Sitting of 7 February 1957

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
NEW WRIT
For Carmarthen, in the room of Sir Rhys Hopkin Morris, M.B.E., Q.C., deceased.—[Mr. Wade.]
PETITION

  Roads, Scotland
  Sir W. Anstruther-Gray: I beg to ask leave to present a Petition signed by 52,025 people resident in Scotland, including many resident in Berwick and East Lothian, referring to the urgent need for improving road communications in Scotland. The Petition reads as follows:
  Wherefore your petitioners pray that to ensure the early completion of adequate modern roads in and serving Scotland arrangements shall be made to raise a special road loan to provide the necessary funds to carry out this work under a comprehensive scheme, so avoiding the delays and frustrations which have proved to be inevitable under the present system of financing road works by means of annual grants.
  And your petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

ORAL ANSWERS TO QUESTIONS
  TRADE AND COMMERCE

    Anglo-Rumanian Trade
    Mr. George Craddockasked the President of the Board of Trade when he intends to resume the trade discussions with Rumania, having regard to the possibilities of obtaining dollar-saving commodities from this source.
    The President of the Board of Trade (Sir David Eccles): I have nothing to add to my predecessor's Answer to the hon. Member for Morpeth (Mr. Owen) on 4th December last.
    Mr. Craddock: Is the Minister aware that Rumania has agreements with 62 countries but not with Britain, that at the moment trade between Rumania and West Germany is running at £21 million a year, and that a recent delegation appointed from West Germany to go to Bucharest will substantially increase this amount? Surely the commodities which Rumania has to trade, such as fodder, grain, petroleum products, timber, oil seed and newsprint, are important products to this country? Will the Minister please make it his business to see whether we cannot at long last get a satisfactory trading agreement with Rumania?
    Sir D. Eccles: I am aware that Rumania has trading agreements with many other countries, but she has very large debts with this country and we expect her to make some gesture on those debts.
    Mr. Craddock: Is the Minister aware of the agreement which France has entered into with Rumania for the allocation of 6 per cent. of the value of the trade done annually to a special fund until the necessary figure is reached to liquidate the debts between the two countries?
    Sir D. Eccles: Yes, Sir.

    Tobacco Imports
    Mr. George Craddockasked the President of the Board of Trade what steps he proposes to take to encourage increased imports of tobacco from China and Bulgaria and so to reduce next season the scale of imports of tobacco involving the expenditure of dollars.
    Sir D. Eccles: Imports of tobacco are on private account. I am prepared to grant licences freely for imports from China and Bulgaria.
    Mr. Craddock: I am very glad to have that reply from the Minister. I hope he realises that if we are not careful we shall lose the race with Japan and West Germany. Last year the trade between Japan and China was £47 million, which is more than double the trade with this country. I think that we ought to do our utmost to increase our trade with China—
    Mr. Speaker: This is not an occasion for the hon. Member to tell us what he thinks. He should ask a very short

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    supplementary question, not these long questions.
    Mr. Craddock: Does not the Minister think that we could increase our trade in tobacco with Bulgaria, and would that not be a very good dollar saver? What steps does he propose to do that?
    Sir D. Eccles: I have told the hon. Member that licences are free. If he likes to smoke Bulgarian tobacco, he can do so.
    Mr. Dudley Williams: Will my right hon. Friend bear in mind, when considering possible tobacco imports from Bulgaria, that at the moment there is a considerable amount of tobacco in Southern Rhodesia which has not yet been sold?
    Sir D. Eccles: There is another Question on the Order Paper about Southern Rhodesia, and in answering it I will try to answer my hon. Friend.
    Mr. Jay: Is it the Government's general policy to seek non-dollar tobacco wherever we can get it, particularly in the Commonwealth?
    Sir D. Eccles: It is on open licence. That is so.

    Jute Sacks (Prices)
    Mr. Templeasked the President of the Board of Trade if he is aware that the prices quoted to the agricultural industry for jute sacks are identical; and if he will take steps to submit this matter to the Registrar of Restrictive Trading Agreements.
    Sir D. Eccles: I understand that suppliers quote identical prices for jute sacks. Agreements on prices are covered by the Registration of Restrictive Trading Agreements Order, 1956, and the parties must furnish particulars of them to the Registrar.
    Mr. Temple: While thanking my right hon. Friend for his reply, and appreciating the difficulties of the jute trade, may I draw his attention to the fact that those difficulties are very largely brought about by Government trading in jute? Will he bring about a position in which the law of supply and demand can again operate by free competition?
    Sir D. Eccles: I will try, Sir.

    Knitwear Firm, Hawick (Sale of Shares)
    Mr. Lawsonasked the President of the Board of Trade in view of the importance of dollar exports to this country and the record in this regard held by the 83-year-old Hawick knitwear firm of Lyle and Scott, what steps he proposes taking to ensure that those exports are not lost through this firm passing, by means of a take-over bid, into other hands.
    Mr. Benceasked the President of the Board of Trade what steps he proposes to take in response to the request of the directors of Lyle and Scott, of Hawick, that he should intervene in the take-over bid made by another firm.
    Mr. Willisasked the President of the Board of Trade what steps he proposes to take as a result of the representations made to him concerning the take-over bid of £600,000 for Messrs. Lyle and Scott Limited, Hawick.
    Sir D. Eccles: I would refer the hon. Members to the Answer given on 5th February by my hon. Friend the Parliamentary Secretary to Questions asked by the hon. Members for Kilmarnock (Mr. Ross) and Leith (Mr. Hoy).
    Mr. Lawson: I have read that Answer, and I am pleased to see that the officials of the Board of Trade are to meet the chairman of this company. Might I ask the right hon. Gentleman whether he himself might meet the chairman, bearing in mind that two-thirds of the company's exports of knitwear go to the dollar market, and that those exports might be lost if there were a change of control?
    Sir D. Eccles: The company was invited to come to the Board of Trade, but we have had no answer to our invitation. I am aware of the nature of the export business.
    Mr. Osborne: Has my right hon. Friend any power to see that the buyer of this business does not put into the home market stocks which would otherwise be exported? If he has not such power, has he any power to acquire it, so that those products are not put into the home market when they could be sold in the dollar market?
    Sir D. Eccles: I have a very large number of powers already. I really do not wish to add to them.
    Mr. Rankin: Is the President of the Board of Trade aware that his attitude is much more helpful than was that of the Secretary of State for Scotland when we raised this matter on Tuesday?

    Wool Glove Industry
    Mr. Jannerasked the President of the Board of Trade whether in view of the policy of Her Majesty's Government not to restrict imports of goods from Hong Kong, what other steps he proposes to take to save the knitted woollen gloves industry in Leicester and other parts of the country from being eliminated.
    Sir D. Eccles: I do not accept the hon. Member's view that, in the absence of action by Her Majesty's Government, the knitted wool glove industry will be eliminated. Although imports of knitted wool gloves from Hong Kong increased substantially last year, United Kingdom production up to the end of October, the latest date for which returns are available, showed an increase each quarter over the corresponding quarter of 1955.
    Mr. Janner: May I ask the President to convey to his right hon. and learned Friend the Minister of State my thanks for having informed me that tomorrow he is going to Leicester to meet industrialists? May I also ask, through the President, whether the Minister of State will, while there, inquire into the parlous condition in which this particular Leicester industry finds itself? May I further ask where the Minister got his information from, and whether it is not a fact that 500,000 pairs of knitted gloves were manufactured in this country in 1956, whereas 900,000 pairs were imported from Hong Kong? And is he aware that the position is growing progressively worse—
    Mr. Speaker: Order. That is quite enough for one supplementary question, surely.
    Sir D. Eccles: My right hon. and learned Friend will, of course, make excellent use of his time in Leicester, and no doubt, if the hon. Gentleman's case is as stated, he will hear about it.

    X-Ray Film
    Mrs. L. Jegerasked the President of the Board of Trade if he will state for the last convenient period the amount of X-ray film suitable for dental purposes exported from this country, the amount imported, and the sources and cost thereof.
    Sir D. Eccles: These goods are not separately distinguished in the trade returns.
    Mrs. Jeger: Is the President aware that in respect of the largest firm of suppliers there is a three months' delay, and that much of the imported film being used for dental purposes is inferior to that which we are exporting and involves dentists and patients in frequent retakes and delays? Will he look into this question?
    Sir D. Eccles: I will look into that. I was not aware of it.

    Price Increases
    Mr. Lewisasked the President of the Board of Trade if he will take steps to ensure that all manufacturers, wholesalers, retailers and those organisations that supply services to the general public shall register with his Department all price increases that are made in their products and services, either directly or indirectly as a result of the oil and petrol shortage, of the increase in the price of these commodities or of the 1s. tax thereon, and ensure that such registered price increases shall be removed one month after petrol derationing, on a similar basis to the removal of the 1s. petrol tax.
    Sir D. Eccles: No, Sir. Such a proposal could not be made to work.
    Mr. Lewis: Why could it not be made to work? Surely the Minister is aware that the Prime Minister, when Chancellor of the Exchequer, introduced such a Measure in relation to the petrol tax? Could not the President introduce a Measure such as is suggested in the Question, so that we can be sure that those prices will fall once the extra 1s. is removed?
    Sir D. Eccles: No. I think that if the hon. Gentleman were to consult traders he would find it quite impossible to distinguish exactly what, if any, cost increase was attributable to the 1s. rise in petrol tax.

    Gordon Hotels Limited
    Mr. Lewisasked the President of the Board of Trade the names of the inspectors appointed by his Department to inquire into matters affecting the Gordon Hotels Limited; how many meetings these inspectors have held into matters affecting the Gordon Hotels Limited since March, 1956; and whether he anticipates receiving their report before the end of the present financial year.
    Sir D. Eccles: The inspectors appointed by my predecessor were Mr. Melford Stevenson, Q.C., and Mr. D. V. House, chartered accountant. I do not know how many meetings the inspectors have thought it necessary to hold. I hope to receive their report very shortly.
    Mr. Lewis: Surely the Minister ought to have found out how many meetings have been held so that he could have answered the Question. Is he aware that the shareholders are very annoyed with him and with his Department because, for over twelve months, they have been waiting to get this sorry state of affairs cleared up? Will he do something to get this report before the shareholders have their requisitioned meeting next week?
    Sir D. Eccles: Mr. Melford Stevenson has, I believe, been engaged on some other business, and he states that we shall get the report very shortly.

    Rhodesian Tobacco
    Mr. Gordon Walkerasked the President of the Board of Trade what reply he has given to the protest by the Rhodesian Tobacco Board against his forecast that the United Kingdom will further reduce its demand for Rhodesian tobacco in 1959.
    Sir D. Eccles: A forecast was made by the leading United Kingdom tobacco manufacturers. The protest by the Rhodesian Tobacco Marketing Board was accordingly addressed to them and not to me.
    Mr. Gordon Walker: Would not the Minister agree that it really is essential to increase the consumption of Commonwealth tobacco in this country as one means of saving dollars?
    Sir D. Eccles: I understand that pretty well all the tobacco of good quality from Rhodesia is now bought.
    Mr. Langford-Holt: Is my right hon. Friend aware that one of the difficulties is the fear of the tobacco companies that if they were to increase the percentage of Commonwealth tobacco their sales might suffer? Would he, therefore, consider inviting the heads of the cigarette manufacturing industry to meet him, with a view to getting a uniform increase in the percentage of Commonwealth tobacco in cigarettes?
    Sir D. Eccles: I am always willing to see the manufacturers on any subject.
    Mr. Beswick: Is the President also aware that at one time there was a very useful ad valorem duty which gave some protection to the Commonwealth product, but that, since the increase in domestic taxation, that duty has been absolutely swamped? Will he see what else he can do to restore the protection which this Commonwealth product formerly had?
    Sir D. Eccles: Protection is given, as I am sure the hon. Gentleman can see, by another method. It is given by the quota method.
    Mr. Jay: But will not the right hon. Gentleman take some initiative himself in regard to this?
    Sir D. Eccles: I am ready to look at this matter but, as I understand it, the facts are as stated by my hon. Friend the Member for Shrewsbury (Mr. Langford-Holt)—that a change in the proportion of American tobacco might have very serious effects upon the cigarette industry.

    Visitors from Overseas (Petrol Allowance)
    Sir I. Fraserasked the President of the Board of Trade what steps his Department is taking to make known to prospective overseas visitors the arrangements for extra petrol for tourists in the United Kingdom.
    Sir D. Eccles: My Department issued a statement on 21st December about the arrangements for overseas visitors and arranged for wide publicity to be given to it through United Kingdom posts abroad and the British Travel and Holidays Association.
    Sir I. Fraser: As persons overseas must arrange their holidays early in the year,

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    would my right hon. Friend give further publicity to this Answer, so that we may get as many visitors here as possible, spending their money?
    Sir D. Eccles: Yes, Sir. I think it is very important to have as many visitors as possible this summer.
    Viscount HinchingbrookeWhile it is important to have as many overseas visitors as possible, is it not grossly undignified for a country like ours to lay itself open to giving overseas visitors a superior way of life compared with that of its own nationals? While we all hope that petrol rationing will be abandoned as soon as possible—and, I hope, in favour of a free market, even if the Canal is not opened—let us hope also that those who visit our country share in our own griefs and our own sorrows.
    Sir D. Eccles: If my noble Friend cares to take his car across the Channel, he will get the same generous treatment as we are giving to tourists who come here.

    China
    Mr. Rankinasked the President of the Board of Trade what proportion our total trade with China in 1937–38 was of our total foreign trade; and the proportion at the most convenient recent date.
    Sir D. Eccles: United Kingdom total trade with China in 1937 and 1938 amounted to 1·0 per cent. and 0·8 per cent. respectively of our total foreign trade for these years, while in the twelve months ended 31st December, 1956, the proportion was 0·3 per cent.
    Mr. Rankin: Does that difference not alarm the Minister? Is he aware that during the autumn, when in China, a number of us were assured by Ministers of the Government that China is anxious to expand trade with us and that on our own side businessmen in this country—I name particularly the Bergius Engineering Company in Glasgow, about which I have spoken to the right hon. Gentleman's Department—are anxious that that trade should be expanded? Can the Minister not give us some further information than we have at present as to when trade may become nearer the pre-war norm?
    Sir D. Eccles: The Government are anxious that trade in non-strategic goods with China should expand, and we are doing our best.

  NATIONAL FINANCE

    Purchase Tax (Pottery)
    Dr. Strossasked the Chancellor of the Exchequer (1) the amount of revenue that has accrued from the imposition of the 30 per cent. Purchase Tax since it was imposed on domestic earthenware and china, giving the figures separately, as well as the total amount, to the nearest available date;
    (2) the amount by which the revenue has benefited from the imposition of the 30 per cent. Purchase Tax on pottery for domestic use in Britain, up to the latest date.
    The Financial Secretary to the Treasury (Mr. J. Enoch Powell): Receipts of tax to date, which reflect the eleven months trading from 27th October, 1955, to 30th September, 1956, are estimated to amount to £4¾ million for all pottery. Of this sum about £3¾ million relates to earthenware, about £¾ million to china, and about £¼ million to other kinds of pottery.
    Dr. Stross: Is the Minister aware that it was hoped originally when this tax was imposed that £7 million a year would be gained from it, and apparently that has not been achieved? is the hon. Gentleman further aware that during this period, and as a result of this tax, the workers have left the industry to the extent of some 12 per cent., and that there is unemployment and a great deal of short-time working? Does the hon. Gentleman think it has been worth while?
    Mr. Powell: I am aware of the difficulties of the industry, and an indication has been given that those difficulties are being considered.

    Estate Duty
    Mr. John Hallasked the Chancellor of the Exchequer what estimate he can give of the cost of giving retrospective effect to Section 19 of the Finance Act, 1956, in all cases where the total tax and duty paid exceeds 20s. in the £; and how many such cases would be involved.
    Mr. Powell: I regret that this information could not be obtained without undue expenditure of time and labour.
    Mr. Hall: Would my hon. Friend agree that the number of cases involved is not likely to be large? In view of the obvious injustice of imposing a levy exceeding 20s. in the £, would not my hon. Friend persuade his right hon. Friend to introduce retrospective legislation, following a well-known precedent, even though the benefit will go to the taxpayer and not to the Treasury?
    Mr. Powell: But the injustice which the Finance Bill last year sought to remedy was not confined to cases where the total burden amounts to more than 20s. in the £.

    Capital Investment, Canada
    Mr. E. Johnsonasked the Chancellor of the Exchequer what was the

    £ million

    —

    Direct investment in Canada

    Dealings in Canadian securities

    Loans by U.K. Government to a Canadian corporation

    Total

    1946

    …

    —

    -29

    —

    -29

    1947

    …

    +1

    -13

    —

    -12

    1948

    …

    +2

    -4

    —

    -2

    1949

    …

    +4

    -7

    —

    -3

    1950

    …

    +6

    -18

    —

    -12

    Total, 1946–50

    …

    +13

    -71

    —

    -58

    1951

    …

    +10

    -11

    +8

    +7

    1952

    …

    +6

    -4

    +8

    +10

    1953

    …

    +16

    +9

    +8

    +33

    1954

    …

    +27

    +11

    —

    +38

    1955

    …

    +24

    +11

    —

    +35

    Total, 1951–55

    …

    +83

    +16

    +24

    +123

    Total, 1946–55

    …

    +96

    -55

    +24

    +65

    [Source: Dominion Bureau of Statistics]

    Travel Allowance (Dollar Area)
    Mr. E. Johnsonasked the Chancellor of the Exchequer if he will discuss with the Canadian Government the possibility of coming to some mutual arrangement to make it possible for citizens of the United Kingdom to buy dollars for private visits to Canada.
    Sir C. Taylorasked the Chancellor of the Exchequer whether he is now prepared to allow a small allocation of
    total amount of British capital invested in Canada during each of the years 1947 to 1956, inclusive.
    The Economic Secretary to the Treasury (Mr. Nigel Birch): Figures published by the Canadian Government covering the years 1946 to 1955 inclusive show that there was not long-term disinvestment by the United Kingdom of nearly £60 million in total over the years 1946 to 1950, and not investment of nearly £125 million over the years 1951 to 1955. These figures exclude inter-Government loans.
    I will, with permission, circulate in the OFFICIAL REPORT a table showing figures for individual years.
    Following is the table:
    dollars for tourists to visit Canada and the United States of America.
    Mr. Birch: Although my right hon. Friend cannot commit himself at this stage, he is anxious to provide a basic travel allowance for the dollar area as soon as circumstances permit.
    Mr. Johnson: Is my right hon. Friend aware that the present exchange control regulations have prevented a great many people visiting Canada who would wish to do so, which means that few people

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    in this country are getting to know much about Canada? Is he not aware that that may in the end weaken the ties between Canada and the United Kingdom?
    Mr. Birch: My right hon. Friend is well aware of the desirability of such an allowance, if it can be managed.

    Gold and Dollar Reserves
    Mr. Croninasked the Chancellor of the Exchequer the respective proportions of gold and of dollar funds in Great Britain's gold and dollar reserve.
    Mr. Birch: It is not the practice to reveal the composition of the reserves.
    Mr. Cronin: Is the right hon. Gentleman aware that it is well known that the reserve contains a very high proportion of gold? Therefore, will he follow the more perspicacious example of Finance Ministers of other countries in Western Europe and substantially increase the dollar balances in the reserve, as the dollar balances earn 3 per cent. whereas bars of gold are productively inert?
    Mr. Birch: I will note the hon. Gentleman's suggestion.

    Beer Duty
    Mr. Liptonasked the Chancellor of the Exchequer to what extent increased expenditure on beer from £195 millions in 1938 to £535 million in 1956 was accounted for by increased duty.
    Mr. Powell: The duty accounted for about 57 per cent, of the increase of £340 million.
    Mr. Lipton: If the bulk of the increase is due to more duty rather than to greater thirst, will the Financial Secretary say whether the Chancellor is considering a higher or lower rate of duty in the forthcoming Budget?
    Mr. Powell: I must in no circumstances anticipate my right hon. Frend's Budget statement.
    Mr. Marlowe: Would my hon. Friend agree that while the brewing industry, by its efficiency and private enterprise, has done everything possible to keep prices down, the recent increase in the price of beer in some parts of the country is almost entirely due to increased taxation?
    Mr. Powell: I should like to see that question first.
    Mr. H. Wilson: While we understand that the hon. Gentleman cannot anticipate his right hon. Friend's Budget statement, will he say what proportion of this increase in revenue is due to weaker beer?
    Mr. Powell: I should like to see that question too.

    Members (Pensions)
    Mr. Lewisasked the Chancellor of the Exchequer if he is aware that former Prime Ministers are able to claim a pension of £2,000 per annum on vacating office, whereas Members of Parliament, who only receive one-tenth of the salary of a Prime Minister, are not entitled to claim any pension; and whether he will remedy this anomaly by introducing legislation conferring non-contributory pension rights upon Members of Parliament.
    Mr. Powell: I am aware of the provisions of Section 4(2) of the Minister of the Crown Act, 1937, but I see no connection between them and the question of pensions for Members of Parliament.
    Mr. Lewis: Does the Minister see the connection in the fact that Ministers, civil servants and former Prime Ministers all receive much higher salaries than Members of Parliament but do not have to meet the cost of their postage and other expenses as Members of Parliament do? Why should Members of Parliament be compelled to contribute to a pension fund upon which they can make no claim? They are not entitled to claim a pension. Surely they should at least be treated in the same way as civil servants or former Prime Ministers in this matter?
    Mr. Powell: I distinguish there at least four separate questions, none of which is on the Paper.
    Captain Pilkington: Before Members of Parliament vote themselves bigger pensions, would it not be better to deal with certain deserving sections of the population—for instance, old-age pensioners?
    Mr. Shinwell: Is it not really invidious that hon. Members who have served many years in this House and who have reached an advanced age should be compelled, in reduced circumstances, to apply to the pension fund which is subject to a means test? Is the hon. Gentleman aware that this is the only Parliament in the

    595
    world, certainly among the Commonwealth countries, where no pension scheme is available?
    Mr. Powell: I am asked here to comment on an alleged anomaly between pensions for ex-Prime Ministers and the absence of a non-contributory pension for Members of Parliament. I see no such anomaly, and therefore no reason for legislation to correct it.
    Mr. Callaghan: Quite apart from any particular anomaly contained there, may we not ask the hon. Gentleman to display a little sympathy and humanity in this matter? Is he not aware, as a result of his years of experience in this House, that a number of our older colleagues are really getting to a very difficult stage indeed, and grave hardship is liable to overtake them? Now that we have had a clean sweep at the Treasury, may we not ask the new Treasury team to consider this question with a sense of humanity?
    Mr. Powell: If there is such a case, it is not connected with the existence of a pension for ex-Prime Ministers.
    Mr. Lewis: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, the cold reply from the Minister, and his manner of dealing with this question, I beg to give notice that I shall raise the matter at an early opportunity on the Adjournment of the House.

