Lords Sitting of 10 June 1958

Preamble
Reassembling after the Whitsun Recess, the House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers
  ROCHDALE CORPORATION BILL [H.L.]
  Read 3a, and passed, and sent to the Commons.
  ASHTON-UNDER-LYNE, STALY- BRIDGE AND DUKINFIELD (DIS- TRICT) WATERWORKS BILL [H.L.]
  Read 3a, and passed, and sent to the Commons.

  PAKISTANI IMMIGRANTS
  2.36 p.m.
  LORD HAILEY: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government if it has been found possible to control the influx into this country of Pakistanis of the non-labouring class, of whom considerable numbers are now stated to be dependent on public assistance for their support and that of their families.]
  THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, as the noble Lord will know, the recent sharp rise in immigration from Pakistan, as well as from India, has become a matter of concern to Her Majesty's Government. The Governments of India and Pakistan share this concern. I have recently been in close touch with them, and am glad to say that they are now taking a variety of further measures designed to reduce the flow of migrants coming to this country. In the past few months the great majority of these immigrants have been unskilled labourers, most of whom speak
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  little or no English and who cannot therefore easily find employment.
  As regards genuine students coming to recognised places of learning with the support of their Government, they are always welcome here. The Pakistan authorities have informed me that no "students" other than genuine ones should have travelled to this country since the end of April. At that time fresh instructions were issued to passport authorities in Pakistan under which all prospective student migrants have to produce a letter of admission to an appropriate educational institution in this country. I am aware of a few isolated instances in which persons describing themselves as students from Pakistan have in the past, shortly after their arrival, gone on to National Assistance. I have drawn the attention of the Pakistan Government to these cases. I have no evidence, however, to suggest that this is a widespread development. I feel confident that the measures which the Pakistan Government have now adopted will go a long way towards ensuring that only genuine students are in future provided with passports valid for travel to this country for educational purposes.
  LORD HAILEY: My Lords, I hope that the noble Earl will allow me to ask him just one supplementary question. Would he allow me to send to him for his perusal the information I have on this particular point? I think he will find it of interest.
  THE EARL OF HOME: Of course, my Lords, I will willingly receive any information.
  LORD BARNBY: My Lords, may I ask the noble Earl whether in those cases where Pakistanis have been employed and are now out of work, it is understood that there should be insistence on priority of their dismissal because they are newcomers, as against old residents of equal efficiency?
  THE EARL OF HOME: My Lords, I am not quite sure that I follow the noble Lord's question. But I would say that so far as immigration is concerned the approximate figures in the last three months are very much down—from 1,934 in February to 433 in April—and so I hope that this problem will work itself out in the very near future. So far as

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  I know—I am certain, indeed—there is no discrimination either for or against Pakistanis in this country.
  LORD BARNBY: My Lords, I am grateful to the noble Earl for that reassuring statement.

  TRADE WITH COMMUNIST COUNTRIES
  2.39 p.m.
  LORD BARNBY: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask Her Majesty's Government if, in view of official statements of policy favouring approved trade with Communist countries (including China), they will state on what basis are quotas of imports fixed for primary products coming from such countries when payments for the same might be expected to assist exports from the United Kingdom to those countries.]
  THE MINISTER WITHOUT PORTFOLIO (LORD MANCROFT): My Lords, the great majority of our imports of primary products from Communist countries, including China, are not subject to quantitative restrictions, so that no quotas need to be fixed for them. Her Majesty's Government consider that the interests of the United Kingdom are best served by allowing importers to procure their supplies of these products from whichever parts of the world can best meet their commercial requirements. For the remaining primary products, and for other products from these countries which require individual import licences, the Board of Trade are prepared, generally speaking, to grant import quotas in exchange for reciprocal facilities in their markets for corresponding British exports.
  LORD BARNBY: My Lords, I thank the noble Lord for his reassuring reply, but arising out of it may I ask him whether he will review the question of Poland, which at present is able to take substantial quantities of British merchandise and is being subjected to severe restrictions, if not discriminatory restrictions, on her exports of primary products to this country? Also, is it to be under-
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  stood that among the ships from which labour is being held back in the Port of London there are included ships from Iron Curtain countries?
  LORD HENDERSON: My Lords, further to that supplementary question, may I ask the noble Lord whether any progress has been made in removing the embargo on trade with China, which has a bearing on the point which the noble Lord has already raised?
  LORD MANCROFT: My Lords, as the noble Lord, Lord Barnby, knows, we are not prepared to establish quotas for Soviet bloc countries' consumer goods, except against reciprocal facilities for consumer goods which we wish to sell to them. It is, of course, a very wide range of United Kingdom consumer goods for which reciprocal facilities are acceptable. If the noble Lord will let me have particulars regarding Polish goods I will look into the question. With regard to his second question, I hope that the noble Lord will allow me to say that a greater degree of poetic justice is involved than of strict relevance to his original Question. The noble Lord, Lord Henderson, asked a question which is really concerned with "Cocom", which again is a different matter. I am happy to tell him that when we have some progress to report we shall report it.
  VISCOUNT ELIBANK: My Lords, why does the noble Lord say that it is concerned with "Cocom"? Surely the question of abolishing the embargo against trade with China is a matter for Her Majesty's Government. And have we not asked time and time again whether Her Majesty's Government will initiate steps to abolish this embargo?
  LORD MANCROFT: My Lords, it is a matter for Her Majesty's Government, and the noble Viscount has asked, time and time again; but it has nothing whatever to do with the Question of my noble friend Lord Barnby.
  VISCOUNT STANSGATE: My Lords, but still there is no reason why the question put should not be answered. It is a very interesting question, and it has been asked once or twice of another distinguished member of the Government. Have the Government or anybody else at "Cocom" put forward the simple proposition that this embargo should go?
  LORD MANCROFT: My Lords, my affection for the noble Viscount, Lord Stansgate, is such that I must rise, but only to tell him that his question is even more irrelevant than those he has previously asked on this subject.
  LORD BARNBY: My Lords, may I return to the original Question, for the purpose of the accuracy of the record? In his reply the noble Lord referred, if I correctly understood him, to consumer goods to Poland, as against primary products from Poland. I should like to make sure that he understood that my reference was to the import of primary goods from countries like Poland against the export of manufactured goods, or Empire raw materials, to the country concerned.
  LORD MANCROFT: Yes, my Lords, I understood.

  BUSINESS OF THE HOUSE
  THE EARL OF ONSLOW: My Lords, perhaps I may be more mundane and give your Lordships some information which I think will be suitable. My noble friend Lord Mills will be making a statement at 3.30 p.m. There is such a formidable list of speakers on the Local Government Bill that it has been arranged through the usual channels that, should we go on too long, we shall break at 7 o'clock for dinner and resume at 8.15.

  FUTURE BUSINESS
  THE EARL OF HOME: My Lords, I beg to move the Motion standing in my name on the Order Paper.
  Moved, That leave be given to advance the Second Reading of the Defence Contracts Bill, the Committee stage of the Disabled Persons (Employment) Bill, and the Consideration on Report of the Land Powers (Defence) Bill (which stand appointed for Thursday, the 19th instant) to Tuesday, the 17th instant.—(The Earl of Home.)
  On Question, Motion agreed to, and ordered accordingly.

  LOCAL GOVERNMENT BILL
  2.45 p.m.
  Order of the Day for the Second Reading read.
  THE LORD CHANCELLOR (VISCOUNT KILMUIR): My Lords, I rise to move that the Bill be now read a second time. It will be generally agreed, I believe, that the time is ripe for a comprehensive reorganisation of local government in England and Wales. I think it is true to say that there has been no thoroughgoing reform of the main structure of local government since the 1890's.
  There have, of course, been changes in detail, such as the reviews of county districts carried out in the 1930's, and there have been changes in the financial basis of local government of a somewhat limited and piecemeal character; but no effective general reconsideration of the whole organisation of local government has been carried through.
  I feel sure, too, that there will be broad agreement that what is required is an overhaul and improvement of the present system of local government, rather than its replacement by something entirely different. The two Local Government Commissions to be established by the Bill are enjoined to secure "effective and convenient local government", and this requirement epitomises the objects of the Bill. In the financial field, the Government's aim has been to strengthen the local character of local government by giving the authorities greater responsibility over the spending of money on the services which they provide in their areas.
  Let me outline at once the main provisions of the Bill by which we have sought to achieve these objects. Even this, I fear, will take a considerable time. The financial proposals are contained in Part I, which provides for changes in the rating system and for a recasting of the system of Exchequer grants, the most important change being the introduction of a new general grant to county and county borough councils in place of a number of specific grants in aid of particular services. I hope to be able to show your Lordships that all of these changes are designed to further the object of increasing the responsibility of the local authorities to manage their own affairs.

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  The financing of local government services now rests overwhelmingly on Exchequer grants and rates—in that order. In the last year for which detailed figures are available, 1955–56, the total income of local authorities in England and Wales on revenue account was £1,147 million, of which £500 million took the form of grants from the Exchequer, while rates produced £421 million. The remaining £226 million represented income from rents, trading services and other miscellaneous items. The Government have reached the conclusion, after a most careful study of other possibilities, including the suggestions of the group of the Royal Institute of Public Administrators, that the path we should pursue is that of strengthening the present bases of local government revenues, rather than seek to devise some new sources of revenue.
  As I have said, we have concentrated our attention on improving the existing sources of revenue—rates and grants. In the matter of rates the main adjustment proposed by this Bill is the re-rating of industry and freight-transport from 25 per cent. to 50 per cent. of net annual value. Industry's share of the total rate payments rose by half as much again following the revaluation of 1956, and re-rating to 50 per cent. on top of that, as we now propose in this Bill, will have the result that industry's share will have increased three-fold since the year 1955–56. In the present economic situation, and having particularly in mind the effect on the costs of exported goods, this seems to the Government to be as heavy an addition to overheads as industry can safely be required to bear.
  We are also proposing in this Bill some changes in the basis of rate contributions of the electricity and gas industries. These changes will not materially affect the total contributions made by these industries, which are, in the Government's view, soundly based, but they will result, we think, in a rather more equitable distribution of these contributions among the local authorities. I would also draw your Lordships' attention to the proposal in Clause 10 of the Bill which provides for the separate assessment of electricity and gas show-rooms so as to bring them fully into line with the rating of other shop premises.
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  I turn now to the changes in the grant system. The present methods of determining Exchequer contributions towards local services have grown up over the years, and no one can claim that they follow any discernible general pattern. The great majority of the grants are percentage grants—that is to say, the Government pay a fixed proportion of the expenditure incurred by each local authority on the service concerned; but the rates of grant vary on no logical principle from one service to another, and the methods of calculating the Exchequer share vary in detail between one grant and another. In the Government's view, this method of contributing to local expenditure is not conducive to that independent and responsible local administration which it is the Government's prime aim by this Bill to foster.
  Percentage grants have the result that the more an authority spends, the more the contribution received from the Exchequer. I would ask your Lordships to consider whether such a system is compatible with objectivity in local financial administration. I would also ask you to consider whether it does equity between authorities well endowed with rate resources, who can well afford to earn the higher grant which accompanies higher expenditure and those less well financially endowed, to whom the residual burden falling on the rates, even with the grant, may well be a powerful deterrent against undertaking worthwhile but costly developments.
  The Government seek by this Bill to give a large proportion of Exchequer assistance towards local authority services in the form of a general grant. The principle here is that the amount paid to each individual recipient authority should depend not on the amount the authority spends, but on needs, and that the money provided by the Exchequer should be available in the hands of the authorities to apply as they think best in providing the services. The Exchequer money will thus be made available in a form which will encourage authorities to consider the financial aspects of their transactions without the bias that is apt to be associated with percentage grants—a bias created not by the intrinsic merits of particular proposals but by the incidence of grant. Moreover, authorities will be stimulated to administer their services so as to obtain

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  the best possible value for their expenditure, since the benefit of any savings resulting from efficient administration will accrue to the authority itself and will not be shared, through a percentage grant, with the Exchequer.
  My Lords, you may ask me what assurances there are that the total amounts made available by the Exchequer under a system such as I have described will represent a proper contribution towards the local services. And you are entitled also to be assured that the basis of distributing Exchequer aid among the authorities is soundly conceived. I hope to be able to show your Lordships that the Bill contains satisfactory provisions on both these important matters. The total of the general grant is to be fixed for periods of two or more years, in advance, and Clause 2 of the Bill contains directions to the Minister as to the manner in which he is to address himself to the fixing of the annual totals. The Minister is required to take into consideration the latest available information of the rate of expenditure on the services covered by the grant and also the current level of prices, costs and remuneration; he is to have regard to any probable fluctuations in the demand for the services. Then he is to consider the need for developing those services and the extent to which, having regard to general economic conditions, it is reasonable to develop them.
  The basis of distribution of the grant to individual local authorities is set out in Clause 1, subsection (2), and in Part III of the First Schedule to the Bill. I will not weary your Lordships with a detailed exposition of the distribution formula, which we shall no doubt be examining more closely in Committee. But we have sought to identify the factors which have a necessary effect on the cost of providing services—such factors, for example, as the size of population, the proportion of schoolchildren to population, sparsity of population, high population density and so on. The Bill does not, however, determine the relative values to be attached to any of these factors. These weightings will be settled afresh for each grant period, and the formula is flexible enough to enable the changing conditions to be taken into account in fixing the distribution for any year.
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  I would invite your Lordships' attention to the procedure which the Bill lays down for settling such important matters as the total grant for any year and the detailed basis of its distribution. There is to be consultation with the local authority associations, and the Minister's conclusions are to be embodied in a general grant order which will not have effect until it has been approved by a Resolution of the House of Commons. The order will be accompanied by a report setting out the considerations which led to the particular provisions contained in the order. Your Lordships will see that all this is in Clause 1 of the Bill.
  I do ask your Lordships to consider objectively for a moment whether this completely open and orderly method of determining the needs of important local government services and the proper measure of Exchequer aid towards them has not much to commend it, compared with the present method. A valuable feature of the method now proposed is that it will afford regular opportunities for a survey of progress and proposals for development of such important services as education, health, welfare, child care and fire services.
  Your Lordships may wish to have some explanation of the method by which the services to be covered by the general grant have been selected. These services are described in Parts I and II of the First Schedule to the Bill. The Government's approach has been to include all those grants where the service is provided over the whole country on a reasonably uniform basis—obviously, we could not include in a system of general grants distributed to all county and county borough councils a service which operated only in certain parts of the country. The second condition is that the need for expenditure on the service must be capable of being reflected reasonably as between one area and another in the sort of objective factors which go to make up the formula for distributing the grant. Thirdly, we have looked for services in which there is real room for local discretion and initiative in local administration.
  I am, of course, aware that fears have been expressed, particularly by teachers and others concerned with the education service, but not, I am happy to say, by the County Councils Association or the

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  Association of Municipal Corporations (which are the associations representing the local education authorities), that this system of general grant will operate to the disadvantage of the services. In part, these fears are founded upon a complete misinterpretation of the Government's motives in introducing this new system. Fear has been expressed that proper provision will not be made from central funds towards the carrying out of these services.
  I hope that I have shown your Lordships that the Bill does contain appropriate and proper provision to ensure that the total aid made available under the general grant will take full account of needs, including the need for developing the services. My right honourable friends, the Minister of Housing and Local Government and the Minister of Education, have also given categorical assurances of the Government's intention to make a proper contribution towards the development of the education and the other services concerned.
  For the rest, these fears that I have mentioned seem to depend on an assumption that local authorities will not, unless they are able to share every penny of their expenditure with the Exchequer, devote adequate funds to maintaining proper standards in the provision and development of the services. My Lords, I say at once that the Government's proposals are based on a different concept of the sense of responsibility of local authorities towards the important duties that have been entrusted to them. We think that these authorities, stimulated and encouraged by the lively public interest which services such as education and health always attract, can be relied on to apply themselves responsibly to these matters—and all the more so, now that we are proposing by this Bill to take them out of leading strings.
  Of course, there must be safeguards to protect national standards, and these are the power to make regulations laying down standards and powers to withhold the grant under Clause 3, in addition to other powers such as exist under the Education Act, 1944. I should like to emphasise that these powers of central supervision will be limited to what are sometimes called the "key points" in the services—that is to say, those matters which are properly of national concern.
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  One of the difficulties about a percentage grant system is that it necessarily involves the Government Departments in reviewing in great detail, first, the need for, and, secondly, the amount of, expenditure to which they are contributing. One of the useful by-products of the new system of general grant will be that the attention of Ministers and their Departments will be concentrated on the matters which are of true national concern. The Government are confident that this will strengthen and not weaken the partnership between central and local government.
  Before I leave the subject of the financial provisions of the Bill, I should like to draw your Lordships' attention to the useful improvement in the distribution of the important exchequer equalisation grants—which are now to be renamed rate-deficiency grants—provided for in Clause 5 and the following clauses of the Bill. These are now to be available directly to county districts. These changes in rating and in the grants system will, of course, affect the finances of individual authorities to varying degrees. Overall there will be a gain to local authorities of an amount which, on the basis of the illustration contained in the White Paper on Local Government Finance in which the Government's proposals were first published, will be equivalent to a rate of 4d. in the pound over the whole country. It is undeniable that some authorities will be somewhat less well off under the new arrangements, but some—a much greater number, I am glad to think—will be better off.
  Important changes in the basis of local government finance cannot be made without gains and losses of this sort arising. The Government are, however, satisfied that the Bill will generally create a more equitable distribution of resources than exists at present. Nevertheless, they have thought it right to include in the Bill provision for a transitional scheme under which the financial effects of the Bill will be graduated over a number of years. This scheme provides for contributions to be made by gaining authorities to those which are estimated to lose under the Bill, the contribution being such as to meet the whole of the estimated losses for the year 1959–60 and 90 per cent. of the losses in 1960–61. The duration of the transitional scheme for years after 1960–61 is not provided for in the Bill, but will, under Clause 15,

