase in the rates for the coming year.
That causes discontent with the local authority, not always reasonable discontent. Sometimes, it may be, the discontent is quite unjustified, but there is no doubt it makes for criticism and discontent with the bodies that have to levy that rate. In my own county, where there has been not a large increase, but still an increase, we have been having from all directions protests from public bodies against the increase which has occurred. Where, as has happened in some parts of the country, the increase is excessive, where the rate is very heavy indeed, that fact prevents people from coming to live in that particular district, and it also prevents manufacturers from starting works in that district, thus increasing the very evil which was the first cause. Another thing we ought to consider is that this burden of rates will get more acute as the population falls. As we all know, the symptoms of a fall 1016 in population have already begun to appear, and there is every evidence that they will accelerate. As the population falls the number of people who will have to pay the rate will get smaller, and so the burden will be greater.
I should like first of all to say one word about the general cause of this increase in rates, and then, if the House will bear with me, I would come to more particular instances and take them very shortly in detail. The cause in general is, I think, that people all over the country expect everything to be done a little better than they did a few years ago. That is the first reason. They expect to have everything a little better than it used to be, and if you have a thing a little better you have to pay for it. The second reason is the number of new services that have been imposed, are being imposed, and are likely to be imposed upon the local authorities. The last one has been, it is true, a small one, the air-raid precautions. I attended a committee only two days ago considering this matter. We had to see what it was likely to cost. Remember, you have to split your county into districts, each district has to have an organiser, and the first thing that organiser asks for is an office, and the second thing he asks for is a clerk. It is not a very large charge. For a county of the size of my own we find it would come to about £5,000 a year, or almost exactly a halfpenny rate. That is in addition to the grant that is going to be given to us by the Government. That is only one instance of these new services which are being imposed one after another every Year.
Now let me take the principal matters on which the local authorities have to spend their money. They are police, education, roads and the Poor Law. The police system is, I think it must be generally admitted, an anomaly, and if any inquiry is set up that is one of the things which ought to be inquired into. The standing joint committee is a body independent of the county council, though it is true that half of its members are county councillors. The other half consists of representatives of magistrates, and it is a body independent of the county council. It is not directly elected in any way, but it orders very considerable expenditure. It orders new buildings for one thing, and it sends in the bill to the 1017 county council. The county council cannot even question the details; it has to foot the bill. That is one thing, at all events, which shows, I think, there is a case for inquiry.
Then as to education. The education rate is one of the heaviest that we have to pay. The standard all through is laid down from above. The whole scale on which the thing has to be done is dictated by the Board of Education, and the actual administrative body is partially co-opted. A large proportion is appointed by the county council, but the remaining members are co-opted from various people with knowledge and experience of education. Those people are very valuable, but my experience has always been that the co-opted member is more in favour of expenditure than the elected member. The result is that the conditions under which schools are built nowadays are, in the opinion of a great many people, extravagant. I do not want to express a personal opinion, but I was at one of our great public schools myself, and when I think of the form rooms in which we sat then I can only say that we were living in a state of absolute squalor compared with the village child of the present day. Is that altogether necessary? I want to see children well housed, and decent conditions in their schools, but have we not gone a little too far? Have not we gone beyond the requirements of decency and infringed upon the precincts of luxury?
There, again, it is not the local authority but the Board of Education that controls the standard of school that we have to build, and it is the Board of Education that also is controlling—I will not say by order and I will not call it by bribery but by financial inducement—the time in which the schools have to be built. They are pressing to get these new big schools to which the noble Earl, Lord Liverpool, referred just now done by a certain clay, and the method of pressure is by saying: "We will give you a grant of so much per cent. if you complete them by a certain time. If they are not done by that time we cannot promise what grant we shall give you." They are really pressing a standard of expenditure upon the local authorities which I do think at all events merits reconsideration. It is a thing in regard to which a local body might very well look to the Board of Education itself 1018 to give them a helping hand in keeping down expenditure. I think we ought to look to the Board for all the economy that is possible in the present state of things. Again, when these schools are being built, I do hope that the Board will take into account the certainty in the future of a drop in the birth-rate. We do not want to see very large sums of money spent on schools which before long are going to be half empty.