    Investment Allowances
    Mr. Croninasked the Chancellor of the Exchequer if he will extend the present category of exceptions to the suspension of investment allowances so as to include the steel, shipbuilding, heavy electrical industries and such other manufacturing industries for which greater capital expenditure is now essential.
    Mr. Powell: My right hon. Friend has noted the hon. Member's suggestion.
    Mr. Cronin: In taking steps to increase capital expenditure, will the Minister accept the principle of selectivity?
    Mr. Powell: I do not think it is the principle which is at stake, but the application.
    Mr. H. Wilson: Is the hon. Gentleman aware that, as a result of Treasury policy,
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    capital investment in this country is now falling compared with that of our principal trading rivals? Is he further aware that the previous Economic Secretary, on being asked whether the Government wanted investment to go up or down, would not answer, but in the end said he wanted it to be selective. Does not this Question provide the means by which the Treasury could encourage selective increases in essential investment?
    Mr. Powell: I heard the previous Economic Secretary's reply to the right hon. Gentleman and thought it very effective.
    Mr. Wilson: On a point of order. The statement referred to was not a reply to me but was a reply to a debate—in which I did not take part—in the House of Commons on the Thursday before the Christmas Recess. Would the hon. Gentleman now look up the actual terms of the statement?

    Entertainments Duty
    Captain Duncanasked the Chancellor of the Exchequer if he is now carrying out a review of the Entertainments Duty, as promised by his predecessor, with special reference to the incidence of the duty on cinemas.
    Mr. Powell: The review of the Entertainments Duty, which was initiated by my right hon. Friend last June, is continuing. It covers all aspects of the duty, including the position of cinemas.

    Nuclear Physics (Research)
    Mr. E. Fletcherasked the Chancellor of the Exchequer what steps are being taken for the establishment of a national centre for nuclear physics where the Atomic Energy Authority and the universities can co-operate in research in nuclear physics.
    Mr. Powell: My right hon. Friend hopes to make a statement about this very shortly.

    Dollar Imports
    Mr. Vaneasked the Chancellor of the Exchequer what measures he has taken to reduce the cost of imports from dollar sources to levels below those ruling early in 1956, in order to help pay for the additional oil required from dollar sources

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    without making claim on our reserves; and what further such measures he has in mind.
    Mr. Birch: I cannot add to the Answer which the Prime Minister, when Chancellor, gave to my hon. Friends the Members for Shrewsbury (Mr. Langford-Holt) and Chigwell (Mr. Biggs-Davison) on 18th December.
    Mr. Vane: Cannot my right hon. Friend at least say that some special measures are being taken and that the whole of this extra cost is not being drawn from our reserves?
    Mr. Birch: The answers to which I referred in reply to my hon. Friend's Question were to the effect that we thought that the best chance of prosperity in this country lay in the stimulation of trade, rising world trade and increasing British exports, rather than in restrictions.

    Departmental Committees' Reports (Publication)
    Mr. Hurdasked the Chancellor of the Exchequer the average time now taken by Her Majesty's Stationery Office to print and issue the reports of Departmental committees.
    Mr. Powell: The time varies considerably according to the size of the report. During the last three months the average has been about five weeks.
    Mr. Hurd: Is it not a fact that in the case of at least one report six months have elapsed between the time when it was presented and the time when it was printed and published? Will the Treasury consider afresh whether it might not be a good plan, if there is congestion in the printing works of the Stationery Office, to put some of the work out to tender?
    Mr. Powell: I will look at the case which my hon. Friend mentions, but I think that the figures which I have given show that the Stationery Office does this work with reasonable expedition.

    New Properties, St. Pancras (Rateable Value)
    Mrs. L. Jegerasked the Chancellor of the Exchequer (1) his estimate of the rateable value of new buildings in St. Pancras which are in rateable occupation but for which his Department has proposed no assessment;
    598
    (2) how many notifications have been received by his local valuation officer from the St. Pancras Borough Council of changes requiring alterations in the valuation list; how many have been dealt with; and how many remain outstanding.
    Mr. Powell: Up to now, 487 notifications of new and altered properties have been received, and 275 of these have been dealt with. Of the others, 40 have been valued, but proposals for alteration of the valuation list have not yet been issued by the valuation officer. The remainder are being dealt with as rapidly as possible. It is not possible to make an estimate of the rateable value of these properties because they have not yet been inspected.
    Mrs. Jeger: What steps is the Minister taking to ensure that these matters will be dealt with before 31st March so that the local authority does not lose its right of recovery? Secondly, is the Minister aware that, solely because of delays in his Department, the local authority has been deprived of about £200,000 of rate income for the current year and has had to borrow at 5½ per cent.? Would it not be fair for his Department to refund to the local authority the cost of borrowing money which is solely attributable to Treasury delays?
    Mr. Powell: I have every reason to expect that these valuations will be complete and the alterations made in the valuation list in time to ensure that the local authority does not lose revenue in the current rating year.
    Mrs. Jeger: With respect, Mr. Speaker, my second question has not been answered at all. Many of these premises have been in rateable occupation since June. Is the Minister not aware that the local authority has had to expend money which it has had to borrow at 5½ per cent.? Will he not look at the possibility of making a refund?
    Mr. Powell: It is always the case that there is a time-lag in the downward and the upward adjustment of valuations as a result of proposals.

    Annuity Premiums (Income Tax)
    Mr. Gresham Cookeasked the Chancellor of the Exchequer what arrangements have been made to enable

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    persons who took advantage of the provisions of the Finance Act, 1956, and paid premiums during that year in respect of annuities, to make the appropriate deduction from Income Tax payments demanded from them on 1st January this year.
    Mr. Powell: Where retirement annuity relief has been duly claimed and the relief is due, the assessment will be reduced, or tax repaid, as the case may be. It is hoped, however, that all adjustments, arising out of premiums paid during 1956 will have been made before the second instalment of tax for 1956–57 falls due on 1st July, 1957.
    Mr. Gresham Cooke: Is my hon. Friend aware that there is a shortage of forms for these claims? At the same time, may I assure him—[HON. MEMBERS: "No."]—that the professional classes—
    Mr. Speaker: The hon. Member must not use this occasion in order to give assurances. He must ask a question.
    Mr. Gresham Cooke: May I ask my hon. Friend if he is aware that the professional classes are very grateful to the Conservative Government for bringing in this scheme in the face of Socialist opposition?
    Mr. Powell: I am well aware of that, and I will look into the matter of the forms.

    £ Sterling (Value)
    Captain Pilkingtonasked the Chancellor of the Exchequer by how much the £ sterling has fallen since 1951.
    Mr. Birch: The internal purchasing power of the £ has fallen by 3s. 10½d. since 1951. This estimate is based on changes in the Consumer Price Index between 1951 and 1955 brought up to date by reference to the Index of Retail Prices.
    Captain Pilkington: Since this fact is mentioned in the latest Labour Party leaflets, but not the fact that during Socialist rule the £ fell by 5s. 9d., will my right hon. Friend suggest to the leaders of the Socialist Party that they include both facts in future leaflets, as I am sure that they want to be fair?
    Mr. Birch: I have no doubt at all that they have noticed my hon. Friend's suggestion.
    Mr. H. Wilson: Since the whole country, if not the hon. Gentleman, is aware that the cost of living under the Labour Government changed far less than the increase in world prices and far more under the Conservative Government, will the right hon. Gentleman take steps to ensure that the Answer which he has given is brought to the attention of the voters of Lewisham?

    Raw Material Stocks (Sales)
    Mr. H. Wilsonasked the Chancellor of the Exchequer the total value of the sales of raw materials and other goods out of Government strategic stocks during 1955 and 1956, respectively.
    Mr. Powell: Receipts by the Board of Trade from net sales of raw material stocks were about £1 million in 1955–56 and about £25 million in the first nine months of the current financial year.
    The corresponding figures for the Ministry of Agriculture, Fisheries and Food are some £6½ million in the last nine months. There were no net sales in 1955–56.
    Sir C. Taylor: On a point of order, Mr. Speaker. May I ask your guidance about Question No. 36? [HON. MEMBERS: "It has been answered."] I understand that it was answered in conjunction with Question No. 20, which referred only to Canadian dollars and not to United States dollars. Would it not be right for an answer to be given to the American part of the Question as well as to the Canadian part?
    Mr. Speaker: I could not allow that now. Had the hon. Member been here, he could have asked a supplementary question.

    Industrial Wages
    Mr. John Hallasked the Chancellor of the Exchequer what has been the increase in the purchasing value of the average industrial wage between April, 1945, and April, 1951, and between April, 1951, and April, 1956.
    Mr. Birch: Between July, 1945, and April, 1951, the average earnings of adult male wage-earners increased by 32 per cent.; during the same period the index

    601
    of prices of consumer goods and services rose by about 33 per cent.
    Between April, 1951, and April, 1956, average earnings rose 13 per cent. more than the Index of Retail Prices.
    Mr. Hall: Is my right hon. Friend aware that Members in all parts of the House will, I am sure, welcome this evidence of the increase in the acceleration of the rate of purchasing power of the industrial wage which has taken place under the Conservative Administration?
    Mr. C. Pannell: Is the Minister also aware that when he gave that figure, a considerable amount of it was based not upon the standard working week, but upon the amount of overtime that people have put in?
    Mr. Nicholson: Is my right hon. Friend aware that whoever has or has not benefited, the net result is a very sorry story for the British economy? Is he also aware that people on fixed incomes suffer, however much the increased purchasing power of wages, with or without overtime, benefits those who receive them?
    Mr. John Hallasked the Chancellor of the Exchequer the average industrial wage today; and what wage would be required by a married man with two children to give the same purchasing value as the average industrial wage in 1938.
    Mr. Birch: The average earnings of an adult male wage-earner in April, 1956, in the industries covered by the Ministry of Labour's earnings inquiries, were 235s. 4d. The corresponding figure in October, 1938, was 69s. and the increase since then in the prices of consumer goods and services is estimated at 168 per cent. The average earnings of 1938 may thus be estimated to have the same purchasing power as 185s. in April, 1956.
    Mr. Hall: Is my right hon. Friend aware that this advantage of the improved purchasing power of the wage of the industrial worker is not shared by any similar increase in the standard of living and the standard of the purchasing power of the professional and executive classes? Is it not the knowledge of this fact which is encouraging so many of our more able young men to emigrate?
    Mr. Birch: I think that there is force in what my hon. Friend says, but, of course, it does represent a considerable
    602
    increase in the standard of living of workers in comparison with before the war. No doubt, hon. Members opposite will use that in all their propaganda.
    Mr. H. Wilson: While accepting the advice of the right hon. Gentleman, may I ask whether he is not aware, first, that this shows what a miserably inadequate level wages were at in 1938—
    Dame Irene Ward: After six years of Socialism.
    Mr. Wilson: —after about 20 years of Toryism—and since the right hon. Gentleman and his hon. Friend think that these movements of wage rates are good Tory propaganda, will the right hon. Gentleman explain why his Government published a White Paper last February saying that wages were rising too fast and should be kept within bounds, and why the present Prime Minister made the same appeal in his "plateau" speech at Newcastle last May?
    Mr. Birch: The right hon. Gentleman will recollect that all Governments have said that rises in wages must be related to rises in productivity and that if they get outside that rate it is very damaging. So far as before the war is concerned, we had a personal assurance that the right hon. Gentleman could at any rate afford boots when he was at school.
    Mr. H. A. Priceasked the Chancellor of the Exchequer the estimated annual cost of the increase in the incomes of industrial workers during the last five years for which statistics are available.
    Mr. Birch: As the Answer contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT. [Interruption.]
    Following is the Answer:
    As shown in Table 2 of National Income and Expenditure, 1956, the increase in the total wage bill in each year of the years 1950 to 1955, compared with the previous year, was as follows:

    £ million

    1950 to 1951

    …

    …

    …

    500

    1951 to 1952

    …

    …

    …

    345

    1952 to 1953

    …

    …

    …

    320

    1953 to 1954

    …

    …

    …

    415

    1954 to 1955

    …

    …

    …

    560

    Mr. Price: On a point of order. I could not hear that reply, Mr. Speaker.
    Mr. Birch: As the Answer contains a table of figures I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. H. Wilson: On a point of order, Mr. Speaker. Since the right hon. Gentleman seeks to make that smart reply, may I remind him—[HON. MEMBERS: "No."]
    Mr. Speaker: It is not really a point of order. I think that the right hon. Gentleman wants to ask a supplementary question on the Question that we have now passed. It is not a point of order, but if he can put it as a point of order, I will listen to him.
    Mr. Wilson: That was not the purpose of my point of order, Mr. Speaker. Since the right hon. Gentleman wishes to score a cheap point by misrepresenting what I said, may I ask whether he is aware that I never said anything of the kind, and that the only—[Interruption.]
    Mr. Speaker: Order. The right hon. Gentleman is entitled to make a personal explanation of this matter.
    Mr. Wilson: Since this is based on a misrepresentation, may I ask the right hon. Gentleman whether he is aware that the only Tory paper that attributed that remark to me has since apologised and agreed that I never made it?
    Hon. Members: Withdraw.
    Mr. Lipton: Resign.
    Mr. Speaker: Points of order are addressed to me and not to the Minister. I thought it was right that the matter should be cleared up. Mr. Henry Price.
    Mr. Callaghan: Further to that point of order. As we have the Chancellor of the Exchequer here, and as we are getting such thoroughly cheap and unsatisfactory replies from his assistants, could we have replies from the Chancellor?
    Mr. Speaker: Mr. Henry Price. Question No. 43.
    Dame Irene Ward: On a point of order, Mr. Speaker. There was so much row going on that there was no chance of asking a supplementary question. I wondered, therefore, Mr. Speaker, whether you were going to call anybody to ask a supplementary question and, if so, whether you could kindly call on me.
    Mr. Speaker: I should be delighted to do so, but I am afraid that I have passed that stage.
    Captain Pilkington: On a point of order. Is there any means of stopping points of order being abused by Front Bench Members on the other side of the House?
    Mr. Speaker: I suffer from points of order not only from the Front Bench above the gangway, but from that below it too, sometimes. Mr. Henry Price, Question No. 43.
    Mr. Price: I have not yet asked a supplementary on Question No. 42.
    Mr. Speaker: I am afraid I have lost count. Will the hon. Member please ask Question No. 43?

    Bank Rate (Reduction)
    Mr. H. Wilsonasked the Chancellor of the Exchequer if, in view of the fall in the Treasury Bill rate he will make a statement about his policy in relation to the Bank Rate.
    The Chancellor of the Exchequer (Mr. Peter Thorneycroft): As the House is doubtless aware, the Bank of England has today announced a reduction in the Bank Rate of ½ per cent. It would be wrong to interpret the move from the 5½ per cent. to a 5 per cent. Bank Rate as a change in economic policy. This is not a signal for bankers or others controlling sources of finance to relax credit or to ease restrictions on lending.
    Today's reduction in the very high rate which has prevailed for the last twelve months, is designed to enable the Bank of England to maintain the full effectiveness of monetary policy. I am assured that its control will not be weakened by this move.
    I must emphasise to the House that there is no change in the need to restrain both public and private spending and lending in order to make room for exports and essential investment. As long as these are our economic objectives, we intend to continue to make full use of interest rates to discourage spending and encourage savings. At the same time, as my right hon. Friend the Prime Minister said on 5th June last, it is necessary that our monetary policy should remain flexible and the Bank Rate will be varied as circumstances require.
    Mr. Wilson: While thanking the Chancellor for that Answer, may I ask whether he will allow me, I am sure on behalf of the whole House, to congratulate him on having taken this decision, in view of the fact that the Bank Rate last went up on 16th February last year, the day after the Taunton by-election and has been reduced this year the Thursday before the North Lewisham by-election? That having been done, would the right hon. Gentleman tell the House what additional deductions we must draw from his statement, apart from those which he has given the House, for which we thank him?
    Are we to take it from this Answer that the Chancellor now assumes, in view of the reasons given by the Prime Minister a year ago for the increase in the Bank Rate, that the gold reserves are in such a position that they no longer need the protection of the Bank Rate? Are we to assume—and these are very important questions—that the Chancellor now wants an increase in investment which the Government were trying to discourage, or that he does not?
    Finally are we to assume that the right hon. Gentleman now accepts the argument, which we on this side of the House have put over a period of years, that he can have an effective monetary policy without necessarily having very high interest rates?
    Mr. Thorneycroft: All that the right hon. Gentleman need assume from my Answer is that this is not the time to let up and that this move is simply designed to maintain an effective monetary policy.
    Mr. Gaitskell: Could the right hon. Gentleman explain how a reduction in Bank Rate enables the Bank of England to have a tighter control over the credit situation?
    Mr. Thorneycroft: I do not want to get into a technical discussion, particularly with the right hon. Gentleman. All I would say is that the effective use of monetary policy is concerned not only with the Bank Rate but with the market operations associated with it.
    Mr. Nabarro: Does not this important change signify growing confidence in the economic policies of Her Majesty's Government?
    Mr. Thorneycroft: Certainly we have full confidence in the policies of Her Majesty's Government, but I want to emphasise that this change in Bank Rate is not a signal that there is no need for restraint. That need will remain.
    Mr. Gaitskell: In view of the right hon. Gentleman's reference to market operations, does he mean that the purpose of this change is to enable the Treasury to borrow or reborrow more cheaply than otherwise it would have done?
    Mr. Thorneycroft: I do not wish to add any comment to what I have said.

    Technological Students, University of Wales
    Mr. G. Thomasasked the Chancellor of the Exchequer what was the number of full-time students taking courses in technology in the University of Wales in 1947–48, 1949–50, 1953–54, and 1954–55, respectively; and whether he will make a statement.
    Mr. Powell: I am informed that the number for the four years in question were 507, 489, 360 and 380, respectively, but that by 1956–57 they had risen to 477, which represents an increase since 1953–54 of 32 per cent. in Wales as against an average of 23 per cent. in Great Britain.
    Mr. Thomas: Can the Minister give an assurance that he will give full assistance to the university in seeking to increase this number?
    Mr. Powell: Of course, the distribution of grant as between universities is a matter which is left primarily to the University Grants Committee, but I am sure that it has that matter well in mind.
    Mr. Glenvil Hall: May I ask the Financial Secretary whether the Government know the cause of this rather terrible drop in numbers?
    Mr. Powell: Yes, Sir. I am told that the fall between 1947 and 1953 was the automatic result of the extra numbers of ex-Service men in the years immediately after the war passing out of the universities.

  CIVIL SERVICE

    Higher Executive Officers (Salaries)
    Mr. H. A. Priceasked the Chancellor of the Exchequer what was the commencing salary of a higher executive officer in 1939; what this salary would need to be today to compensate for increases in the cost of living and higher taxation; and the commencing salary of this grade today.
    Mr. Powell: The commencing salary of a higher executive officer was £550 in 1939. For a married man with one child, the equivalent salary today to compensate for increases in the cost of living and higher taxation would be £1,733. The commencing salary of this grade is now £1,055.
    Mr. Price: Is it not clear that this represents a deterioration in the standard of living of about 40 per cent.? How is this process to be ended?
    Hon. Members: Answer.
    Mr. Powell: Yes, it is clear.
    Mr. Callaghan: As we have the Chancellor and the Prime Minister here, may I ask whether they will relate that reply to the position of the salaries of Members of Parliament, who are suffering a steady deterioration in their standard of life and many of whom, moreover, are now unable to perform their duties as they should be performed because of the lack of proper remuneration? Now that we have had a clean sweep in the Chancellorship and the Prime Ministership, can this matter be reviewed again?
    Mr. Powell: That appears to relate to an entirely different matter.

  PERSIAN GULF OIL (TRANSPORT)
  Mr. Nabarroasked the Prime Minister what steps he is taking in consultation with Commonwealth Governments to investigate the strategical, economic, technical and financial considerations inherent in building an all-British trans-Africa oil pipeline, the building of super-tankers and other similar arrangements, with a view to circumventing transportation of oil from the Persian Gulf to the United Kingdom through the
  608
  Suez Canal; and whether he will make a statement.
  The Prime Minister (Mr. Harold Macmillan): As the House is already aware, the Government are studying the long-term problem of the transport of oil to this country from the Persian Gulf by the best means. Commonwealth Governments will be consulted as appropriate. As regards the particular proposal referred to by my hon. Friend, I am advised that the cost of constructing and operating a pipeline across Africa would outweigh any advantages it might offer.
  Mr. Nabarro: While not wishing in any way to associate myself strongly with either of the specific propositions in this Question, may I ask my right hon. Friend whether he can say that it will be possible for an early statement to be made on this general topic, which is undoubtedly one of wide public interest and a source of considerable anxiety.
  The Prime Minister: Yes, Sir. I hope to be able to do so, but I thought it only courteous to answer the specific Question which my hon. Friend asked.
  Mr. Nabarro: I am very grateful.

  PRIME MINISTER (PRESS REPORTS)
  Mr. G. M. Thomsonasked the Prime Minister if he will place in the Library the full text of his recent speech to the representatives of the United States Press in London.
  The Prime Minister: I have not made any speech recently to representatives of the United States Press in London.
  Mr. Thomson: Can the Prime Minister, therefore, deny the story that appeared in an article in the British Press that he told American correspondents that he considered himself practically a Socialist?
  The Prime Minister: No, Sir, but I am slightly amused by the fact that during the early part of my life I was accused of leaning too much to the Left. I have seen recently accusations that I have leaned to the Right. I propose, as I have always, to follow the middle way.
  Mr. H. Wilson: Will not the Prime Minister, in our interest if not in his, utterly repudiate this suggestion?
  The Prime Minister: I understand from recent events that hon. and right hon. Members opposite are anxious to get allies from wherever they can.

  UNITED NATIONS CHARTER
  Mr. Zilliacusasked the Prime Minister whether he will introduce a Bill for a Peace Act that would incorporate in the law of the land the obligations in the United Nations Charter to settle disputes with other States by peaceful means and refrain from resort to force, to submit to the Security Council any claim to be fighting in self-defence, and comply with its injunctions.
  The Prime Minister: No, Sir.
  Mr. Zilliacus: Does the Prime Minister not think that an act of this kind would serve on the one hand to make public opinion aware of the nature of our obligations as a member of the United Nations and anchor them in the consciousness of the people and, in the second place, give much-needed assurance to our allies and to world opinion in general that henceforward the policy of the Government will be based on loyalty to the Charter and that there will be no recurrence of recent deplorable attempts to gain our ends by committing aggression and violation of the Charter?
  The Prime Minister: No, Sir. It is a long tradition of successive British Governments to maintain our international obligations. Her Majesty's Government hope that other Governments will maintain theirs.