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  be determined by regulations which will be subject to the Affirmative Resolution procedure. It will be necessary to gauge the effect of the revaluation for rating due to take effect in 1961 before these matters can be completely settled. For your Lordships' convenience, I would draw your attention to the hypothetical illustration of the financial provisions of the Bill which my right honourable friend had prepared for the use of Members of Parliament.
  My Lords, the financial provisions that have described in Part I of the Bill, important and useful though they are in themselves, are, of course, only one part of the Government's comprehensive scheme. It is not solely a question of seeing that local government obtains and safeguards its monetary resources in what we believe will be a better way than at present. We must also ensure that it is organised, so far as its structure is concerned, so as to enable resources to be used to the best advantage. Responsibility in local government must be matched by effectiveness and convenience—as regards both the provision of local services and participation and access by those served. And so we have provided, in Part II of the Bill, for a comprehensive system of review, and reorganisation to whatever extent may be found necessary, of the structure of local government throughout England and Wales.
  My Lords, as I have already said, the need for a review of this kind has long been accepted. It stems from the simple fact that during a half-century of rapid, complex and far-reaching changes generally, the pattern of our local government organisation has changed but little—and then only piecemeal. Many boundaries are now plainly unrealistic; many areas are divided into too many units of separate administration; and there is a growing number of communities who feel that they have outgrown the limitations that at present exist on their powers of self-government. There is also wide agreement as to what the review should aim at: to bring the system of local government up to date, preserving its essential features, rather than replace it entirely by sonic new and alien scheme of things.
  This being so, the Government have felt it right—and I make no apology for this—to base the provisions of this part of
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  the Bill very largely on the "Proposals Agreed Between Representatives of Local Authority Associations", as set out in the Appendix to the White Paper on Local Authority Areas and Status, published in July, 1956. The problems and the policy outlined in that White Paper have been discussed widely since that time, and the Government believe they can fairly claim that the provisions now being considered by your Lordships are, broadly speaking, acceptable to the great mass of public and local authority opinion in the country, and not merely to those who specialise in the study of local government from the outside.
  Of course these provisions in Part II are, essentially, machinery provisions. We could not hope, here in Parliament, to find out by ourselves just what is needed for the local government of each area in the infinitely varied circumstances of our counties, our cities and towns, and our rural communities, throughout the country. What the Bill does is to provide for a series of reviews; then for orders to be made by the Minister of Housing and Local Government following those reviews; and thirdly (I stress the importance of this) for Parliament to have an opportunity of approving or rejecting each such order, in the light of the report of the review on which it is based.
  The first reviews will deal with the pattern of the major units—the counties and county boroughs—and also with the whole complex of local government in the great conurbations, which in the Bill are referred to as "special review areas". Your Lordships will see the machinery and powers for this purpose set out in Clauses 17 to 26 of the Bill. Two Local Government Commissions are to be set up, one for England and one for Wales, and constituted as provided for in the Fourth Schedule. My Lords, may I break off for one moment on a personal point? My noble friend Lord Brecon is, unfortunately, ill, and he has asked me to say to your Lordships how disappointed he is that he cannot be present during this debate. He promises his earnest study of what is said in your Lordships' House, especially from the Welsh point of view.
  These Commissions will be empowered to propose, within the range prescribed, whatever changes in those fields may be found desirable in the interests of effective and convenient local government; and

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  then it will be open to the Minister, subject in each case to Parliamentary agreement, to give effect to the proposals by order, with or without modification. My Lords, let us consider what may happen. It can be expected that these reviews by the Commissions will lead, in some cases, to alterations of county boundaries, and possibly even to amalgamation of certain counties or creation of new ones. But whatever the outcome, as soon as the future pattern of county boundaries outside the conurbations in any part of England or Wales has been settled one way or another, then each of the county councils concerned will have to carry out a review, and propose any necessary alteration, of the pattern of its county districts—non-county boroughs, urban and rural districts, and the rural parishes as well. Your Lordships will see that the provision for these reviews by county councils, and for ministerial orders to implement their findings, is made in Clauses 28 to 33, and that subsequent reviews of the same kind will be possible at intervals of not less than ten years, on the direction of the Minister.
  I come to consider a suggestion that has been made in some quarters, namely, that the county councils should not be left with the task of reviewing their districts, but that it should be given, instead, to the Local Government Commissions to carry out at the same time as they are dealing with the boundaries of the counties and county boroughs. The Government cannot accept this view. We believe that, outside the conurbations, which I will deal with later, the best people to look at the district organisation in a county are the county council themselves, who know the area, the people, and their local government problems.
  I now come to the conurbations, the special review areas, which are, of course, a very different matter. In each such area you have a number of county boroughs with a larger number of county districts, big and small, usually belonging to more than one county, lying between and around the boroughs. All these communities form part of one great urban agglomeration having prima facie interacting needs and problems; yet they at present possess a local government organisation which, to put it mildly, seems not very obviously adapted to their special situation. In such a case, the
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  Local Government Commission must, clearly, examine together all the different types of local authority, and also the degree of co-ordination existing or needed in their services, as part of one comprehensive review. Your Lordships will find the special review provisions for this purpose set out in Clauses 19, 20 and 26.
  I must draw your Lordships' particular attention to Clause 20, which is designed to meet the possibility—I put it no higher—that the Commission examining a special review area might believe there was a need for smoothing out the existing mixture there of one-tier and two-tier government, and moulding it into a special conurbation county within which there are no completely autonomous units. We must see that, for the complex problems of these conurbations, bold solutions are available if needed—even though it may be found on review that, after all, something less bold will suffice.
  There are only five areas which have seemed to the Government, on present evidence, to need special review as conurbations, and these are defined in the Third Schedule. But your Lordships will see that there is power in Clause 17 to add to their number if the Commission for England find a need for this, and power in Clause 25 to vary the extent of an area that is thus subject to special review, if in the course of the review itself this is found to be desirable. These powers are, of course—I emphasise again—subject to Parliamentary control by Resolution.
  I would also invite your Lordships' attention to the safeguards which the Bill provides to ensure that these reviews, whether by Commissions or by county councils, cannot result in hasty or arbitrary charges smuggled through without Parliamentary discussion or proper scrutiny. I have tried to epitomise this because it is a point of importance. There are, first of all, the question of the independence and stature of the Commission, subject only to guidance as to the general considerations which the Commissioners must take into account. This guidance will be given in regulations approved by Parliament under Clause 36; secondly, their consultation with local authorities; and thirdly, the requirement to put out provisional conclusions and hear comment before making their final proposals.

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  Then there is the further requirement that the Minister, in turn, must make the final conclusions and reports known, and must hear objections, probably by way of public inquiry. Finally there is the Parliamentary control of any action which the Minister may take.
  Clause 29 sets out the safeguards, of a broadly similar kind, that will apply to the conduct and implementation of the reviews of the districts by the county councils. In Clause 30 there is also a special safeguard for use in the remote contingency of a county council's falling down on this job altogether. In such a case, the appropriate Local Government Commission can be put in to do the review of the districts over again, in the county council's stead.
  The rest of Part II consists primarily of provisions filling in the details of this scheme for reviews by Commissions and county councils, and at this stage of our consideration of the Bill your Lordships will not desire me to go into all these matters, or into the minor connected matters in Part IV of the Bill and the Eighth Schedule. I shall therefore mention only two points of special interest: Clause 34, which deals with the creation of new county boroughs, and Clause 35, which concerns the limitation of alteration of local areas or status by Private Bill procedure for fifteen years.
  It is only right that I should invite your attention to the way in which this Part of the Bill can affect boroughs. The Bill is so framed throughout that there can be no disappearance of a borough except where its area becomes part of a larger borough. This principle will operate even in the difficult case, in a rural area, of a small borough which is felt to be not strong enough in these modern days to continue as a separate county district but yet has no urban neighbour close by with which it could be amalgamated so as to form an enlarged municipal corporation. In such a case, the Bill will allow of the inclusion of the borough in a rural district, although I would point out that no arbitrary figure is fixed and everything relevant will be considered before this can happen. I also want to make it clear that the borough and council, as such, will remain—with a charter, mayor, regalia, corporate property, and so forth, but it will lose its county district functions.
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  The provisions to secure this are in Clause 28 (3) (b) and the Seventh Schedule. May I just mention, to get it out of the way for our present discussion, the position of Greater London? The Bill excludes the metropolitan area now being examined by the Royal Commission under Sir Edwin Herbert from the provisions of the Bill until the Royal Commission has reported. Provision is made for certain possible actions after the Report is received.
  My Lords, I explained earlier that Part II of this Bill was complementary to Part I, in that both sets of provisions aim at modernising and revitalising our local government system. I ask your Lordships now to bear with me for a short time further while I touch on the main provisions of Part III—because these provisions, also, are part of the same grand design. They illustrate the Government's recognition of the importance of the word "local" in our concept of local government. They provide, in Clauses 45 to 50, for devolution of the health and welfare functions of county councils to the councils of the larger county districts—but, here again, not in Greater London, unless so applied by Order in Council. Similarly they provide, in Clause 51, for some increase in the number of "excepted districts" enjoying devolution of county education functions under the Education Acts. Boroughs and urban districts with at least 60,000 population, and other districts where there are special circumstances to justify it, will be able to take over responsibility, by means of delegation schemes, for the management of these county services in their own areas.
  Your Lordships will readily understand why it is only the larger districts that can be provided for in this way: the size and complexity of the services concerned speak for themselves. It was against that background, also, that the Government concluded that the devolution desired would have to be by way of delegation, and not by a complete transfer of all responsibility. Education, health and welfare services need to be planned and paid for on a county rather than a county district basis and scale. Nevertheless, it is intended, by means of the delegation schemes to be approved by the Ministers concerned, to ensure

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  that—subject to the county council's control of broad policy and finance only—each county district council exercising delegated powers in these fields should have the widest possible measure of autonomy in local policy and management.
  My Lords, a measure of this kind, which contemplates important changes in the detailed organisation of local government, necessarily contains a whole lot of detailed provisions which it would not be possible or desirable to mention in the course of a Second Reading speech. But I have, I think, given an explanation of the main features of the Bill, and I hope that I have been able to show your Lordships that the scheme fits together into a satisfactory comprehensive plan for creating a vigorous and efficient local government system. The Bill is a first step forward to that objective, and the work over the next few years of filling out the details of the design will demand the critical attention of all who have the interests of local government at heart. I commend this Bill to your Lordships as a measure which creates the opportunity for a real step forward in local government. I am sure that it deserves the support of all who wish to see effective and responsible local administration of local affairs. I beg to move that this Bill be now read a second time.
  Moved, That the Bill be now read 2a.—(The Lord Chancellor.)

  DECONTROL OF HOUSE COAL SUPPLIES
  3.31 p.m.
  THE MINISTER OF POWER (LORD MILLS): My Lords, Her Majesty's Government have now decided that the statutory control of house coal supplies and prices, which has been in existence ever since the beginning of the war, should be brought to an end at an early date. The restoration of free competition and freedom for the householder to buy from any merchant should encourage producers and distributors to offer the public the qualities of coal they need at the most competitive prices. With the ending of control, administrative expenditure of nearly £1 million per annum will be brought to an end.
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  In reviewing the question of decontrol, Her Majesty's Government have been materially helped by the Report of the Robson Committee on Coal Distribution Costs which has been published to-day, and is now available in the Printed Paper Office. I should like to take the opportunity of thanking Sir Thomas Robson and his colleagues for a Report which provides detailed and authoritative information about the organisation and economics of coal distribution. The Committee have made a number of recommendations which Her Majesty's Government will consider in consultation with those concerned.
  I propose to have immediate consultations with the National Coal Board, the merchants, the Domestic Coal Consumers' Council, and the local authorities to ensure that the transfer from control to free competition is effected smoothly. Her Majesty's Government have it in mind to end the control about the middle of July. Control of the prices of coke and manufactured fuels would end at the same time.
  3.32 p.m.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, we are most grateful to the noble Lord, the Minister, for making this announcement at the same time as it is being made elsewhere. It is an important announcement, for the ending of a control after so many years must be of importance. What we should like to be assured of, first of all, is, as we hope. not merely that this does not mean that there will be no increase in the price to the consumer in bulk but also that it does not mean a set of differentiated increases and reductions on various classes and types of coal.
  No doubt it is a good thing that the Minister, as he has announced, will have immediate consultations with all the interests concerned. To anyone who, like myself, has had some experience of the central administration of coal distribution, other trade questions arise immediately in one's mind. The other which we are anxious to know, in view of the decision of the Minister, is how this is going to affect trade in relation to the differentiated prices now operating between summer orders and orders at other times in the year. I am already a little uneasy over the fact that the latest date for the placing of summer orders is June 14. I should have thought it would be

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  much more desirable, in view of the state of coal stocks and the general desire for clearing some of them, for the date for summer price orders to be extended beyond June 14. Many people, owing to their cash position, do not get the chance of placing orders within that short period of time, and I should have thought that the summer prices might well have been continued to a later date. If, however, the Minister will be good enough to inform Parliament as soon as he has had consultations with the trade, I am sure we shall all join with him in happiness that there is less restriction and more freedom.
  3.35 p.m.
  LORD MILLS: My Lords, I am grateful to the noble Viscount, Lord Alexander of Hillsborough, for his encouraging statement. I can appreciate his anxiety that the removal of control should not result in increased prices. That is one of the objects of the removal of control—to let competition exercise its influence. Besides that, I intend in the series of discussions which I propose to have, to see that clue emphasis is placed on that aspect of the matter. In regard to the question of summer prices, I can assure the noble Viscount that that matter has been carefully and thoroughly studied by the National Coal Board. Their anxiety is to sell coal and to keep coal moving evenly throughout the year, because it is produced fairly evenly throughout the year and it is desirable that it should move easily. The particular dates chosen for certain variations in price are those selected by the National Coal Board after most careful consideration. I hope the noble Viscount will be satisfied with that explanation.
  LORD MACDONALD OF GWAENYSGOR: My Lords, there is one question I should like to put to the noble Lord, the Minister, regarding the variation in price. I take it that there will he no variation in the early stages without consultation with the Ministry.
  LORD MILLS: My Lords, I may explain to the noble Lord that the general price fixing—that is, the fixing of pithead prices and the fixing, therefore, of the zone prices (the price at which the National Coal Board deliver to the merchants)—is arranged after full consultation with the Minister. The only part which is in question is the difference be-
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  tween the zone delivered prices to the merchant and the price at which the consumer is supplied. I intend to watch that very carefully.
  VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, might I, with the permission of the House, put just one more question with regard to what the Minister has said about the aim of the removal of control being rather the reverse of raising prices—in fact, to reduce them? I hope that when the noble Lord comes to discussions with the trade he will not forget the experience in some agricultural commodities, where Her Majesty's Government are mulcted in charges for subsidies to the farmers and where the removal of control at the market end has left freedom of buying to the retailer but rising prices, in face of a lower income, to the farmer. I believe that that is the kind of thing one should try to avoid, at any rate, in the case of coal.
  LORD MILLS: My Lords. I can assure the noble Viscount that I will keep that matter and every other matter which is germane to this subject very closely in mind.

  LOCAL GOVERNMENT BILL
  3.40 p.m
  Debate on Second Reading resumed.
  LORD SILKIN: My Lords, we have heard from the noble and learned Viscount, as we always do, an efficient, comprehensive and lucid account of the provisions of the Local Government Bill. I believe it would be right to say that this Bill and the Rent Act are the two masterpieces of the present Government during this Parliament. We have seen the effects of the Rent Act, and we now await with interest what is going to come out of the Local Government Bill.
  The noble and learned Viscount, the Lord Chancellor, began by telling us that the time was ripe for a thoroughgoing overhaul of local government, and I am sure every one of us will agree. I hope that the House will bear with me if I enlarge on that matter to some extent, so as to indicate how ripe the time really is for a thorough-going reconsideration of the whole structure of local government. In the last few hundred years there have been vast changes in the social life and

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  structure of this country. I want to outline some of them. There has been immense general progress of commerce and industry. We have had the Industrial Revolution, which has completely changed the face of these Islands: this country, from having been a predominantly rural country, has become predominantly industrial. There was previously little intercourse between one part of the country and another; to-day we have very easy intercourse between all parts of the country.
  In the last fifty years an increasing number of people have been living in towns. About 80 per cent. of the whole population now live in towns and only about 20 per cent. live in the country. As a result, we have created vast problems of housing and overcrowding. We have produced a new educational system involving compulsory education for every child up to the age of fifteen; we have invented the internal combustion engine, which has completely altered the tempo and conditions of movement of people and goods and which has created a demand for a wholly new road system, which we have not yet achieved. We have the Welfare State, with all the additional public services associated with it, including the complex Health and Infant Welfare services, most of which are being provided and maintained by local authorities. We have building regulation, and, a vast subject in itself, town and country planning; housing projects; slum clearance; a Police Force; a Fire Service and Civil Defence. Practically all these are services which have had to be created in the past fifty to one hundred years.
  Local Government has obviously increased vastly in importance, as has its impact upon the general public in all sorts of ways. Yet, in the face of all these changes that I have enumerated, and many more, the structure of local government has remained virtually unchanged over the last few hundred years. Of course, there have been some changes, and I will mention one or two of them, but they have been of a minor character. We have always had the counties, the county boroughs, the non-county boroughs, the county districts and the parishes; and we have them to-day virtually unaltered. What was acceptable as a suitable structure of local govern-
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  went in the reign of Queen Elizabeth I is to-day accepted as suitable for the reign of Queen Elizabeth II.
  There has been very little inquiry into local government. The noble and learned Viscount, the Lord Chancellor, referred to the Royal Commission on Local Government of, I believe, 1923—the Onslow Commission. But, apart from that, I can find no trace of any real inquiry into the structure of local government in the last fifty years, in spite of the changes that I have enumerated. One of the results of the Royal Commission of 1923 and of the Local Government Act, 1929, which followed it, was that there was a reduction in urban districts from 827 to 572; and a reduction in the rural districts from 779 to 476. That is the sum total of the changes which have taken place in the last one hundred years in the structure of local government.
  In 1945 a Local Government Boundary Commission was appointed. It worked for some four years, and then, for reasons which I do not think it necessary to go into, partly because I do not know them, that Commission came to an end. And so to-day we have the present system, which grew up and developed in the days when there was virtually no local government at all, being used for the most elaborate and complex form of local government. The units, the areas, the populations and the resources of the local authorities bear no relationship at all to the efficiency of the services administered; they are far too numerous. We have to-day something like 12,000 different units of local government administering our affairs. It is true that about 11,000 of them are parish councils and parish meetings, but we still have 1,530 units of local government in this country, not counting the parishes at all. In addition, we have a considerable number of joint boards or joint committees or joint advisory committees, all playing some part in the work of local government.
  I have intimated that some of these units are much too small to administer our affairs efficiently. I should like to give one or two examples, which are of course well known to your Lordships. Rutland covers 85 square miles; it has a county council, and a population of 60,000. Devon, on the other hand, has an area of 2,500 square miles and a population approaching half a million. Then there are a number of counties—