Now I come to the next item, that is the roads. They, after all, are the biggest item of all. I think in almost every county the expenditure on the roads is the largest item of its budget. There may be some countries in which there are better roads than there are in this country, but I do not think that taking them as a whole we have much to complain of in the standard of quality. In making a comparison with other countries we have got not only to take quality but also quantity into consideration, and I think it is a fact that for the area of this country we have got a very much larger number of roads of one sort and another than they have in any other country, and of course that means that the expense is on a larger scale. Here again the Ministry have adopted a system of grants, but their grants have been regulated, first according to time and then according to quality. All those who are connected with local government have heard of the five-year plan of the Ministry of Transport. That means a promise to give you a big grant on condition that you put through a big and very expensive programme within the next five years. This action is something which I think is a very good subject of inquiry. Is this the right time, when we have this enormous national expenditure on armaments going on, to spend very large capital sums upon the big main roads of the country?
Another matter in which I think there is at all events a case for inquiry in regard to the action of the Ministry is the standard to which they insist that a main road should be made before they will consent to give their grant. I am all for having good roads, but we do not want such wide roads or such expensive roads in a county like my own, or in a county like that of my noble friend, as are wanted in the counties immediately around London. You do not want the 1019 same class of road in Hereford or in Cornwall as you do in Kent or in Surrey. The Ministry might well take into consideration the question whether it would not be in the interests of the country that roads made in the more distant counties should not be of such an expensive character as those on which the Minister insists in counties nearer London. Again I do not want to dogmatise, but I think it is a matter on which it would be very well worth while having an inquiry. I expect the experience of the noble Earl is the same as my own and the same as the experience of most county councils. There is perpetual pressure for improvements—small improvements which may cost £2,000 or £3,000 each, but they all mount up. I do not think that this is a time when we ought to make them. Most of them can wait a bit, and while the present large national expenditure is going on we ought only to make those improvements for which there is absolute necessity.
Another matter that is coming up all over the country, and a matter that we cannot shirk, is the rate of wages and provision for superannuation. That will probably be urged upon us from above unless we deal with it ourselves before very long. It is something that everyone wishes to see done, but it does mean expense. We were going into it the other day in my county and found that to provide the roadmen alone with a system of superannuation will cost something like an extra penny-halfpenny rate. These are all things that are pressing on the county councils and making it very difficult for them to keep the rates down at the present time.
Then there is the Poor Law. Like my noble friend I do not wish to say much about that. I think that on the whole the system of taking the administration of the Poor Law away from boards of guardians and putting it into the hands of county councils has been a success and has been more economical. It is very hard to assess the pecuniary results exactly, but what evidence I have seen tends to show that on the whole there has been a decrease in cost. On the other hand, you have to bear in mind that people are living longer than they used to. If people on Poor Law relief live longer there are consequently more of them at any one time.
1020 And next we have the health services. First of all there are nursing and midwifery, two very important subjects. There again, we have had the charge for midwifery forced upon us by the action of the Government. The Board that controls midwives' salaries has insisted upon those salaries being raised to such an extent as to need an extra penny rate. We have sanatoria for tuberculosis, and isolation hospitals. That is an expense which we must incur, and they are institutions that must be kept up properly. We saw in Croydon only the other day what an outcry there was directly there was any suspicion even that anything was wrong with the medical services. Lunatics are about stationary, but mental defectives are a very growing charge. That is a new service and the Ministry demands that provision should be made for that new service on a very expensive scale. The cost for mental defectives comes, I believe, to something near £300 a bed, which is a great deal larger charge than most of these people were accustomed to in their own homes.
I think that concludes the services for which the county councils are responsible, but I should like to say a word about district councils because housing comes under their care. The same danger has to be faced there as in regard to other items of expenditure I have mentioned. With regard to housing more than perhaps anything else, we have to remember the danger of a falling population. The time may come when we shall have all these houses built at the expense of the community and we shall not get tenants for them. Then there is the most difficult question of water supply and drainage. The finance of that service is most extraordinarily difficult because it has been done hitherto either by a district council or in respect of a small area in the jurisdiction of a district council. To get a good system the area ought to be a very much larger one. You ought to have the service spread, if not over the whole county, at any rate over a very considerable portion of the county. What has happened, however, is that it has been done by very small detachments of the county as I may call them. Those who are most progressive have done it long ago, have borrowed money to pay for it, are paying off that money and in some cases have nearly paid the whole of it. Then the less progressive places come along and they are beginning to spend 1021 money on the same object when the others have nearly finished paying. It is extraordinarily difficult to pool the lot when some areas have paid a very considerable proportion of their loans and others are only just starting. It is a very difficult question on which inquiry such as the noble Earl suggests might be of the very greatest value.