  TOBACCO REVENUE (CHANCELLOR'S SPEECH)
  Mr. Liptonasked the Prime Minister whether the speech of Mr. Chancellor of the Exchequer at Barnstaple on 18th January last, in so far as it related to the revenue from tobacco, represents the policy of Her Majesty's Government.
  The Prime Minister: My right hon. Friend was, I understand, discussing the problem of further switches from dollar sources of supply of tobacco to Commonwealth sources. In the course of his argument he referred to the fact that the sale of tobacco was a source of revenue.
  Mr. Lipton: In view of the known connection between smoking and lung cancer —[HON. MEMBERS: "Not known."]—was it not quite disgusting for the Chancellor, for quite mercenary reasons, to suggest that too many people should not abandon smoking habits, purely for the purpose of creating a Budget surplus?
  The Prime Minister: I think that that is a rather unrealistic approach to the problem. I have yet to meet a man whose sense of public duty is so highly developed that he is deterred from giving up smoking by a fear that that might mean a loss to the revenue.
  Mr. Lipton: In view of that unsatisfactory reply, I beg to give notice that I shall raise this matter on the Adjournment. I have already tried to do so.

EXPORT OF LIVE CATTLE (COMMITTEE)
The following Questions stood upon the Order Paper:
Mr. DYE: To ask the Minister of Agriculture. Fisheries and Food what further reports he has received from his inspectors investigating conditions under which fat cattle are exported to the Continent and subsequently slaughtered.
Mr. E. JOHNSON: To ask the Minister of Agriculture, Fisheries and Food if his attention has been drawn to the considerable increase in recent months in the export of live cattle from this country to the Continent; and if he is still satisfied about the arrangements made for their care on the journey, to provide adequate food and water and to avoid unnecessary suffering; and what information he has about their ultimate destination.
Mr. CHAPMAN: To ask the Minister of Agriculture, Fisheries and Food whether his attention has been drawn to new evidence, details of which have been sent to him, of cruelty in the export of cattle to Europe; and what immediate steps he is taking to end this cruelty.
Mr. G. JEGER: To ask the Minister of Agriculture, Fisheries and Food if he is aware that cattle are being shipped from Hull to continental ports under distressing conditions; what action he proposes to take; and whether he will make a statement.
Mr. FELL: To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the ill-treatment of cattle being exported to Europe during their journey by sea, and by rail on the Continent; and what action he is taking.
Mr. HURD: To ask the Minister of Agriculture, Fisheries and Food if, to allay public anxiety about the 'treatment of cattle sent to the Continent for slaughter, he will arrange for an immediate inquiry to establish the facts and advise on the desirability of this trade; and if, at the same time, he will enforce strict measures to ensure that these cattle in transit here and on ship do not suffer any avoidable hardship.
Mr. SORENSEN: To ask the Minister of Agriculture, Fisheries and Food if he will confer with other appropriate Departments in respect of the shipment of live cattle from this country to continental slaughter-houses with a view to securing that carcases and not live cattle should be shipped; and what objection to this has been advanced by those who raise cattle for export from this country.
The Minister of Agriculture, Fisheries and Food (Mr. Derick Heathcoat Amory): I will, with permission Sir, answer Questions Nos. 56, 58, 62, 64, 71, 73 and 75 together.
My right hon. Friend the Secretary of State for Scotland and I have appointed a Committee to inquire into the export of live cattle and to make recommendations. Lord Balfour of Burleigh has kindly agreed to act as Chairman and the other members are my hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir), the hon. Member for Derbyshire, South-East (Mr. Champion), Mr. G. N. Gould, M.R.C.V.S., and Mr. Clyde Higgs, M.C. I am circulating the Committee's terms of reference in the OFFICIAL REPORT.
The Committee appreciates the need for urgency in carrying out its tasks and will start its inquiry forthwith.
In the meantime, my right hon. Friend and I have made an Order under the Diseases of Animals Act requiring cattle to be rested for 10 hours and to be provided with food and water at or near the place of embarkation.
Mr. Dye: While thanking the right hon. Gentleman for that reply and for the action that he has taken, may I ask
612
whether he is aware that there is a feeling throughout the country that this traffic in live animals to the Continent has developed? Would he see that the latter part of his reply is carried out to the best of his ability, not only in this country, but also on the Continent?
Mr. Amory: Yes, Sir. I agree with what the hon. Gentleman has said about public concern on this matter and I fully share it. My right hon. Friend and I will certainly not countenance the continuance of this trade unless we are satisfied that no inhumanity is involved. Therefore, I am anxious that prompt action should be taken. I am making this Order to close what I have found to be a gap in our provisions in this country. I am in touch with the French Government about conditions on the other side of the water, and I am glad to say that I understand the Committee will hold its first meeting on Tuesday of next week.
Mr. E. Johnson: If my right hon. Friend is not able to be completely satisfied that there is no cruelty on the other side of the water, will he seriously consider banning this trade altogether and having the cattle slaughtered in this country and shipped as carcase meat?
Mr. Amory: My hon. Friend will note what I said earlier in reply to the first point in his Question. The substitution of a trade in carcase meat for live animals is one of the problems involved. I understand that it is by no means an easy one to solve, but it is one on which I hope that the Committee will give us some advice.
Mr. Speaker: Mr. Jeger.
Mr. G. Jeger: Thank you, Mr. Speaker, but my question has already been answered.
Mr. Sorensen: While thanking the Minister for the action he is proposing to take, may I ask him approximately how long the inquiry is likely to last and, therefore, when its report will be published? Do we take it that as a result of the report the right hon. Gentleman will himself embody the proposals in appropriate legislation?
Mr. Amory: I hope that the Committee will find it possible to report within about three months, but, of course, it would be

613
open to it to make an interim report earlier, if it wished to do so. The Committee is fully conscious of the urgency of the matter.
As regards what action my right hon. Friend and I would think it right to take after the report has been presented, I think we must wait and see what are the recommendations.
Mr. Fell: While being very grateful to my right hon. Friend, as I am sure the whole country will be, for setting up this Committee, I cannot view with complete equanimity the fact that it may take three months to report. This trade has been going on now for some time, and such disturbing aspects of it as have been reported suggest that the French importer had given instructions that the animals were not to be watered as this would increase their weight, and that they went without water from the Thursday evening of one week until the following Tuesday, as stated by the veterinary officer who went with them. If these practices are being agreed to by exporters in this country on the instructions of French importers, it seems disgraceful that the trade should be allowed to continue any longer.
Mr. Amory: I assure my hon. Friend that there will not be inaction in the meantime. I mentioned that we have made representations to the French Government, and I have already had assurances from the French authorities that animals will be watered and fed on disembarkation. I am in further touch with them, and I can assure my hon. Friend and all other hon. Members of the House that I have not been inactive in this matter in the last two months. My veterinary inspectors have been doing everything possible. There are still some difficulties, notably in the lairage accommodation, because the numbers have been so much greater than were expected, but they have now gone down substantially. I can promise hon. Members that every step I can take will be taken to improve the position pending receipt of the report.
Mr. Royle: Is it good economic policy to export fat cattle to the Continent when we have to buy so much beef from the Argentine and other sources?
Mr. Amory: It is difficult to explain these matters, because one can argue about them a great deal, but on the purely
614
economic point I am satisfied that the trade is of advantage to this country. I would add that however advantageous it is to us, if an element of inhumanity is involved I think that all hon. Members will agree that it is trade we could do without. I am hopeful that we shall succeed in eliminating all inhumanity in this trade.
Mr. Hurd: Would my right hon. Friend consider setting a limit to the number of cattle to be shipped during the next three months while the Committee is establishing the facts, so that there is no unnecessary cruelty or hardship caused through congestion at the markets and ports?
Mr. Amory: I am hopeful that there will not be congestion, but I shall keep a close watch on the progress of this trade during the coming two or three months.
Following are the terms of reference:
To inquire into the export trade in live cattle from Great Britain to the Continent for slaughter, the considerations affecting the continuance of this trade, and steps to avoid any unnecessary suffering of the cattle at all stages of their journey; to consider whether slaughter before export would be a desirable and feasible alternative; and to make recommendations.

BUSINESS OF THE HOUSE
Mr. Gaitskell: May I ask the Leader of the House whether he will state the business for next week?
The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): Yes, Sir. The business for next week will be as follows:
MONDAY, 11TH FEBRUARY—Debate on Welsh Affairs.
The debate will arise on a Government Motion to take note of the Report of Government Action in Wales and Monmouthshire, and the Third Memorandum by the Council for Wales and Monmouthshire.
TUESDAY, 12TH FEBRUARY—Second Reading of the Consolidated Fund Bill, which it is proposed to take formally.
Debate on the Economic Situation on an Opposition Motion.
WEDNESDAY, 13TH FEBRUARY—Committee and remaining stages of the Consolidated Fund Bill, which it is also proposed to take formally.
Debate on Defence, on an Opposition Motion.
Consideration of the Motions to approve the Draft Silo Subsidies (England and Wales and Northern Ireland) Scheme, and a similar Scheme for Scotland.
THURSDAY, 14TH FEBRUARY—Committee stage of the Rating and Valuation Bill.
FRIDAY, 15TH FEBRUARY—Consideration of Private Members' Bills.
Mr. J. Griffiths: As the right hon. Gentleman knows, the debate on Welsh affairs on Monday, on the Report of Government Action in Wales and Monmouthshire, is a long-postponed debate on a Report published in the autumn. The Third Memorandum by the Council for Wales and Monmouthshire has been in our hands only recently and it raises very important matters. I think that it would be the desire of Welsh Members on both sides of the House that Monday's debate should take place on the Report of Government Action; and we think we are entitled to a special day to discuss the Memorandum. Would the right hon. Gentleman consider that?
Mr. Butler: I have discussed this matter with my right hon. Friend the Minister of Housing and Local Government and Minister for Welsh Affairs. We realise that the Third Memorandum was published only recently, but I think it would be convenient, and it would be of great value to by right hon. Friend, if hon. Members would give their views on the Third Memorandum—if they feel so inclined—in the course of this debate. I would, therefore, rather keep the subject of the debate general than particularise it on Government action alone.
Mr. Griffiths: Do I take it that the Government have not yet made up their minds on the proposals in the Memorandum, and that there will not be a Government statement on Monday?
Mr. Butler: There is always a Government point of view, but I think that this debate will be used by my right hon. Friend to ascertain the views of hon. Members on the Third Memorandum.
Mr. Gresham Cooke: Will my right hon. Friend tell the House when we are
616
to debate the Regulations for the variation of the speed limit of heavy vehicles to 30 miles per hour? Will he also say whether there is anything sinister in holding up this important debate for three weeks?
Mr. Butler: There is nothing sinister. We should have liked to have taken the Regulations last night, but in deference to the views of the House we devoted the whole of the time yesterday to the Homicide Bill, which I think was perfectly understandable. There does not happen to be a vacant day next week which would enable us to take it, owing to the Consolidated Fund Bill. Although I do not like announcing business further in advance than this, we propose to try to take the Regulations as soon afterwards as possible.
Mrs. Jeger: In view of the continuing gravity of the situation in Cyprus, can the Leader of the House say when we can expect to have an opportunity to debate the general situation there, with particular reference to Lord Radcliffe's proposals for Cyprus?
Mr. Butler: I can give no undertaking, but I will discuss the hon. Lady's representation with my right hon. Friend the Colonial Secretary. As the hon. Lady will see, the time for next week has been filled.
Mr. Nabarro: My right hon. Friend will recall that fourteen days ago I asked him, evidently with support from all quarters of the House, whether an early opportunity might be arranged for a debate on fuel and power and notably our future energy resources. Can my right hon. Friend say whether there will be any opportunity on the remaining stages of the Consolidated Fund Bill for a specific debate on these important topics?
Mr. Butler: The trouble is that the time on the Consolidated Fund Bill, at the request of the Opposition, has been devoted to the economic situation and a debate on defence. That is our constitutional procedure. There will, therefore, not be time on the Consolidated Fund Bill—unless the hon. Member intervenes on this subject, for example, on the first day—to allocate a particular day for the subject he mentions. I referred to this matter as early as 13th December and I am aware that it is of great importance.
Mr. Gaitskell: Would the right hon. Gentleman make it plain that the Consolidated Fund Bill, which we are taking formally, is a very narrow one and that had we not taken it formally the debate would have had to be related closely to the Army Supplementary Estimate?
Mr. Butler: Yes, Sir. That is true. My language in answering my hon. Friend was not as precise as I like it normally to be. I had intended to convey that the subject he mentioned could be raised not in the debate on the Consolidated Fund Bill, which relates to the Army Supplementary Estimate, but in the debate on the economic situation, from winch the question of power is not totally absent.
Mr. Cooper: Would my right hon. Friend tell the House when it is proposed to debate the White Paper on the reorganisation and reform of local government?
Mr. Butler: We are in the very happy state of awaiting reactions on this matter.
Mr. Blyton: Is the Leader of the House aware of the resentment in the coalfields at the Government's delay in implementing the agreement between the National Coal Board and the National Union of Mineworkers on increases of pensions to retired miners, widows and children? If the Government intend to do anything, can he tell us when legislation will be brought before the House to implement that agreement?
Mr. Butler: I have discussed this with my right hon. Friend, and at the moment he cannot give me a date when I could make an announcement for the benefit of the hon. Member and the mining community in general, but I will again raise it with my right hon. Friend and will communicate with the hon. Member and the House.
Mr. J. Taylor: Will the right hon. Gentleman bear in mind the advisability of affording the House an early opportunity to consider the Report of the Runciman Committee on Horticultural Marketing?
Mr. Butler: We must live in hopes about that, but I realise its importance.
Mr. H. Wilson: Since the former Chancellor of the Exchequer's Budget, as he told us last year, was based entirely on
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the assumption of a cut of £100 million in Government expenditure, and since the House now has before it £100 million increase in Supplementary Estimates, will the Lord Privy Seal tell us whether we are to expect a third Budget during the present financial year?
Mr. Butler: I think that on business I had better not discuss whether we are likely to have an extra Budget or not. I should not like to excite any hopes or fears that there will be any alteration of the normal financial procedure this year.
Mrs. White: May I return to next week's business and ask the Leader of the House whether he will not reconsider his statement about the debate on Welsh affairs? The Report to which my right hon. Friend the Member for Llanelly (Mr. J. Griffiths) referred is a very long Report, is extremely detailed and raises matters of great constitutional importance and of economic interest to Wales. I am sure that the Welsh Members on both sides of the House require more time to consider it, to consult their constituents and to prepare to give their considered views. It would be most unfortunate if the impression were given that the Government were not prepared to give adequate time for the discussion of this very important Report.
Mr. Butler: There is no question of precluding any discussion of this Report. But as the Report was published on 25th January, and the debate is to take place on 11th February, I think it would be unreasonable to preclude Welsh Members, who have a perception very much above the average, from stating their views on a document published over a fortnight before. If they do not wish to state their views we cannot help it, but I recommend those who have views to state them, although not to come to any final conclusion.
Mr. J. Griffiths: Will the right hon. Gentleman give an assurance that although we may discuss this Memorandum among other matters on Monday, he will be prepared to consider allotting another day later for a fuller consideration of it?
Mr. Butler: That is taking things very much too far ahead. I should like first to listen to the debate. I should not like to say that this was the final decision

619
by the Government on the conclusions of the Third Memorandum. I think that is fair. I cannot go as far as the right hon. Gentleman asks me to go.
Mrs. Braddock: The Leader of the House will no doubt have noticed on the Order Paper a Motion in the name of my hon. Friend the Member for Brixton (Mr. Lipton) and myself with reference to statements which are made by recorders and judges following sentences in courts. In view of the fact that these comments give very grave offence to many industrial workers, is there any possibility of referring to this matter in Tuesday's debate on the economic situation so that attention may be drawn to the fact that the industrial workers, and particularly very many thousands of seamen in my constituency, resent the comments which have been made about them by the Recorder of Liverpool?
[That this House deplores the making of irrelevant and offensive remarks by judges in court to which the person or organisation aggrieved thereby has no right of reply.]
Mr. Speaker: I do not think that that arises on business.
Mr. G. Thomas: May we take it that the Minister of Housing and Local Government and Minister for Welsh Affairs is now thoroughly steeped in Welsh matters and that he will be able to make a definite statement on Monday on the Government's activities concerning the
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ports of South Wales? Secondly, will the Leader of the House bear in mind that the Welsh Members are now occupied, in various groups, in considering and discussing the Third Memorandum by the Council for Wales? Will he let us have a further day for its discussion.
Mr. Butler: I think that my right hon. Friend will be very much more familiar with Welsh affairs after listening to the debate, especially to what the hon. Member may say.
Mr. Lipton: Will the Leader of the House have a look at the Motion about judges making irrelevant and offensive remarks in court? While it is true that an apology has been tendered in one case—
Mr. Speaker: If the hon. Member is referring to an individual, he must proceed in the proper manner, by a Motion, and not raise it adventitiously as a business question.
Mr. Lipton: There is a Motion upon the Order Paper, Sir.
Mr. Speaker: I understand that, and on that Motion the merits of the matter can be argued, but it should not be brought in as a business question.
Proceedings of the Committee on Rating and Valuation [Money] exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. R. A. Butler.]

ORDERS OF THE DAY

  RATING AND VALUATION BILL
  Order for Second Reading read.
  3.52 p.m.
  The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): I beg to move, That the Bill be now read a Second time.
  As the House knows, my right hon. Friend the Minister of Housing and Local Government—[Interruption.]—
  Mr. Speaker: Order. Will hon. Members pass out quietly?
  Mr. Bevins: —intends to make an announcement to the House at an early date on his proposals for local government finance as a whole. Those proposals will then have to be discussed with representatives of local authorities and we must allow reasonable time for consultation. It is, therefore, clear that those major proposals cannot come into force by April of this year, that is to say, in time for the next financial year in local government.
  There are, however, three problems which can brook no delay. They cannot be allowed to continue into the next financial year without some solution. They are the subject of the Bill now before the House. The first problem is the direct result of assessing houses at 1939 values and other properties at current values. Many hon. and right hon. Gentlemen on both sides of the House are very well versed in this subject and will remember that as far back as 1948 it was decided, rightly or wrongly, that houses could not be assessed on current values, because, owing to rent control—one of the subjects which has recently crept into the news—there was no adequate evidence of true rental values on a post-war basis.
  More recently, complaints have been made that this dual level of assessments—one for houses and one for other properties—would impose an unfair rate burden on the highly assessed occupiers of commercial premises. In December, 1954, my right hon. Friend the present Minister of Defence undertook that when the effects of revaluation could be clearly seen we should look at the position again to see whether any changes were needed.
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  It is now quite clear that, whatever the effect of outstanding appeals against assessments may be, the distribution of the total of the rateable values among the various classes of hereditaments will be very much the same, although not exactly, as that shown in the White Paper, "Distribution of Rateable Values between different classes of property in England and Wales," which was published in March of last year.
  As hon. Members know, the largest increase of rateable values has fallen upon industry itself. [HON. MEMBERS: "No."] If hon. Members will permit me, they will realise that what I am saying is correct. The biggest increase in rateable values has fallen upon industry, I mean the full rateable values. Industry is, of course, already 75 per cent. derated. I think that that is what hon. Members have in mind. This is a simple statement of the fact that the largest increase in assessments fell upon industry. I added that industry is three-quarters derated. That is a fact and not a matter of argument. It would, however, because of derating, be manifestly wrong that industry's rate burden should be reduced still further. Indeed, the subject of industrial derating, as the House knows, is included in the present review of local government finance.
  The next largest increase in assessments has fallen on shops, offices and certain miscellaneous properties. Here, the average percentage increase in assessment is about 125 per cent. That involves an increase of about one-third in their share of the total rateable values, that is to say, the average assessment for this class has gone up by 125 per cent, and its share of the total is now one-third higher than it was. As hon. Members know, there is no derating for this class of property and it will be conceded that ratepayers in this group have been required, as a result of legislation and what has flown from it, to delve much too deeply into their pockets.
  That is recognised on both sides of the House. Certainly, a number of hon. Members opposite, as well as many of my hon. Friends, have made it clear that they do recognise it. It remains for me only to add that this discrimination against shops and commercial premises has its roots in the Local Government Act, 1948, which was sponsored by the right hon. Member for Ebbw Vale (Mr. Bevan) and supported by the party opposite—
  Mr. G. Lindgren: We cannot allow the Parliamentary Secretary to get away with that. After all, it was the Rating and Valuation (Miscellaneous Provisions) Act, 1955, which created the problem, because that altered the basis of rating for domestic hereditaments and left the basis for shops as it was. If the basis had been left as it was under the 1948 Act, the two would have been in line.
  Mr. Bevins: No. With all respect to the hon. Member, that is not the case. The fact is that the 1948 Act, introduced by the party opposite, provided for the assessment of houses on a pre-war basis. As it made no reference whatever to the basis for commercial premises and industry, it automatically followed that when revaluation took place that second group would be assessed on current values, as, in fact, they were. I do not think that there is much between us on this point.
  As my right hon. Friend feels that the ratepayers of the class of which I have been speaking, shopkeepers and tenants of commercial premises, are being asked to pay too much, the Bill gives relief to the majority of properties of that class by reducing their rateable values by one-fifth. It is a temporary relief and will cease at the next revaluation when, as the law stands at present, houses are due to be assessed at current values.
  No doubt shopkeepers and other beneficiaries coming under Clause 1 will regard this as an act of mercy; indeed, my right hon. Friend does not pretend that it constitutes any more than a rough measure of justice. Nothing short of a complete revaluation upon the basis of present-day values all round would be ideal and, as hon. Members know, the realisation of ideals is not always universally popular. I should add, however, that even after the changes made by the Bill and the revaluation of Crown properties have been taken into account the classes of property of which I am speaking will still be bearing about 13 per cent. more of the national rates than they did last year, and correspondingly, the share borne by householders will still be about 13 per cent. less than it was last year, after the 20 per cent. cut in certain groups of assessment has been give effect to.
  Mr. J. T. Price: I do not think that the Minister should proceed
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  on the assumption that we are accepting these glib statements, because we are not. In many North of England boroughs house property built in the 'thirties has already had its assessment increased by about 80 per cent., while many of the shop properties, not rented by small shopkeepers but consisting of great chain stores, have appreciated in value over the years by as much as 500 per cent., as against the average 120 per cent. increase to which the Minister has referred. The argument seems to fall to pieces upon the facts as I understand them.
  Mr. Bevins: I do not think that the argument falls to pieces. The fact is that it is quite clearly established that the general increase in assessment for the group of properties about which I have been speaking has risen by about 125 per cent. It is equally true that the changes in the assessments of private dwelling-houses as a whole have shown nothing like the same sort of movement. As the hon. Member says, there are obviously variations within houses as a class, one way or the other, but we are concerned at the moment only with the broad outline of the situation. In broad terms this reduction of 20 per cent, in rateable values is limited to properties other than domestic properties, for which, first, a gross value has to be found and which, secondly, are not derated.
  I now turn to one of the several bones of contention in the Bill. Are we right to exclude from this reduction properties which are assessed direct to net annual value? Why should some properties be assessed in this way, and why have they been excluded from the benefit of Clause 1? In the main, the properties assessed direct to net annual value consist of public utilities and those hereditaments which do not consist primarily of buildings. They are a mixed bag, including such things as water undertakings, piers, racecourses, holiday camps, and crematoria. In these cases the net annual values themselves take account of the full current costs of repairs, maintenance and insurance, whereas the annual values of the other types of property are ascertained by deductions, in respect of repairs, from gross values.
  The public utilities and some of the other undertakings are assessed upon the