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  Middlesex, Surrey, Kent, Yorkshire and London—all of which have populations running into millions. Then there are county boroughs, possessing exactly the same kind of conditions—they are self-contained—such as Canterbury, with a population of 22,000, and others like Birmingham and Manchester with populations of one and a half million or thereabouts. There is a corresponding diversity of area, population and financial resources running right through all the other various types of local government authorities. One of the effects of that is that, while most of us would agree that it is right that children of equal aptitude, wherever they may live in this country, should have an equal chance in life, the facts are very different. A child living, say, in Somerset—I take Somerset just as an example; I am not necessarily casting any reflection on Somerset—
  VISCOUNT ALEXANDER OF HILLSBOROUGH: Hear, hear !
  LORD SILKIN: I knew that my noble Leader was behind me. A child living in Somerset, with its relatively depleted resources, may well have only one chance in four of going to a grammar school, as against a child of equal aptitude living, say, in Middlesex. And a child living in a rural area in many parts of the country—I hope we shall hear more about this on some further occasion in a debate on education—would have virtually no chance of going to a grammar school as against a child of equal aptitude going to a primary school in a town. That is wrong. And it should be one of the functions of local government to put, such a thing right.
  Then there is confusion about powers between different authorities. I wonder how many of your Lordships could pass an examination on the powers and functions of different kinds of authorities throughout the country. If we could do so, I am certain that the ordinary citizen could not. They must find it difficult to decide whether a particular function is that of the county council, of the county borough council or of the county district council—or even possibly of the parish council. Some services are administered concurrently by more than one authority; some again are delegated by one authority to another; and it is
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  difficult to ascertain in whom the ultimate responsibility lies.
  Some authorities are much too small for the kind of functions they are required to carry out. For instance, to be effective, town and country planning requires large areas. We cannot plan this country in small units—say, under district councils; we have to take the broad view of the most effective way of planning and developing these Islands. There is no single local government unit which is big enough for that purpose. This is a problem we have to face. The same applies to many education authorities. If we are really desirous of making the educational authorities self-contained, so that within their areas children will have the opportunity of going to the types of school for which they have the greatest aptitude. that involves having a substantial number of different types of schools in every educational area, and a great many local education authorities are quite incapable of providing the necessary education within their areas. Larger units are essential for that purpose.
  I should like to refer to the bitter rivalries and antagonisms which have grown up between the different types of local authorities. There is an inherent antagonism between the county council and the county borough council, and naturally so, because the county borough draws population, rateable value and so on from the county, and very often it is a rival in importance and status. For instance, Birmingham is inside the geographical area of the county of Warwick, and Manchester is inside the geographical area of the county of Lancashire, but in both cases I think it would be fair to say that the county borough has overshadowed the county itself, which one would normally regard as being the major authority. The conflicting interests between the two are bound to lead to rivalry, unpleasantness and difficulties.
  We have conflicts also between county council and district council. The district councils desire to get more and more power in their own hands rather than to have what is becoming fashionable—delegated powers. They want to have the power of running the different services which are entrusted to them. That again is a fruitful source of conflict. Finally,

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  in this catalogue, I should like to mention the considerable vested interests which have grown up in local government units, which make changes more difficult. We have the county boroughs, which have a vested interest in remaining is a fruitful source of conflict. Finally, have the vested interests of the non-county boroughs, with their mayors, aldermen and officials and the constant pressure to maintain and increase their existing powers. Then, with this vast number of separate authorities, we have the great difficulty of getting and paying for suitable men and women both to serve as officials and, even more, to serve on the councils and co-opted bodies. This is becoming a real problem in our democratic system of local government.
  As a result of everything that I have said, it is not surprising that to-day little interest is taken in local government elections, and it is rare that more than one-third of the electorate goes to the poll. If there is even a 40 per cent. poll it is regarded as something startling which requires an investigation into why there have been so many voters. What is needed is a complete and courageous examination and overhaul of our local government system. And my first criticism of this Bill is that it does not do that at all. It sets up these two Commissions without any real examination.
  In his opening speech, the noble and learned Viscount the Lord Chancellor assumed that what was needed was an overhaul and improvement of the existing structure. He may be right. It is possible that the existing structure is so ingrained in our lives, that the tradition of county and county borough is so great, that to-day it is unthinkable and impossible to make any change whatever, in spite of the fact that, as I have tried to explain, these organisations were devised under totally different conditions and for totally different purposes. It may be so; but I think it is wrong to assume that it is so. I would strongly object to taking the view, without any further examination, that it is quite impossible and impracticable to build up a fresh system of local government which, as the noble and learned Viscount said a number of times, would be effective and convenient and would meet modern conditions. At any rate, I think that the order has been reversed—that no inquiry has taken place
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  and that the Government are introducing this legislation without really being clear about where they are going, what they desire to do and how they are going to do it. The last thing this Bill will do will be to achieve what the Minister, in his speech on Second Reading, said he wanted to achieve—and I believe that he does; that is to say, to give fresh strength and inspiration to local government, and to reorganise it so as to make it valuable and the services in it worthwhile.
  The Bill, in its machinery (with which I do not propose to deal in any detail to-day, because I think that will be more appropriate in Committee), contemplates the retention of the existing structure and an examination of the structure virtually county by county. Whilst I would agree in all fairness that it is conceivable that two counties, or more, might be joined together as a result of the recommendations of the Review Commissions, nevertheless it is almost unthinkable that, if you decide to build on the existing structure, any such recommendations will, in practice, be made; or that, if they are made, they will, in practice, be carried out. The howl that will arise if it is sought to join little Rutland with the adjoining county, or to get rid of the Soke of Peterborough, will be such that even the noble Viscount, Lord Hailsham, will not be prepared to face up to it.
  I venture to prophesy that in five years' time, after the review has taken place, the County of Rutland will remain the County of Rutland and the Soke of Peterborough will remain the Soke of Peterborough. I do not believe you will get any change unless you are prepared to contemplate reviewing the whole structure of local government ab initio and to make up your mind whether to carry out modern functions as I have described them. And it is practicable and possible completely to review the kind of local government areas that we have to-day. It is for that reason that I find myself unable to believe that what is sought to be done in this Bill by way of improvement of local government will have any greater effect than the recommendations of the Onslow Commission, which after many years, succeeded in reducing the number of district councils by about one-third.
  Now I want to say a few words about the financial provisions in Part I of the Bill. I do not wish to elaborate on them, because my noble friend Lord Latham, who

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  will he winding up from this side and who is much more competent to deal with the detail than I am, will do so. However, I should like to make a few general observations. The first is that when we talk about a new grant system and the changes that are taking place we are virtually talking about the education grant, which will comprise 75, 80 or 85 per cent., or at any rate a large proportion, of the total grant. The change that is being criticised relates particularly to that proportion of the block grant which is at present being paid by way of percentage grant for education.
  I thought that the noble and learned Viscount on the Woolsack brushed aside rather cavalierly, if I may say so, the fears and apprehensions that exist in so many quarters about the effect of the change from the percentage grant to the block grant. He must bear in mind that this proposal has an unfortunate history. On every occasion when it has been put forward—and it has been put forward on a number of occasions before—it has been associated with the desire of the Government to save money. On previous occasions there was no nonsense about its being an improvement in the machinery of local government, or about its making it much easier for local authorities to do their business; it was put forward as a straightforward economy measure. To-day it is wrapped up with the desire to give local authorities more freedom. But do any of your Lordships doubt that the real purpose of this measure is linked up with all the other economy measures whack the Government are taking at the present time; that it is to save money and not intended primarily to bring about any improvement in the machinery of local government?
  The noble and learned Viscount told us—and I accept the fact—that there will be no reduction in the amount of money available to the local authorities, and that there might be more. But, of course, the local government services are expanding, and particularly education, which I feel ought to expand far more. For one thing, we have not yet fully seen the effect of the bulge in the population which occurred at the end of the war and soon after. The number of children who are receiving education at public expense is still growing. While it changes its place from the primary schools to the secondary schools, and in due course to the technical schools and the universities, the number of children is still growing.
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  The schools that have been built since the war are most charming and delightful, but by and large the quality of the schools in the towns has not changed. A school that I went to as a boy is still being used as a school—and it was a pretty bad school in those clays. The village school seventy or eighty years of age is still there; and in a large number of cases children whose ages range from five to eleven are being taught in different parts of one room. Those conditions still exist. And in many parts of the country there are still classes of forty, fifty and more. Generally, if all the improvements contemplated under the Education Act, 1944, are to be carried out, an enormous amount of expenditure will need to be undertaken. Therefore it is natural that the education service must be for many years to come a growing service. When the Lord Chancellor tells us that there will be more money available under the block grant, he is not necessarily saying very much. The present system—though it is not completely satisfactory, and I do not suggest that it is—does at any rate ensure that the expenditure incurred by the Government and the grant are related to the educational needs of the locality, so far as the local authorities can see them. It is a direct inducement to the local authority to spend as much as it can afford in the field of education.
  Great play has been made in another place—and to some extent the noble and learned Viscount did it here—about the competition that will arise between different services for the amount of money available. I think the general view of the Government is that that is a good thing; it is regarded as giving the local authorities freedom. Freedom for what? Freedom to fight over the money that will be made available to them by the Government. I do not regard that as a desirable thing. I do not believe it is a good thing that the battle should be fought out between the different chairmen of committees for the amount of money available, and that the chairman with the strongest personality or the biggest pull, or who is able, for other reasons quite unconnected with the merits of the case, to get his way, should prevail. Yet that is what is going to happen. The noble and learned Viscount may regard that as giving the local

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  authorities freedom, but it is not a desirable freedom and it is not in the best interests of the community. You are not going to get the best possible use of the money that will be available by encouraging this "scrap" between different chairman of committees. I have seen it myself. I have had some experience of this kind of battle, and I know that it is not always the best man who wins—certainly not the best service that wins. So I feel that this so-called freedom which local authorities are going to enjoy may turn out to be a very undesirable thing.
  As I said, I do not want to elaborate on the question of the block grant: we shall no doubt hear a good deal about it in further stages of the Bill, and in further stages of this debate. The only other matter upon which I wish to comment—and it rather lends colour to the view that I and most of my noble friends hold; that the real purpose of this measure is to save money, not by economy but by reducing the amount of grant that would otherwise be given to local authorities—is the way in which the re-rating proposals have been dealt with. Local authorities have been pressing that industrial undertakings should make a greater contribution towards the rates in their area. The Government have agreed, and they take two-thirds of the benefit. I do not know whether they can justify that or not. Perhaps they can, but I feel that it is rather a mean thing to do. I think that the local authorities, who are bearing the heat and burden of the day, should at least have been given the benefit of any increased rating which they enjoyed as a result of the partial re-rating of industrial premises. They have had to provide the services for many years without getting a proper contribution. Although the amount involved is relatively small—only £10 million a year—it is indicative of the approach of the Government to the question of the block grant, and in my view throws some light upon it.
  I regard this as a thoroughly bad and ineffective Bill. It might have been a good Bill soon after the Report of the Royal Commission on Local Government was published in 1923, but it is wholly inappropriate to the needs of the present time and to the needs of present conditions. I feel that the Minister has missed
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  a great opportunity. He might have gone down in history, in spite of the unfortunate Rent Act, as one of the great local government reformers (let me give credit where credit is due), in the line of the late noble Chairman, who was a great local government reformer. I am sorry that the Minister, who is an old friend and colleague of mine, has missed his chance of following in that great tradition. He has frittered away the chance that he had, and he has built in this Bill a house of cards which, in my opinion and in the opinion of most people who have any expert views on this matter, will fall and disappear.
  4.16 p.m.
  LORD AMULREE: My Lords, the noble and learned Viscount on the Woolsack has given such a clear explanation of this Bill, with a large amount of which I agree, that the remarks I propose to make will be extremely short. There is, I think no one can deny, a great advantage in giving local authorities as much responsibility as possible to spend money themselves, and not telling them what to do from any central authority.
  There is one matter to which the noble Lord, Lord Silkin, has referred and about which I and friends of mine feel rather worried. I refer to the provisions made for education. This is a matter about which we shall hear a great deal more on Committee stage, but I thought it worth while to refer to it on Second Reading. Up to the present time, as your Lordships know, the education grant from the central authority has been a percentage grant, and it is now to become part of the general block grant, or grant given to the local authority. I think that that will be an unfortunate thing to happen, for two definite reasons. One is that if anything should be national policy at the present time, it is education. It needs a large amount of guidance from the centre, because I am sure that upon education alone depends the way we are going to escape from the troubles of the world.
  If the block grant system is adopted, it will mean that there will be 146 educational authorities in the country, and one cannot be sure that they will all give the same attention to education as they would if they could be more centrally guided. Personally, I think education is one sphere in which there should be central

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  guidance. The grant system was introduced a long time ago, immediately after the First World War, and, so far as I know, has worked very well. There is no doubt that when attempts were made during that time to introduce the block grant, they were made on the ground of economy. Nobody would deny that economy is a proper consideration now; but whether this is meant to be a matter of economy I do not know. The noble and learned Viscount assured us that it is not, and I hope he is right, for I think that education is the one thing upon which we cannot afford to economise to any great extent.
  Looking at the Bill, I find there are certain other curious things. Some of the school services, such as school meals and school milk, are not going to come under the general block grant system. It seems rather curious to differentiate between the spiritual and the temporal needs of the child. I do not know whether there is anything sinister in that or not. There again it makes one wonder what the reason is for changing the educational grant from the percentage to the block grant system. That is the one point I wanted to bring up at this stage, and in view of the large number of speakers I can only say that, apart from that point, the Bill seems to me to be a satisfactory Bill which will do a great deal of good to local government.
  4.21 p.m.
  LORD HYLTON: My Lords, I rise to support this Bill, and I am sure that the Government will be grateful to hear of the support from the Liberal Benches opposite. Listening to the speech delivered by the noble Lord, Lord Silkin, one would suppose that this Bill has, as it were, fallen from Heaven, without any preliminary discussion with any of the local authorities or with any of their associations. But it is well known to your Lordships—it must be well known to the noble Lord, Lord Silkin—that this Bill is the result of negotiations that have been going on for four or five years. It is nothing new. Therefore, I think it is fair to say that the Minister probably has the support of all the local government associations on the main proposals in this Bill. The weight of paper produced over the last two or three years must weigh hundredweights, and oceans of ink have been spent in producing memoranda,
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  papers, appendices and annnexes; so much so that anybody who is a member of a local government authority has been quite unable to read or digest the enormous volume of paper that has been produced on this subject. Therefore, I think it is incorrect to say that this Bill is a sort of makeshift, unthought-out and unpremeditated Bill. It has been, to the best of my knowledge, the result of an immense quantity of most detailed examination.
  I regret at the same time that the noble Lord, Lord Silkin, should take such a very gloomy view about the future of local government in this country. If I am right in my reading of his remarks, he would prefer local government authorities in this country to be the agents of Government Departments. He does not wish to see them have any freedom, or any more freedom, and I very much doubt whether he wishes to see them have any more responsibility. That conception I believe to be fundamentally different from the conception of local government held on this side of the House and different from the conception of local government held by the Government to-day. We have been told something of the history of local government. That history goes back many centuries, and in my opinion it deserves great credit. Many people have devoted a large part of their lives to local government, and the efforts of this Government to increase the responsibility and the freedom of local government should, I feel, be commended very highly.
  Local government to-day is suffering from anæmia; and the anæmia arises from the fact that for so many years powers of Government Departments have increased and the responsibility and powers of local government have decreased. The result is that to-day we are not getting the same interest in local government, and we are not getting the same quality of persons offering themselves for election. But what the noble Lord, Lord Silkin, suggests, will simply make this problem worse. He is suggesting that local government should become the pure agent of Government Departments. Yet local government would die under that system. Local government must be given more freedom and responsibility. That is what has been pressed for by the associations of local government for the last ten years.
  LORD SILKIN: Would the noble Lord allow me to intervene, just in the interests of accuracy? He is imputing to me something I am supposed to have suggested. I did not. What I said was that I thought there ought to be a full inquiry, having regard to the modern conditions of local government, with a view to arriving at some conclusions as to what is the most suitable form. I did not pretend to anticipate the result of such an inquiry. I was complaining that this Bill had been made without that sort of inquiry.
  LORD HYLTON: I am obliged to the noble Lord for explaining what he meant, but the impression he gave was very much the opposite. At any rate, the background of this Bill is one of constant pressure by the associations of local government, and by local government bodies themselves to be given more freedom; and it is largely for that reason that this Bill has been framed in these terms.
  The noble and learned Viscount, the Lord Chancellor, explained the financial provisions of Part I so clearly that at this stage not a great deal need be said about them. There is, however, one important point, and that is that we shall not get greater independence and freedom for local government unless the Government Departments are willing to relinquish the very strong control that they hold to-day. Although there are promises that Government Departments will diminish what amounts almost to their stranglehold on local government authorities, it is not clear in any part of the Bill how that will in fact be done. Later on, I hope that the Government spokesman will explain.
  The noble and learned Viscount, the Lord Chancellor, spoke about key points, but he did not tell us which the key points were or how control was going to be exercised from them. I think it would be helpful to your Lordships if, at a later stage, we could be given a clearer indication of how much of this control will really go, because if it is not to go, then these financial proposals have little fact or meaning behind them. If Government control is to continue at its present standard, then it is hardly worth making these alterations in the grant system—for this reason: that no grant system ever can be perfect. I think that is perfectly clear to anybody who has had a part in the negotiations up to the present time. What suits one authority will not suit another.
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  It is humanly impossible to get a grant system that is ideally suited to all types of local authorities. But I believe it is important that the Government proposals should be accepted by the local authorities in good faith. Unless that is so, very little progress can be made. But that, of course, carries with it the corollary that the Government must act in good faith towards the local authorities in relinquishing their financial control of the key points; it must be a two-way system.
  There are one or two small points to which I should now like to refer. First, I believe that there is great difference of opinion as to whether the estimates for the first year should be for a period of two years or whether, for the first one or two years, they should be annual. I believe, and I am advised, that it would greatly simplify matters if for the first two years—that is to say, after April, 1959, the estimates of local authorities were for one year only and not for the envisaged two years. But that, no doubt, is a matter that we can go into at a later stage.
  Dealing with the Boundary Commission, as the noble and learned Viscount and, I think, the noble Lord, Lord Silkin, said, there are far too many small authorities—small measured by financial power, and small measured geographically. If the Boundary Commission (Sir Trustram Eve's Commission), which was bard at work some ten years ago, had not been abolished by the Government then in power, I think great progress would have been made. Now, of course, the work has to be started again. But I believe that many counties contain too many district councils, both urban and rural, and that there is an enormous field to be investigated. Dealing with the special review areas, the conurbations, I think there is a point to be made in that if a new county borough should be created within a special review area the fact of its creation is submitted to Parliament only in an Order which cannot be amended and which can be only passed or rejected. I believe that it would be an improvement if the creation of such a county borough were made subject to the usual procedure in the matter instead of being merely included in the Order for the special review area.
  Dealing with Part III, which provides for delegation, I believe that there is a case for not delegating responsibility