This is a Motion to set up an inquiry which ought to decide two or three things. It ought to give the Government a chance to explain things that seem to the outsider, or to the interested observer, to be unreasonable. It ought to reveal how far local authorities are responsible for the expense which they are at present incurring; and it ought to show the grumblers who are complaining of all these "local extravagances," as they accuse them of being, whether they are right or wrong. I therefore have much pleasure in supporting the suggestion of the noble Earl. I hope he will consider the suggestions I have made to him as to the terms on which his proposed Commission should be set up. I hope the Government will give the matter favourable consideration. All we are asking for is some inquiry into matters that are causing much trouble and grumbling. If anything can be clone to get them right, it would be well worth the time of any Commission that might be set up.
THE MARQUESS OF CREWEMy Lords, I am sure that your Lordships' House ought to be grateful to my noble friend for introducing this Motion, which ought to be of prime interest to a great many noble Lords. He compressed his remarks into a very small compass, but the noble Lord opposite, Lord Bayford, speaking with the greatest authority from his knowledge of local government and his position as president of the County Councils' Association, was able to develop the question with a number of most acute and searching observations, to which I am sure your Lordships listened with the utmost interest. Those of us who can recall the leadership of the late Lord Salisbury here will remember how often, when some project was advanced of which he in any way disapproved, used to point out with urgency what a damaging effect any such legislation would have on the rates, more especially in rural districts. I cannot help wondering what the reaction of Lord Salisbury's intensely practical mind would 1022 have been if he had been here to-day and had witnessed the state of things described by my noble friend and by the noble Lord opposite.
My noble friend began by mentioning the cost of living as one of the elements involved in this inquiry. I was very glad that Lord Bayford was able to say that this question is absolutely germane to that raised by my noble friend. It is quite evident that anything which tends to increase the general cost of production must also increase the cost at which a commodity can be sold. But my noble friend's main point—and I am sure it is one with which the noble Earl will desire to deal—is the singular inequality which exists between different local authorities who have to carry out the duties imposed on them by various Statutes. He specially alluded therein to the cost of education, and mentioned the interesting points of difference which the institution of central schools—admirable, no doubt, in themselves—is apt to make in the cost to some counties as compared with others, his own county being one of the chief sufferers. These matters, of course, all come back to the whole question under dispute, if dispute is the right word: what ought to be the local charge, and what ought to be the charge to the Central Government, of various local improvements and the carrying out of local duties. Of course, it is a platitude to say that where administration or the form of government is left to the local authority, they will not carry out their duties with the greatest efficiency unless they are themselves liable for part of the cost. That, of course, is the merest common sense. But the allocation of portions of the charges in particular instances must always remain a difficult matter and one which is liable to give rise to certain degrees of friction.
Both noble Lords dealt with one of the principal questions, and perhaps the most: important: that of the roads. The greatest social revolution which has ever taken place in this country has been caused by the invention of the internal combustion engine. In the generation before mine the railway system of the United Kingdom came into operation. That was in a sense a revolution, but it was a very gradual revolution and its effects, though large and in a way permanent, were not appreciated in a moment. But the revolution caused by 1023 the universal adoption of motor cars and of tractors has come like a flash of lightning. It is practically since the War that our whole social system has been affected by it. As a result, it has been found impossible to bring our system of roads into conformity with the need—or at any rate with the supposed need—of those who use them in the modern manner. I am not going to dilate on the whole question of the great roads which it is sometimes proposed to make in imitation of those which are being made in various parts of the Continent of Europe, but it is interesting to note, as Lord Bayford said, that considering the relatively small size of this country we are more largely provided with roads than any country on the Continent of Europe, and of course that is even more true of the rest of the world. Therefore I am sure that it is wise to approach with caution, and with a great deal of thought, the whole question of improving our national roads, and to be rather shy of sudden remedies, which are proposed in some quarters, and which might, I think, if carried into effect, prove disastrous from many points of view.
I cannot attempt to follow all the points which have been raised, but I would just say one word on the question of the absorption of our rural districts by the ambition of boroughs, and of course, in a degree, of urban rural district councils, to enlarge their areas. The noble Lord opposite spoke of the attempts from time to time made in Parliament by a town to bring the question of enlargement before the Committees in another place and here. I think it is quite true that this has been sometimes overdone in a rather unprincipled way; that is to say, by a sort of Oriental system of bargaining, in which a town has claimed almost fabulously large areas outside its boundaries, in the knowledge that it will not get all it asks for, but in the hope that having made a rather large demand it will get much more than it would have got if it had asked for less. I am very glad Lord Bayford alluded to that particular matter.
My noble friend touched on the question of foreign investments, as having a certain bearing on this question. When he stated that the noble Earl opposite, Lord Stanhope, had remarked—I do not say 1024 complained—that my noble friend's Motion covered a somewhat wide field, I think it is possible that he might have been alluding to that particular item. However that may be, and whatever the noble Earl's views on that particular point may be, I do hope that he will be able to do something in regard to the matters raised by the Motion. I feel sure that it would be a distinct comfort to those local authorities who are represented by the noble Lord, the Chairman of the Association of County Councils, if the noble Earl were able to say that some form of inquiry into these points should be made. I trust, therefore, that the noble Earl will be able to give not merely a sympathetic but a hopeful reply to my noble friend's Motion.