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  basis of their accounts, and that automatically ensures that the rate charged after revaluation—as was the case with the rate charged before—is within their capacity to pay, because it is calculated by taking a proportion of the net income after charging working expenses. These constitute about half the total value of the group.
  I confess that it is not very easy to generalise about the rest of these net annual value cases. I agree that some of them have had very substantial increases in assessment, although that in itself does not take us very far, especially if such increases were due to previous underassessment. It is the great advantage of the group of properties which are assessed to net annual value that, automatically, current costs of repair are taken fully into account in reaching their net figure. There may be some in respect of which repairs costs are not a material item, and I agree that these probably have a better case than the others for inclusion under Clause 1, but in temporary legislation of this kind, which must be drawn in fairly broad terms, it is not easy to include some while excluding others.
  Finally, in connection with Clause 1, I would emphasise that the increases in respect of shops, commercial premises and other miscellaneous properties included in the Bill have been sharp, and indisputable, because there is a mass of evidence of current shop and office rents being paid at the level at which the rating assessments have in consequence been fixed.
  Mr. J. A. Sparks: Is the hon. Member now condemning the Commissioners of Inland Revenue for assessing this valuation? That is what he seems to be doing. It is their valuation.
  Mr. Bevins: On the contrary, all I have been doing is to try to show what is the difference between those cases which are assessed, first, gross and then, by deduction, net, and the other group of cases which are assessed direct to net annual value. There is no criticism whatever of the Inland Revenue valuers, who have been working so hard upon this task in recent years.
  The position of the miscellaneous group, in the class which are assessed direct to net annual value, is not quite the
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  same for, by their very nature, there is not the same evidence of comparable current rentals as proof of the soundness of the assessment. I do not know what will be the outcome of the many appeals which have been lodged in relation to this class of property, and it would be unwise to stake a claim for relief on the evidence of the assessments in the lists before the appeals have been determined.
  What will be the effect of this concession upon the rate poundages for the coming year? I am under no illusion that many local authorities and many right hon. and hon. Gentlemen are very agitated about this question. Indeed, just before I came into the Chamber I was reading a report in my local newspaper which said that the leader of the Liverpool City Council had informed the Council yesterday that the provisions of the Rating and Valuation Bill now before Parliament would mean a loss of rate revenue of about £8 million to Liverpool. The fact that an extra nought was added to the figure of £800,000 makes it more interesting still, if more disquieting to the ratepayers of Liverpool.
  We should not exaggerate the effects of Clause 1.
  Mr. J. T. Price: The Minister has quoted Liverpool. Let him now quote Manchester, or Birmingham.
  Mr. Arthur Moyle: May I help the Minister to be a little more precise? I am speaking about Liverpool. In my constituency, Oldbury and Halesowen, the concession of which he speaks will mean an increase of about 10d. in the £.
  Mr. Bevins: Yes, that may very well be so, and I have no doubt that the hon. Member's hon. Friends could give examples far more blood-curdling than that. Rateable values and rate poundages are the swings and roundabouts of local government. [HON. MEMBERS: "Oh."] Oh, yes; lower rateable values mean higher rate poundages, and vice versa. Many estimates of increased poundages in this borough and that borough have been bandied about during the last few days. I do not say that they are all inaccurate, but I should be very rash to make any forecast of what is likely to be the precise effect of the Bill in terms of rates.
  Mr. John Paton: Does not the Minister know?
  Mr. Bevins: I have spent a few years in local government and I should have thought that it was very difficult indeed for the leader of any large local authority, at the beginning of February, to estimate with any precision what would be the rate poundage at the end of March. [HON. MEMBERS: "No."] If hon. Gentlemen disagree, perhaps they will be good enough to listen to some of the uncertain factors in the circumstances.
  For example, these cuts in the rateable value of shops and commercial premises fall unevenly throughout the country according to the nature of the town or city concerned. Obviously, these cuts will have an important reaction on the grant received by local authorities from the central Government; on the distribution of payments by the transport and electricity industries and also on the distribution of county expenses. As hon. Members know—
  Mr. David Jones: If the hon. Gentleman will not accept an estimate by a leader of a political party on a council, is he prepared to accept the evidence of the Treasurer of the County Borough of West Hartlepool, or the Town Clerk of Middlesbrough, or the Clerk to the Durham County Council?
  Mr. Bevins: I do not think that we need to get very agitated about this. All I said was that it was difficult to make precise estimates of what rate pound-ages were likely to be two months before the event. I think the House will agree that that is so.
  There are other factors which hon. Members cannot speak about with certainty. There are the results of further appeals which are outstanding and which have to be taken into account. There are also, of course, the revaluation of Crown property and the effects of Clauses 2 and 3 of the Bill; apart from the estimates for expenditure for the current year. All these factors have to be taken into account before the rate poundage can be fixed.
  Mr. G. R. Mitchison: Are we to understand that the hon. Gentleman, with all the resources of his Ministry available to him, has made no estimate of the effect of these concessions
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  on the poundage charged by local authorities in the coming year?
  Mr. Bevins: If the hon. and learned Gentleman will be a little patient, I think I shall answer his point.
  I do not blame members of local councils or city treasurers if they want to make their estimates, but I am saying no more at this moment than that it is not possible for them to be precise in their estimates of rate poundage. I am trying to be fair, and I must tell the House that the furthest I can go is to say that the effect of Clause 1 as a whole is that the total rateable values throughout the country will fall by about 7 per cent. I think that the figure of 7 per cent. is the nearest figure, and is the average. The figure will be higher in one place and lower in another.
  Mr. Mitchison: I am obliged to the hon. Gentleman. That figure was given in answer to a Question some days ago. It adds nothing to our knowledge. Has he not made an estimate of the effect on the poundage anywhere?
  Mr. Bevins: I should have thought that a matter essentially for the local authorities.
  Mr. J. Paton: But the hon. Gentleman does not accept that. It is no use the hon. Gentleman making that point to us, because he has already told us that a local authority official cannot make a precise estimate.
  Mr. Bevins: The hon. Gentleman must not corrupt what I said. I did not say anything of the kind. I said that it was not possible to make a precise estimate at this time. That is a quite unexceptional statement. I went on to say that the total drop in rateable value, so far as we could estimate, would be 7 per cent.
  The second purpose of the Bill is rather more complicated. It is to adjust the amounts payable in lieu of rates by the nationalised transport, electricity and gas industries. During the debates on what is now the Rating and Valuation (Miscellaneous Provisions) Act, 1955, a promise was given that the special provisions governing the rate liabilities of those industries would be looked at again during the present financial year so as to take account of the effect of revaluation and various other proposals for changes

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  in the system. So far, this review, is incomplete, but there has been a preliminary examination and we hope very soon to start formal consultations with the local authorities and those nationalised industries as part of the general review of local government finance.
  Clauses 2 and 3 of the Bill deal exclusively with the consequences of recent revaluation, for these are the really urgent issues on which action could not wait until the completion of the more general review. Perhaps I might turn for a moment to Clause 2. The Local Government Act, 1948, as many hon. Members will know, took the railway and canal properties of the British Transport Commission out of rating altogether and put in its place a system of payments to local authorities based upon what is called the standard amount. These payments are made to the Ministry of Housing and Local Government, and the Ministry, in turn, distributes them to rating areas in proportion to the rateable value of the area. In the counties two-thirds of the apportioned amount goes to the county councils and the remaining one-third to the county district councils.
  In the case of the Transport Commission, the standard amount, about which I have spoken, was based on the aggregate amount of rates paid by the railway companies in 1947–48. The amount payable by the Commission in any year is that same standard amount increased or decreased in proportion to the change up or down in the national average rate poundage for the previous year—I emphasise that it is the previous year—as compared with that for 1947–48 and further adjusted to take account of changes in traffic carried by the railways.
  I apologise for that "mouthful." I know that it sounds complicated. Put simply, it amounts to this. The Commission pays more as a sum in rates or in lieu of rates if the rate poundages go up and also if the Commission is doing more business than it was, which I think fair. In the 1948 Act the standard amount was £1,810,000. In 1956–57, that is, the current financial year, the amount payable is £2¼ million and this increase is entirely due to the rise in the average rate poundage. It went up from 214d. in 1947 to 269d. in 1955. But this year, 1956–57, the average rate poundage has fallen to 188d., so the operation of the 1948 Act
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  as it stands would cut back the payment for next year to about £1½ million. On any view, that would be quite absurd, for had there been no revaluation of property at all, and had the rating authorities wanted to raise the same amount of money in rates, the liability of the Commission would have gone up to about £2½ million.
  I think I should tell the House that there is a further complication in the case of the Transport Commission, that is, its financial position. If the railways were still assessed as they were in the old days, when the main railways were privately owned, this would very much have affected their assessment, and, obviously, in favour of the Commission. I agree that this is a most complicated and tangled story, but in these circumstances the Government, taking all in all, did not feel justified in imposing an increase in the rate burden of the Commission.
  It has, however, been decided that the Commission's payment for next year should not be less than that this year. The Bill gives effect to this by altering the amount specified as the standard amount in the 1948 Act, so it will produce the payment of about £2¼ million in rates in 1957–58—that is, next year—which is, broadly speaking, the same as the payment for the current year.
  I come now to the case of the electricity industry. I apologise for having to deal with these three industries separately, but the basis is rather different in all three cases. The 1948 Act dealt with electricity in a not altogether dissimilar fashion from that applied to the transport industry. With the increase in the average rate poundage and the number of units of electricity supplied, their payments have grown from the standard amount of £11¼ million, which was the estimated amount of rates paid by the electricity industry in 1947–48, to about £16¾ million in the present financial year. That is a big increase—from £11¼ million to £16¾ million between 1947 and 1956. But with the fall in the rate poundage from 269d., in 1955–56, to 188d. in 1956–57, the payment of £16¾ million for this year would fall to about £11¾ million next year.
  Here the standard amount has been fixed so as to secure that the Central Electricity Authority will pay next year about the same amount as it would have paid had there been no revaluation. It

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  has been shown, unfortunately, however, that the estimate of the rates paid by the electricity industry in the last year before nationalisation was about £500,000 too much, chiefly because of arguments about assessments which had not at that point been properly determined, and the figure fixed as the standard amount by the 1948 Act was also too high by the same amount, that is, £500,000.
  We have made an adjustment for this. Clause 2 substitutes a revised standard amount of £18,280,000 for the figure of £11¼ million which appeared in the 1948 Act, and in consequence of this the Central Electricity Authority will be liable to pay about £19 million in the coming financial year, that is, rather more than £2 million more than was paid by the industry this year.
  Finally, I would say a word about the gas industry.
  Mr. Eric Fletcher: This is very complicated. Would the Minister make it clear that the figures he is giving are comparable as regards premises and that there has been no change as regards the total area of premises occupied by the electricity industry?
  Mr. Bevins: I did not say that. The figures I am giving take account of the shape, expansion and growth of these industries as it has occurred in the last nine or ten years.
  As to the gas industry, the gas hereditaments actually occupied by the gas boards were also taken out of rating by the Rating and Valuation (Miscellaneous Provisions) Act, 1955. But a gas board still pays rates direct to the rating authority. It is unlike the other two cases in that respect. Rates are paid direct to the rating authority in the area in which it manufactures or sells its product, and the rates are levied on a rateable value apportioned to the area in proportion to the amount of gas made or sold in the area during the penultimate year.
  The total rateable value of a gas board is taken from its "basic total of rateable values." This was based on the aggregate of rateable values of gas properties in the area of the board just before nationalisation, and it is varied each year to take account of changes in the amount of gas sold by the gas board
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  in the penultimate year. The rateable value for all the 11 gas boards in England and Wales was just over £3 million. By 1955–56, this figure had grown through increased sales to £3,170,000 and the rates paid for that year were about £3½ million.
  This year, 1956–57, the rateable values again went up to £3,206,000, but because the rate poundages had fallen the rate payments by the gas boards fell to about £2½ million. Therefore, Clause 3 of the Bill says that the basic totals of rateable values of the Boards shall be increased by 70 per cent. That is, approximately the average increase in rateable values for all properties affected by the revaluation. This has a very similar effect to that achieved by Clause 2 for electricity.
  The gas industry, therefore, will pay about the same in rates in 1957–58 as if there had been no revaluation at all. Unlike the Central Electricity Authority, the gas boards have already enjoyed a reduction in their rate payments for the current year. It might, therefore, be logical to make the effect of Clause 3 retrospective to that year on that account; but since the legislation on which this year's payment was based is little more than a year old and, as the House knows, the industry has pegged its prices for the current year, the Government have not felt justified in imposing an additional liability on the boards for the current year.
  I now turn to Clause 4, which—
  Mr. Glenvil Hall: May we be told at this juncture whether the three bodies concerned have been consulted and agreed these figures?
  Mr. Bevins: All three bodies have been consulted and long discussions have been in progress. I am not in a position to say that final agreement has been reached on the formula for the three industries at the moment, but my right hon. Friend is certainly very hopeful that it will be reached in the very near future.
  Mr. Mitchison: Does that mean that the hon. Gentleman expects agreement to be reached before the Committee stage, next week?
  Mr. Bevins: I cannot give the hon. and learned Gentleman that assurance.
  Clause 4—
  Mr. D. Jones: Does the Minister's answer mean that the Government are trying to force the hands of these authorities to agree by getting Parliamentary sanction first?
  Mr. Bevins: We never force the hands of anybody. What is provided in the Bill is, in our view, a perfectly reasonable provision and we have no reason to suppose that we shall not reach an amicable agreement with all parties concerned.
  Mr. E. Fletcher: If the Bill goes through, it does not matter whether they agree or not, does it?
  Mr. Bevins: In the last resort this is a matter for decision by the House of Commons and by Parliament.
  If, for the third and last time, I may turn to Clause 4, may I say that its purpose is to deal with a relatively small anomaly in the distribution of the Exchequer equalisation grants as a result of Section 8 of the 1955 Act? This concerns the rating of properties occupied for charitable and similar purposes, almshouses and playing fields of certain kinds.
  The result of Section 8 of the 1955 Act is that these properties may not pay rates on the whole of their rateable value and, while this has the effect of reducing the amount of rates obtained by the local authorities from these properties, and obviously the rates which these institutions and bodies have been paying to the local authorities, it has the further effect that it does not reduce the rateable values shown in the local authorities' lists.
  As the equalisation grants depend on the rateable value per head, the local authorities have been getting no extra grants for loss of rate income due to Section 8. This operates in such a way that although the rate income of the local authority declines, the rateable values in the list are not affected. As equalisation grants depend upon rateable values they are liable to variation on that account only. In most areas this does not matter, because the loss of rate income is small, but it has the effect that in three specific counties, Cambridge, Cardigan and Caernarvon, the loss is serious. That is mainly because university college buildings account for a high proportion of the total rateable value.
  In Cambridge, for example, the loss this year amounts to more than a rate of 2s. in the £.
  Mr. Mitchison: How does the hon. Gentleman estimate that?
  Mr. Bevins: On the basis of the figures.
  Mr. Mitchison: Why did the hon. Gentleman not make a similar estimate of the effect of Clause 1?
  Mr. Bevins: Because, as the hon. and learned Gentleman will appreciate if he reflects upon it, this is a simple calculation dealing with the effect of the increased rate poundage arising from the relief of rates to certain institutions and bodies. The other calculation is complicated by at least a dozen factors which I mentioned before. As a result of this provision, the grant payable to Cambridge County Council, according to the first estimate for 1957–58, will be increased by £190,500. There will be increases of £13,500 to Cardigan and £24,900 to Caernarvon.
  Mr. Goronwy Roberts: Is the hon. Gentleman aware that the cost to the Caernarvon County Council of the University College of Bangor is £31,000 per annum? He mentioned a grant of £24,900; why cannot he make it up to the loss sustained by this not very wealthy county?
  Mr. Bevins: I think that the figure I gave for Caernarvon, £24,900, is accurate, but I have a soft spot for Bangor, so I shall be very happy to look at the matter again.
  Hon. Members: Why a soft spot?
  Mr. Bevins: Clause 4 has been included because we did not think it would be reasonable to expect these three counties to bear the loss unaided for a further year. My right hon. Friend is considering a number of more important changes in the equalisation grant system. We must discuss these with the local authority associations before anything is done. Clause 4 will in no way affect the discussions.
  I would like to apologise to the House—
  Mr. S. O. Davies (Merthyr Tydvil): The hon. Gentleman has been extremely good in giving way to interruptions on numerous occasions. He has referred to the local authority associations. Has he discussed the Bill with them? If so, what has been their reaction?
  Mr. Bevins: Certain provisions of the Bill were discussed with the local authority associations. The House knows, or will be informed from what hon. Members may have read in the newspapers and by what has been said here this afternoon, that Clause 1 has not been discussed with the local authorities.
  Hon. Members: Why not?
  Mr. Bevins: This is a matter for Government decision, which was to relieve the burden on the shopkeepers.
  Mr. Lindgren: Are we to understand from that last remark of the Parliamentary Secretary that local government has ceased to be a partnership between Her Majesty's Government and the local authorities, and that now it is a matter of Government decision and local authorities carrying out that decision without discussion?
  Mr. Bevins: I am sure that the hon. Gentleman knows my right hon. Friend and myself well enough to be aware that that is not the case. There are circumstances, as the House well knows, when, reforms have to be put to this House and carried through, and where there is simply not the requisite time to discuss the matter with the local authorities.
  Hon. Members: Oh.
  Mr. Bevins: It will be—
  Mr. Mitchison: Will the hon. Gentleman tell me—
  Mr. Bevins: I think it is clear. It will be obvious to hon. Members that if Clause 1 and its effects are to be put into operation, as we want them to be, from the beginning of the next financial year in local government, from 31st March or 1st April, this Measure will have to become law fairly rapidly. Time is the essence of this business. It was largely because of the time factor that the local authorities were not consulted.
  Mr. Mitchison: What I wanted to ask the hon. Gentleman was whether the circumstances which led to that decision included by-elections?
  Mr. Bevins: I apologise for having detained the House for so long on a matter which is not very exciting. Before I sit down I would emphasise once more that
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  the Bill is an interim Measure and nothing more than that. My right hon. Friend will no doubt have something to say in the near future on the major issues involved in the reform of local Government finance.
  4.37 p.m.
  Mr. G. R. Mitchison: I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House declines to proceed further with a Bill which contains no proposals consequent on a general review of local government finance, does not provide for the re-rating of industry and so imposes an unnecessary burden on domestic ratepayers and local authorities."
  This has been the hon. Gentleman's first speech as Parliamentary Secretary of a great Ministry. In those circumstances, I will not make the comment on it that I otherwise should have had to make.
  As to the Bill, there are three Clauses at the end which are highly technical and which involve comparatively small sums of money; I mean small by comparison with the sums involved in Clause 1. As far as I am concerned, it will be better to discuss them in Committee though some of my hon. Friends may wish to raise points upon them. I know there are points which could be raised. There is, for instance, the point that arose on a previous rating Bill about the treatment of gas in some parts of South Wales, Port Talbot particularly. The matter very much concerns the constituency of my hon. Friend the Member for Aberavon (Mr. Cove). There are other points about universities and local authorities, one of which has been mentioned today.
  I want to confine what I have to say to Clause 1. The three other Clauses involve, if I followed the hon. Gentleman's figures rightly, about £3½ million difference altogether in rateable value. Shall I say under £5 million? In Clause 1 we are dealing with very much larger figures than that. I begin by reminding the House that the 1948 Act provided in Section 14 for an exceedingly important matter. Before the end of this month the Minister is under a statutory obligation to complete his investigations into the working of the Exchequer grant system, having regard, among other things, to the payments of nationalised industries dealt with in subsequent Clauses of the Bill.