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  for mental health in quite the way suggested. I am advised that mental health is a subject that is at present dealt with by county councils; that it is a most delicate and difficult service to administer, and that if an attempt is made to delegate it into smaller units it will be to the disadvantage of the service itself. I am sure there are many noble Lords far better qualified than myself to speak on this subject, and I hope that it will be ventilated at a later stage. In conclusion, I think many of your Lordships on these Benches would wish to congratulate the Government on having had the courage to bring forward this Bill. This is one of the two matters in home affairs that were dropped by the Government of the Party now in Opposition: the other, of course, was concerned with housing. But this Government have had the courage to deal not only with housing but also with local government. I believe that political courage will in course of time have its reward.
  4.35 p.m.
  VISCOUNT RIDLEY: My Lords, I should like to say how much I agree with the noble Lord. Lord Hylton, on his last point. This is a subject which has been hanging about in the air for years and years. It has always been held, or one has always been told, that one Government or another would not dare tackle it for fear of upsetting either the county councils on the one hand or the county boroughs on the other. At last something has been done. The noble Lord, Lord Silkin, said that he would rather have seen an inquiry. But, as Lord Hylton has said, there has been endless discussion and correspondence between the various associations and local government authorities, the Minister and everybody else, and I do not believe that more could have been done to get agreement than has been done. In fact, I am rather inclined to think that on some points the Bill goes a bit too far to get agreement, and it would perhaps have been better if it were a little stronger in one direction or another.
  As to the financial provisions, I think it is common knowledge to anybody who has been a member of a local authority that the percentage grant system is a thoroughly evil one. I have often heard people say at county councils and district council meetings, "It does not matter; the Government pay 70 per cent.
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  It does not matter whether we spend this or not." It is a great incentive to lack of care and economy. Of course, it has a worse effect, to which other noble Lords have already referred—namely, that on any matter where the Government pay a certain grant, if it is a percentage grant the council has to get the approval of the Government to the scheme, whatever it may be; and in approving the 60 or the 50 or the 70 per cent. grant from the taxpayer, naturally the Government Department has to lay down particular points and say, "We will approve it only if you do it this way, that way or the other way, instead of in such-and-such a way." That is really the worst part of the percentage grant system. The detail of the decision is not made by the local people, and often not the policy of it, and they tend eventually to lose the sense of responsibility and the feeling that they are looking after their own affairs which it is vital that the local councils should have.
  A lot has been said about the effect of this Bill on education. I do not know whether many people who talk on that subject have ever been on an education committee. For some years I had the honour to be chairman of a county education committee. My experience there would lead me to think that this method is going to make it much easier for a committee to do what it wants to do. There are certain key points at which the Minister of Education or his colleagues in the Government can easily control the system and can see how it is working. I think I am right in saying that there is a provision in the Education Act, 1944, that the Minister has the duty to see that the education committee carries out its duties in a satisfactory way. But the points at which it seems to me simple for the Minister to control the activities of the education committee, if it tends to lag, are very few.
  One of them is in the reorganisation of rural education and the provision of new schools, pot only in rural but in all parts of the county. That is a matter which is easily checked. Long after the war, each education committee made its development plan. The whole thing is set down and it is then approved by the Ministry, subject, of course, to later review. It seems to me perfectly simple and easy for the Minister to see how it is going, compared with the plan made

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  for that education committee, and he has means of his own of stimulating committees which may lag behind. I do not know whether there are in this country any education committees which lag behind. All those of which I have heard are wishing to go faster than the resources of both the ratepayer and the taxpayer will permit them to go; and, quite rightly, they are keen to carry out their duties as well as they possibly can.
  The other point of control seems to me to be in regard to the starting of schools. Once schools have been built in certain places, fulfilling certain functions, and a certain number of teachers have been obtained, it is easy to see from records whether any education committee has, for example, as many teachers as it should have. Those are points on which one can see the whole thing through; and I can see no difficulty there. I do not believe that any Government, knowing their responsibilities under the Education Act, responsibilities which they share with education committees, would wish to cut down on expenditure; and I do not believe any education authority would wish to do so either. I feel certain that without the percentage grant control there should be considerable economies in manpower in both council and Government offices. So much of the work is immaterial, as is proved by the procedure on one of the council's committees, details being checked there, sent to London, checked and altered and sent back again. The amount of work saved there would be quite noticeable; and that is not at all a bad object to have in mind. I am looking forward to seeing how this system is going to work.
  I was interested to see the services chosen to be covered by the new grant, and rather hoped that more of them might have been included. One point which might be worth mentioning is that the responsibilities of different kinds of local authority can vary as the years go by. For example, since the war, fire brigade work is new. Civil Defence work since 1938 is new to all authorities who do it, and the new provisions for children's committees have added to the responsibilities of local authorities. It seems to me inevitable, and also very right, that as conditions change more jobs will have to be taken on and others perhaps dropped off. I should hope that there might be
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  more provision in the Bill to ensure some flexibility from time to time by changes approved by Parliament or the Minister, so that some services can be brought into the new system of the overall general grant and others perhaps transferred as the need arises. I do not think that that contradicts the principle; in practice it might improve it.
  The real difficulty about this Bill is the reorganisation question. I join with the noble Lord, Lord Hylton, in congratulating Her Majesty's Government on having the courage to tackle it, and I believe that this scheme, so far as it goes, is good. It is worth while trying to think out in one's own mind the real need for any revision and reorganisation—I will not say "reform", because that word might seem to suggest that the whole system was bad, which nobody would suggest. From my experience of county government I should say that the real difficulty arises when a large county borough wants to expand at the expense of the county, its neighbour, or other county boroughs, or when a large non-county borough or group of urban district councils wants to become a county borough, and their interests therefore clash with the remainder of the county from which their areas would be taken. That seems to me the main difficulty in the sphere of the two Commissions. I believe, therefore, that there should have been in this Bill rather more direction to the Commission on what they are to do in situations of that kind.
  For one thing, there has been a great deal of experience over the years of county boroughs promoting Bills to increase their territory, taking in certain areas of a county; and there has always been a feeling on the part of the county that the interests of the remainder of the inhabitants of the county have not been considered enough. I should have liked to see somewhere a direction to this Commission. It is implied that they will have to do this; but as this is a change of attitude I believe it should be included.
  There is only one reference to numbers, and this is where I believe Her Majesty's Government have been rather "up against it" in trying to get agreement with the different associations. The only mention of numbers of population in this Part of the Bill is the 100,000, deemed to be the population that a borough should have before it becomes a county borough. For many years a large body of opinion

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  has felt that the figure should be very much larger, and one can argue that point on another basis, and not only on the number of people required to support efficient services of one kind and another, the number of schoolchildren necessary for a whole series of streams to be built up, the number of people required to justify a police force, and so on. I should have liked to see the number more carefully analysed, and I believe that the figure then would have been much larger. I should like to see guidance to the Commission on what they should do in the situations to which I have referred.
  There is a small point, hardly worth Second Reading mention. There is a clause which says, quite rightly, that after fifteen years Private Bills may not be brought into the House to alter the status as between county and county borough. It seems natural, after a major upheaval of this kind, that they must be left alone. In practice, the constant expectation of changes of boundaries every few years is most upsetting and tiresome in local government work. I have had a good deal of experience of it. I regret, therefore, that in the Eighth Schedule, paragraph 7, there is a provision whereby the Minister may, by an order, alter the boundaries of a county borough so as to include part of or the whole of a county district. I do not think that that provision should be there. I believe that the job should be done properly; and when this Commission has reviewed the whole of the country and has finally arrived at a view it seems wrong that there should be the possibility that that may be done. It is quite a small point but it is important. It refers to the Local Government Act, 1923, Section 2, and I am advised that that is what is meant, although, not being a lawyer, I cannot enter into the point myself.
  May I say a few words about special review areas. I hope Her Majesty's Government will forgive me if I speak only of one which I know very well. I fully admit that what I now venture to say may be quite inappropriate for other special areas with which I am not familiar, but possibly my experience, which has been of the Tyneside review area, may be of relevance and of some importance and help in relation to considering other special review areas.
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  The Tyneside area includes the two big cities on each side of the river with a number of county districts north and south of the Tyne. I believe I am right in saying (though I am not sure) that the first time there was any suggestion of rearranging local government in that area was round about 1935–36, at the time of the depression, when there was unemployment and a great deal of difficulty, and things were very bad. A commissioner on special areas was appointed and he suggested that some alteration of local government boundaries would be an improvement. His reasons were nothing whatever to do with local government but were concerned with the social and economic life of the area, and I could never see the connection between the two. I hope that there was a review of the scheme. There was a report on it and various proposals were made which were locally much disliked, and argument went on and on until the war.
  I was much involved in all the argument, both during and since the war; and we in that part of the country concocted a theory which rather went like this. So far as could be seen, each of the local authorities was in fact carrying out its functions very well. I have never heard anyone say that the various county districts on the north bank of the Tyne are inefficient or incompetent, and the same applies to those on the south. If it is felt they should be amalgamated, altered, changed, improved, added to or taken away from, it should first be-necessary to show what is wrong with them. In these county districts and districts in Northumberland, where I am a member of the County Council, I do not see any difference between the competence, as we judge it from the county, of those authorities—I will not use the word "conurbation," which was referred to. It should be demonstrated that some change should be made, and the reason should be given.
  Next I would come back to the principle which was suggested in reference to the ordinary case of a county borough wishing to expand its territorial area into its neighbouring county. That must not be done entirely without regard to the viability of the county as an administrative unit. It is not a question of rateable value; it is a question of organisation and whether the thing can be made to work. It appears, in this particular

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  case, that if all these districts are taken from the county, more than one third of the county's population disappears. To my mind, there is only one solution, and that is, not to take away, but to combine together all these county boroughs with their constituent county districts. That may not be a solution anywhere else. It may, in the end, not be reasonable even in that part of the world. But I believe it is; and I have a fairly good idea that it is also the solution for the southern part of that special review area, which presents a different problem but a very similar one.
  So far as I can understand the wording of the Bill, such a solution would not be possible; and I should like to see that it is open to be done if, in fact, the Commission have any idea, after their review, that it should be done. It would have the result, inevitably—or it should have the result—of a two-tier system throughout the area. But I do not see why the county borough should not, as it were, become a county district, in the same way as it is now proposed to merge a municipal borough, where necessary, with a rural district. In both cases they keep their rights and privileges and it would seem to be an entirely workable scheme.
  I want to say one further thing in that connection—and I do not want friends or members of county boroughs to think that I am, or anybody else is, wishing to demote them, as it were. If it is thought necessary to incorporate some important parts of counties with county boroughs and to make these new kinds of unit, which I think is the only way to do the job, then the only answer to it is to combine the whole lot together. This was, of course, debated endlessly locally, before the war and since, and by the County Councils Association. However, the trouble is that not many counties are in the situation of counties which are next to these special review areas, so not many people are familiar with problems of this sort.
  I want to see more guidance given to these Commissions. The late-lamented Local Government Boundary Commission, who were appointed by the Act after the war, lasted for only a few years. They were given no guidance at all. They produced a solution which was unpopular. They devised a new kind of authority called a "new county borough", which
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  was between a municipal borough and a county borough; and they faded out. I am afraid that if the Commissions to be established under this Bill are not given more definite instructions and more guidance, they may fail in their object, because they will not be strong enough to go one way or the other. I fear the situation may end up as being too much of a compromise. That is not criticism of the general trend of the Bill; but I rather hope that in Committee the Government may make suggestions that will give strength in that way.
  I wish to make one further small point. I am horrified to see the special clause about joint boards which may be proposed by the Commissions for a special review area, part of a neighbouring county district, and so on. Everyone who is experienced in local government wishes to avoid the creation of a joint hoard, if possible. I think it is the worst kind of administration, apart from the consideration of its election. Such boards are difficult things to work. If there are members from different local authorities concerned there is always a feeling that they are watching each other to see which is going to get some advantage out of it, and watching to see that they themselves are not left behind. These joint boards are very difficult and awkward things and in many cases remove the decision as to finance and raising money, which comes to these boards without any real responsibility. I would suggest, in the case where the Commissions make reviews of the major local government units, that if they do their job well there should be no need for any joint boards at all. One would hope that in the carrying out of their work in general, over all the country, they may be able to bring about a reduction of the number of joint boards that already exist. I think this Bill is a good start, and I hope that, as it goes through the House, we shall learn a lot more about it and that we shall effect improvements.
  4.58 p.m.
  LORD DARWEN: My Lords, the noble Lord who has just sat down painted a picture, which he told us was drawn from his own experience, of irresponsible spending on the part of local authorities, induced by a 70 per cent. Government grant. Actually, I am not aware of any 70 per cent. Government grant.
  VISCOUNT RIDLEY: In some cases it is loan expenditure.
  LORD DARWEN: That suggests to me, and I think that it will suggest to some of your Lordships, that there is a gross wastage of public money on the part of local authorities. I find that experience rather difficult to understand, and I cannot but think that the noble Lord has been rather unfortunate in his experience.
  Another suggestion which has been made, both by the noble Viscount and by the noble and learned Viscount the Lord Chancellor, is that the County Councils Association or the county councils in general, are in favour of this Bill. I am not going to dispute that, but I would suggest that there are a large number of county councils who are not in favour of it. The Association of Education Committees has provided me with some figures which they obtained as the result of an investigation. They invited 146 county councils and county borough councils in England and Wales to say whether or not they approved of the proposed legislation. The figures they have given me do not add up correctly; nevertheless, there is a picture here which I hope your Lordships will accept. They received 110 answers, of which 60 were against the proposed Bill and 2 in favour; 26 were not opposed to the Bill in principle but would have liked to see substantial changes, and 24 did not express a view.
  In speaking in the Second Reading debate, I do so as an educationalist, or perhaps I should say, as an ex-educationalist, a humble one, I have been a teacher. I have taught in very ordinary schools, in a village school, in a secondary modern school and in a grammar school. I do not suggest that this experience gives me any specialised knowledge which would enable me to bring a particularly critical mind to the Bill, nor am I suggesting the contrary. The Government might feel that the views of a teacher can be lightly set aside—in fact, one gets this impression from the Government statements which have been made, despite the unanimity of teachers in their opposition to the Bill. However, it is a fact that the experience which I have had is such that I have a keen appreciation of the immense value of the national plan for education and of the fact that it is administered in a special way—that is, through local
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  government. I certainly should not like to see any change in that.
  The child who now comes under the Education Act, whatever his disabilities and lack of aptitude, has a fair deal. Though he may have no likelihood of becoming a Prime Minister or a scientist of value to the country, he gets an education which is appropriate to his aptitude. The 1944 Act, at any rate, implicitly recognises that the level of civilisation achieved by the Greeks was not of the highest kind, because it was based on privilege; and we now realise that if we are going to have a great civilisation, that civilisation will be measured largely in terms of the standard of education. A backward step, as I believe this Bill to be, is a step towards barbarism.
  If we reduce to their simplest terms the differences between the proponents and the opponents of this Bill, the question can be put in this way: are these new methods of financing education appropriate to the present needs of the country? Do they, on the one hand, recognise an inflationary trend which must be stopped or blocked, and, on the other, meet the inescapable fact that the educational services are expanding, as my noble friend Lord Silkin emphasised, and that that expansion is essential if the 1944 Act is to be implemented? History will record—in fact, I think it has recorded—that the 1944 Act, which is sometimes called the Butler Act, and rightly so, is one of the most enlightened pieces of legislation on the Statute Book. But its implementation is not yet complete. There are still too many schools with very large classes. There are still too few grammar school places. There are still a large number of old and antiquated schools. And teachers, although of recent times they have received a considerable improvement in their pay, are still not particularly well paid, having consideration for the kind of work they are doing and its importance.
  Four Ministers of Education in succession have never doubted the importance of securing education of the highest quality for our children, and have stoutly defended the provisions of the 1944 Act. They have given assurances that there will be no interference with the provisions that are intended there. The trouble is that we do not know very much from this Bill about the amount of money that local authorities will receive under it. It appears as a kind of planners' dream, a