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW)My Lords, I want to detain you only for one brief moment. Lord Liverpool, in introducing his Motion in a most interesting and able speech, referred to the question of the absorption of parts of the counties by county boroughs, by means of extensions, and I have no doubt he had in mind the creation of county boroughs, although that is not a matter which often comes before us at the present time. If it were to do so I should remind your Lordships that the population limit had been increased from fifty thousand under the Act of 1888 to seventy-five thousand under the Act of 1926, but I do not think we have, or are likely to have, very many county borough extensions. Indeed I hear that there are some towns and municipal boroughs which are approaching, or which may approach in the near future, the seventy-five thousand limit, which would prefer to find themselves in the proud position of remaining the chief town of the county, rather than go out of the county and become a borough. I myself would welcome such a decision on the part of many towns, and I think that the community in most cases would benefit by such a decision; but you have a large number, some eighty, of county boroughs which throw out houses round about and who are constantly applying for leave to extend their boundaries.
My noble friend said he hoped I would see that attention was called to any such endeavours, but in my position I have very little to say on the question of county borough extensions. I only have 1025 anything to say if such proposal is unopposed, and it is not within my recollection that a county has not opposed such an extension. If there has been an extension Bill I think I am right in saying that the county council has always had a petition against it. I must remind your Lordships, if I may, that the whole of this question was reviewed some twenty or thirty years ago, and there was considerable opposition on the part of the counties to what they considered the unfair methods by which the county boroughs were able to absorb some of their most valuable rateable areas. In consequence, Parliament, in the Act of 1926, took certain steps. The county boroughs objected to the method of procedure by Provisional Order, because they said that when the Local Government Board in those days—the Ministry of Health in these days—sent down for a local inquiry the county borough really was in a better position as promoters than the county council as opponents. Whether that was the case or not I do not know, but it was certainly an opinion which was very generally held—as I think the noble Lord, Lord Bayford, will agree—among the County Councils' Association. Parliament made a very considerable alteration in the law in the Act of 1926, because it abolished the procedure by Provisional Order in any opposed case, and insisted upon procedure by Private Bill; so that now any county borough which wishes to absorb a portion of a county has to proceed by Private Bill.
A great deal of attention was given to the question of whether you could by any means restrict the extension of county boroughs. After a most exhaustive inquiry the conclusion was reached that it was impossible to lay down a rule whereby you could curtail the extension of county boroughs, and that the only method was that proposals for such extensions should be subjected to the statutory test as to whether in the opinion of the proper authorities such extensions were desirable. I may say I have had a certain amount of experience, and have gone into this question pretty carefully, and I do not think there is any other way of settling it. The situation all over the country varies so much that it is only by subjecting the point to a competent authority that it can 1026 be properly dealt with. The competent authority should take the views of the inhabitants who are going to be included in the borough, and then strike a balance and, if they find it desirable, give to the county borough the extension, or such part of the extension as they may think proper. I think that is the only means whereby you can possibly adjudicate on these demands.
My noble friend (Lord Liverpool) in most touching terms referred to the demands made on agricultural counties, and in fact all counties, although I think he excepted my own County of Surrey, which he spoke of with some envy. I would remind your Lordships that when a county borough applies for an extension and it is granted there is a financial adjustment. In 1913 a strong Committee sat, presided over by the noble Duke whose loss to your Lordships' House and to the country we all lament: I mean the late Duke of Devonshire. That was just before the War. They laid down, and it was embodied in the Act of 1913, that fifteen years' purchase should be given for financial adjustment for the added area. Of course after the War the altered value of money caused that period of fifteen years to be inadequate, and by the Act of 1926 it was raised to twenty-one; so at the present time the financial adjustment is made on a twenty-one years' basis.
The noble Lord very truly observed that Parliament piles more and more expenditure on the counties. We notice it wherever we go. You have only got to look at the county halls. Every one of them in this country seems to have got a new wing, or is building one. That is to accommodate the officials to do the work that Parliament puts upon them. It may be that by now this period of twenty-one years is inadequate, but there is no means that I can see of altering the method of county borough extension except possibly by some change in the proportion of financial adjustment. The counties have enormous expenses put upon them, and they very justly say, when most valuable rateable area is taken from them, that it is a great hardship, but the only remedy is some means of financial adjustment.