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  At that period we were a little more thoughtful of the rights of local authorities than some passages of the speech of the hon. Gentleman appeared to indicate the present Government are. We expressly provided that there should be consultations with associations. That statutory obligation is still there and it is to be completed by the end of next month, and by the end of next month—if I read the Statute rightly—or very shortly afterwards, a report of the result has to be laid before Parliament. In those circumstances, which I shall develop a little further in a moment, I suggest that the Bill, especially Clause 1, is out of time and that by now we ought to have had more than what is provided in that Clause.
  It may be said that this is a particular review provided for imperatively in the 1948 Act, and why should there be a general review? The answer to that question is that this Government and predecessors of the right hon. Gentleman have chosen to enlarge the somewhat narrow review into a general review. They have given certain promises about its completion with which for the moment I must trouble the House. The change was made, I think, originally in two statements, one on 15th March, 1956, in Written Answers contained in column 72 of the OFFICIAL REPORT of that date, and again on the 8th May, 1956, reported in column 97 in Written Answers. I quote simply this:
  "the effects of revaluation are being Studied by the Government together with other related aspects of local government finance …."
  Here comes the puff—
  "This the most thorough review of kind since 1929, and naturally includes an examination of the issue of derating. This review …"
  This is in may,1956—
  "which was started, some months ago, is now already advanced. In fact, the Government expect to be ready with proposals for discussion with local authority associations by the autumn; …"
  We are now told there are to be discussions after some Government statement later on from now, this autumn. The predecessor of the right hon. Gentleman said:
  "and we hope to be able to make an announcement of our conclusions before the end of the year."—[OFFICIAL REPORT, 8th May, 1956; Vol. 552. c. 97.]
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  That was in May, 1956. They had been examining the matter for some months, they were going to discuss it with local authority associations by the autumn and were going to have their conclusions ready and announced before the end of the year. The matter was again mentioned in the Gracious Speech, which said that the Government had been reviewing the finance of local government. I ask the House to note the words:
  "including the incidence of the rate burden between different classes of property. Their conclusions …"
  The conclusions of the Government—
  "will, in due course, be announced to Parliament."
  What was contemplated in the Gracious Speech was what had been referred to before, a general review including de-rating and including the question of
  "the incidence of the rate burden between different classes of property."
  It is perfectly clear that that general review foreshadowed in the Gracious Speech would have covered not only de-rating, but the kind of matter which is to be dealt with by Clause 1 of the Bill. It is not altogether surprising, in view of what had been said earlier, that on 11th December the predecessor of the right hon. Gentleman, when again asked by hon. Members when he was to make his statement, said that he hoped to make a general statement on local government finance quite soon. There have been many previous promises, but that at any rate was a tolerably definite one. We came back from the Recess on 22nd January and found a Government of the same complexion but of different personalities. The present Minister, on being asked the by now, somewhat hackneyed question of when this general review was to be made, had the Question put to him:
  "… whether he is now in a position to make a full statement on local authority finance, Eating and valuation, with particular reference to industrial derating."
  The right hon. Gentleman answered:
  "I am sure the House will allow me a little time to carry through my own study of these important matters."—[OFFICIAL REPORT, 22nd January, 1957; Vol. 563, c. 34.]
  I should very much like to know whether or not he has carried out that study. If he has not done so, why is Clause 1 in the Bill? If he has done so, why have we not a general review of the whole problem? That plea of a Minister new to his

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  office to be allowed a little time to form his own conclusions on matters which have been under investigation, as we have been told, for a very long time, was made when those matters ought to have been, and in fact had been, in discussion with local authorities and when all the material and probably the opinion of his predecessor was ready to hand for him to study.
  I recognise that the right hon. Gentleman has had his hands and his letter bag remarkably full with matters concerning the Rent Bill, but that is not our fault. The terms of the Amendment call on the right hon. Gentleman now to produce not this half-baked effort in Clause 1, but a proper general review of local government finance. There must be some very remarkable reason if Clause 1, and Clause 1 only, comes forward now. The reasons given by the hon. Gentleman for it being imperative to bring forward Clause 1 now apply equally to the derating of industry and a general review of local government finance. If I die soon, as I dare say I shall. I hope it will be written on my tombstone, "He tried to make rates interesting." The word "tried" may be underlined, but one has to look at these matters as what after all they are—a very considerable burden on individuals and enterprises all over the country—and as something which has its human reactions.
  I shall come back to the question of the shopkeepers because there is a great deal more than shopkeepers in this story. We shall be told that shopkeepers are to get something, but the factory round the corner is still paying rates on the footing of the concessions made at a time of national difficulty and national crisis very many years ago—particular concessions for a particular purpose to pull industry out of its difficulties. The ordinary domestic ratepayer will ask hon. Members opposite, as he will ask us on this side of the House, that simple, time-honoured question to which we ought always to keep our ears open: "Is it fair?" What is their answer going to be?
  Mr. Frederic Harris: The hon. and learned Member will agree that the householder is already back to 1939 values?
  Mr. Mitchison: I am much obliged to the hon. Member. I have not forgotten
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  that point and will deal with it in a moment, but he will realise that that is no answer whatever to the man who says, "It may or may not be right to make a concession to the shopkeepers"—as I say, there is a great deal more than shop-keepers in this—"but if you are going to do that, why do you continue to make a very particular and substantial concession to industry which was given in particular circumstances and which we all know is no longer required?" He will go a little bit further and say, "If you did that, if you treated industry fairly, as it ought to be treated, you would not come down on me." Is he not right?
  We have had this question of the re-rating of industry several times before. It was discussed in Committee on the Floor of the House in connection with what is now the Rating and Valuation (Miscellaneous Provisions) Act, 1955, and there it is in column 555 onwards of the OFFICIAL REPORT. It was raised by an Amendment moved by my industrious, intelligent and eloquent colleague who sits for Acton (Mr. Sparks), and who interests himself particularly in these things. It was a remarkably good speech, and I do not mind saying so. But what was the answer? It was: "We cannot do it yet. We are going to have a general review of local government finance." That was June, 1955.
  In March, 1956, up it came again, when the same hon. Friend brought forward a Private Member's Bill, on a merry Friday, about the re-rating of industry. We want only two lines to do it—to repeal the particular Section that gave this extraordinary concession. Again, what happened? The Government and the Government's supporters got out of it, not by any discussion on the merits, because they are going to do it anyhow; not that, but simply by saying, "We must wait until we have a general review of local government finance." If they can wait for that, why cannot they wait for this? That is the question that I want answered.
  I said just now that if this were done, there would be no need for the concession in Clause 1 to come down on the domestic ratepayer, and I agree with the hon. Gentleman that this is quite a complicated figure. It does involve quite a number of questions, and therefore, I will pray in aid what his predecessor in office said

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  at the time. In column 760 of the OFFICIAL REPORT the Parliamentary Secretary to the Ministry at that time said that the result, by and large, would make a difference of one-sixth in the domestic rate burden.
  Let us take that. We have been told that the average rates are 15s. 8d. in the £, and, of course, I quite agree that these figures are approximate. They are bound to be, but that is an authoritative statement, and it looks, at first sight at any rate, as if the result of derating industry would be at least 2·7d. in the £ to the advantage of the domestic ratepayer. I tried to get the poundage figure out of the hon. Gentleman, but he said that it could not be done, and that there were good and sufficient reasons why it could not be done. What cared he whether city treasurers and accountants, people who had spent their lives in this kind of thing, had made estimates? He was not going to quote them certainly, he was not going to rely on them. He made no attempt to tell us what effect it would have on rates in the country at large.
  Like many other hon. Members, I received the other day a document which, I am bound to say, reminded me of one of those treaties which one finds in the archives of the Foreign Office, because it represented an agreement between great and semi-sovereign powers. It was signed by so-and-so on behalf of the County Councils' Association, by so-and-so on behalf of the Association of Municipal Corporations, by so-and-so on behalf of the Urban District Councils' Association and by so-and-so on behalf of the Rural District Councils' Association. It takes quite a lot to make all these people agree, but here it was, and they appended at the end the figures of the approximate increases. I agree they are approximate, because one cannot be dead certain about these things.
  The approximate increase in rates for 1957–58 which would result from the de-rating provisions of the Bill would range from 9d. to 2s. ld. If we take as instances one or two of the largest boroughs in the country, places where, after all, the rates are a matter of very considerable sums of money and of very considerable importance to the inhabitants, what do we find? We find, for instance, Birmingham, which alphabetically is first in this list, though the list is not complete, with
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  a figure of 1s. 7d. If we go a little way down the list, we find that Leeds is not in it, but I have had the figure from Leeds, which is 1s. 10d. In Manchester, it is 2s., and here is a case where it is 2s. Id. I wonder where hon. Members think it comes from. It is Skegness, the place that is so bracing, and it is 2s. 1d.
  Commander J. W. Maitland (Horn-castle): Does the hon. and learned Gentleman know that that 2s. 1d. is in itself a measure of the very heavy burden which the shopping district in Skegness has had to bear?
  Mr. Mitchison: I do not think it is, or that it purports to be that. What it purports to be is the increase in the rate poundage which will result from Clause 1 of the Bill. If the hon. and gallant Gentleman who sits for those parts likes to give the reason to his domestic ratepayers when they ask him why their rates have gone up, it is that his own Government introduced Clause 1 in this Bill, instead of making a general review of local government finance which is long overdue, instead of rerating industry, also long overdue—but they are going to do that anyhow.
  Commander Maitland: May I tell the hon. and learned Gentleman why the rates have gone up in my part of the world? It was because the Government which the hon. and learned Gentleman supported re-arranged the equalisation grant before they had a revaluation. That is the reason why the rates have gone up in my part of the world.
  Mr. Mitchison: I really think that the hon. and gallant Gentleman should take a tip from me. When one is discussing a document, it is better to read it first.
  Commander Maitland: I have done so.
  Mr. Mitchison: I am glad to hear that the hon. and gallant Gentleman has done so. Let him go away and look at it again, when he will find that what it referred to was one thing—the effect that Clause I will have on the rate poundage in Skegness. Now, vitally important though Skegness is, we must for the moment proceed to some more general considerations. Perhaps it was my fault. Obviously, it was, as I can see from the hon. and gallant Gentleman that it is a very bracing place. So much for that.

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  I ask the House for one moment to compare these two figures. It is perfectly clear on any showing that the re-rating of industry would have more than carried the charge that is to be put on the domestic ratepayers, or on the rates generally, by Clause 1 of the Bill. Let us see what this charge is, and, first of all, let us try to see for whose benefit it is. When it has been discussed previously, and it has been discussed before, hon. Members opposite, and I am bound to say one or two of my hon. Friends also, have gone forward behind what I may call a screen of small shopkeepers. I quite recognise that small shopkeepers, like Many other people in the world, have their difficulties, but they will not be the main people who will get any benefit out of this business. I asked the right hon. Gentleman some Questions a very short time ago, and I got from him some of the actual facts. I appear to have mislaid my papers again.
  Mr. A. E. Cooper: Will not the hon. and learned Gentleman agree that the Table in front of him appears to be in a stage of organised chaos?
  Mr. Mitchison: I am grateful to the hon. Member for his interruption. My only doubt is whether at the moment it is well organised.
  We have had reference made to Cmd. 9718, which dealt with the distribution of rateable values between different classes of property in England and Wales. It referred to three categories. One category was "domestic", and we have been talking about domestic rateable values. Another category was "shops". We find from the explanation at the beginning that shops are not just shops but include, for instance, banks in shopping areas, cafes, and so on. Then there is the category "miscellaneous", referred to in his speech by the hon. Gentleman. Out of the concession only three-eighths will go to the shops, and five-eighths will go to the miscellaneous group. Consequently, shops will get considerably less than half the total sum involved. The total sum involved, as a result of another Answer given to me, proves to be £219 million rateable value—

  ROYAL ASSENT
  5.2 p.m.
  Message to attend the Lords Commissioners.
  The House went; and, having returned—
  Mr. SPEAKER reported the Royal Assent to:
  Ghana Independence Act, 1957.

  RATING AND VALUATION BILL
  Question again proposed, That the Bill be now read a Second time.
  5.14 p.m.
  Mr. Mitchison: I was pointing out that the total effect of Clause 1, so far as I can judge from the figures which the right hon. Gentleman gave me as recently as 31st January, in column 228 of Written Answers, appears to be £219 million. The persons who are to get the benefit of that are, as to three-eighths, the class known as shops—about £82 million in all; and as to the remaining £137 million, the miscellaneous class. Apart from the shops, the remaining banks, and practically the whole of the City of London, for instance, and of the commercial centres of the large towns are included in the miscellaneous category. Those old and valued friends of hon. Members opposite, the breweries, are also included, the public houses, the cinemas, and the theatres and the rest of it. In fact, far the greater part of that type of property is included.
  There is a further point. The Treasury valuer has indicated to the local authorities associations that the principles laid down by this Clause for dealing with commercial property in private hands will be applied in dealing with offices and the like, corresponding, I suppose, to commercial property, when the Crown makes its usual contribution in lieu of rates. It is, of course, a formal difference and no more, and Crown property has not been dealt with yet.
  Therefore, at least £219 million is going to the relief of the joint stock banks, the breweries, the theatres, the cinemas—I am not sure that I do not grudge it to them rather less than to some other

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  people—and the shops. Oddly enough, as hon. Members will realise, that fine figure the small shopkeeper—and to do him justice, we all know him and respect him—is not the only shopkeeper. There are others. There are large multiple stores. There are big trading concerns which have branches, sometimes through subsidiary companies, all over the country.
  Mr. Peter Remnant: Like the Co-op.
  Mr. Mitchison: I quite agree with the hon. Member—and the Co-op. And the Co-op line about this is that it wants a general review of local government finance, and I earnestly trust that the remaining shopkeepers will be as public-spirited as the Co-op and will say to the right hon Gentleman, "We quite recognise your political motives for introducing this Clause now, but we would prefer to do the right thing and have a general review of local government finance and the re-rating of industry."
  I wonder if they will do that? I do not want to rouse any unnecessary heat—I do not feel any—but, really, this small shopkeeper business must not be overdone. He very often was a bit undervalued in the past. That is, what the local authority associations point out, and they know about these things. The small shopkeeper is only a very small part of it when we come to the mass of the business. There is Mr Isaac Wolfson, with all his subsidiaries—Great Universal Stores, I think it is called—spread all over the country. There is Unilever—some of the giants of modern finance, sorely in need of rating relief. By comparison, there is the small man in his house, whereon, at the moment, he is to be called to pay double his previous rent. I do not know how it appeals to hon. Gentlemen opposite, but I just do not like it.
  That is how it is coming down on the local authorities. Those are the people who are to be relieved—and who has to pay? Looking at the table, the two relieved classes amount to rather over 40 per cent. of the total, in rateable values. The domestic ratepayer accounts for roughly 50 per cent. The remainder, including the present rateable values on industry—not what they ought to be paying, but the form of the 75 per cent.
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  concession is, of course, a reduction in the rateable value and, therefore, in the present figures—well, there is only 9 per cent. left for all the rest. In substance, what it will come down to is that there is only £219 million for the benefit of the shops and miscellaneous group, to be paid practically entirely by the domestic ratepayer.
  That is one side of the thing. What about the local authorities? I ask the right hon. Gentleman the Minister of Housing and Local Government particularly, just to remember what the position of local authorities is at present. They will, no doubt, benefit by a very small amount from the reduction in the Bank Rate that was announced today, but, by and large, they are making necessary expenditure. There is very little within their discretion nowadays. I say with confidence that there is nothing that could be called extravagance by local authorities. Their expenditure is controlled in many ways. Hardly any of it is uncontrolled, and they are having to borrow at a rate of interest that is totally beyond anything in their experience before, and beyond their expectations in recent years.
  They are being called upon increasingly to pay more and more for what they have to provide. They are being called upon to pay more and more for the necessary services that are, after all, one of their primary functions. House building is costing more; so are education and welfare. One of my hon. Friends said just now that Manchester is likely to have a 2s. additional rate, quite apart from the 2s. which it will get out of Clause 1 of the Bill. Here are these local authorities struggling with high interest rates and with increasing costs, the conscientious ones struggling with the complete removal of the housing subsidies which helped them in one of their really essential functions, and the Minister is going to put on their backs £219 million for the benefit of the banks, the brewers, Unilever and all the rest. That is really what this Bill comes to.
  I am not ruling out for a moment that there are cases that ought to be considered. I take the view that a general review of local government finance is really necessary. I share, in a somewhat abstract spirit, the view which was expressed just now, that we really ought

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  to get a uniform basis of assessments so far as possible, and then make the allowances that are due on social grounds openly and to the people who really need them.
  I believe that is the right way of tackling rates. That is the way we deal with direct taxes. We make them progressive taxes. In varying degrees, under various Governments and from various points of view, we try to put the burden upon those who can afford them most. Rates are a thoroughly bad form of taxation. There is no doubt about it. They come down on one particular property, and nobody has ever been able to make them quite fair. Government after Government have produced illogical expedients to try to do in some rather crooked and unfortunate way that which it would be much better to do straight. That is my personal view, and there it is. It is not, however, only my personal view—it is everybody's view—that rates are an unsatisfactory form of taxation, and they are particularly unsatisfactory because they come down unduly hard on the small house owner. The small house owner at the moment cannot afford that sort of thing.
  So far I have been talking about the people who are to benefit under the Bill. I have said very little about re-rating industry because, after all, we have had that subject ventilated before. I have said a few words about local authorities. I find it a very good rule, in considering Tory legislation, to look and see who ultimately is to get the money out of it and who is to pay it. We found that the payer is the domestic ratepayer—in another way, if hon. Members like, the local authority. We found some of the people who are going to do rather well out of it.
  There is, however, one important distinction between the domestic rate and practically every other kind of rate. Those other kinds of rates on commercial property, industrial property and the rest of it are, if any profits are being made at all, a deduction from tax. That, of course, makes things very much harder for the domestic ratepayer. He can have no deduction. He is to take the burden of practically all of this £219 million—say £200 million. What is to happen so far as the Treasury is concerned?
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  The present Government have an absolute passion for dealing in round sums of £100 million. I have noticed it time and time again. This is about what the tenants will have to pay extra to the landlords under the Rent Bill. That is what the Chancellor of the Exchequer was going to save by a supplementary budget on his original plans. That is about what he now finds has to be paid extra. Somewhere about £100 million comes in here again. If this benefit is to be given to these people there will be less deductions of taxes. They will, therefore, pay more taxes and, as the local authority associations point out, the result will be that half—a rough figure, but somewhere about half—Income Tax and Profits Tax, remember—is going to benefit the Treasury.
  At the end of this technical and at first sight fairly limited Clause we come to the end of so much modern legislation. The Treasury is taking some more out of the pockets of the local authorities, and just about that sort of sum. There are too many uncertainties in it. Not all these people are making profits. It is not possible to tell what is the exact rate of tax. I expect that somebody tucked away somewhere in the Treasury has a pretty good idea, but I doubt if the right hon. Gentleman will tell us today. He will say that that is a matter upon which we should now ask the Treasury. I think it is possible that at the moment his move happened, he saw one side of the picture in the Treasury and looked at the other side in the Ministry of Housing and Local Government, and so is the only fortunate person in the country to know the real effect of what he is doing. One never knows.
  In all seriousness, I say to the Government that this really is not the time for the Treasury to try to make some more out of this rating business—because that is what they are trying to do indirectly. Of all the misleading notes that are put, quite correctly, on the outside of Bills, the Financial Memorandum in this case is about the most misleading. It is correct. It would not be possible to say anything else under our procedure, but it does not let the cat out of the bag—and that, as between the Treasury and the local authorities, is the cat.
  In the last resort, the man in the small house who is going to have his rent put
  up, the owner occupier who is having to

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  struggle with rising prices, the ordinary men and women all over the country, those who return hon. Members to this House, are the people who will have to pay for this untimely and naughty concession. It will be shared partly by the Treasury, and partly by a large number of commercial concerns including a few, but only a few, small shopkeepers. It is a naughty Bill, and is naughty for what it omits rather than for what is in it. The Government will not be at all surprised that we object to it on the grounds set out in the reasoned Amendment. Why have we half the cake, and only half the cake, now?
  Before I resume my seat, there is one document to which I should like to refer. Here is an institution which is certainly as mild as any dove. It is called the Institute of Municipal Treasurers and Accountants—technical people, whose journal is full of advertisements for insurance, calculating machines and things of that sort, who have no political views at all. It takes something to provoke a body like that to produce their leading article headed "Poujadism"—this is a reference to a gentleman in France who kept a stationery shop at one period—"pays off". I will quote only the first and last sentences:
  "Shopkeepers and commercial men must have rubbed their eyes in undiluted pleasure at the present that Mr. Sandys popped into their Christmas stockings."
  At the end, it says:
  "Poujadism grows with any success it has to feed upon, and the Federation of British Industries"—
  this is in connection with re-rating of industry—
  "will be quick to learn from the embattled 'shopocracy' that even in this country Poujadism pays."
  I quote that because of the source from which it comes. I hope that hon. Members will not accuse me of saying that I do not recognise—certainly, I do—that this Clause would cover some hard cases, I recognise that there is some inconsistency, quite considerable inconsistency, between the present assessments of domestic premises and shops. I recognise all that. But the Bill and this Clause in it is not the right way to deal with it. What we have in the Bill is, in fact, the result of political pressure by chambers of trade and so forth. It is no more urgent—it is indeed less urgent—than the re-rating
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  of industry, and both those things ought to have been dealt with together in a general review of local finance.
  5.31 p.m.
  Mrs. Lena Jeger: I beg to second the Amendment.
  It has been ably and, if I may say so, interestingly moved by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). He is one of the few people who can make the higher levels of local government finance seem not so abstruse and difficult to understand as they often appear to be when many other hon. Members speak upon the same subject.
  At the lowest level, of course, local government finance directly affects every single individual's pocket. I wish to support the Amendment particularly from that point of view. The Bill not only affects every household budget by reason of the increase in rent which must follow the increase in rates, but it will have a general effect upon the rise in the cost of living, and that is particularly to be deplored at this time.
  Nobody on this side of the House disagrees with the thesis that something must be done about local authority finance. In fact, we are all waiting for something to be done. We are still waiting for the statement which was promised on 20th December by the then Minister of Housing and Local Government, who said:
  "The major question, … of the derating of industry, is one of the large issues which will be dealt with in the full statement that I have promised after the Christmas Recess."—[OFFICIAL REPORT, 20th December, 1956; Vol. 357, c. 1476.]
  It might be said that today is after the Christmas Recess, and it will still be "after the Christmas Recess" for a long time to come. But I believe that the use of those words led hon. and right hon. Members of the House to expect that the statement would be produced soon after Christmas, 1956, and not after another Christmas.
  The difficulty about the Bill, and one reason why we must oppose it so strongly, is that instead of taking a step forward towards uniformity of rating, it is, by introducing a further measure of derating, taking us farther away from any uniformity. The Parliamentary Secretary, in opening the debate, referred