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  streamlining of Government grants; and it is a little difficult to gauge how far local authorities are going to be embarrassed by it, whether it will be possible for them to meet the expansion due to the so-called "bulge" and whether the Bill will permit local authorities to meet the cost of improving standards. If we could be assured of these things, there would be none of this sense of disquiet that exists at present among teachers and education authorities.
  One can understand the motive which prompted the Government to introduce the financial aspect of the Bill. They did so as an anti-inflationary measure, and I think it only fair to say that in my view it is an anti-inflationary measure. I do not think it is any use blinking that fact. Percentage grants do maintain the buying power in an inflationary economy, whereas block grants, on the other hand, have the opposite effect. But to say that the percentage grant acts as an indiscriminate incentive to further expenditure, which is the way the White Paper on local government finance describes it, seems to suggest that local authorities are singularly lacking in a sense of responsibility.
  If one concedes that a block grant will have a stabilising influence on the central Government's contribution to local government expenditure—and that is what the Chancellor of the Exchequer said—it is fairly obvious that the instability and uncertainty which the Treasury have borne is, in fact, being transferred to the local authorities. The local authorities are faced with a situation in which the block grant is to be given for two years, during which period there are to be opportunities for review, but only, as I understand it, in a downward and not in an upward direction. The question then is: is it reasonable to resort to block grants in an inflationary situation? I think the answer your Lordships will expect me to give is, "Definitely no"; and that is my answer. If certain duties are laid upon the local authorities—and duties are indeed laid upon them by the 1944 Act—then surely it is the duty of the Government to see that they have the means, or at least the opportunity of obtaining the means, to carry out those obligations. The central Government, after all, control the real
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  value of local expenditure on grant-aided services, and it is therefore only equitable that they should maintain the real value of the grants as well.
  I agree that percentage grants have certain dangers, but I do not think a responsible local authority, as has been suggested, wastes public money on education. A percentage grant certainly encourages local authorities to raise the standards, whereas the block grant has the opposite effect and will unquestionably discourage them from doing so. We shall have a curious situation in which the central Government are responsible for seeing that certain standards are maintained, yet the local authorities may be unable to raise the money in order to do so. Moreover, the new policy means that if a local authority has a standard of service which is rather better than average, or if it wants to achieve such a standard, then the whole of the cost must come from the rates. Another point that does not seem to have been allowed for in the Bill is that of local differences in necessary expenditure. For example, the cost of fuel varies from one part of the country to another. I am told that in Leeds and Bradford fuel is 60 per cent. cheaper than it is in the South-West of England.
  Since I have been concerned for part of my life with adult education, I would make a special plea for this marginal service, this "poor sister" of the education services. I believe that under the proposed legislation it will necessarily go to the wall. In my view, the basic defect of this legislation is that it gives the local authority no incentive to raise standards. The local authority which is comparatively backward in its provisions will be in a much better position under the Bill than an authority which has been progressive and wishes to continue to be so. As I see it, the local authorities are going to become a kind of battleground in which the progressive elements will fight it out with the reactionary elements; and the price of victory for progress in education is likely to be dismissal by the ratepayers, who cannot understand why the Government should, to all appearances, have withdrawn moral support from progress in education by saying to the local authorities in effect: "Good luck to you! Educational progress is a good thing, provided that you can pay

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  the bill and still keep the electors on your side."
  5.19 p.m.
  VISCOUNT GAGE: My Lords, I suppose the effect of all Bills is a little difficult to foresee, but I must confess that I find this Bill a good deal more problematical than most. I understand that the scheme on the financial side is to replace the percentage grant by a general grant calculated in advance. I can see great advantages in this idea, not because it is necessarily an anti-inflationary step but because at the present moment I think the Chancellor of the Exchequer has the greatest difficulty in knowing where he stands. I think there is a backlog of expenditure amounting to millions of pounds, which is not ascertainable until quite late in the financial year.
  I can also see some advantages for the local authorities, provided that the sums which local authorities receive through the general grant do not compare too unfavourably with what they get under the percentage grant, and provided that they know in advance what they are going to get. At the moment, we do not know what effect this Bill will have on our rates, and that is one of the things we all want to know. We do not know what the total sum will be, and we do not know how it will be divided up. In addition, I do not think we have a clear idea of how the various Ministries and Ministers will seek to guide and control our activity. I should like to come back to that point in a moment, but what I am saying now is that there are a number of things we do not know at present. Whilst I recognise that nobody can expect a Government at this stage to have cut-and-dried answers to every point in an operation of this magnitude, the trouble with legislation of this sort is that it leads to every kind of assumption which may be totally disproved in practice.
  For example, hardly had the Bill appeared before educationalists were attacking it—not, as the noble Lord, Lord Darwen, suggested, expressing disquiet, which I could have understood, but having made up their minds in no uncertain fashion that this was going to be the most appalling threat to education this century. Such critics included a number of responsible people, and I, as chairman of a county council at that time, felt that I should try to find out what
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  their difficulties were. But quite frankly, although I have tried, I have quite failed to see—it may be due to my stupidity—why the control of a local government finance committee should be more onerous, or indeed less onerous, under the general grant system than under the percentage grant system. People have been talking as though, before estimates for education are passed, they are never submitted to a finance committee. I cannot speak for other authorities, of course, but certainly in the case of my own authority estimates are considered carefully by the finance committee; and I do not think our educational standards compare badly with those in other areas.
  Quite frankly, I cannot understand why all this pessimism is necessary or what the excitement is about. There are passages in the Bill—possibly rather obscure passages—which give the Minister power to make provision for expanding services. I entirely agree with the noble Lord, Lord Darwen, that if the Bill had the effect of cutting down the reasonable expansion of services it would be a bad thing. But I have no reason to think that that is what will happen. I really despair of trying to understand this excitement. In some cases I feel that I am up against a religious sentiment on this point, not based on reason at all. I believe that we all have our phobias and fears: I have my own, but it is of rather a different character. Supplementary grants, rate-deficiency grants and so forth are all distributed on the basis of formulæ. I am sure that these formulæ have been scientifically thought out, but none of them is completely fool-proof. They are not, of course, as we have heard to-day, fixed for all time—there is a certain flexibility. The Minister, with Parliament, can alter them. I do not at all complain of that. It seems that some flexibility is necessary, if for no other reason than to safeguard against miscalculation. But I am afraid that this flexibility may be used, or that pressure may be exercised that it should be used, in such a way as to produce a seemingly greater degree of equality in the rate burden borne by different authorities, and particularly at the expense of the so-called rich authorities.
  This sounds fair, and it might be fair except for two considerations. First of all, the comparison of rate poundages alone as a measure of the real burden

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  on the community is crude and misleading, and I regard the whole term "rich authority" as a very loose expression, because poor ratepayers in a rich area are just as poor as the poor anywhere else. Indeed, the truth of this is borne out by this reform which the Government have introduced—and I am extremely glad that they have done so—by which the rate-deficiency grants are now granted to districts. That, I feel, is an admirable thing to relieve the pockets of poverty in a county council area. But administratively it is impossible to carry this principle further, though the problem itself does go further.
  I should like to quote one example. I live in a rich area, and one of the boroughs in the rich area is the Borough of Hove, which I mention because many of your Lordships have been down to Brighton and gone on to Hove. Hove has all the appearance of a rich borough, as indeed, on the formula, it is. But I happen to know that in the Borough of Hove there are about 1,000 houses of which the rents and rates are paid out of National Assistance. So if, for any reason, however seemingly good, there is a violent increase in the rates as a result of passing this Bill, the effect will be to put more and more people on to National Assistance. In modern thinking maybe that does not matter, but it always rather horrifies me, as I am sure the poor are horrified at having to seek National Assistance. However, this may not happen. I certainly could not advise an Amendment to prevent its happening, but I feel that that sort of pressure will develop.
  I should now like to turn to this question of the liberty we have been promised, and to ask whether we can be given a little more specific information about it. I realise that it is not at all an easy request to answer, because so many of the present controls arise from causes outside the scope of this Bill. For example, the present limitation on capital investment has produced a good deal of detailed control. In my own county, under the limitation on capital expenditure, we were instructed to defer the carrying out of some sanitary improvements that we wanted to carry out to primary schools in rural areas. If we want to make an issue of stock, that matter comes under a different sort of
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  control analogous to the capital issues control. If we want to put up buildings, we have to submit plans—and I presume that that situation will continue, because there must be a measure of uniformity throughout the county. On top of all this it seems to me that some uncertainty must arise from the fact that Ministers must be given some liberty to interpret in their own way their responsibility to Parliament.
  For all these reasons I cannot expect a detailed reply from my noble friend Lord Hailsham. However, I believe that some conversations on these very points have been proceeding between the associations and the Ministries, and my noble friend may be able to say something to illumine us. I think it would be a good thing if he could, because we on local authorities, too, have our problems. When we are asked, as we have been, to submit by this coming August estimates of our expenditure to cover the next two and a half years, it is rather difficult, without any knowledge of what we shall be allowed to do. I think the figure that we submit must be something of a token figure.
  I should make it clear that I am not necessarily attacking controls. I hope, however, that my noble friend will be able to give us some assurance that the whole question of controls is being reviewed at present, for different Departments seem to have different ideas, some being much more stringent than others. I do not know why that should be so, but no doubt tradition has been developed in the course of time. Clearly it would be wrong to have different standards of school buildings, say, prevailing in different parts of the country. But excessive centralisation and control breeds its own brand of inefficiency; and projects are allowed or disallowed, not because of their relative importance to a particular locality, or even because of their relative expense, but simply because they do not happen to fit in with some perfectly artificial category for priority established for departmental convenience. I am not sure that that is not already happening in regard to the Ministry of Transport.
  About the other aspects of this Bill I have very little to say, because they have been dealt with at considerable length by previous speakers. I think the machinery for review of boundaries is sound, but here again, of course, we shall not know

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  for a number of years what they recommend. The delegation proposals have, we know, been the subject of lengthy negotiations between the different associations—I think they have been going on for something like eight years now. I do not suppose that anybody is in wholehearted support of every detail. It is a compromise, but I do not think we can hope to get a better compromise at this stage. I hope that delegation will not involve us in a lot more administrative expense, though I am afraid that may be the case. My Lords, I am aware that what I have said cannot be described as an enthusiastic welcome to the Government Bill, but that is due not to any feeling of hostility but really to ignorance. I personally cannot quite see how anybody, with so many imponderables, can pronounce himself absolutely in favour or not in favour. But I can say this: if things work out as the Government say. I believe that the Bill will be a considerable improvement to local government structure; and I have no particular reason for thinking that the Government are going to be proved wrong.
  5.30 p.m.
  Loin ELLENBOROUGH: My Lords, I intervene briefly in this debate, and also with some hesitation, since, unlike so many of your Lordships who have already spoken this afternoon, I cannot claim to be a member of any local authority. I have, however, for some years been connected with a national association known as the National Union of Ratepayers, of which, rather to my surprise, I have had the honour of being President and through which I have during the past few years met a great many people closely connected with the problems of local authorities. This association, incidentally, which is a non-Party one, has branches, some large and some small, up and down the country, and it does its best to protect the interests of ratepayers, to combat waste and inefficiency on the part of local authorities and generally to stimulate interest in the various problems and affairs of local government amongst what is to-day unfortunately an all too apathetic electorate. If, as I understand it, this Bill has as its main theme and purpose the promotion of a stronger and more independent local government, then I personally welcome it. I am sure it deserves support from all who are
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  genuinely interested in the welfare of local government, and I can tell the Government that it has the general support of the association to which I have referred.
  As has been pointed out this afternoon, this Bill is the first really major reform of local government since the last century, and since that time, of course, the complexities of local administration have grown enormously. Yet the Bill is being introduced at a time when interest in local government is at an appallingly, even dangerously, low level. We cannot complain to-day that nothing much is heard of local government. On the contrary, only last year we had the Rating and Valuation Act and now we have this comprehensive Bill before us with all its widespread implications to us all. Yet at local elections fewer than ever turn out to vote. Even at the last London County Council elections barely 30 per cent. voted, and for a Council to which I myself would hardly give first prize for its record of economy in recent years. Now we have reached the dismal stage that, at any rate in some of the larger council elections, to vote for an independent candidate is almost a rarity, and almost alone the only people who turn out to vote are the Party faithfuls on each side, who all too often vote for candidates quite irrespective of past record or merits.
  I think this low interest is displayed partly perhaps because ratepayers are inevitably a meek-and-mild and somewhat long-suffering lot, and that is perhaps because so many of them pay rates only indirectly and there are some who perhaps do not realise that they pay rates at all. Some of us who get those nasty envelopes twice a year may be fully aware that we do pay rates, but I am sure many people are not fully aware of the contribution they make. If a council indulges in unduly lavish expenditure they think how splendid and generous it is of them, and they do not realise that it is they themselves who are contributing with their own money. If this Bill, which as I say I welcome, can bring about a new vitality in local government and can really awaken greater interest and enthusiasm, I think it will have accomplished a very great thing. Certainly a greater interest in local government should do nothing to strengthen the hold on councils by Party cliques; and that, also, I think would be very good.

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  Of course, one must appreciate that the central Government cannot do more, and indeed should not necessarily be expected to do more, than create conditions in which a healthy and efficient local government can flourish. After that, the rest is up to the elected representatives and the local government electorate to show a continuous and lively interest in their affairs. I therefore welcome the proposed reviews of the organisation of local government which I trust in due course will ensure that we have areas of reasonable size with sufficient resources to administer the necessary services entrusted to them and at the same time not being so large as to lose their local character or identity.
  That this is long overdue we are all well aware. Since the last century geographical distributions of population and industry and the complexities and costs of local authorities have altered right out of all proportion. I believe that this has deeply affected the basis on which local government rests, and indeed has for too long been the excuse for taking powers away, at any rate from some of the smaller authorities, on the ground that they cannot afford adequate services. What is needed, I am sure, is a comprehensive reorganisation, and it is to be much hoped that this review the Government propose will help to stimulate public interest in local government matters generally.
  Of course, a prime condition for good local government is that its finances should be on an up-to-date, sound and realistic basis. It is quite pointless to reorganise the boundaries and status of local authorities unless there is to be a greater financial independence. I therefore support the principle of the block grant, which, as I see it, will give a greater measure of local autonomy and a greater measure of responsibility of local authorities to their ratepayers. It will be for the local authorities to decide how to spend their grant. weighing up the importance of different services. I think that this will be a very important step towards independence.
  Much concern has been expressed, if not this afternoon at any rate in another place, about how the educational services will fare under this block grant system. From what has been said one really might suppose that the Government were trying to
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  use the Bill as some underhand weapon to slash the educational services. I would say that any study of the Government's record during the past seven years in which continuous progress and improvement in education has been made, would go to prove the opposite. At any rate, even if, in some way, through this Bill there occurred the very unlikely event of a council's being so utterly stupid as to skimp educational services in a particular area, then it is surely pretty certain that the next local election would see the end of those who would be responsible. After all, the parents are the ratepayers, and it would be up to them to do something about it.
  Therefore, on the whole I have great hopes of this Bill. I feel that it will place services more firmly in the hands of local authorities and it will get away from the long-range scrutiny of Whitehall. With a greater independence, I believe we shall see a higher calibre type generally of men and women offering themselves for local government services and offices. It will give the electorate a greater responsibility, and also a greater incentive to go out and choose their representatives. If powers and functions are really local, then the greater the power the local ratepayer will have to exercise his views.
  5.42 p.m.
  LORD MILVERTON: My Lords, in rising to support the Second Reading of this Bill I should like to make a few comments on the principles of the Bill and perhaps add to them one or two minor complaints. If, in passing, I may have the temerity to refer to one or two of the remarks of the noble Lord, Lord Silkin, to whose extremely interesting sketch of the history of local government I listened with great appreciation (although I was not able to follow him in his denunciation of the Bill, quite largely, as I gathered, based on the fact that there had not been a commission of inquiry into the whole history and requirements of local government), I would say that it seemed to me that his remarks were based perhaps on a latent dislike, or a fear or distrust, of the results of freedom. I had an irreverent picture in my mind as he spoke, of him quoting Omar Khayyám to the Lord Chancellor and saying:
  "Ah Love! could thou and I with Fate conspire
  To grasp this sorry Scheme of Things entire,
  Would not we shatter it to bits—and then
  Re-mould it nearer to our Heart's Desire!"

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  If I may say so, with great respect, there is nothing easier than to devise a perfect scheme on paper, whether for local government: or for anything else. But the simple fact remains that it probably will not work in practice. To do the noble Lord, Lord Silkin, justice, I fully appreciate that he did envisage the fact that all that such an inquiry might reveal might be that our system of local government, inefficient as it may appear by some standards, was so deeply engrained in the life and traditions of the people as to be an essential and integral part of that life; and that the best thing that we could do would be to endeavour to give it the freedom to work and fit itself for modern conditions. If I may trouble the House with my own view of stable democracy, it is that of a country in which the exercise of responsible authority is pushed ever lower and lower, as low as it can effectively and efficiently be fulfilled. I suggest that in order to preserve a democracy in any country there must prevail the process, which is partly embodied in this Bill, of pushing responsible authority lower still in order that people may be trained in its exercise and may accept it in the higher realm to which they themselves may possibly never aspire.
  One of the most important things about the present reorganisation is. as has been said many times this afternoon, the emphasis which is given to placing the responsibility on local authorities and consequently the need to treat them as responsible bodies, removing, so far as possible, the fetters which have hitherto bound them, owing largely to the prevailing financial arrangements. The other facet of this conception of local authorities as responsible bodies is that of consultation in matters concerning them. One must admit that for years this has been accorded by most of the Government Departments with which the local authorities have to deal. The Ministry of Housing and Local Government, the Ministry of Health, the Home Office and, more recently, the Ministry of Agriculture, Fisheries and Food are, generally speaking, most punctilious in consulting with local authorities and local associations on any matters which they have in mind and which are the concern of the members of the association. The one exception to this welcome state of affairs arises from the repeated failure of the
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  Ministry of Transport and Civil Aviation to discuss matters with the associations concerned.
  It is true that the present Local Government Bill may be regarded as a milestone on the road of progress—though not, we should all hope, the final stage. Few, indeed, would claim that for it, because it would be a had day for local government if it were so, since it is surely important that local government and local authorities should continue to be a living organic body, as it were, and should be constantly in quest of better ways of looking after the welfare of their people. The workmanlike provisions of this Bill are, I suggest, in no small measure due to the fact that consultations took place throughout the period of gestation of the Bill. It is based, as we know, on three White Papers which were issued by the Government in 1956 and 1957, after full and detailed discussions with the associations of local authorities concerned. Even in the White Paper on local government finance, in which the proposals made no pretence of being the result of consultations with local associations, but were meant to be, and were, a statement of the policy decided upon by the Government itself, the proposals were made known to the local authority associations who had an opportunity of commenting on them privately or confidentially before the Government finally made up their mind. Of course, there have been a number of matters on which the Government have not found it possible to please all the local authorities. That is due to a variety of reasons, sometimes, of course, because the local authorities themselves were not in agreement with each other. Naturally, the Government then exercised their proper prerogative of coming to a decision.
  The keynote of this local government reorganisation, as it has been presented to the country, is, as we have been told again and again, the establishment of more efficient and convenient units of local government and the removal, as far as possible, of the fetters which previously had bound them. In conceding this new freedom, the Government are pursuing a course which was given a good start by the Local Government Manpower Committee which reported in 1950 and 1951. The general approach laid down by that body, which is, I