I think I ought to say a word on the subject of the authorities who adjudicate on the question of whether or not an 1027 extension is desirable. These matters—I am speaking of your Lordships' House, and I have no doubt the same is true of another place—go before very strong Committees. Those Committees have the advantage of counsel and witnesses and reports by the various Ministries, and they are eminently competent, I think, to adjudicate on these questions of extension. My noble friend Lord Crewe has said that he had heard that some county boroughs may ask for rather more than they expect to get, and that sometimes they are successful. But I would say this, that the noble Lords who sit on those Committees—and I have no doubt the same is true of another place—are very wary, and if such matters were to come before them I feel pretty sure that the question would be examined very closely. I really do not see how you are going to alter for the better the law as it stands at present. The only thing that can be urged on Committees—and I should like, most respectfully, to do so—is that they should use the utmost vigilance and really make up their minds that the extension demanded is desirable before granting it.
THE MARQUESS OF ABERDEEN AND TEMAIRMy Lords, having spent many years in local government, I should like to say a few words on the subject raised by the noble Earl, whose speech I regret to say I did not hear on account of having been called out of the House. But I should like to join the noble Marquess opposite in expressing my thanks to the noble Lord, Lord Bayford, for the very illuminating facts he put before the House. With regard to roads, I think that the Ministry of Transport insist on county councils spending far more money than is necessary on what might be called the touching up of new roads. For example, they refuse to pay a grant unless the county council puts a stone kerb all along the road. I am hoping that the Committee presided over by the noble Lord, Lord Alness, will convince this House and the Ministry of Transport that that is not the safest way of providing for traffic conditions on our main roads, though it adds enormously to the cost of construction, as also does the insistence on a pathway being made along all these main country roads—to be used by nobody, because nobody is going to walk a long distance on these 1028 country arterial roads; they would rather use a bicycle or some means of public transport.
With regard to housing, which was touched upon by Lord Bayford, I do not think it is realised that a great deal more money is spent, comparatively, on housing in rural areas than in urban areas. It costs much more, relatively, to bring the same services to a few houses per acre than to houses in an urban area. The result is that an enormous amount of money is spent on services to which rural inhabitants are not necessarily accustomed. The private owner finds it practically impossible to meet the cost because, curiously enough, although the cost of building has gone up enormously, yet the limit under the Housing (Rural Workers) Act which attracts a grant has not increased, so that if you spend £401 on putting a house right you would get no grant. When the Housing (Rural Workers) Act was first in operation, £400 was an ample sum, but now it is not ample. Therefore you penalise the private owner as well as the county council by raising the cost of building houses and not meeting that increase by Government grants, and thereby increase the rates as well as the costs to the private builder.
The same applies to water. Recent legislation treats the country house in the same way as an urban house, but obviously a water supply in a thinly populated area costs very much more than it does in an urban area. Again, when a county council creates a water district, it creates a rate only for those who live in that district. Lord Bayford's argument on that point seems to me irresistible. Such a rate ought to be spread over a larger area, and I am not at all sure that the same conditions should not be insisted on in the depth of the country as in urban areas. Moreover, it has to be borne in mind in these days that there is often not a water supply. An insanitary house supplied with water which does not flow is much more insanitary than one which is not supplied with water at all.
With regard to the rural aspect of this whole question, the State and the municipalities between them take all the labour, especially at the present time. Nobody says it is wrong to use all the labour you can get for social improvements, but it is an extraordinary thing to go full force 1029 with your social programme and at the same time go full force with your rearmament programme. The two cannot go together. There, again, the ratepayers suffer. The most serious point about the rising rates is that at the same time as the rates are raised the assessment rises also. If you have an increased assessment the extra amount of money raised in that way ought to be sufficient without increasing the actual rate. There seems to be no reason for an increased assessment as well as an increased rate. The Government could by a little more careful administration so arrange their legislation that the national cost and the local cost should not clash and go up together, and therefore make the state of both the taxpayer and the ratepayer almost impossible, especially in the case of the private owner who tries to do his duty towards the legislation passed by Parliament. There is every reason why the noble Earl should be congratulated on bringing this question before the House, and I hope something may be clone in the way of an inquiry whereby this ever-increasing local expenditure may be curbed.
§ THE EARL OF GLASGOWMy Lords, I would like to support the noble Earl, and I shall not occupy your Lordships more than five minutes. I am a member of the Scottish County Councils' Association; we are affiliated to the English County Councils' Association and know a good deal of what they are doing. There has been a tremendous increase in the rates during the last few years, and that increase is one of the reasons why this Commission should be appointed. There is another reason, and that is the tremendous demands which are going to be made on county councils in future. That it just as important a reason to my mind. Lord Hayford, in his most interesting speech, spoke about education and roads. If your Lordships will allow me, I will approach these particular questions from another angle.