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  to the difference, in valuation between domestic and shop premises; but surely the House recalls that the Bill which provided for domestic premises, to be rated on their pre-war s value provided for that only in this first valuation, and in 1961 the second valuation was to be assessed on the post-war value. We had all hoped that by 1961 we should have taken a step further towards uniformity in the basis of rating.
  We now have, instead of that, a completely arbitrary and piecemeal approach to the problem. For many local authorities, it has come at a most inconvenient time in the financial year, at a time when they have already made some progress with the estimates for the coming year, as indeed by the middle of February, they certainly need to have done. Instead of there being some comprehensive Measure being put forward, we are faced again with what has been stated in the House to be a temporary measure. I submit that we cannot expect local government finance to be conducted for much longer on this purely temporary and arbitrary basis, with local authorities not knowing from month to month whether the Government of the day, for purely political reasons, is going to spring on them some basic change in the system of rating which completely disorganises their finances.
  I cannot emphasise too strongly the necessity for waiting until we have a complete review, including the derating of industry, to enable a lasting, comprehensive settlement to be arrived at, so that local authorities know where they are. I cannot see how it is right to try to remove what one hon. Member this afternoon referred to as discrimination against shopkeepers by imposing a discrimination against householders. I should have thought that, if there is a discrimination to be put right, it should be put right at the expense of those who are now enjoying quite unnecessary privileges.
  I am very sorry, too, that there is no provision in the Bill for any compensation to local authorities for their loss of revenue. It will be recalled that when the Local Government Act, 1929, was passed there was provision for a block grant to make good to local authorities their losses under derating. In fact, a sum of £27¼million was set aside by the Exchequer to
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  compensate local authorities for their losses under derating. Now, there is nothing to suggest that the present Government are making available to local authorities any sum to assist them in the present situation such as an addition to the Exchequer's equalisation grant. In fact, the evidence is to the contrary.
  Mr. I. J. Pitman: There is a difficulty about this, that whereas the block grant went as compensation to every local authority for industrial derating, with the change in the Exchequer equalisation grants there are many local authorities which are not getting the advantage of that. The relativity has been grossly disturbed.
  Mrs. Jeger: I should have thought that, with all the resources of the Treasury, there could somehow be produced, if there was the wish to do so, some way of making good to the local authorities this money which they are about to lose. An extra contribution to the Exchequer equalisation grant is an obvious way to meet the point.
  As my hon. and learned Friend has pointed out, the Bill is opposed by every single local authority organisation in the country. These are composed of men and women of no particular political persuasion, but people who are closely concerned with having to apply the Bill, and surely they are the very people whose views should carry some weight with the Government.
  The Bill will have an especially harsh effect in London. I make no apology for being parochial, because I conceive it to be our job to try to assess the impact of the Bill on the people whom we represent. Over the whole of England and Wales, domestic tenancies account for about 59 per cent. of the total rateable assessments. In London, the figure is only 29 per cent.
  In my borough, the Borough of St. Pancras, only 29 per cent. of our rateable premises are domestic. Therefore, it is upon that 29 per cent., that minority, that the burden of the Bill will fall, and because there are so few the impact will be proportionately heavier. This will come at a time when householders are facing heavy increases as a result of the Rent Bill, which is before the House, when the housewife is confronted with ever-increasing rises in the cost of food to feed

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  her family, when fares to work has gone up, and when there are increases in the cost of living on almost every major item of expenditure.
  If I may refer to the particular circumstances in St. Pancras as an example, I should say that the figures which I quote have been carefully worked out by the Borough Treasurer. I was rather sorry that the Parliamentary Secretary, in opening the debate, seemed to suggest that there was something unreliable in the estimates which had hitherto been given.
  In the present financial year, the borough had to raise £2,503,000. To do that, we levied a rate of 14s. 6d. in the £, which seemed quite enough to those of us who had to pay it. On the new basis, to raise that same sum, we should have to levy a rate of 17s. in the £—that is, an increase of 2s. 6d. in the £—to raise only the sum that we have used this year. The indications are that next year we shall need more money, owing to the policies of the Government, which have deprived us of housing subsidies, which have imposed high interest charges and which, in so many ways, have sent up the costs of materials and of services which local authorities need. I find it very difficult to explain to my constituents why their rate should be increased by 2s. 6d. in the £, and certainly I shall not go to a great deal of trouble to make any excuses.
  We must face fairly the position of the small shopkeeper. It is difficult to deal with it separately but I remember many occasions when, in discussing subsidies, for instance, right hon. Members on the Government Front Bench have said that subsidies were a had thing because they provided help to everybody in order to help a few people. Surely, that is exactly what the Bill is doing. It is saying to all the banks, the big offices, commercial firms and great chain stores, two of which have recently put out a free bonus issue of shares, "In order to help the little shopkeeper, we are giving you all a present."
  In my borough, about 2 per cent. of all the rateable assessments relate to shops with living accommodation over them. That is the core of the small shopkeeper population. I know that there are others, because there are small shopkeepers who do not live over their premises, but that 2 per cent. is the core
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  of the small shopkeeping population. Although a certain number must be added thereto, it is not an enormous number.
  As anyone who knows St. Pancras realises, we have in the borough the headquarters of many wealthy commercial undertakings. On every side there are rising great cliffs of office buildings, occupied by prosperous firms, paying out high dividends to their shareholders. It is very difficult for us to explain to the householder that because of the financial situation of these great firms which happen to find their home in our borough, the householder must be penalised. It may be that nobody—
  Mr. Bevins: The hon. Lady is developing a most interesting argument and I recognise from what she says that St. Pancras is a rather special case. [HON. MEMBERS: "No."] I wonder whether the hon. Lady, who obviously wants to be fair to the House, would tell us to what extent the assessments of those so-called wealthy commercial firms went up on reassessment and by how much the rate poundage in St. Pancras came down last year as a consequence?
  Mrs. Jeger: The point is that many of them went up on value. The other difficulty is that in the case of many of the new blocks, some of which have been in rateable occupation since June, another Department for which the Parliamentary Secretary is not responsible is so far behind with its assessments that we have not been able to collect any rate income at all.
  The income lost to the borough council from that cause will be £372,000. It is not good enough for the hon. Gentleman to go back in this matter, because we are all trying to look forward to a fair and uniform basis of rating.
  We have in St. Pancras a total of 15 per cent, of premises comprising shops, banks, cafés and so on, and 12·25 per cent. of office building. When the Bill was introduced this afternoon, no case was made out for relieving such premises of rates.
  Mr. Graeme Finlay: As one of the hon. Lady's constituents in Holborn—she has been rather forgetting Holborn and mentioning St. Pancras—may I point out to her that the rates of

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  most householders in the Holborn section of her constituency went down substantially as a result of the last reassessment?
  Mrs. Jeger: The fact that domestic rates went down last year seems very little reason for putting them up this year in order to help the Prudential, which I do not include among my poorer constituents.
  Mr. Bevins: The hon. Lady must follow the logic of her argument. She says that we must look to the future, but she also suggests that the future will not be right until we have a completely uniform basis of valuation. When we have that, I think that the hon. Lady knows what will happen without my saying so.
  Mrs. Jeger: I know that when we have a uniform basis of valuation which includes industry, we shall be gaining nearly £500,000 in rate income. I am sure that that can have only a helpful effect on the total rate burden which will have to be shared.
  There are obvious reasons why we have the Bill before us. There has been a great deal of pressure from interested parties, particularly from chambers of commerce and trade and shopkeepers' organisations, and I understand their difficulties. The Government, however, must be criticised for not having met those difficulties on their own level and in their own way. Certainly, there is no justification for helping them by a system which will relieve wealthy and prosperous undertakings from rate payment and impose this heavy burden on the ratepayer in domestic premises.
  This arbitrary and rather high-handed way of dealing with our local rate problem just will not do. It is not fair to the House. It is insulting to local authorities who have to face tremendous difficulties at the present time and who, when representations are made through the proper channels of their organisations, receive very scant consideration from the Parliamentary Secretary. It may be that he has in mind meeting some of these organisations and that in Committee there may be Amendments to meet their objections. I should like to think that he will at least try to meet the financial aspect of the case by promising some provision in the Exchequer equalisation fund to
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  compensate for their losses. The Bill is a thoroughly bad and unfair Measure, and I very much hope that it will be defeated.
  5.50 p.m.
  Mr. Frederic Harris: It is, of course, quite wrong of the Opposition to impute that the Government have brought the Bill forward entirely from political motives. I am very interested in this subject, and I fully agreed with many of the points made by the hon. and learned Member for Kettering (Mr. Mitchison), particularly with reference to derating. I very well remember many hon. Members opposite appreciating, when the new valuations were published, the fact that small traders were getting a very unfair deal. The Bill has been brought forward, not from political motives, but to remedy that injustice to small traders.
  It is easy to quote banks, because one is bound to bring in anomalies en route in a Measure of this kind. The fact remains that many hon. Members opposite, and certainly many on this side of the House, felt at the time that small traders were unfairly treated, and it was in answer to our pressure that the Minister promised that the matter would be remedied if injustices were disclosed.
  Mr. Lindgren: The hon. Member makes a good argument, but he and his colleagues previously said that it was unfair to give a food subsidy to the millionaire in order to give one to the old-age pensioner. Can he justify, in order to give a subsidy on the rates to the little, poor shopkeepers, giving one at the same time to Marks and Spencer's and Woolworth's?
  Mr. Harris: The same point was made by the hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Jeger) in relation to householders. We cannot deny that a householder today is held back to the 1939 values. Therefore, that in itself is an anomaly. What is the good of arguing from one anomaly to another like this? It was recognised by all fair-minded people that the small trader was being unfairly treated.
  Mr. Sparks: The hon. Member is referring to the fact that householders were assessed on 1939 values, but a large number of the shops which are in the present valuation list were previously

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  assessed on 1934 values, and that accounts for the present considerably increased valuation in many cases.
  Mr. Harris: The hon. Member is deeply concerned. I seconded his own Private Member's Industrial Rating Bill last year. I cannot imagine that he disputes that the valuation lists, when published, were unfair to a majority of small traders. Although I fully agree that in a few years' time the new valuations will take place for householders, probably with reorganisation of local government finance, we must recognise that the householder is not at present being unfairly treated.
  Mr. Mitchison: The hon. Member is making some very good points, but he will bear in mind that the Minister has to make this examination before the end of next month. It is not a question of a few years.
  Mr. Harris: I was speaking of the effect of the new valuations when they were published. I appreciated the points made by the hon. and learned Member on derating.
  I have my own complaints on this matter, as other hon. Members may have. I have tried to ascertain from the Borough Treasurer of Croydon the effect of all this on Croydon. Whereas throughout the country the effect is an adjustment of 7 per cent. on the rate burden as a whole, in Croydon it will amount to about 6 per cent. We in Croydon, as the result of the Bill, will lose, on valuation, about £300,000.
  The result of all that would normally mean an increase of 1s. in the rate poundage but, owing to the other points, which the Minister detailed, relating to proposals about the gas and electricity industries and the British Transport Commission, there will be an adjustment against that of about 2d. in the Croydon rate. Therefore, the whole effect will be about 10d., so far as we can ascertain at present.
  People throughout the country, and particularly hon. Members of the House, are most anxious that there should not be excess Government or local government expenditure at present. We want to be sure that there is no extravagance, but I fully agree with the hon. and learned Member for Kettering that we
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  can hardly accuse local authorities today of personal extravagance. They have to undertake expenditure at the direction of Parliament, and much of it comes under the heading of education alone. Nevertheless, the local authorities themselves are having to meet increasing commitments. I notice that no reference has been made in this debate to the wage demands which represent a very large amount of additional expenditure.
  Mr. Lindgren: Because of increased prices.
  Mr. Harris: All this additional expenditure will be included in the financial rate burden of the local authorities next year. Obviously, there will be considerable confusion in the country, and these increases of rates will be all attributed to this Bill. Whereas part of the increases will be attributable to the Bill—10d. in Croydon—another part, which will be at least another 10d. or 1s. in Croydon, will be attributable to increased expenditure by the local authorities.
  Mr. W. R. Williams: How would the hon. Member feel if the total increase were 4s. in the £, as it will be in Manchester?
  Mr. Harris: I agree that that is very disturbing, but I do not represent Manchester. I concentrate on Croydon, part of which I have the privilege to represent.
  Mr. D. Jones: The hon. Member will recognise that for every gallon of petrol put in its vehicles, Croydon Corporation will now have to pay 1s. 5½d. more, directly as a result of the Government's actions.
  Mr. Harris: Yes, but, unfortunately, Croydon Corporation cannot use its vehicles as much as it would wish to do at present, and that is also part of the whole argument.
  We must recognise that there will be considerable confusion throughout the country and all the trouble will be blamed on this Bill. Will the Ministry, in this case, really wake up and make sure that it is made clear to all concerned, when it takes place, that the general increase is not entirely due to this one, little effect? I sincerely hope that the Borough Treasurer of Croydon will make it abundantly clear that this Bill is not the reason for the total rate increase.

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  Whatever we may feel, however, the Bill had to come into being in sheer fairness to the small traders, so we cannot dodge the fact that it is only right that we should be faced with it now. Against that, time and time again I have personally pressed the point—sometimes I think that I am a lone wolf on this side of the House—that there is no justification for industrial derating under present conditions. It is fatuous for business houses to have a derating allowance of 5 per cent.—and I speak as one with business interests and who, would, therefore, be affected.
  The hon. Member for Acton (Mr. Sparks) will agree that I was the only Conservative Member who supported his Private Bill to abolish industrial derating—[An HON. MEMBER: "In the Lobby?"] Yes, I supported it so well that we won the first main Division.
  Mr. Sparks: The hon. Gentleman is right in saying that he supported the Second Reading of my Bill, but he was absent when it came up for Third Reading.
  Mr. Harris: The hon. Member must be fair to me. At that time I was not in England. It was unfortunate, but it was not deliberate. I supported his Bill fully and I have left my colleagues in no doubt of my views on the cancellation of industrial derating. As a matter of fact, the Croydon Council has known them for some time, and the Surrey County Council knew them years ago, when I had the privilege of being there.
  The Croydon Borough Treasurer, in response to my request, has told me that if industrial derating were cancelled in Croydon the immediate effect would be a saving of 1s. 2d. in the £. Therefore, on the one hand, the rate poundage would be up by 10d. and, on the other, it would be down by 1s. 2d., so if the Government could have gone the full way there would have been virtually a balance and the disturbance which will be created by this Bill would not have been necessary.
  Even if derating cannot be completely abolished, the derating concession could at least be eased down to the extent of 25 per cent. Of course, I would prefer to see it go completely, because that is the right way to tackle it; but if that
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  is not possible, why cannot it be done in part?
  The Minister has already said that industrial derating has to be, and will be, considered with the Government's new proposals for reform of local government finance, details of which will be given to us shortly. [An HON. MEMBER: "Why not wait for them?"] What a pity that those two steps could not have coincided with each other. If that could have been done, it would have avoided all the annoyance that will arise in people's minds, all of which will be blamed on this Bill. It will be claimed that in another way it will increase the cost of living once more, and, once more, that will be blamed on this Bill. I try to look at this matter from a purely business point of view, and I can say that if I had been faced with that problem in my business I would have made sure of the two things balancing.
  I do not doubt that it will be the view of the Government that the 75 per cent. concession on derating is out of date and that, if they cannot cancel it altogether, they must go a long way towards it. The Croydon Borough Treasurer tells me that it could easily have been done in this Bill and that that would have prevented many avoidable worries. I sometimes feel that Governments do not take into account all the additional problems they create for their back benchers and supporters which, with a little thought on the part of their advisers, could be avoided. I say that with great respect for the Civil Service.
  When derating is cancelled, as I am sure it will be, there will be no reason for manufacturers to say that they must put up their prices as a result. I say that because normally there is plenty of room in business margins to absorb the cancellation of derating. I know what I am talking aout, because it will affect my own business interests. I am disappointed that the Government have not seen their way to ease our problems a little by doing something for which I have been hoping for many years.
  6.6 p.m.
  Mr. Percy Holman: It gives me great pleasure to follow the hon. Gentleman the Member for Croydon, North-West (Mr. F. Harris), since I agree whole-heartedly with much of what he has said. I have a close association with

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  the Co-operative movement and that movement, with its 25,000 shops, was among those traders who made representations to the Government against the full 1956 assessments which were inflicted on their shop premises.
  The commercial section felt, rightly I think, that they were being unfairly treated as compared with industry. The commercial section is a wide section, which includes not only shops and offices but hotels, boarding houses, cinemas, public houses, schools, hospitals and a group of non-industrial establishments. Although industry came under the full 1956 assessment, in my view it was more fully assessed on current values than many in the commercial section, while domestic property was left on the 1939 basis.
  The Co-operative movement made representations to the Government, and at the Annual Congress held at Whitsun last year it passed unanimously a resolution which had considerable bearing on the present situation, and which read as follows:
  "That this Congress confirms the action taken by the Central Executive in pressing the Government to appoint a Committee of Inquiry to go into the whole question of rating in the domestic, commercial, industrial, agricultural, public utility, entertainment and educational aspects.
  At the present time occupiers of shops, offices and other commercial premises alone pay rates on the basis of current letting values, creating a situation which in the view of Congress is anomalous and requires investigation with a view to greater equity being secured in responsibility for the payment of rates."
  That resolution emphasised what the Government were considering already, the inequitable position of the rating system, and it implied that this unfairness would persist until a degree of equity was attained. In the Amendment moved by my hon. and learned Friend the Member for Kettering (Mr. Mitchison) emphasis is placed on the necessity for re-rating industrial premises as part, and an early part, of the move towards greater equity.
  Like the hon. Member for Croydon, North-West, having some experience of the rating of premises and so on, I should welcome the rerating of industry today. It would have been a very much sounder policy if the Government had rerated industry in order to equate the reduction of 20 per cent. in rate payments by commercial property at the full assessment.
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  This would have left the domestic, non-industrial and non-commercial sector in much the same position as it is now. That sector will have to face modifications in April, 1961, when assessments are brought fully into a position of equity for rating purposes. I trust that prior to that there will have been a further movement towards the broadening of the basis of local authority incomes from the present rather limited basis.
  The Co-operative demand, in the name of all its societies and members, was for a rapid attainment of equity in the rating system. I feel that most of us anticipated that a Government statement would have been made before any further legislation of a temporary or permanent character was introduced. There was absolutely no reason why this should not have taken place. While we appreciate that there has been a change of Minister, the promise was "in the autumn", then "early in the New Year", and now "very shortly".
  I do not know whether Ministers have found extraordinarily complicated problems arising or that the various municipal organisations are not as amenable as had been hoped, but it is essential that grievances should be rectified as soon as possible. It was impossible to get the residential assessments on a current basis in the first post-war revaluation, but singling out the commercial group as being the only one in the country to be rated on the full net assessment—not touching any other group other than the lifting of the basis for the industrial group, but leaving it at the full 75 per cent. Deduction—gave a sense of injustice to others, including the small shopkeepers. The small shopkeepers benefit in respect of only a small part of the amount which is being given away. In most areas, the other sectors on the commercial side represent much bigger rateable values than the small shopkeepers. Yet, as with the widow and orphan argument, the small shopkeeper is the one whose contribution is raised in order to reduce the rate payments of the very big sector in municipal economy.
  While the Co-operative movement was taking a leading part in asking that the inequity should be removed, at the same time, its resolution demanding greater equity took into consideration other factors. That enables me to say that the

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  Co-operative movement as a whole will support the Opposition in its antagonism to this bit of piecemeal legislation.
  I want now to say a word on behalf of a very large sector of the ratepayers of the country, the 11½ million members of the Co-operative movement, for whom perhaps, the societies, even in the resolution which I quoted, spoke somewhat inadequately. I believe that the overwhelming majority of those people—they represent half our community—would condemn the present Bill. As a result of the Bill alone, rates in my constituency, the poorest municipal area in the County of London, will increase by more than 2s. in the £. I do not hide the fact that there are other factors which will lead to a further increase in rates. These include the increased interest rates which have had to be faced during the last twelve months, and the increases in wages and salaries and cost of materials arising out of the inflationary situation. Rates in such areas are likely to rise by at least 3s. in the £. Small shopkeepers in such areas will find that they will not be saving 20 per cent. of what they have been paying in rates. They will be lucky if they save one-third of that amount in the light of the present economic situation.
  It is no exaggeration to say that the effect of the Bill plus the general inflationary situation will mean in the County of London an increase in rents from April of from 1s. to 2s. 6d. a week for the average working-class home according to its rateable value. This will be a prelude to further increases that we expect in the autumn arising out of other legislation. This will intensify feeling and lead to demands for still higher wages, a situation which many of us frankly admit is bringing us near the danger point, especially in conditions when productivity is not rising but is even tending to fall.
  If the Government cannot withdraw the Bill, they should do the only fair thing. I urge the Minister to promise tonight to amend the Money Resolution in such a way that the Government will be able to stabilise the situation in respect of the rates which will be brought about by the Bill, especially as it is only a temporary Measure, for by amending the Money Resolution they will make it possible for the Bill to be amended in Committee.
  6.19 p.m.
  Sir Spencer Summers: If I may refer, first, to the comment of the hon. Member for Bethnal Green (Mr. Holman), and to what was said by the hon. Lady the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) about recompensing local authorities for the losses which they will suffer as a result of the Bill, I hope that no one will imagine that the instrument of the Exchequer equalisation grant is a means by which the Government can achieve that end. There are very large sections of the country, including my constituency, which derive no benefit whatever from the operations of the Exchequer equalisation grant. If that means is not open to the Government, I hope that no fresh instrument will be devised, but that we shall instead hasten the financial survey which has been promised so that we may settle the problem as quickly as possible.
  There are two main points to which I want very briefly to refer, but before doing so I want to make two observations. I cannot see the justice of the argument of the Opposition who assert that although the Bill does justice to the small shopkeeper, undertakings which are much larger should not receive the same justice. Rates have never been assessed on the basis of capacity to pay. Where there are large and small enterprises, it cannot be fair to remove an unfair burden from the small and deny removal of the burden to the large.
  Mr. Lindgren: The hon. Member says that rates have never been assessed on capacity to pay. That is true, but they have been based on value, and the value arises from the business's ability to provide profit. If the ability to provide profit is larger in the big shop, the rateable value is there and surely rates should be paid on that.
  Sir S. Summers: The hon. Member knows that the Bill applies to far more than shops. Commercial undertakings are charged rates whether they have a good or bad year. It is unfair that the large enterprises should be singled out and put in a position different from that of the smaller ones. If they are in the same way of business, they should be treated on all fours with the small concern.