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  presume, embodied in the Bill, was, if I may quote from what the Committee said,
  "to recognise that the local authorities are responsible bodies competent to discharge their own functions and that, though they may be the statutory bodies through which Government policy is given effect, and operate to a large extent with Government money, they exercise their responsibilities in their own right, not ordinarily as agents of Government Departments."
  The latter part of that passage, my Lords, was what moved me to take the liberty of quoting from the Report.
  The recognition of local authorities as responsible bodies carries with it not merely the relaxation of unnecessary controls on the exercise of their functions but also the obligation to consult with them on any matters of common interest so that the Government Departments may have their views before they reach a final decision. The principle of consultation and the welcome fruits of it are exemplified in the provisions of the Bill. As I have said, generally speaking, the Government Departments have punctiliously consulted the local associations, and there are no complaints on that account.
  The present Bill, however, contains an example of a failure in this principle of prior consultation. When the Bill was being considered in another place, after the Committee stage it was re-committed and, during the Re-committal stage, a new subsection (6) was added to Clause 38 of the Bill. The indirect effect of this was to impose certain additional requirements upon local transport authorities whose areas were extended by an order of the Minister of Housing and Local Government under the Bill. This provision is unique among the substantial Government proposals and Amendments made in the Bill, in that it did not form the subject of prior consultation between the Government Department and the local associations concerned. It came, as it were, as a bolt from the blue. It was done, I know, at a late stage in the consideration of the Bill, and, in the ordinary way, no one would complain of emergency measures in an emergency. I suppose that it took place because somebody had noticed a point which had been over-looked. The reason I mention it now is that the lack of consultation came from the Department concerned, the Transport Department, and it is to be hoped, may I
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  say, that the spirit which pervades the Bill will, when it has been passed, reach the Ministry of Transport and Civil Aviation and bring about a change in its practice in relation to consultation with local authority associations.
  I could quote various instances to emphasise the point and what it may mean. There have been four recent examples, but I will not go into them in any detail. There was an occasion in December, 1957, when the Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation announced in another place that he proposed to hold meetings to discuss methods of ensuring uniformity and continuity of street lighting on major traffic roads. The first meeting took place in London on May 1, without any notice to the associations concerned. Another case was in January, 1958, when the Ministry informed the local authority associations that it was examining the double white line system and would be writing later to ask officially for their views on these proposals. In March, 1958, the proposals were sent to the local authority associations, together with the decision of the Minister, who had already decided, in principle, to introduce the double white line system. Any comments on the part of the local authorities could really be confined to matters of detail only.
  The third case I was proposing to trouble your Lordships with was in August, 1957, when the Minister stated that he had received the Report of the Working Party on Child Cyclists. In February, 1958, the associations whose members were concerned were invited to attend a meeting about this Report, which had not yet been made available to them. The Report was not, in fact, published until March 14, and the suggested date of the meeting was March 24. After a protest from the associations, the date was advanced a week. Although there had been no time for the Report to be considered by a committee of the associations, the representatives were invited, at that meeting, to approve the Report.
  The last instance I should like to quote was in March, 1958, when the Minister announced that he had reached agreement with the organisations representing the motor trade on the fees for which private garages would undertake vehicle

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  testing. The associations were subsequently invited to a meeting to discuss the conditions in which local authorities might undertake compulsory testing, but the earlier agreement between the Ministry and the motor trade on the question of fees was binding on the local authorities, and the Minister was not prepared to consider any alteration.
  My Lords, in many aspects of local government, it is customary to speak of the relationship between the Government and the local authorities as one of partnership. Partnership can produce satisfactory results, surely, only if there is mutual confidence. Although, fortunately, this confidence is displayed by the majority of Government Departments, it is to be hoped that, as the Bill goes on to make the responsible authorities of local government stronger and more self-sufficient, the sense of partnership will grow and extend to all parts of Government with which the municipalities and councils of this country have to do. My Lords, I support the Second Reading of the Bill.
  6.0 p.m.
  LORD LAWSON: My Lords, I want to speak for just a few minutes upon this Bill. First, I want to say that if this Government find fault with those who criticise the financial clauses, they have just got themselves to blame, for if there is a "squeeze" associated in time with a Bill of this kind, those who make the inference that the Bill is intended to pursue the purpose of the "squeeze" cannot be blamed for the conclusion at which they arrive. But I really rose to speak upon one particular aspect of the Bill. I am surprised that Her Majesty's Government should so underestimate the question of what are called "conurbations" that they include it in a Bill of this kind whose characteristics in size and depth have little to do with conurbations, unless one describes those as coming generally under local government.
  I believe that Her Majesty's Government would have been wise to have a separate Bill altogether to deal with the question of conurbations. I believe that if those concerned travelled the country and saw some of these communities they would hardly have thought it worth while to tack this on to another Bill merely because that Bill involves a question of local government. I have watched these communities growing and
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  it really frightens me. Once upon a time there was the village, whether it was in Wales, England, Scotland or Ireland, of which one could say, "That is Welsh", or "That is English", and so on, and even the industrial areas that grew out of those villages had upon them all the characteristics of their nation. But when one comes to conurbations there is only one term that fits them—that used by rough and ready fellows: "They are neither nowt nor summat".
  The people cannot help it. They live in communities that have, been overgrown, and in a desperate effort someone, trying to be truly scientific, has given the community the name "conurbation". I support we might call the people inside them "conurbators". It is characteristic of them that they have no social life at all—not even the Cockney in the conurbations around London. Those of us who belong to the Northern parts, who are called "Geordies", were almost as proud of the Cockneys as we were of the Geordies but the conurbators round about London are a different matter altogether. They have no characteristics. They can hardly be said to have a community life.
  Her Majesty's Government must realise, of course, that with this question is associated the question of the growth and spread of industry. I know that in the far distant past the Government tried this question of conurbations on Tyneside. I do not think either the individuals on Tyneside or the average local councillors knew what they were talking about when speaking of a conurbation. I believe that that attempt failed because neither the Government nor the nation generally understood what was happening. But it can be said for that kind of community that they did grow roughly out of the industries around about—the mines, shipyards, steel and all that matters to heavy industry. They did keep, to some extent, the imprint of that. Although the general sprawl tends in those areas to undermine and wipe out the particular characteristics of the community, it is vitally associated with industry.
  Is it not a fact—and here I am speaking of a matter with which the noble Viscount, Lord Ridley, has been associated and in connection with which he has done some very good work—that

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  before the war there was endless misery in some parts of the country because employers just would not go there? They were warned at the same time by the very people the Government appointed to lead in the areas concerned that the overgrowth in this great city would lead to destruction if war should happen. It is as plain as A.B.C. that heavy bombing was attracted to a great extent by some of the industries in this area that ought never to have been put there. Every thoughtful man and woman in this nation who has given consideration to this question knows that that is true. I should not have believed it possible myself that any Government would allow that to continue after the experience we have had; but is it not a fact that it is continuing?
  I had an example of that only the other day when I went out of the city, going south. Is not the same thing happening now? Is it not a fact that employers can go where they like and, in the cause and the name of English liberty—for them—nobody seems to interfere with them? Is there any liberty for the workpeople concerned? They have to go. We can use this spread of industry and retain the characteristics of the community. It is not really a question of being kind to the people. If anyone wants to see how it can be done, let him look at the west and south-west of Durham. Those were places which were hopeless, but employers knew that there were plenty of good workers, good women labour and so on. One has only to go to those places now to see how wise have been the employers who went there. They are satisfied and happy. They know that the quality of the labour they get is all right. But in every part of the country this feeling is growing again. Her Majesty's Government have introduced an Industry Bill for the spreading of industry, as though it had nothing to do with this question that affects the life of the nation.
  I do not want to speak at any length. All I want to do is to draw attention to this fact. The biggest point that emerges is that there are clauses for the appointment of two Commissions. What is happening now is better understood than it was long years ago when the Tyneside Commission was decided upon; but I should have said that, instead of tacking
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  that matter on to this Bill, it is big enough to have the attention of the Government by itself, in order that in the main those characteristics which we call British shall be preserved. I cannot see how they can be preserved in those things which we call "conurbations".
  6.11 p.m.
  VISCOUNT BRIDGEMAN: My Lords, the noble Lord who has just sat down is, as we well know, deeply concerned with the matter of conurbations, and especially, I think, the conurbation on Tyneside which is mentioned in the Bill. But, with great respect to him, I should have thought that that Part of the Bill which deals with conurbations is not directed to what should be the right policy for the location of industry for the future, but is much more directed to the question of what is the proper form of local government for those areas which are fully industrialised yet are covered by a large number—too large a number—of local authorities. That problem is one which I think ought to be pursued and solved independently of the very important problem raised about the unsound distribution of industry in the future. The conurbations have their industries now. Whether they stay or go somewhere else might possibly be thought to be another matter.
  Many of us who are concerned in any way with local government will have been glad to see the arrival of this Bill in your Lordships' House. For my own part I think it is high time for it. At the same time I am bound to say that I do not think it is very surprising that a few years ago a similar Bill got off to a false start, because the Bill arouses two major conflicts from which many timid people might easily recoil. Indeed, many people might recoil, and many Governments might recoil who are not sufficiently sure of themselves and of their policy, from tackling this problem, which has been baffling people for nearly twenty years. These, I think, are the two conflicts which come out into the open as a result of the discussion of this Bill. The
  first is the conflict in Part I, which I would put as being a conflict between the theory and the practice of political democracy; and perhaps I can explain in a moment what I mean. Then, in Part II, we come to another conflict, and

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  possibly a rather simpler one: the conflict between efficiency and tradition.
  If we take the first conflict and come to the general grant, I think everybody agrees that, whether it is right or wrong, the general grant will have the effect of giving the councils of counties and of county boroughs very much more authority over their own spending than they have had for many years past. After all, those of us who have been members of county councils, and, no doubt, of borough councils as well, will know perfectly well how very small in practice is the percentage of the county budget over which the county council have any real control. The rest of it, you find, when you come to deal with it in finance committee, or wherever it may be, is all pegged, either by the impact of national wages or by the influence of the grants system, which the noble and learned Viscount on the Woolsack described when he introduced this Bill. And so, whatever may be the appearance of liberty, liberty has not, in practice, been present to any great degree during the last few years. That, I think, was the point made by my noble friend Lord Milverton. And, after all, if local authorities are to be realistic, and if membership of local authorities is going to be attractive to the sort of people we want in them, then there must be real control.
  I would say quite certainly that the principle of the general grant is right, in that it will give much more real control to the local authorities themselves. I would entirely agree with something said, I think, by my noble friend Lord Gage: that the workings of the general grant are still very much a matter for the future, and it would be unwise, from the point of view of a county council, to say that they think that, because a principle is right, all the details are bound to turn out as expected. I doubt very much whether they will. Most of the arguments I have seen so far against the general grant seem to me to be based on the idea that in certain matters local authorities, if they were given more rope, would fail to "deliver the goods", or that the administration of the country as a whole would not go so well and so smoothly as some people may think it has done, in recent years. Whatever may have been the appearance of independence of local authorities, Government
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  Departments were in many ways in virtual control. While I think that most attention has been drawn publicly to the matter of education, that is the underlying idea—to put it crudely, local authorities could not be trusted, if they were given more freedom and more rope, to do the right thing for the people they represented. That is not a view which I would share for a moment.
  I am quite sure that there are always a certain number of people who are not sufficiently sure of themselves to want to stand in the open and to stand on their own feet in support of their own decisions. From certain points of view it may be more convenient locally to shelter behind Whitehall, especially if, as a member of a council, you find you have to be responsible for a decision which you think is right but which other people may think is locally unpopular. There comes to my mind the sad story of a butcher in my own neighbourhood who, on the day that meat rationing was officially ended, decided to commit suicide because he could not face the task of running his own business in competition with other butchers after having had it "so good" under control for a long time. Possibly there is something of that feeling about it in those quarters where the opinion is held that the principle of the block grant is wrong. It has all been so easy tip to now.
  But, my Lords, there is another side to this picture, and even when supporting the principle behind the general grant I think it right to draw attention to the dangers which lie on the other side. Parliament is here, I imagine, to decide on national policies, and it is part of the business of Parliament to see that national policies are not stultified locally. In other words, it is no part of the business of Parliament to abandon its functions to local authorities or to anybody else. Therefore (and here we come to the conflict on democracy in theory and democracy in practice), one has to make sure that liberty does not turn out to be licence, and that policies which are decided on by Parliament, whatever they may be, are not stultified by local authorities, and that this Bill does not give a local authority power to stultify a national policy.
  May I give an example, one about which a certain amount of fear has been

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  expressed? I would quote the support given to voluntary organisations like the National Council of Social Service and those voluntary bodies which are included under the term of the Youth Service. These Youth Service bodies have their charter in the 1944 Education Act, Sections 41 and 53. The actual money reaches them not from the Ministry of Education in Whitehall, but via the local authorities. Therefore there is always the danger that a local authority, in the exercise of their discretion, may withhold a grant, which will have the effect that in the area controlled by that authority the policy of Parliament to help voluntary organisations is not implemented. That is a danger which is bound to be present if we decide on a plan of a type contained in this Bill. Therefore I suppose that it is part of the business of Parliament to safeguard itself against that state of affairs. However, I think that there are sufficient powers in Clause 3 of the Bill to cover this point, at any rate for the present.
  But if we want local government to be a reality, and members of local councils to be people who participate in making decisions, instead of merely being "shop window" people—members of advisory councils and things of that sort—it is right to take this plunge, remembering at the same time the danger and, as my noble friend Lord Gage said, seeing how things work and keeping an open mind on the need for making adjustments later. And I am sure that, in greater or lesser degree, adjustments will be needed. That is the issue, I think, of the first conflict of ideas.
  In Part II we come to this other issue—tradition versus efficiency. Here I am talking as a member of the county council of a medium-sized rural county, fortunately (as I said just now) not a conurbation and not a special review area, and with no county boroughs. I do not think that one can possible defend for a single moment the present boundaries in our part of the country or the breakdown of any rural county into its present set-up of county borough, urban districts and rural districts, because more often than not—let us face the fact—they are too small for modern efficient administration and bear little or no relation to the current economic conditions and conditions of transport. That is not surprising,
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  because the origins of most of these districts, particularly the municipal boroughs, at any rate on the Welsh border, are not economic but strategic. There is no ground whatever for thinking that any of the considerations which decided the formation of these small units in past times are likely to have any application to-day. In many cases the headquarters of the rural districts and the boroughs are in the same town, and we have two bodies trying to deal with the same larger problems, such as, for example, the local water supply. In many of these cases there are manifest arguments why in future the borough and the rural district should be one unit.
  That is one side of the picture, a side which I think is already clear in outline, and which will become clearer when the two main Commissions have done their work and the county reviews start. On the other side, we have the force of tradition, which can be used for good or for ill. Tradition is an asset which I think we ought to take the greatest care not to destroy or damage more than we can help in the course of reorganisation. After all, whatever the people at Westminster or in Whitehall may think, the traditions of a small borough matter immensely to the people who live there, and especially to those who have been elected to office to take care of those traditions. From the point of view of administration, it ought not to matter very much, certainly not in Whitehall, how those traditions are carried on, provided that in the result they can be put to proper modern use and made to serve the purpose of progressive local government, instead of becoming strongholds of reaction and obstruction, as they will do if they are mishandled.
  A great deal depends, therefore, on the handling of these problems at local level. That is why I was so glad to hear the noble and learned Viscount on the Woolsack say that the Government felt that the counties should stand on their own feet and take the responsibility of producing their own schemes, instead of having people come in from outside, who will not know the conditions nearly so well, to impose schemes on them. I do not think that any county which knows its business would care to shirk that job and see it put on to a commission sent from Whitehall; nor do I think that a commission is likely to be nearly so successful as the county in making the review.