With regard to education we have, I suppose, one of the best educational systems in the world. We have the finest lot of teachers, women and men, in the world to carry on the work of education, but the whole of our education is marred by one thing. and that is the size of the classes. It is impossible in a class of sixty pupils—and I know classes of sixty 1030 spupils—to get at the children properly. That is a question that must be met some time in the future. Of course it means a great many more teachers and very considerable expense all round. We know that the population of the country is said to be dwindling, and perhaps pupils will decrease in number, but I cannot help thinking there will be a great demand for teachers in the future.
The other point is about roads. The Government have taken a very good step in taking over the trunk roads, but let your Lordships visualise the traffic we are bound to have throughout this country in the future. I have been shown the possible traffic we may have in fifty years' time; it is enormous. I have not the figures with me, unfortunately, but they are enormous. When you go to Germany and Italy and see their marvellous roads going right through the country, you must recognise that such roads will be necessary in this country. I recognise that the Government have taken over the trunk roads, but when I visualise the future I look forward to the Government more than the county councils, and if this inquiry is carried out it might consider the question of the State taking over the first-class roads of the country. There are certain roads in our country which, as your Lordships know, carry a tremendous amount of traffic and are not included in our trunk system. The traffic over them is increasing day by day. It is absolutely necessary that something should be done about these roads. What I suggest would be to raise the grant we get now for roads in the counties and allow that extra grant to be applied to the roads to which we consider it necessary it should go. Those are the two points which I really wished to make to your Lordships as reasons why this inquiry should be held. I hope that the Government will take the matter into their very serious consideration.
§ THE LORD PRIVY SEAL (EARL DE LA WARR)My Lords, I think after the debate to which we have just listened the noble Earl, Lord Liverpool, should be feeling very satisfied with the result of putting down his Motion. May I first of all thank him for his courtesy in letting the Government know the main points which he intended to raise. This debate has really established that there are a great number of points of agreement. 1031 The first point on which we are all agreed is that the subject is a very important one, and that His Majesty's Government must take this discussion most seriously, as they do. Then we are all agreed that the rates have increased very largely during the last few years. Yet it is perfectly true that during the last five or six years, since 1932, the actual rate in the pound for the country is lower than it was in the nine preceding years. I do not stress that point, because, as we all know, assessments have gone up.
There are one or two points that have not really been very much stressed. I expected a certain amount of discussion in regard to the incidence of public expenditure as between rates and taxes, a point the importance of which it has sometimes seemed to me it is very possible to exaggerate. When a sum of money has to be obtained for public expenditure, if it does not come out of one pocket then it comes out of another. While taxation raised by a system of rates may to some extent seem to be a worse burden on the cost of production than the Income Tax, it is no doubt inevitable that a great amount of public expenditure must be borne locally for the simple reason that the majority of us in this country are very satisfied with our system of local government and desire it to continue. I think very little has been said about the actual amount of the rates. The noble Lord, Lord Bayford, did deal with the question of the increase, and said he would like that question to be included in any inquiry that might be set up, but I think he recognised fully that with our rates we, as the public, do in fact buy certain services. We buy our roads, our police protection, our sewage system, our lighting, the better health of our people and the greater intelligence of our people. Those are all things that Parliament and the local authorities between them have laid it down that it is desirable the public should enjoy.
The noble Lord, Lord Bayford, mentioned a number of specific points. He said, for instance, that there was extravagance in our expenditure on education. He mentioned the new schools. I wonder if he is right there. I believe that if he and I sat down to criticise the results of our present educational system we should probably find ourselves in very considerable agreement. We complain that that 1032 system has turned out far too many black-coated workers from our villages where we should like to see our children being taught something about the countryside. We are turning out far too many typists and clerks, but how are we going to adjust that? Surely that question is bound up with the question of more expensive schools. As long as you are satisfied with having in the school a number of little boxes, which you call rooms and in which you enclose children for the purpose of pumping into them a certain amount of information out of a book, you can do it very cheaply, but you get a kind of education which the noble Lord and I dislike. It must be remembered that we have to have a woodwork room, a metalwork room, school kitchens, a gymnasium, school gardens and so on. Those are the things that are adding to the cost of education, and I would suggest to the noble Lord that they are undoubtedly the cause of the cost of the new buildings being greater than the cost of the old buildings. At the same time we are getting very much better value for our money. I think it was the noble Lord, Lord Bayford, who made the point that the luxuries of one generation become the necessities of the next generation. That is inevitable, and it is a subject in which I think he and I, and also the noble Earl, Lord Liverpool, would be mutually interested.