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  I am one of those who believe that it is no longer tenable to continue with the 75 per cent. reduction in industrial rating. However, I believe that there is a strong case for saying that something less than 100 per cent. payment is justified for industrial undertakings, on the ground that they do not derive the same benefit from available local services that many other ratepayers do.
  I am not sure whether I followed the Parliamentary Secretary's explanation of the Clauses affecting nationalised industries. As I understand it, the British Transport Commission will be treated more favourably than others because it has not been doing so well. That treatment can hardly be described otherwise than as a subsidy. I am sorry that this means of assisting the Commission should have been taken and that on those grounds it should have been treated differently from other undertakings.
  The formula to be applied to electricity undertakings will ensure that next year they pay the same amount of money as they paid this year If I have missed something I will no doubt be corrected later, but that seems to me to freeze the burden of rates on electricity authorities, a position not open to other people who are in no way assured of not having an increased rate burden in the future. That is a slightly favourable discrimination which requires more justification than we have yet had.
  The main topic to which I want to refer concerns those undertakings which are not to derive the benefit of Clause 1, because they are assessed on net and not on gross values. As I understand it, the justification for leaving them out is that the increased burden of maintenance is already taken care of in the net value and therefore it is not proper again to give them relief in the form of this 20 per cent.
  It is very hard to see in some cases how this increase in maintenance costs arises. Some of these undertakings are fishing rights, advertising rights, sports grounds and so on, in which maintenance costs play little or no part and yet they will not benefit from the 20 per cent. If the Bill goes through Committee unamended in this respect, we shall have the remarkable situation in Aylesbury that one of the few undertakings which
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  will be fully valued on current values without relief will be the football ground, which has the utmost difficulty carrying on as it is precluded, because a charge is made for admittance, from some of the advantages of Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955.
  Other undertakings which will be given no relief from paying current values in full will include car parks, cattle markets, swimming baths, sewage disposal works and so on, while others similarly placed will derive the 20 per cent. advantage resulting from Clause I. I hope that the Government will look at the Clause again and study the examples of the anomalies which arise from assessments on gross values and net values and that all will be treated on the same basis.
  6.26 p.m.
  Mr. Donald Wade: It is very unfortunate that we should have reached February, 1957, without having achieved a radical reform of our rating system, without even having the long-promised review of local government finance. Although some parts of the Bill have merits, to which I will refer later, it adds to the complexities of our rating system and I can quite understand the protests which have been made by local authorities.
  The Parliamentary Secretary referred to swings and roundabouts. We have had so many swings and roundabouts in our rating law in the last ten years that we are becoming a little dizzy. Local councillors are becoming extremely worried. Legislation since 1948, has made our rating law, especially as it affects the distribution of the rate burden, almost as complicated as the Rent Restrictions Acts.
  The anomaly with which Clause 1 deals is not something which has just arisen. As a result of the Valuation for Rating Act, 1953, four categories of properties are dealt with differently in rating—that is quite apart from properties used for charitable purposes. First, there are dwelling houses; secondly, agricultural land and premises; thirdly, industrial premises and, fourthly, shops and offices. This distinction is quite illogical. My view which I have expressed ever since 1953, is that shopkeepers have had a raw deal.

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  In the Second Reading debate on the Valuation and Rating Measure of 1953, I said:
  "I know that there are many small shopkeepers throughout the country who find the rates a very heavy burden, and there is no doubt about it when this revaluation takes place as a result of these provisions, the increase of rates upon the shopkeepers will be very heavy indeed."—[OFFICIAL REPORT, 21st May, 1953; Vol. 515, c. 2348.]
  The Government are not asking for a subsidy for shopkeepers and it would be unfair to talk in terms of a subsidy. The Government are asking for rectification of injustices created by earlier legislation.
  There was a clear injustice in basing the rating of shops and offices upon 1955 values and dwellinghouses upon 1939 values. I have always said that that was anomalous. There is, at any rate, a case for remedying that anomaly, and in a few moments I shall indicate how I think that it should be dealt with.
  Mr. Lindgren: How can it be an anomaly if, in 1956, when the valuation operated, the house was at the 1939 value? We have had rent restrictions ever since 1920. Therefore, it would have the same value in 1956 as it had in 1939.
  Mr. Wade: I do not think that the hon. Member has followed my point.
  Mr. Lindgren: If the rentable value of a house was £50 in 1939 and is still £50 in 1955, that is its value for rateable purposes. If a shop was rated at £200 a year in 1935, and is paying £400 in 1955, surely the value has changed.
  Mr. Wade: I do not think that there can really be any dispute about this matter. What I am saying is that since 1st April dwellinghouses have been rated upon the basis of 1939 values, whereas shops and offices have been rated upon 1955 values. It is difficult to justify that position. There will continue to be anomalies until we have a complete overhaul of our rating system. That is an urgent requirement.
  I want to see a different division of financial responsibility as between local authorities and the Exchequer. Certain expenditure should be borne by the country as a whole rather than by local authorities. That point will presumably be considered in the review of local government finance. As for the burden
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  which falls upon local authorities, and which is carried by the rates, I would preferto see the assessment based primarily upon site values rather than as at present. If that were done it would help to remedy some of the anomalies that exist today and which have existed for many years.
  When shall we get this review, and when will the recommendations be put into effect? I was very disturbed by one remark of the Parliamentary Secretary, and I hope that I was misled by what he said. I understood him to say that the Bill would apply only until the end of the present quinquennial period. It would seem to follow from that that the major reform would not take place until the end in the period of five years commencing n April last year. That is disturbing. I assumed that the major reform would take place very much sooner than that.
  Mr. Bevins: Perhaps the hon. Member did misunderstand what I said. I said that my right hon. Friend will announce to the House at a very early date his major proposals for the reform of local government finance. I can assure the House that it will be at an early date. I said that, meanwhile, this Measure would be an interim Measure, but that the 20 per cent. adjustment of rateable values upon commercial premises, the law being what it was, would be temporary, until the time of the next revaluation.
  Mr. Wade: I am still a little disturbed by that reply. It seems to indicate that the major reform will not take place until the next revaluation.
  Mr. Bevins Mr. Bevins indicated dissent.
  Mr. Wade: If the proposal contained in Clause 1 had been introduced a year ago, although it would have provided very rough justice, there would have been something to be said for it. Today, some shopkeepers may say that it is too little and too late. I know of a number of shops which have already gone out of business as a result of the increase in rates which followed the new assessments and the new rates which came into effect last April.
  Clause 1 may go some way towards meeting the injustice to which I have already referred. The question we have to bear in mind is whether, in remedying one hardship we are not creating other

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  hardships which are just as serious. As I understand, the Opposition's view is that we should throw out the Bill altogether for that reason. I have not come to quite the same conclusion. I should be sorry to see Clause 4 dropped. That makes a very necessary though minor amendment. I would not go so far as to say that rejecting the Bill would be tantamount to throwing out the baby with the bath water, but there are some minor changes made by the Bill which I should like to retain, and I would prefer to see the Bill given a Second Reading and then very drastically amended.
  That does not alter the fact that we have here a choice of evils, and there are some very serious evils, as has been brought to light already by other speakers. But before I pass to those I want to say a word about Clause 4. As I understand, that will remedy the somewhat anomalous position which arose particularly in places like Cambridge and Aberystwyth. Section 8 of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, had the effect of depriving certain county and borough associations of compensation from the Exchequer equalisation fund, which they would otherwise have received. I have some doubt whether they will be fully compensated even if the Clause is passed, and I should like some assurance that their case will be fully met
  Even if it is, there is another legitimate criticism about the Clause which I hope the Parliamentary Secretary will consider. It occurs to me that it will freeze the position in regard to premises which are treated as charitable at the discretion of local authorities. On 27th December last year, The Times printed an article which contained a reference to that point, and which said:
  "… the Bill provides that an authority's rateable resources for the purposes of the Exchequer grant are to be measured as though the proportionate method of charitable relief were the only method. This is bound to have the effect of fettering local authorities' discretion to allow lesser or greater relief as they judge fit."
  I should like to know what the Parliamentary Secretary has to say about that.
  On the more serious aspects of the Bill, there is a clear need for major amendments arising from three serious flaws. The first is the fact the Bill may come into effect before the rerating of industrial premises. I have endeavoured to
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  draft a new Clause which, if it is in order and is accepted, will have the effect of making Clause 1 coincide with the repeal of the derating of industrial premises. I appeal to the Minister to adopt that proposal. If it is practical to tinker with this complicated rating system at all, if there is a case for dealing with an anomaly as a temporary measure, there is just as strong a case for repealing the de-rating of industry as there is for introducing Clause 1 of this Bill. If that is not done, it will undoubtedly be unfair to householders.
  The second point is one which has already been raised by the local authorities. In the letter of 5th February sent out by the Association of Municipal Corporations and other local authority associations it is pointed that
  "local authorities are deprived of a large proportion of their rate income which can only be regained by levying increased rates."
  The organisations express their opposition to this in principle, and ask for some compensation. I realise that that would involve additional sums being granted by the Exchequer. I appreciate that it could not be dealt with by the Exchequer equalisation fund as it is at present. But, as the associations point out:
  "if any precedent is needed for payment of such compensation, it can be found in the provisions of the Local Government Act of 1929."
  The only sensible way to deal with the matter is to make a special grant. Otherwise, local authorities will be put in a very difficult position. I am not suggesting that my own local authority will be the hardest hit. Cases of greater hardship than that of Huddersfield have been quoted. But the Town Clerk writes:
  "The position in Huddersfield is that the reduction by 20 per cent. in the rateable value of shops, etc., will result in a reduction of the rateable value of the borough of £107,000, i.e., approximately 8 per cent. of the toal valuation."
  He goes on:
  "It is not possible at this stage to say exactly what would be the rate increase resulting from this reduction in the rateable value, but it has been roughly estimated as between 1s. 3d. and 1s. 6d. in the £."
  For a long-term policy I see objections to meeting those difficulties by a further grant of funds by the Exchequer. But if this is only a temporary Measure, if we are dealing only with an interim period until we get a major reform in the rating

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  system, I think that the fair and proper way to deal with this problem would be by a special Exchequer grant; in other words, to put the burden on the country as a whole until we have a reformed rating system. It is not the fault of the householder, or other ratepayers, that a major reform of the rating system has been delayed for so long.
  My last point relates to the Financial Resolution. The letter from the Association of Municipal Corporations and other associations points out—I think rightly—that the Bill contains no provision for the payment of compensation and that any Amendment in Committee would be out of order unless the proposed payment were covered by the terms of the Financial Resolution. That provides an interesting and rather serious example of a Financial Resolution being worded so tightly that not only is the House prevented from amending it, but, as I see it, the House would be prevented from discussing a very important point which hon. Members might wish to raise and would be unable to do so because of the way in which the Resolution has been worded.
  Hon. Members may think that, in view of those criticisms, it is difficult to support the Bill at all. But in these days of strict whipping I do not suppose that it will make much difference whether I say that I propose to support the Motion for Second Reading or not.
  Mr. Ede: The hon. Gentleman is a Whip and should know.
  Mr. Wade: I live in hope that we may be able to obtain some major Amendments to this Bill during the Committee stage. We may be able—and I think it would be right—to do something for the shopkeepers who have suffered a genuine injustice. But what we do will be only rough justice—the Parliamentary Secretary talked about rough justice, and it will be only rough justice—if, at the same time, we do something to ensure that an additional hardship is not placed on the householders.
  6.45 p.m.
  Lieut.-Colonel J. K. Cordeaux: The hon. Member for Holborn and St. Pancras South (Mrs. L. Jeger) said that something had to be done for the small shopkeepers, but that she did not think that the Bill provided a way to
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  help them. She also did not say, unless I missed it, what was the right way. I strongly support Clause 1, because I feel that it provides the only practical means which may be used in sufficient time to protect small shopkeepers, who are a most deserving class.
  I know, as many hon. Members have said, that the small shopkeepers are by no means the only beneficiaries. The hon. Member for Bethnal Green (Mr. Holman) was right in suggesting that they form only a small proportion of the beneficiaries, or perhaps it is more correct to say that they would get only a small proportion of the benefit. I think I am right in saying that of the rateable value resources of about £289 million the commercial and shop rates are the largest item.
  Mr. Mitchison: Which shops?
  Lieut.-Colonel Cordeaux: At the moment I am referring to shops as a whole. I will come to that point later.
  Of course, there are very many large shops, but there are many more small shops, and, therefore, there are many more small shopkeepers. Besides being a deserving class they are a long-suffering class. In recent years they have suffered a good deal in silence, but they are not prepared to suffer the latest revaluation in silence and I do not wonder at it. Hon. Members on both sides of the House, and even the four local government associations who have written to all hon. Members, would agree that in the last revaluation the small shopkeepers were treated—perhaps they would not agree unfairly—but certainly unkindly, and I feel that the figures support that contention.
  After all, in the old valuation the proportion of the total rateable resources of this country as represented by the shops was 10·74 per cent. In the new valuation that figure has risen to 14·79 per cent., an increase of about one-third, which is a big increase. In my own city, Nottingham, the increase in the new valuation for shops was actually six times as great as in the case of dwellinghouses; and for dwellinghouses with shop accommodation it was as much as three times. That seemed to many of the small shopkeepers to be the last straw. I believe that Clause 1 will remove that straw from their backs. I do not agree with the hon.

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  Member for Huddersfield, West (Mr. Wade) that it is too late. I believe that it will remove the straw in time to prevent a number of them from going out of business.
  Mr. Wade: For the sake of greater accuracy, may I say that I referred to some shopkeepers who will say that it is too little and too late?
  Lieut.-Colonel Cordeaux: I am happy to say that so far as I know the majority of small shopkeepers in Nottingham, anyway, are still hanging on.
  The new valuation of many of the small shops in Nottingham was considerably more than double what it was in the previous valuation. In the city a small shopkeeper, in order not to have to pay more rates and to break even, had to have an increase of not more than 72 per cent. in the new valuation. This shows what a burden these people have to put up with.
  I should like to quote from a letter which one of them wrote to me not long ago. He said:
  "I am serious when I say that it will be very difficult to get that extra money out of one-man shops. The large concerns could stop one or two of their workpeople and meet it that way. But we shall shopkeepers are a sitting bird for this new valuation stunt. As for appeals, well, I have had some. We won't have a cat in hell's chance."
  That is the only polite and repeatable part that I can quote from a three-page letter. I sympathise with nearly all that the letter contains. It was from one of my more voluble shopkeepers. There are many elderly ladies in my constituency who keep dress shops and baby linen shops, and there are other small shopkeepers, who do not write to their Member of Parliament and shout about their troubles. Many of them do not have a very big turnover and this savage increase in rates was a disaster for them.
  It is no good going to these small shopkeepers and giving them an official explanation by saying, The old valuation lists were made twenty-two years ago; we had to have some new ones it was absolutely essential", or to say, "There has not been a free market in houses since 1939 because of the housing shortage and continuing rent control" or, "We have had to assess these houses on the 1939 basis, but, of course, that does not apply to you." Particularly was it
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  no good saying to them, "Don't you think that the Conservative Party has done a very brave thing? It was necessary. The Labour Party shirked doing it."
  That, perhaps, went down worst of all. They were not interested in all that. All that they were interested in was the hard fact that the increase in their rateable value had gone up six times more than in the case of the ordinary dwelling-house, and that they would have to pay appreciably more in rates whereas their neighbours in ordinary dwellinghouses were, in many cases, going to enjoy a decrease. It was no good saying to them, "Industry is badly off and it has had just as big an increase as you, or even bigger."
  One of the chief sources of grievance of the small shopkeeper is the fact that he can look out of his shop window and see a managing director driving his Rolls-Bentley to his factory, which is 75 per cent. derated and from which he is very likely running a shop himself in direct competition with the small shopkeeper, and which is 75 per cent. derated as well. The small shopkeeper is not a bit interested in these explanations. He thinks that it is damned unfair and, personally. I could not agree more.
  The small shopkeeper did not deserve the treatment which he got by the new valuation. He deserves well of the community. He has built up his business mostly by sheer hard work, often a 14-hour day, for years, because he does not stop working when he locks the door any more than the bank clerk does. There are all the accounts to be done, the stock taking, the window dressing for the next day, the rearranging of goods, the correspondence to be answered. The small shopkeeper, by hard work and real service, and by considering the convenience of his customers, can still. I think, compete with the big chain stores and other big shops if he gets a fair crack of the whip and reasonable justice. I think that that is what Clause 1 of the Bill will give him.
  Mr. Mitchison: Does not the hon. and gallant Gentleman realise that Clause 1 will help the large chain stores, the Prudential, the joint stock banks, and other similar institutions just as much as, and at a great deal more expense, the small shopkeepers? Further, if it

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  is a brave thing to do to introduce the Bill, would it not have been even wiser and braver to rerate industry at the same time?
  Lieut.-Colonel Cordeaux: I fully realise the first point that the hon. and learned Gentleman made. I can only go back to what I was saying earlier, namely, that despite that, Clause 1 was really the only practical way in which to give help to the small shopkeeper in time.
  That, of course, does lead to the second question which the hon. and learned Gentleman asked me—would it not have been much better to have carried out re-rating at the same time? I do not know whether it would have been practical to have done so, but I myself would have thought that it would have been much better.
  I agree with what was said earlier on this subject by a colleague on these benches. The Bill provides a certain amount of rough justice because it reduces the shopkeepers' share of the total rate resources to about 12 per cent. from 14·29 per cent. to which it had gone up. But, even so, it will be 1·2 per cent. above what was being paid of the total proportion on the old valuation.
  There has been strong criticism of the Bill both inside and outside the House. It is being said today that it is piecemeal legislation. That was the criticism made by the hon. Lady the Member for Holborn and St. Pancras, South, and it was said by the hon. and learned Member for Kettering (Mr. Mitchison) that it was a retrograde step to take before a final decision could be reached on local government finance generally, including, perhaps, derating. In fact, it was said that the whole Bill was thoroughly untidy. Maybe it is, but I would prefer untidiness to injustice, and for that reason I very strongly support Clause 1.
  6.58 p.m.
  Mr. Glenvil Hall: The hon. and gallant Member for Nottingham, Central (Lieut.-Colonel Cordeaux) is the first speaker, apart from the Parliamentary Secretary who opened the debate, to announce that he is in favour of the Bill.
  The hon. Member for Huddersfield, West (Mr. Wade) indicated that he will probably not vote against the Second Reading, although I found his reasons
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  rather obscure. He dislikes the Bill, apart from parts of Clause 4 and was certain that the Financial Resolution was so tight that even if we agreed to the Second Reading there was very little we could do with the Bill. Nevertheless, he would let the Bill go through now in order to try to amend it in Committee.
  I would like to feel that it was possible to amend the Bill in Committee because there is not the slightest doubt that the Government will get the Second Reading because they have a sufficient majority to do so. But we can only do so if the Financial Resolution is amended. The Minister knows how difficult it is to do anything in Committee when the Resolution is too tightly drawn to permit reasonable Amendments to be moved. That is one of the procedural difficulties of the House. We certainly have to protect the Exchequer, but in doing so the Financial Resolution should not be so drawn as to stifle discussion and prevent fair Amendments being made.
  It is difficult to say anything new about a Bill of this kind, particularly when the issue is so narrow and when my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and other hon. Members have so completely covered the ground. In any case, a number of my hon. Friends wish to speak and, therefore, I shall not detain the House for very long.
  I have been asked by all the local authorities in my constituency to do all I can to oppose Clause 1 of the Bill. I represent a very scattered area on the roof of the Pennines, where there are five urban district councils by no means all Socialistic in outlook. I have had representations from them asking me to oppose the Bill. The West Riding County Council has also written to me, as well as to others, asking us to do what we can to prevent the Measure from going through. The West Riding is at present a Conservative county council.
  This Bill will increase rate burdens on local authorities and householders from one end of my constituency to the other. Much has been said by Government supporters about the Bill being primarily designed to help the small shopkeeper. We too wish to help the small shopkeeper. Government supporters appear to assume there is only one way of doing this, by passing Clause 1, but we believe that the best way of helping, not only the small

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  shopkeeper, but also the small householder, is by carrying through the review of local government finance, as the Government promised to do a long while ago, to a satisfactory conclusion. The Bill would not be before us if that review had taken place or were likely to come to a conclusion soon, so the assumption must be that the Government have no intention of dealing with local government finance for many months, and possibly years, ahead.
  I agree with much that was said by the hon. Member for Croydon, North-West (Mr. F. Harris). I, too, cannot for the life of me see why, if we can give a 20 per cent. relief to certain ratepayers by Clause 1, we cannot deal with the rerating of industry in much the same way. It is not as though the Government did not know the rateable value of industrial hereditaments. They know it quite definitely. We are all aware that rates are levied on them to the extent of 25 per cent.; it would be simple, surely, to enact, for example, that the 25 per cent. should be doubled. That would be one way of helping to relieve the small shopkeeper, if that is what we want to do.
  We all know that in addition to helping the small shopkeeper, for whom an excellent case can be made, the Bill will give relief to some very much larger fish. It is unfair that the Bill should give such relief at the expense of householders and by adding to the financial troubles of local authorities.
  I have here a communication from one of the urban district councils I mentioned, reminding me that other burdens have been put upon local authorities by the actions of the Government during the past few years. There has been the increase in interest rates and-the changes in housing subsidies, not, to mention the additional costs due to 'petrol rationing and other things. The burdens, on local authorities increase yearly. It will be a great pity if the Government add to them by the Bill.
  I therefore hope that some Government supporters, at least, who have also had representations made to them by their local authorities, will join with us tonight in our opposition to the Second Reading of the Bill.
  7.6 p.m.
  Mr. A. E. Cooper: I am very sorry that, for the second time in a few months, I find myself at odds with my right hon. Friends. For about three years I have been President of the Ilford Chamber of Trade and Commerce and, naturally, I would very much like to do all I can to help the Chamber to get such relief from rates as might be possible to them.
  The Bill, particularly Clause 1, seems to be thoroughly bad. I do not profess to be an authority on rating and valuation, but I believe that Clause 1 offends against every known principle of rating. Previous Rating and Valuation Acts have laid it down that the valuation which took place last year related, so far as shops were concerned, to current values, and to 1939 values for house property. Now the Government seek to alter that position by Clause 1.
  The proposals make nonsense of those previous Acts. We have got to the position where house property is rated on 1939 values plus x and shop property is rated on 1955 values minus x, with nobody knowing anything about what x really means in either case, except that the Government have now decided that it shall be 20 per cent. of current values.
  I recognise the force of the arguments put forward by the hon. and learned Member for Kettering (Mr. Mitchison) and the right hon. Member for Colne Valley (Mr. Glenvil Hall), to whom I would observe that my constituency is also on a roof-top. They pointed out that the Bill will enable insurance companies and banks also to benefit materially, but I would remind them that that benefit will be shown in their balance sheets and will be taxed by the Inland Revenue. Therefore, the benefit which they will get on the one hand the Chancellor of the Exchequer will take away on the other hand. But that does not help the individual ratepayer in the small house.
  During the last Session of this Parliament the hon. Member for Acton (Mr. Sparks) introduced a Private Member's Bill—to which reference has already been made—concerning the rerating of industry. We on this side of the House, who had great sympathy with the objects of that Bill and have spoken in favour of