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  Therefore, I think that it is a good thing that Clause 29, which gives the Minister the right to supervise the reviews and to have the last word, is in the Bill.
  I hope that the clause is elastic enough to meet all the different solutions which are likely to be put forward, because if we are to preserve tradition and local good will, and at the same time have proper administration—big enough districts and properly paid local government officers—a great many of these solutions, if they are to be the best possible, will have to be tailor-made, and will not necessarily be like the solutions adopted in the next county. It is not going to be a quick or an easy matter. We must remember that reaction has its attractions in many ways. Reaction and obstruction are a good deal easier mentally than the task of thinking out something new, and often obstruction is much easier in a democracy than under a more total form of government. The "hard lines" story, and the small man's fight for freedom are always better news in the papers than agreement among people to some new scheme.
  Two things will have to be faced and ought not to be shirked, because whatever we may say, a reorganisation of this sort is certainly overdue, and we shall all feel much better when we have come through it. But do not let us underestimate the task. We have five or six years' jungle fighting on these matters before we get through and have the pattern of the new layout in this country—it will not take less time—and a great many points, as the noble Viscount, Lord Gage, said, which are unknown or unsuspected now, will emerge in the process. If the thing is to go right, then it is vital that the Government and the people in Whitehall, whoever they may be, who have the responsibility for seeing the job through should keep an open mind and take a wide view of the smaller details, which people in Whitehall would very much like to see tidied up and put into a neat box, whereas the local answer, if we are to have good will all round, may need to be something quite different.
  In a rural county like mine the Seventh Schedule and the position of the smaller municipal boroughs is the key to the problem every time. What we have to produce is not the dying borough with its traditions and its functions fading away,
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  but that same borough as the centre of a progressive district, providing the services, the leadership arid the financial control which is all so necessary. If we get to work on those lines within the framework of this Bill, then by the time our minor struggles are over local government will be a great deal more efficient than it is now.
  I feel that I must say a word or two more, because, although in my view the Government have been courageous and right in nearly the whole of this Bill, as one who comes from the Welsh Border I cannot say that of Clause 43, which says that the Bill shall not apply to the Border between England and Wales. I am sorry my noble friend Lord Brecon has had to be away to-day, but I hope that someone may let him know what I have to say. This is complete nonsense. Anybody who knows the Border knows quite well that the present county boundaries bear no relation to the racial, geographical or commercial border, in any case. There are any number of places where pieces of England should, by any common-sense standard, go to Wales, and no doubt pieces of Wales which should, by any common-sense standard, come to England. Some of them, which I know, are not inhabited at all. Here are the Government going in for appeasement and trying to pacify a certain number of Welsh extremists, no doubt in the Welsh universities—and much good that will do! The appeasement will probably be far less successful than any Mr. Neville Chamberlain attempted, and we shall go on having the public house—which is riot entirely apocryphal—with two doors, one in England which can statutorily be opened on Sundays, and the other in Wales which must statutorily be closed. This surrender to nonsense of that sort is a blemish on the Bill. I only wish that I could have commended the Bill in its entirety, but alas! I cannot.
  6.35 p.m.
  LORD LATHAM: My Lords, we are moving to the end of a fairly lengthy consideration of this Bill which purports to be a measure for the reform of local government. As my noble friend Lord Silkin said, in what I thought an impressive speech, the reform of local government in this country is long overdue. Nothing has been done since 1888,

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  except, of course, by the Local Government Act, 1929, which had some outstanding merits, one of which was the transfer of Poor Law from the guardians to the counties and county boroughs. The Act also had some grave demerits, one of which was that it introduced for the first time the block grant, although I should say here that the block grant did not then comprehend and include educational expenditure.
  I think it would be unfortunate if the idea got around that local government has broken down. Such is not the case; it is still doing a very fine job of work. But it is the case that its structure and its functions need a thorough-paced adaptation, not now, as we used to say, to the conditions of the motor age, but to the conditions of the atomic age and the electronic age. One hoped that this Bill would have been infused with a sense of the needs of to-day and to-morrow, and that it would have provided for a reform of local government which would be adequate to the need. In submitting the Bill for Second Reading in another place, the Minister of Housing and Local Government said, with perhaps an unwonted bravura [OFFICIAL REPORT, Commons, Vol. 579, col. 901]:
  "One thing to which almost everybody has assented ever since the war has been the need for Parliament to tackle a comprehensive measure reorganising local government. This is it."
  I submit that it is not it; that it is not a comprehensive measure. It is in fact a Bill manqué; it is a "might have been", and, indeed, it is an "ought to have been". As my noble friend Lord Silkin said in his speech, here is an opportunity which the Government have missed. The noble and learned Viscount on the Woolsack used the words "a grand design". I confess that I cannot see any design whatsoever in this Bill, let alone a grand design.
  This matter has been under consideration by the Governments of the day and local government for many years. Endless were the conferences which earlier on I attended dealing with the question of the reorganisation of local government, and very little progress was made because, let us be candid about it, there were, as there still are, deep differences of opinion between the various types of local authorities and their associations. It is the case
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  that the predecessor of the present Minister of Housing and Local Government, Mr. Sandys, said that unless the associations representing the various categories of local authorities could get together and agree, then the Government would impose their own solution. Those were very brave words. Agreement was not reached, but, nevertheless, the Government have not imposed their own solution. The successor to Mr. Sandys has in fact run away from this disagreement between the local government associations. I think it is fair to say that the Government have abdicated their responsibilities and passed them on to two Commissions and one Royal Commission for the Metropolitan Area, and as regards the reorganisation of county districts, passed the problem on to the county councils.
  There is, in addition, provision in the Bill for the delegation of a few health service functions to the county district units. But even there the functions proposed to be delegated are much less in number, character and extent than those which were envisaged in the White Paper published by the Government in 1957. The county councils have had power to reorganise their county districts since 1929 and, as my noble friend Lord Silkin said, little or nothing has been done since 1930. There are still over 1,000 urban and rural councils. There are still 7,300 parish councils; and I venture to think that the county councils will be no more successful and, indeed, perhaps no more active in the future in this respect than they have been in the past. There are internal jealousies which often defeat the powers of the county council to do what ought to be done. We must remember that a county council has to live with the county districts from day to day in many activities which are of mutual concern and interest. My own anticipation is that there will emerge a kind of jig-saw puzzle of conflicting reports and proposals. There will be endless discussions, disagreements and jealousies, and little will be done.
  If this Bill was intended to reform local government, I predict that it will be a failure. If it was not intended to do so, then it is a pretence. The real purpose of the Bill is not to reform local government; its real purpose is to change the financial basis of Treasury assistance—namely, to change the percentage grant for many services, including education, on

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  to the basis of a general block grant. The purpose of that, as was the case with the introduction of the block grant in 1929, is to reduce the Exchequer contribution lo the cost of local government and to throw more of the expenditure on the rates; and, however much this Bill, if it becomes an Act, may fail as regards the reform of local government, as regards throwing more of the cost on to the rates it will certainly succeed. It is a fundamental change which is to operate as from next year—there is to be no delay in that element of the Bill. The cutting is to start almost straight away. I shall confine myself mainly to dealing with this proposal and the proposals in the Bill with regard to de-rating.
  I can think of no more unfortunate time to introduce a block grant than the present, when social services are expanding with, I think, the consent of most people of good will, and especially when education is expanding. Indeed, if we are to maintain our position in the world of industry and commerce, our expenditure upon education must expand. Perhaps it would be helpful if I rested this part of my case upon a statement made in July, 1943, by the present Minister for Housing and Local Government. He was discussing the Education White Paper which was issued prior to the introduction of the Bill which became the Education Act, 1944. I quote from a publication called Education, which is the official organ of the Association of Education Committees. He said on finance:
  "I wish I could think that local authorities were not going to be deterred by finance. … I ask honourable Members to go into their constituencies and judge for themselves whether local authorities generally will willingly and keenly embark upon a great progressive policy which alone will send up the rates by 16 per cent. … My fear is that not only these big reforms which the White Paper envisages, but all the kind of things we have long known, for instance, over-large classes, will fail to be dealt with unless my right honourable friend the President is able to reach a more favourable agreement with the Treasury. It will be a bad thing if the Treasury gained for itself the unenviable reputation of having stood in the way of what might have been the greatest advance ever in the quality of the British people."
  My submission is that the Treasury is now proceeding to stand in the way; that there can be no doubt that the purpose of this change from the block grant is to cut expenditure on social services administered by local authorities. I
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  submit in support of that a statement contained in paragraph 26 of the White Paper entitled Local Government Finance, Cmnd. 209, in which it says
  "The proportion of grants to rates is now as 6 is to 5, and it is still increasing. It is most important to reduce this dependence of local government on Exchequer grants if it can possibly be done."
  I know that since that White Paper was published it has been stated that those remarks do not apply to the percentage grants generally but have a particular reference to de-rating. It is strange that that should be urged as being the case, but if one looks at the Scottish White Paper one will be in no doubt whatsover that the intention is to reduce the Government proportion of expenditure on social services—I quote from the OFFICIAL REPORT of the proceedings of another place on July 30, 1957, Column 1009. This is what the Scottish White Paper says:
  "The Government's view is that this opportunity should be taken to make some reduction in the level of Exchequer grants."
  There can be little doubt, I think, having regard to those statements, that the real purpose of this change is not to discourage alleged extravagance on the part of local authorities, nor to give them greater freedom, more responsibility and less interference from Whitehall; the real purpose of this change is to reduce the contribution from the State towards local government expenditure.
  As to the charge that percentage grants lead to extravagance, I should like to quote a statement which appears at page 3 in the White Paper to which I have previously referred. It says:
  "The present system of percentage grants acts as an indiscriminating incentive to further expenditure."
  That is not a very worthy reflection, I think, on local authorities; moreover, it is not true. According to a report by a Committee presided over by a Mr. Edwards, who I believe is a high official of the Ministry of Housing and Local Government, no such charge can be supported. I now quote from the proceedings of another place of July 29, 1957, Column 948, which says:
  "It has been suggested that the payment of Exchequer grants on a higher percentage and without central control over the expenditure on which the grant is calculated offers a powerful incentive to extravagance."

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  The Committee said:
  "We have received no direct evidence to support the suggestion that equalisation grants have so far led to extravagance … The evidence presented to the Committee gives no support to the suggestion that Exchequer grants"—
  not only equalisation grants, but Exchequer grants—
  "have resulted in extravagance."
  The second ground was, as I have said, that contributions based upon a percentage of expenditure involve vexatious examination and, indeed, control and interference in the proceedings of local authorities. A Committee was set up by the Institute of Municipal Treasurers, presided over by Dr. Lees, and reported that there were no grounds for the allegation that percentage grants led to this vexatious interference—here I quote from the proceedings of another place of July 29, 1957, Column 950.
  "We find that there is not. The evidence is that complaints of excessive detailed control cannot be substantiated."
  The Report goes on later to say:
  "It is to be hoped that future assertions of this kind will be supported by evidence. In the past, this has not been thought necessary."
  It is a little amusing to note that this excuse is not even original, because it was used by the late Mr. Neville Chamberlain in 1928, in justification of the introduction at that time of the block grant, in the Bill which became the Act of 1929. All those who were engaged in local government at that time and who opposed the introduction of the block grant know that the block grant failed in operation. It proved to be inequitable; it proved to be unfair. Local authorities which were assumed to be gaining local authorities proved to be losing local authorities and the whole thing was unsatisfactory. So unsatisfatcory was it in London that it was found necessary to arrange a kind of equalisation fund within the County of London in order to adjust the inequities which arose from the operation of the block grant as between the poorer boroughs and the richer boroughs. And I should like here to pay tribute to the fine spirit and co-operation, and indeed the generosity, which the richer boroughs of London displayed in that connection. But the block grant was, as I have said, a failure.
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  Moreover, the block grant then did not include education expenditure. As we understood at the time, the Board of Education opposed the idea of bringing education within the block grant, and the Board, happily for education, succeeded. Apparently it had more courage than the Ministry of Education have at the present time. As regards other services the same excuse was used, and there is no doubt that additional expenditure did fall upon local authorities. Moreover, there was at that time no noticeable diminution of control by Whitehall. I do not think any of us, or anyone who was engaged in municipal work at that time, could have noticed any change in the control which was exercised from Whitehall.
  Now, of course, education expenditure is to be brought within the block grant. As my noble friend Lord Silkin said, it represents about 85 per cent. of the total grants to be merged. Education is a national service. It is true that it is administered locally, but it is a national service, and it must expand—everyone concerned with education realises that; and with expansion there must be an increase of costs. At the present time there is a shortage of teachers and of school places. Classes are too large. Slum schools (I use the word "slum" advisedly) abound, and they are not all confined to the rural areas. The bulge is moving from the primary schools into the secondary schools, with the additional difficulty and the additional element of cost that the expected fall in the number of children entering the primary schools, which it was thought would to some extent offset the movement into the secondary schools, is not manifesting itself—in fact the number of entrants, as I understand, into the primary schools is being maintained, if it is not growing. That will involve additional expenditure.
  We are all seized with the importance of technical and technological education. We have realised, with something amounting almost to a shock, how far behind the needs of the times we are in that respect, and how far we fall short of what has been done in other comparable countries. Let me admit quite freely that the Government have taken and are taking appropriate and imaginative steps to cure that defect. But the money spent on seeking to do that will be largely wasted if our technical and technological education is to rest upon a poor primary

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  education. We are often apt to overlook that the basis of all education is the primary education. The secondary education depends upon the quality of the primary, and so does the technical and technological; and unless we maintain an improving standard of primary education, and, of course, of secondary education as well, much of the money that we propose to spend on technical and technological education will be lost. That, I fear, will be one of the results of this proposal to change the percentage grant to a block grant. According to the formula—if I may use the word in that connection—as set out in the Bill, it can happen that the share of the block grant will be based not so much upon what any particular local authority does but upon what others do not do.
  The situation as regards the progressive local authority I can indicate in the following way—and noble Lords will not be surprised to hear that I am taking London as an example, because it is a f tidy typical county. The effect of the formula of distribution of the block grant will, it is considered, be as follows. By the operation of the formula a progressive authority which has been prepared to incur expenditure to improve standards will have the expenditure taken into account in calculating the grant for the general distribution. The authority will not itself benefit in direct proportion to the expenditure it has been prepared to incur: its share of the general total will be adversely affected by the expenditure of a less progressive authority, which will benefit financially by the higher expenditure of the more progressive authority and its own lower standards. Thus, the London ratepayer will bear the full cost of the development by the council of new ideas in advance of the general rate of progress, regardless of the fact that the council's foresight may well redound to the national benefit. If I may say so with proper modesty, I think that has been the case in the past.
  The conclusion appears to be accepted it the following statement of the Parliamentary Secretary which I quote from the OFFICIAL REPORT of another place for July 29, 1957, cols. 1022 and 1023. The Parliamentary Secretary said:
  "So far as individual authorities may have to deal with circumstances beyond their control, for example, an increase in population, this should be covered by the formula,"—
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  and here is the rub—
  "but if a local authority embarks on a deliberate expansion of the education service as an act of local policy it is the deliberate intention of the Government, and it is inherent in their proposals, that this should in future be the local authority's own affair, in the matter of finance."
  There we have, stark and brutal, as I suggest, the effect and the intention of this proposal. I submit that the block grant will put a premium on parsimony and inertia and a penalty on experiments, enterprise and progress, especially in the field of education. I do not know whether this is one of the curious ways in which the Government propose to open the gates to the Opportunity State—to use one of the slogans of the Prime Minister. And as regards removing the alleged meticulous control of education expenditure by instituting the procedure of a block grant, this claim is, if I may say so, just nonsense.
  As I have said, education is a national service and must be nationally controlled, whether the payment is made on a percentage basis or as part of a block grant. I was glad to see that the noble Viscount the Lord President of the Council, when he was Minister of Education, made it perfectly clear that he was not prepared to relax any of the existing controls over education expenditure or over education itself; and that view was confirmed by the Parliamentary Secretary in another place on July 29 last year. Whatever the Minister of Education may seek to do to maintain an even level of standard in educational provision, under the block grant there will be differences of standard which will arise inescapably, in my submission, from the differences in financial resources of the various local authorities.
  The County Councils' Association, as I understand it, agreed to these proposals with considerable reluctance. As regards there being no vexatious interference in the responsibility of local authorities under a block grant system, it will help your Lordships, I think, if I read from a report of a committee of the County Councils' Association dated July 24, 1957. This is what it says:
  "In spite of the Minister of Housing and Local Government's promise of increased responsibility for local authorities, the Parliamentary Secretary to the Minister of Education, when asked in Parliament on March 14 ' what legislative changes he proposed in the apportionment of statutory responsibility be-between the Minister and the local authorities,

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  particularly as regards the present ministerial responsibility for adequate school buildings, size of classes, provision of separate primary and secondary education and other duties under the 1944 Act ', replied that "—
  and here is the quotation—
  "it is not proposed to make any changes which would affect the apportionment of statutory responsibilities to such matters ' ".
  The committee go on to say:
  "Such information as is so far available suggests that the Ministry of Education envisage alterations of forms of control rather than reduction of control, and, if this be so, the Committee challenge the observation of the Minister of Housing and Local Government that the effect of the new grant system will be to strengthen local government and give greater freedom."
  It seems to me that these statements blow sky high the suggestion of less control under the block grant. There is a good deal of additional evidence which I could submit to your Lordships in support of the proposition that there will not be any greater freedom.
  I will pass now to another important aspect of the Bill: that is to say, the provisions dealing with the de-rating and re-rating of industry. If I may say so, with respect to the noble and learned Viscount on the Woolsack, I thought that he slid rather lightly over this part of the Bill, which is, of course, very important from the point of view of local government finance. At the present time, industry pays, and has paid since 1930, only a quarter of the rates otherwise due from it. From April 1 next it will pay a half. According to the figures in the White Paper, this amounts at the present time to a relief of £90 million, a relief which means that the local authorities go short of that sum. As from April 1 next, it will get a relief of £60 million. According to the White Paper, of the £30 million additional rate income of the local authorities, the Exchequer will take £20 million.
  The White Paper talks of the £30 million being a gain to local authorities. It is not a gain. They have been standing out of this sum ever since the revaluation, and before that they were standing out of a considerable sum. The restoration of something which should never have been taken from them is no gain at all. If industry is to be subsidized, we submit that that is the business of the Government. It is not the
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  function or liability or responsibility of local government to subsidise industry. Moreover, the position is very different from what it was when de-rating was introduced by the Local Government Act, 1929. De-rating, which I and my friends then very strenuously opposed, is unsound; it is indiscriminate; it is capricious in its incidence.
  Industry paid £15 million a year in rates before the revaluation. It had been paying, as its contribution towards local government services, rates based upon a valuation which is over twenty years old, dating from 1934. Right through the war boom and right through the boom since the war, industry has been favoured at the expense of local government, notwithstanding (which we all admit) a tremendous expansion and large profits. Why should local authorities be asked to subsidise industry, as they will do from April next year, to the tune of £60 million? Why should we, as it were, keep industry on the rates? If industry needs this assistance, as I submit it does not, the assistance should be provided by the Government and not by local authorities.
  Industry benefits directly, and the Government benefit indirectly. The whole story of de-rating is worth exposing. I can understand the Exchequer's interest in de-rating. It makes a handsome profit out of it. The Exchequer collects 50 per cent. of it in additional taxes. It is a concealed subsidy. According to the White Paper, the full rate product of de-rated properties is £120 million. The local authorities will have half, namely, £60 million, minus the £20 million to be taken out of the other £30 million under the Bill; and so the local authorities get £40 million and industry gets £60 million, of which the Inland Revenue gets half. That is pretty good business, getting £30 million, plus the £20 million reduction in the grant—£50 million.
  But that is not the whole story, because last year Her Majesty's Government introduced and passed a Bill which became the Rating and Valuation Act, 1957. Under that Act offices, shops and miscellaneous buildings were de-rated by 20 per cent. The estimated rateable value of the properties so de-rated was £44 million, and at an average rate poundage of 16s. in the pound (the