Then there is the question of an adequate supply of agricultural labour. We are all concerned about the shortage in the supply of agricultural labour. We have to face the fact that unless we increase—and it has inevitably to be done at the expense of the rates—the amenities of the countryside we are not going to get the necessary supply of agricultural labour. The wives of the agricultural labourers go into the towns, they see their friends' houses, they see their electric light, they see the water laid on to their houses, they see the far more convenient sanitary arrangements, and they go back and tell their husbands to try and get a job in the town. There, again, is an example of how inevitably the costs are bound to run up. These burdens grow and these costs run up. May it not be because we as members of Parliament and as members of local authorities think that certain services have to be extended?
And exactly the same applies with regard to loan expenditure as with regard 1033 to current rate expenditure. We know that year by year the amount of the loans outstanding by local authorities is growing. Nobody has mentioned it to-day, but I think your Lordships should welcome the last circular of the Ministry of Health in which all the local authorities are asked to plan their capital expenditure for five years ahead. There has been far too much spasmodic expenditure in the past, and I think this question of planning for the future is particularly important from the point of view of the future trend of population to which the noble Lord, Lord Bayford, has referred.
Those are certain remarks on the general side of the subject, but a number of more specific points have been raised, and are particularly raised in the Motion of the noble Earl, Lord Liverpool. The noble Earl has referred to the question of the cost of living. Over a certain period, making comparison between 1931 and 1932, the period of slump, and to-day, it is perfectly true that the cost of living has risen considerably. But is it really fair to take a comparison of those years? Did not every single one of us of every political Party in 1931 say that if we were ever going to escape from the trough of that depression prices had to rise? If we compare 1929 with 1938 we find that the index of retail food prices is down by no less than 11 per cent. and that wages are up on an average 6½ per cent. I can also tell your Lordships that the rise in the cost of living has been definitely checked, and we are actually down 2½ per cent. as compared with the end of last year. This is a question that is under continual review by the Government, and your Lordships will realise that the Food Council is continually watching the price of food. You may also have noticed with interest that we have just set up a committee of inquiry into the cost of coal distribution.
Now I come to a point about which a great deal has been said to-day—an extremely important point; that is, the absorption of rural areas by urban areas. If unfortunate Ministers are allowed to have personal opinions perhaps I might be allowed to say that I have a great deal of sympathy with what has been said on this matter. On that point the noble Earl, Lord Onslow, made some very interesting remarks. I cannot see any solution for this problem in the future simply in terms of accepting the 1034 present basis of local government areas and refusing to certain urban areas extensions for which they ask. I believe that ultimately—I use the word "ultimately" because I am making no statement about immediate Government policy—we shall have to look at the matter from a much wider point of view, the sort of point of view that was seen in the report of the Tyneside Commission, and the point of view which I think was hinted at by the noble Lord, Lord Bayford, when he talked about adopting a very much larger area, for instance, for water supplies and other services. We have to think possibly in future far more in terms of the region and far less in terms of the small and in some cases rather out-of-date local government area.
There was one other point which noble Lords have raised, and that was the question of inequality in the incidence of rating between rural and urban areas. I do not think it is quite fair, as the noble Earl suggested, to say—
THE EARL OF LIVERPOOLI do not wish to interrupt, but I should like to point out that I purposely did not touch on the urban question.
§ EARL DE LA WARRI apologise to the noble Earl if I did not quite catch his point, but I think the remarks which I intended to make are equally applicable. I do not think it is quite fair to say that nothing has really been done during the last few years in the matter. Of course nothing can be final, and certainly the present system need not necessarily be final, but a very great deal has been done with regard to this specific point. As your Lordships know, during the last year or so a very big alteration has been made in our rating system. No fewer than 4,500 miles of trunk roads have been taken right out of the sphere of local government expenditure and responsibility for them has been assumed by the State. Then in respect of the smaller roads very full allowance for differences between one rural area and another has been made in the block grant. I wonder if the noble Earl realises how much the assistance given to different areas is varied by the block grant. I find that last year the block grant paid to Lincolnshire was equivalent to a rate of 12s. 4½d. and to Montgomeryshire 12s. 3d. East Sussex, of which I am a proud resident, only 1035 got is. 7½.d. Kent, the home of the noble Earl, Lord Stanhope—I think it was referred to—only got 8½d. Surrey, to which the noble Earl referred, got nothing at all, and from what he said I am sure he thinks that that is quite right. The noble Earl must admit that a very considerable attempt has been made already by the Government to bring about some measure of justice as between different areas. The question of education has been referred to, but I am not going to deal with that because at present my noble friend the President of the Board of Education is engaged in discussion with local authorities in order to get adjustments of what he admits to be certain inequalities and injustices.