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  average over the country is 18s. 10d. but I have adjusted the figure to take account of the loss of rates from the reduced poundage) the loss in rates to local authorities on that account alone is £35·2 million a year; and of that the Exchequer gets £13·2 million, not on the basis of 10s. in the pound on which other figures are based but on the basis of, say, an income tax liability of 7s. 6d. in the £. That is what the Inland Revenue pockets.
  Thus the local authorities through de-rating generally for industry and commerce, will be subsidising the Exchequer to the tune of £63 million a year, and the local authorities themselves will lose in rates £115 million. I stress that last figure, because it ought to be taken into account when one is being influenced by the statement that the proportion of grants to rates at the present time is now as 6 is to 5. It would be quite different if account were taken of this £115 million which the local authorities lose because of the policy of Her Majesty's Government in imposing these subsidies to industry and commerce.
  VISCOUNT RIDLEY: My Lords, perhaps the noble Lord will allow me to interrupt him. Was not the reason that under the 1939 Act, when industry was de-rated, a large adjustment was made in what was then known as the block grant paid by the Central Government to the local authorities in replacement of money lost by the de-rating of industry? I am speaking from memory, and if I am wrong perhaps the noble Lord can put me right there.
  LORD LATHAM: My Lords, I well remember that it was the case that, as regards the loss to local authorities on the properties de-rated at that time, an adjustment was made to the block grant, but the addition paid was gradually reduced and came to an end. But there was no provision at all, either at the start or at any time during the operation of that block grant, for allowing anything to local authorities in reimbursement of the loss of rates on new properties which came into assessment.
  VISCOUNT RIDLEY: My Lords, I believe that that comes out of the rate equalisation grant which is at present being paid.
  LORD LATHAM: My Lords, the equalisation grant was not intended to deal with that. I am now charging my memory, but I was not unacquainted of the details of these arrangements, and I believe it is fair to say that the element in the equalisation grant did not compensate in any sufficient way for the loss suffered in respect of new properties. I know that it was one of the major points of opposition to the then Minister of Health when the block grant was introduced. I submit that there are no grounds now why local authorities should make this subsidy to industry and indirectly to the Inland Revenue and the Exchequer.
  According to the census of production of 1948, the gross output of industry which falls within the de-rating proposals was £10,500 million per annum. How can it be said that industry is unable to bear an additional £30 million and that export prices will be detrimentally affected? So, to conclude, I will sum up by saying that in my submission this Bill does not make any substantial contribution to the reform of local government. It is a Bill which tinkers with the problem. It is a Bill of whose sponsors at least it can be said that they let "I dare not" wait upon "I would." The heart of this Bill is not the reform of local government. Its heart is to change the percentage grant to a block grant, the purpose being to save money at the expense of the rates. The effect will be that social services administered by local authorities will be cramped and, as I have said, the proposal will put a premium on stagnation and a penalty on progress; and it is not a Bill to which we who sit on this side feel we can give our consent.
  7.27 p.m.
  THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HAILSHAM): My Lords, the defence or attack on Second Reading of a measure of this complexity or importance is something which I should think requires a clarity of grasp of principle rather than a minute examination of detail; and I personally felt that the immense industry expended upon his attack by the noble Lord who has just sat down tended to obscure rather than elucidate the central features of this measure.
  The noble Lord, Lord Silkin, who has explained to me that for personal reasons

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  he is unfortunately prevented from being present at this stage of the debate, began his speech with a comparison of this Bill with the Rent Act. I confess that at first I thought that this was a trifle farfetched, but I then began to see that there was in truth a fair comparison; and the comparison is this: that there are two subjects of great importance which the Labour Government funked. One was the gradual falling into disrepair of rented houses, which they dared not deal with, although they knew perfectly well they required to be dealt with. The other was the whole question of local government organisation. The Labour Government funked them both. After six years in office they had failed to deal with either, and now they come here, in the presence of the courageous and extensive proposals of my right honourable friend, to cry "stinking fish". It is an ignoble attitude for them to adopt.
  The noble Lord, Lord Silkin, said—and we heard him say it—that he was unaware why the Local Government Boundary Commission had come to an end. Let me remind the House why the Local Government Boundary Commission, set up by the Labour Government, came to an end, because it is not insignificant, having regard to the criticism that has been levelled at this Bill. The Local Government Boundary Commission, appointed by the Labour Government, came to an end because its terms of reference were too narrow and their recommendations went outside them. The Labour Government thereupon decided to wind it up and to introduce reorganisation proposals of their own at an unspecified date, a commitment which they never performed. And now they come to complain that this is tinkering with the problem!
  The main reason, I suppose, why I was asked to reply to this debate was that I am particularly interested in the problems of education; and I propose to spend most of my time in replying under that head. But I think it is right that I should reinforce what was said by my noble friends Lord Milverton, Lord Ridley and Lord Gage, when they reminded us that the measure which is now before the House corresponds exactly to the specification demanded by Lord Silkin. It has its origin in extensive consultations
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  between Government and local authorities; it is based upon the result of those consultations, and it deals with inquiries by three Commissions: two to be set up under the Bill, and the third a Royal Commission set up for the Metropolitan Area.
  It seems to me to be absolutely inconceivable that a local government structure of such immense detail, and with such immense variations all over the country, could be formulated by a proposed Act of Parliament except in terms which required a commission to issue reports. To claim that the commissions to be set up under the Bill will really be only tinkering with the problem, when in fact they are designed to overhaul the whole system, in the light of the five special review areas and the wide terms of reference of the Royal Commission on London, seems to me to be an absolute travesty of the subject we are seeking to discuss. At all events, that part of the case has almost gone by default and in so far as it required an answer, the answer has already been given by the series of Back-Bench speeches which we have received during the course of the debate.
  I therefore turn to make one or two reflections about the educational proposals, the criticisms of which can be summed up under two heads: the first being the allegation, wholly contrary to the facts, that the purpose of these reforms was (I quote now from the noble Lord who spoke last, but there were other noble Lords who made the same charge, in different language) to cut expenditure on education; and the second, the more reasonable, but equally inaccurate, charge that its effect would be the same if that were not its purpose. I am bound to say that I find the charge that the object or purpose or intention behind the Government's action is to cut expenditure a trifle offensive, because it is clean contrary to the repeated assurances of every Minister who has handled this subject, inside Parliament or outside, and clean contrary to the terms of the Bill itself, which provides, in Clause 2 (1) (c) that the formula for general grant is to provide for the development of services.
  But the allegation is, in fact, as absurd as it is offensive. The noble Lord's Party, when they were in power,

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  were spending in the last complete year of their reign approximately £277 million on education under local government and national expenditure; or, taking their last year of office, which they did not live out, they were spending about £300 million. When I was Minister of Education last year, after six and a half years of the present Administration, the comparable Estimates were £569 million, and this year the comparable Estimates are £613 million—a doubling of educational expenditure in the course of a single Administration. Such a forward movement has never been seen in the history of public education before. And this is the Party, with that contrast to have to face, that comes here and accuses the Government of an attempt to cut expenditure on education! What sort of a cut is it which doubles expenditure and provides in the terms of this Bill for a developing service? This kind of charge only recoils on the heads of those who make it.
  And let me tell this to the noble Lord who has just sat down. I was eight months in this House as Minister of Education, and not one single debate on this vital subject was initiated by noble Lords opposite, with the exception of a debate on university education, initiated by the noble Lord, Lord Pakenham, to which I had to reply as spokesman for the Treasury. That is the interest the Party opposite takes in this vital subject in this House. Then the noble Lord comes here, shedding imaginary crocodile tears over an allegation of an attempt to cut expenditure on this growing service, which we have doubled in our term of office, in the hope that somebody will take him seriously.
  Since this Bill has been before Parliament the Government have increased the allocation to universities far beyond the dreams of the Party opposite when it was in power. Only last February the present Government increased the maintenance grant available to parents; they have increased, since the general grant was announced, the family allowance in respect of those children occupied full-time in education after the statutory school age. And only the other day my right honourable friend the Minister of Education announced further increases in the allowances payable to those attending universities and colleges of further education.
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  It is really fantastic to make a charge of this kind; and if it were not fantastic it would be cruel, because it is a deliberate attempt to undermine the confidence of parents of young people in this country, who care intensely about the future of their children, in the fundamental integrity of the educational system. I confess that one thing which, when I was Minister, at any rate, I thought absolutely beneath contempt was an attempt to make Party politics out of this vital educational service. That is what the Labour Party have done from the beginning to end throughout their opposition to the Local Government Bill, when for the first time, at any rate in this House, showing the slightest interest in or betraying the smallest knowledge of the subject.
  I turn to the more sensible charge that this would have the effect of reducing expenditure on education. Here I think I am voicing the fears of the noble Lord, Lord Darwen, to whose speech I listened with a great deal of interest, as I did to the speech of the noble Lord, Lord Amulree, who expressed the same point on somewhat different grounds. I would say to them, respectfully, that their fears are without foundation and, to my mind, are unsupported by any kind of rationale or evidence.
  I share the difficulties of my noble friend Lord Gage. I recognise that there are people in this country to whom the percentage grant has a kind of religious significance which is supposed to encourage educational expenditure of a kind which is desirable. I am bound to say that I do not find in the history of the percentage grant the smallest evidence to justify their view. The percentage grant system for education obtained throughout the inter-war years, but there was nothing in the inter-war years which gave the smallest possible ground for saying that the percentage grant encouraged expansion in education. Between 1930 and the outbreak of the war, while the rate fund expenditure on local government services increased by nearly 22 per cent., expenditure on education went up by 16 per cent. In the same period, expenditure on public health services, which were aided only by the despised block grant under the 1929 Act, increased by some 40 per cent. What is the ground here for supposing that the percentage grant

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  system is the secret of expansion in education?
  I would tell noble Lords opposite what the secret of the recent expansion in education has been and why it will continue under the so-called general grant. The secret has been a radical change in public opinion, which ultimately governs this country. I would remind noble Lords opposite that the truth of this matter is that Parliament is dependent upon the electorate for its educational policy and so is local government. The days have gone by—though one would not think so, having heard some of the speeches from noble Lords opposite—when the ratepayers were the electorate although the rate fund services were for the benefit of the community at large. The local government electorate is identically the same electorate (except that for some reason Members of your Lordships' House are given the right to vote in local government elections) that elects Members of another place; and that electorate will demand and secure from its local authorities the educational service which it requires and to which it is entitled. There is not one whit more reason to suppose that the electorate, when it realises that the responsibility rests with the local authorities in the matter, will not secure from the local authorities the same consideration of education that it has secured from Parliament.
  I would say to the noble Lord, Lord Amulree, that when we are starting with a consideration of this problem. it is as well to remember the remarkable but none the less well-adapted structure of the educational system that we are seeking to administer. I suggest, because it is convenient to do so, the terms of the first Section of the Education Act, 1944. The business of the Minister, or the central Government, is
  "… to promote the education of the people in England and Wales and the progressive development of institutions devoted to that purpose, and to secure the effective execution by local auhorities, under his control and direction. of a national policy for providing a varied and comprehensive educational service in every area."
  Therefore, what is sought is, first, a national policy, and, secondly, its execution by the local authorities. What is in question is not the extent of that educational service, because in the last resort
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  that will be determined not by the method of ascertaining the grant but by the total amount of money available under the formula and under the rates. What we are discussing is the best method of administering the finance so as to be consistent with the national policy and the local administration.
  Of course, we all know, although we have not said so very often, that amongst those who are interested in education there are people who would like to see the local authorities eliminated altogether. I knew it very well when I was Minister. There are people who would like to see a purely national policy nationally administered. They have not emerged at all so far in these debates, but that is what is actuating a good many of their fears. Others would like to detach education committees from the local authorities who are in fact responsible and make them ad hoc boards responsible for the local administration of education. Of course, there is no doubt that the general grant, so long as it is effective, spells death to their hopes. But nobody has ventured in either House of Parliament to say that that was the real motive underlying his conduct and his criticism of the general grant, because, when we come to face it, the truth is that the development of education in this country does not depend upon the choice between general grant and percentage grant; it depends upon the total amount of money which is available.
  I utterly fail to understand why those who profess to be anxious for the future of education cannot have the same confidence in a local authority popularly elected as they have in a Minister dependent on a House of Commons popularly elected. It seems to me that they worry themselves with a totally imaginary fear. We know that the Government have given the most explicit assurance that the total amount of money available under the general grant, and under the new rating proposals, will be greater than the amount of money which is currently available. We know that the Government have built into this Bill the proposal that in formulating the general grant consideration will have to be given to the need for developing the services and for providing also for recouping local authorities in the event of an unexpected rise in expenditure, such as an increase in teachers' salaries. Therefore, there is no

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  logical reason at all to suppose that local authorities popularly elected will not be competent to provide for the country the execution of a national policy formulated by the Minister responsible to Parliament.
  It is a pure mirage to believe that we can, by an elaborate fiscal device of this sort, hold up education if the people want it, or that, if the people do not want it and vote against it, we can promote education by an elaborate fiscal device of the other kind. It really is pure illusion to suppose that the realities of policy are administered by simple devices of this sort. To my mind, that disposes entirely of the case against the general grant. The so-called block grant has been brought into the argument. It ought never to be called a "block grant". It is not a block grant and those words are nowhere to be found in the Bill. Those who use these words do so for one reason only: because they know that the block grant under the 1929 Act, something quite different, was unpopular, and they hope that the general grant of 1957–58 wilt be made unpopular by the use of this ugly name, which does not properly belong to it. This is the whole of the case which has been led against this Bill.
  Of course, it is true that if the local authorities are not to be trusted, education will fail under their hands. That must follow. But if it were true, a great deal would follow besides. It would mean that there was no future for government by the local authorities of this country. That is the conclusion which would inevitably follow if the noble Lord's case were true. I must tell him that I am absolutely astonished that a noble Lord who has given most of his life to local government should seriously advance a case which in its ultimate analysis means that no faith is to be placed in the body which he has served so faithfully and so long. I cannot follow him in his belief that London would be the loser. London, it is true, is fairly entitled, as he said, to claim to be a progressive authority. It is also, let me say, a very rich authority, and so rich that it does not now qualify for the equalisation grant. But under the Act, so much despised by the noble Lord, he might have thought it just and perhaps a little more generous to remind us that six of the metropolitan boroughs will gain the grant which is to be substituted for the equalisation grant. What is more,
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  in paragraph 8 of the third part of the First Schedule he will find that special additional grant is allowable to metropolitan authorities.
  I would say this to the noble Lord. He claimed that education is a national service—and so it is—under a national policy. But, quite inconsistently, he thereupon went on to lament that if a local authority on its own authority, and on its own authority alone, chose to make an uncovenanted expansion, it should not have to pay for it out of its own rates. You cannot have it both ways. If it is a national service and a national policy, you must accept the corollary, which is that uncovenanted expansions must be taken on the authority of the local electorate who are responsible. The Minister of Education retains the key points of control which he is given by the Education Act. The truth is that he never had anything else. His authority under the percentage grant never extended to the initiation of projects; it extended only in substance to the imposition and the enforcement of standards. And his authority to impose the enforcement of standards derives from the terms of the Education Act, 1944, which are not to be taken away from him but are to be adapted under this Bill. He has, of course, the percentage grant taken away. But that is apparently no loss, because the detailed administration which one would think would ordinarily follow from a percentage grant is, according to the noble Lord, a figment of the Government's imagination.
  The truth is that the Government are (I say this in answer to my noble friend Lord Gage) contemplating the relaxing of irritating and unnecessary controls. I cannot at this stage add to what my right honourable friend said on the Second Reading in the other place on December 9 about the conversations which have been initiated for that purpose. Our object is to relax on points which can legitimately be described as points of detail; but our policy is also to retain the essential element of control which a Minister of Education requires, at any rate in order to enforce a national policy.
  I end by saying this. We are engaged upon the reorganisation of the local government service. No one has denied the premise upon which the argument in favour of that reorganisation is based.

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  The premise is that local government is losing its vitality and not recruiting personnel of adequate quality. We, having inherited from the Labour Party a legacy with which they were afraid to deal, have now tried to deal with it. The Party opposite attack us for doing so on the grounds that, of all things, they wish education, which is the most vigorous, expanding and important of the local services, in effect to be kept away from the responsible local authorities and to be in the hands of the Minister under a detailed control.
  LORD LATHAM: If I may say so, there is no foundation for that statement.
  VISCOUNT HAILSHAM: But this is exactly what the noble Lord is saying. This is the foundation of his case: that they are afraid to hand over to the local authorities. Does not the noble Lord remember the argument which both he and the noble Lord, Lord Silkin, presented to the House? I can see the noble Lord, Lord Silkin, now, as it were, complaining that there was going to be a battle in the education authorities; that the chairman of the finance committee was going to quarrel with the chairman of the education committee, and what an unhealthy thing that was. Is it an unhealthy thing? We on this side of the House do not think it is. What is democracy about if it is not the debate in public and in private between legitimate interests and arguments?
  LORD LATHAM: I am sorry, but in the absence of my noble friend Lord Silk in I must correct that statement. My noble friend did not say that there was going to be an argument between the chairman of the finance committee of the local authority and the spending committee. He said that there would be quarrels between the chairmen of spending committees upon which the chairman of the finance committee would have to adjudicate.
  VISCOUNT HAILSHAM: I think he said both; but let it be as the noble Lord states. But what does he think goes on in the central Government? The noble Lord, Lord Silkin, has experience of
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  both. What do Lord Silkin or Lord Latham think goes on in the central Government here? Parliament is vigorous precisely because on the Floor of both Houses and in the consultations of the Government you do get, not quarrels, but open debate about the priorities of roads, schools, hospitals, defence and so on. This is what gives us freedom and independence. But it is precisely this freedom and independence which the noble Lord and his friends would deny to local government, although they are only too ready to admit that local government lacks that vigour and that attraction of eager and enterprising minds which characterises our Parliamentary institutions. The truth is that the noble Lord has never really thought out his position. He has used the Local Government Bill in order to try to work up the kind of factious agitation, based on imaginary fears against the Government, which he believes his Party were so successful in working up against the Rent Act; and that is why the noble Lord, Lord Silkin, began by comparing the two measures.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
  The CHAIRMAN OF COMMITTEES The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the Orders made on the 6th February and the 15th May last discharged, and Bill referred to the Committee on Unopposed Bills.
  KENT COUNTY COUNCIL BILL [H.L.]
  The Queen's consent signified, and Bill reported with Amendments.

  SURREY COUNTY COUNCIL BILL [H.L.]
  The Queen's consent signified, and Bill reported with Amendments.
  House adjourned at two minutes before eight o'clock.