One last point to which the noble Earl referred was the question of British capital being driven abroad—I think that was his point—by the incidence of rates.
THE EARL OF LIVERPOOLForgive my interrupting, but I only quoted that as one of the results. If capital is invested abroad and comes to nothing we become the losers. But I only put it as a side issue.
§ EARL DE LA WARRThe noble Earl may feel that it is a side issue, but it takes rather a prominent part in his Resolution. We all recognise that foreign investment is frequently more risky than home investment. Against that, however, we must ask ourselves where we should be to-day if in the past we had made no foreign investments. The whole basis of our prosperity to-day is those foreign investments. The noble Earl asks why we do not take a strong line with some of these defaulting countries. I think he is aware of what the Government are saying to Mexico at the moment, and he will agree that we are doing everything we can. I am not quite clear how this matter comes into the question of rates. It might be, of course, that high rates would drive British capital away; that would be more likely were it not that productive industry is exempted from the charge of rates to the extent of no less than three-quarters. The noble Earl mentioned the Kent fruit-growers. They do not come into the matter at all, because they are completely derated.
I am afraid I have only been able to touch on a few of the points that have 1036 been raised, but I hope what I have said will convince your Lordships that His Majesty's Government do take this subject very seriously. They do not feel that a Commission of the very roving type which has been suggested by the noble Earl would help in the solution of these problems, but they feel rather that the continual review and revision of our system of rating and local government which is taking place from day to day, and by which all these matters are under the constant consideration of the Government through the Ministry of Health, the Ministry of Transport, the Board of Education and so on, is a better way of meeting the need for possible adjustment in the future. Although we do not intend to adopt the method proposed by the noble Earl, we certainly admit the need for this continual review. I will close by once more thanking the noble Earl for bringing up this question and for ensuring such a useful debate.
THE EARL OF ONSLOWMy Lords, does the noble Earl suggest that the county boroughs as they are at present should remain static and that there should be no further extensions or creations?
§ EARL DE LA WARRI was purposely vague on that point. I merely said I felt some sympathy with the noble Earl, but in that I was speaking as a county-man, and not as a member of His Majesty's Government.
THE EARL OF LIVERPOOLMy Lords, I will not say that I am entirely satisfied with the reply of His Majesty's Government, but I certainly do not intend to divide on the Motion. These matters seem to be receiving the attention of the Government. I would thank Lord Bayford for the very able way in which he seconded me, and also my noble friend Lord Crewe for supporting me. I quite agree with Lord Bayford in what he said on superannuation. I am afraid I omitted that subject in my first remarks. I would go further and say that the increase in the staff which we have obtained in the county councils has substantially contributed to the large sums we have to pay in superannuation. I think I read in his speech in a paper which is beside me here that the size of our staff is eight times what he originally knew it to be. Our county building has become almost a 1037 small town in itself. The noble Marquess, Lord Aberdeen, spoke about footpaths. I am afraid I do not entirely agree with him. I agree in regard to the kerbings; although they are not used, I grant that it is necessary to place them there for the safety of the younger people, especially those going to school.
I purposely avoided differentiating between the two kinds of taxation, as I was trying to keep to my Motion, National taxation is one thing which, disagreeable as it always is to everybody, we share alike. We all grumble like anything, and I suppose the noble Earl, Lord De La Warr, grumbles no more and no less than anyone else. I certainly am in the same condition. But: the rates are calculated on quite a different basis and, especially in agricultural counties, naturally operate unevenly. That is the point which I particularly wanted to bring out to-clay. I found no fault even with the noble Earl, Lord Stanhope, for courteously sending us away after saying nothing. I quite agree with him, and I should probably have done the same if I had been Earl Stanhope.
§ EARL STANHOPEI think I told the noble Earl that one of the reasons why he had to look forward to a large expense now was that his county had not done these things earlier.
THE EARL OF LIVERPOOLThe noble Earl said that, but whether he was right or not I cannot at the moment say. But the inequality of the incidence of rates on varous counties was the point I chiefly wished to raise. I particularly did not want to question the necessity for the various enactments which impose expenditure on county councils. That is quite another question. I agree with the noble Earl, Lord De La Warr, that something has been done to lighten rates, but I do not think that touches the whole point. Rates are only subsidiary to all the other expenses of the county council, many of which I omitted and Lord Bayford put in. I therefore beg leave to withdraw my Motion.
§ Motion for Papers, by leave, withdrawn.