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  them in the country for many years, were advised by the Minister to oppose it on the grounds that rating and valuation should not be dealt with piecemeal. If we (are quite dispassionate in our approach to this problem we should not deal with rating and valuation piecemeal.
  I do not think the hon. Member for Acton will accuse me of any discourtesy when I say that he did not expect to get very far with that Bill, but that it was a fair bit of political window dressing. Good luck to him for having got so far.
  Mr. Mitchison: He got it through Second Reading and Committee
  Mr. Cooper: The hon. Member got further than that. He nearly got it through Third Reading, but if he had got it through Third Reading he would have been the most surprised man in the country.
  I am sure that hon. Members on both sides of the House will agree that we should not deal with this problem piecemeal, but the Bill deals with the problem piecemeal. It certainly gives justice to The shopkeepers, whom we wish to help, but, in helping them, we place an unfair burden on another very deserving section of the community who need help at present and leave untouched a vast reservoir of rateable value.
  In moving the Second Reading I do not think my hon. Friend made very much of a case for the Bill. I was very surprised to hear that the Ministry of Housing and Local Government did not know what the precise effects of this Measure will be in the country. All I can say to my right hon. Friend is that there is probably no hon. Member who has not already been advised by his local authority of the effects of this Measure on its local finances. I have before me a letter from the town clerk of Ilford, dated 6th February. Apart from drawing attention to the way in which the Financial Resolution is drawn—to which reference has been made—it shows that the officials in Ilford know perfectly well that the effect of this proposal will be to reduce the value of a 1d. rate from £12,190 to £11,500 and to increase the rates by at least 1s. in the £. Those effects are known precisely in the Borough of Ilford. I believe that they are known precisely in every borough.
  Mr. Ede: And by county boroughs.
  Mr. Cooper: I want to say to my right hon. Friend, in as courteous a manner as I can, that it really is not good enough to continue to hold up the reform of local government finance. We have been pressing for that on both sides of this House for many years; ever since I have been in Parliament, more than seven years.
  When we were in opposition we pressed the Labour Government to do this very thing. The right hon. Member for Ebbw Vale (Mr. Bevan), when he was Minister of Health, made promise after promise that this subject would be looked into. Since we have been in power we have made similar promises, but we seem to be as far off any proposals on this vital subject as we ever were.
  This Bill would not have been necessary if we had got those proposals before us, not even in legislative form but as a White Paper. If the country could see what the overall proposals were for the reorganisation of local government and rating and valuation, the Bill would not be necessary. Therefore, I say to my right hon. Friend that some of us on this side of the House require a very specific pledge from the Government tonight as to what their proposals are for reforming local government finance. Unless we receive a satisfactory answer to that question it might be necessary for some of us to abstain from voting on this Bill.
  7.15 p.m.
  Mr. W. E. Wheeldon: It was certainly interesting for hon. Members on this side of the House to listen to the speech of the hon. Member for Ilford, South (Mr. Cooper). I am quite sure that most of us would subscribe most heartily to many of the sentiments which he expressed, and I hope he will come into the Lobby with us against this Bill.
  Mr. Cooper: I was very careful not to say that I was going into the Lobby with the Opposition. I merely said that I might not go into the Lobby, which is a very different thing.
  Mr. Wheeldon: Knowing the hon. Member, we might have been sure that there was an escape clause.
  The most significant part of the speech of the Parliamentary Secretary in opening

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  this debate was the fact that he paid so little attention to the most important Clause in the Bill, Clause 1. Only a small proportion of the time at his disposal was spent in dealing with that Clause. I think he was wise in that in view of the very weak and poor case which the Government have. It is interesting to contrast the speech of the Parliamentary Secretary with the speeches made only twelve months ago by the hon. Gentleman who is now Financial Secretary to the Treasury. Those speeches are in marked contrast. Less than twelve months ago we were told by the then Parliamentary Secretary that it was impossible to deal with the rerating Bill proposed by my hon. Friend the Member for Acton (Mr. Sparks) "because," the Government said," we must first have a complete review of local government finance." So far as I remember, they offered no single argument against that Bill except on that particular ground.
  They supported their argument in one or two ways of which I should like to remind the House tonight. They said, speaking through the mouth of the then Parliamentary Secretary, "If we went ahead and the House adopted the Private Member's rerating Bill, that would leave local authorities in a state of complete uncertainty as to their future." Is that not precisely what this Bill, if passed, will do to local authorities? Of course it is. It was emphasised by Government spokesmen that valuation lists would have to be amended piecemeal; there would be proposals for alterations of the lists, revision of valuations would result from rerating and so on. Therefore, the hon. Gentleman said, valuation lists would be in a state of complete uncertainty. Those are almost, but not quite, the exact words the hon. Gentleman used.
  It seems to me that the passing of this Bill will present local authorities with almost exactly similar conditions. If we have the derating of commercial premises, in the main those premises will attract higher rents and higher rental values and local authorities will lodge objections or proposals for the amendment of valuation lists. Then we shall have the complete uncertainty against which the Minister so eloquently protested when the question was rerating instead of, as in this Bill, derating.
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  The hon. Gentleman went even further and spoke about applications which would arise in connection with equalisation grants and the education grants. He asked, "Why put local authorities in a state of uncertainty?" Some local authorities would get an extra equalisation grant and some would lose it. In some instances the education grant would be altered—indeed, in all cases. It was completely unfair, so the Government said, to chop and change in that manner with the finances of local authorities. "Wait until we get this complete review of local government finance," they said. That was the consistent argument of Government spokesmen, and indeed of those who spoke against the Bill of that day.
  It is the same surely today, in regard to this Bill. The Government are quite prepared, it seems to me, to do this chopping and changing when it suits their purpose, and when it is in the interests of those people to whom the Conservative Party usually looks for support—the commercial interests—and they are prepared to give rate relief to people who do not deserve it. I am not now speaking particularly of the small shopkeepers, to whom reference was made by the hon. and gallant Member for Nottingham, Central (Lieut.-Colonel Cordeaux) and indeed by the hon. Member for Ilford, South.
  We claim with perfect sincerity, I believe, to represent the interests of the small shopkeeper just as much as do hon. Members on the other side of the House, and we are aware that some small shopkeepers are or will be in a difficult position. We acknowledge that, but we say at the same time that this way of dealing with it is not the right way, and that we shall not improve their position by allowing these anomalies to continue.
  On that point, I should like to mention a matter which has not been mentioned so far. My hon. and learned Friend the Member for Kettering (Mr. Mitchison) mentioned that the Minister had informed him that approximately three-eighths of this relief would go to shopkeepers, and that five-eighths was included in what is called "miscellaneous." I should like to point out—and if I am wrong I hope that the Minister will correct me immediately—that the three-eighths mentioned by my hon. and

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  learned Friend is really far bigger than that actual proportion, because shops, in the terms of the White Paper which has been referred to include bank branches. Of course, bank premises carry comparatively high rateable values, so that the actual relief going to shopkeepers is very much smaller even than that suggested by the Written Answer of the Minister to my hon. and learned Friend.
  Mr. J. T. Price: And public houses.
  Mr. Wheeldon: I do not think myself that public houses are included in the Government's classification of shops, but on that point I speak subject to correction.
  I have said that that proportion of three-eighths includes banks, and I am wondering if anyone on either side of the House—certainly, I do not think anyone on this side—would attempt to justify this derating relief for banks. I have looked up today the figures in the various issues of The Times during last month, and it seems to me that here is a real scandal. Let us take the "Big Five" banks. I take them in alphabetical order in order to give the figures that I want to use to support my argument.
  Barclays Bank, with an increase in net profit of 10 per cent., paid a dividend of 12 per cent.; Lloyds Bank, with an increase in net profit of 9 per cent., paid a dividend of 13 per cent.; the Midland Bank, with an increase in net profit of 81 per cent., paid a dividend of 18 per cent.; the National Provincial Bank, with an increase in net profit of 8 per cent., paid a dividend of 18 per cent.; and the Westminster Bank, with an increase in net profit for last year, as compared with the previous year, of 9 per cent., paid a dividend of 16 per cent. It is to these people that the Government are now proposing in this Bill to give relief which will be almost wholly at the expense of domestic householders, tenants and owner-occupiers.
  Mention has been made of the brewers. For thirty years we have given the brewers of this country 75 per cent. relief in rating for filling barrels, and now we are to give them another 20 per cent. for emptying barrels. It has been said that the brewers have always been the best friends of the Tory Party, and when they receive treatment of this kind it is not hard to understand the reason.
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  The industrialist, too, is going to do quite well. He has had derating relief for nearly thirty years on his productive establishment, and now he will get 20 per cent. on his offices. He is really doing quite well, far better than most other sections of the community today. I emphasise that most of this relief will be at the expense of tenants and owner-occupiers.
  I do not want to weary the House will illustrations that are local in character, but I should like to give one which has come to me by way of personal experience in my own constituency. Not only are small tenants who live in rented houses affected, but there is a class of owner-occupier some of whom, because of the Government's policy of high interest rates, have been having a hard time. I have quite a number of people in my own constituency who, during the post-war years, when their wages in the motor industry have been comparatively high because of full-time working and bonus earnings, have ventured to undertake the purchase of houses of their own.
  They have done it primarily for, the simple reason that, with 60,000 people on the waiting list in Birmingham, they knew very well that there was very little chance for many years of getting a rented house. They saved, put their money down, got their mortgages, and found that slowly the interest rates rose and slowly their burdens were increased. Now, as a result of the proposals in this Measure, their burdens will be even greater, and that again is something which I think is completely unfair. What they will lose will go to the bankers, brewers and industrialists, and there is no justification for it.
  Finally, I turn to the position of the local authorities. Quite a lot has been said already, but I want to emphasise one or two points which I think are of importance. The Government are doing what they said they would never do, namely, interfere with the basis of rating prior to their long-promised review of local government finance. I made up my mind in listening to the Parliamentary Secretary that we shall not get any change in the local government financial system before the next revaluation. I hope I am wrong, but that was the impression I gained, and if there is a doubt in my mind or in the minds of any of my hon. Friends on this

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  side of the House, there is one person who can clear that doubt, and that is the Minister himself.
  I hope that when the Minister replies to the debate he will make it perfectly clear that it is the intention of the Government, not only to introduce by means of a White Paper or by some other means the proposals which they make and give them publicity, but also that they intend at an early date in this Session to introduce their legislative proposals for local government finance reform.
  Mr. Ede: And apply them.
  Mr. Wheeldon: My own local authority will be hit very severely, as will other local authorities. As a result of derating, that authority was losing £3·8 million in rateable value every year, and no compensation at all was offered for that. Now, on top of that loss, the authority is to lose another £1·3 million in rateable value per year as a result of the Bill. That means an additional rate of 1s. 7d. in the £, when our rates have been going up steadily, despite revaluation. It is true we had a drop, but now they have started to rise again, and that additional burden will in the main be placed on the shoulders of the poorest members of the community. My own city council at its meeting this week sent a very vigorously worded resolution to the Government, protesting very strongly indeed against the proposals in the Bill.
  The Government are always ready to pay lip-service to local government, but the proposals in this Bill, in my opinion, strike another blow against the vitality and healthy well-being of local government. As everybody knows, the Bill is strongly opposed by every local government association. It gives relief to those who do not need it, at the expense of those who can ill afford to pay. For those reasons, I consider that the House ought to reject the Bill.
  7.31 p.m.
  Mr. Cyril Black: While I find myself in a considerable measure of agreement with hon. Members on both sides who have criticised the Bill, I propose to support it on Second Reading, although I confess that I do so with a singular lack of enthusiasm.
  Mr. J. T. Price: On a point of order, Mr. Speaker. May I ask whether the
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  hon. Gentleman will declare his interest in property before he addresses the House?
  Mr. Speaker: The hon. Member has hardly been given a chance to do so.
  Mr. Black: I do not think that I have any interest to declare, Mr. Speaker.
  I propose to vote for the Second Reading of the Bill but, as I say, with a complete absence of enthusiasm. On the whole, and so far as I understand them, Clauses 2 to 6 seem to be generally sound and Clause 1, which is far and away the most important Clause in the Bill, seems to me to do rough and ready justice to the retail traders. I am bound to say, however, that I agree with all the criticism which has been offered against dealing with the matter in this piecemeal fashion.
  The situation as it affects retail traders is not something which could not have been foreseen. It is not something which is unexpected. It is not something which, as it were, has come upon us suddenly without anyone realising that such a situation would develop. Many people realised, when the basis of the present revaluation was made clear, that this very situation in which we find ourselves now would, in fact, arise. Therefore, I can see no justification for regarding this as a matter of emergency for which drastic and piecemeal legislation is required.
  I do not altogether agree with the phrases which have been used about helping the small trader. It seems to me that what this House ought to do is to concentrate upon doing justice to the general body of occupiers of business premises rather tan, endeavour to give a subsidy or help only one section of retail traders. Perhaps the most important point on which I differ from many hon. Members in this debate is this. Many of them seem to think that the retail traders were not really the victims of any serious injustice in the present situation, whereas I myself believe quite conscientiously that they were unjustly treated and that something ought to be done for them.
  Under the old valuation lists, the burden of rates on domestic premises was about 60 per cent. Under the new list, it fell to about 49 per cent. If the proposals under the Bill are carried into effect, the burden of rates on domestic premises, so I am advised, will be

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  increased to about 53 per cent. Thus, even if the Bill is passed into law, domestic premises will be relatively much better off than under the old lists. Those figures confirm me in the view I have expressed, that occupiers of retail premises are at present subject to an injustice which this House ought to rectify.
  Mr. Mitchison: I have listened to the hon. Gentleman with great interest. I wonder whether he would tell me this. Would he or would he not be in favour of excluding public houses from this advantage?
  Mr. Black: I would certainly be in favour of the matter which the hon. and learned Gentleman has raised being carefully considered. Perhaps we may have an opportunity of considering it in detail when we come to the Committee stage of the Bill.
  I feel some sympathy for the Minister and for the Parliamentary Secretary, because they are very much in the position of having inherited at short notice a Bill and a situation which they might very well wish to be without; but any sympathy I may feel for them in the unfortunate circumstances in which they are placed must not be allowed to deflect me from my duty of criticising what seem to me to be the general defects of Government policy in this particular matter.
  Up to 1929, the practice of rating was relatively clear and simple. It was, I suggest, a system which was intelligible and was understood and respected by the great majority of citizens. That statement could not be made of the position today. Prior to 1929, premises were valued on the basis of current rental values and the rates were levied on the assessments thus arrived at. In 1929, the first step down the wrong road, as I believe it to have been, was taken in the derating provisions which were passed by Parliament at that time, giving 100 per cent. relief for agricultural land and 75 per cent. relief for manufacturing premises.
  A further complication has recently been introduced into the matter, in that the recent revaluation is, for domestic premises, on the basis of 1939 rental values and, for retail business premises, on current rental values. That involves the injustice to occupiers of retail business premises to which I have already referred.
  Mr. Douglas Houghton: Would the hon. Gentleman explain where the injustice comes in, when business premises were in a free letting market and dwellinghouses were not? If the fundamental principle of rating is to be annual value, the letting value, what is unjust in applying that, as the law says, literally to both types of property?
  Mr. Black: My answer is that the annual value is, surely, the value that the property would command in a free market and not the artificial, controlled rent based on 1939 values. If I may say so to hon. Members opposite, the injustice is made clear by the fact that the rate burden on domestic premises, as a result of the recent revaluation, has fallen so heavily on to the occupiers of business premises and away from the occupiers of domestic premises.
  Mr. Sparks: Is not the hon. Gentleman really misconstruing the trend? It is well known that a wide range of shops were under-assessed at the time of the new valuation list; many of them were based upon 1934 values. On the point the hon. Gentleman referred to, the matter of the assessment of houses on 1939 rents, they were not controlled rents, but were rents obtainable in a free market; they were on a very high basis.
  Mr. Black: I am sorry if I cannot make my view on this matter clear to hon. Members opposite, but it seems to me that there is a basic injustice. That basic injustice is demonstrated by an examination of the present valuation lists in assessing the domestic properties on 1939 values and the business premises on current values.
  Mr. Herbert Butler: rose—
  Mr. Black: I cannot give way again, other hon. Members are waiting to speak. I must pass on to the next point I wanted to make.
  My principal criticism of these proposals is the criticism, which has been made by nearly every speaker, on both sides of the House, that the Bill tinkers with only one small aspect of a large and important problem that ought to be dealt with comprehensively and without any further delay. It seems to me quite intolerable for this much-needed question

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  of the reorganisation of local government finance to go on month after month and year after year with promises that the Government are about to make an announcement and about to do something about it when, in fact, after years of waiting, nothing has so far emerged and the need for this temporary and piecemeal Measure has, therefore, been brought about.
  If this Bill becomes an Act, we shall have come to the situation that the comparative simplicity of rating in pre-1929 days will have reached a point that, I suggest, cannot possibly be justified on any system of logic or reason. There will be at least five distinct and separate principal categories of property for local rating purposes. There will be the agricultural properties, 100 per cent. Derated; manufacturing premises, rated at current values with 75 per cent. derating; domestic properties, rated on 1939 values; retail shops, rated on current values with one-fifth deduction; and mixed properties, consisting partly of retail premises and partly of domestic premises, rated on current values with one-seventh deduction. This is the mess, the muddle and the tangle which results from passing from expedient to expedient and from dealing with this matter by means of piecemeal legislation and never tackling the whole problem in a comprehensive, sensible and equitable way.
  Mr. F. P. Bishop: Is there not another class that should be added to my hon. Friend's list—that is, those miscellaneous properties which are assessed at full 1956 value but get no allowance at all?
  Mr. Black: I said that there were five principal categories and there are, I think, other categories, although perhaps not of equal importance. To save time, I was merely concentrating on what seemed to me to be the principal categories that would exist if the Bill becomes law.
  The local authorities are fully justified, I submit, in thinking that they have been most unjustly treated for a long time past. In 1929, they were, at least, compensated by the Government at that time by the block grant for what they lost in rates when the derating of agricultural land and industrial premises was brought into existence.
  Mr. David Griffiths: That was not sufficient then.
  Mr. Black: That may be so, but they were given a measure of compensation which, I think, was generally acceptable at the time to the local authorities.
  In 1948, however, we come to the position that the block grant was done away with and the Exchequer equalisation grant took its place, and we have now more than one-third of the total population of the country that does not benefit in any way from the grant. That is a matter about which the non-receiving authorities feel intensely and bitterly.
  In his speech, the hon. and learned Member for Kettering (Mr. Mitchison) asked the rhetorical question: "Who is to get the money out of Clause 1 of the Bill?" He proceeded, with complete accuracy, as I understand the position, to answer his own question by saying that the Exchequer would profit largely from this concession in rates which it is proposed to grant to the occupiers of retail premises: and, of course, that must be the case.
  I think it would be correct to say that business and industrial profits are being taxed today to the tune of possibly two-thirds, or very nearly two-thirds, of such profits. Therefore, the many millions of pounds by which retail traders will benefit by reason of the operation of Clause 1 of the Bill will benefit the retail traders to the tune of about one-third of the relief in rates which they obtain and the Exchequer to the tune of about two-thirds of the relief in rates which they obtain.
  I should have thought that as a very fair minimum measure of justice the Government would have proposed to give back to the local authorities the two-thirds of the remission of the rates to the retail premises occupiers by which the Exchequer will benefit as a result of the rates of such premises being reduced under the Bill. I see no possible reason whatever why that assistance should not be forthcoming here and now and not dependent upon the general review of the future of local government finance by way of relief to the local authorities who will suffer so severely if this Bill passes into law.
  I want to put three specific questions to my right hon. Friend the Minister, to which, I hope, he may be able to give

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  us clear and definite answers when he replies. First, is the present tangled basis of assessment for different classes of property to continue? I have referred to the five principal categories and there are other less important categories. If it is not to continue, how soon is it proposed to be brought to an end and some measure of order and reason restored to the whole methods of valuation?
  Secondly, I hope that my right hon. Friend may be inclined to tell us whether the Government have yet made up their minds about the abolition of derating. I agree with everything that has been said as to the need for derating being abolished without further delay. I believe that an overwhelming case exists and that it is a reform which is long overdue. I am quite certain that abolition is supported by a large majority of the people of the country and I see no reason why the Government should not now have made up their minds on this matter and be in a position to tell us what are their intentions.
  Thirdly, can my right hon. Friend say whether an announcement about the future of the Exchequer equalisation grant will be made in time for this to be taken into consideration in the local authority budgets for 1957–58?
  I know that my right hon. Friend has a very wide experience of local government, the problems of the local authorities and the difficulties which they have to face. I assure him that a Bill such as the one we are debating today, brought up at this late hour, when the local authorities are at this very time preparing their budgets for 1957·58. and a Bill which, furthermore, cannot pass into law, presumably, until quite a number of weeks have passed, is a very grave embarrassment indeed to the finance committees of the local authorities in the task which they have to undertake. In present conditions their task is difficult enough without an added uncertainty and difficulty of this kind.
  I have served upon my borough council for fifteen years and on my county council for fourteen years, and I have been chairman of the finance committee on both authorities for quite considerable periods. I know at first hand some of these problems, and I know, particularly, how
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  keenly and strongly the local authorities are feeling the injustice of the Bill, especially the proposal in Clause 1, unaccompanied as it is by any suggestion of compensation by a grant from the Government to the local authorities to make up the rate income which they will lose.
  I have already said that I believe that Clause 1 proposes a measure of rough and ready justice to the occupiers of retail premises, but we can do justice to the local authorities only by making up to them substantially what they will lose in rate income by means of a suitable subvention from the Government. I hope that some encouragement on this matter will be forthcoming when my right hon. Friend winds up the debate.
  7.52 p.m.
  Mr. W. R. Williams: Never having served on any local authorities, although I have been a ratepayer and have paid rent during nearly all my lifetime, I very seldom venture into a debate where there are so many experts on both sides of the House. [An HON. MEMBER: "Thanks"] I notice that someone has bitten already. I would not have intervened today but for the fact that there is a tremendous upsurge of protest in my constituency in Manchester, which includes the urban district council of Failsworth, against what all say quite openly is an iniquitous Bill.
  I should have liked to have dealt with a large number of points raised in the debate and to comment in some detail on the speeches of the hon. Members for Ilford, South (Mr. Cooper) and Wimbledon (Mr. Black). The question that posed itself to my mind after hearing both hon. Members speak was how they could vote for the Bill. The hon. Member for Ilford, South seemed to me to be reasonable about his attitude. He said that although he could not give a guarantee that he would vote against the Bill, he would at least have the decency to think about abstaining from voting if he did not receive certain assurances in the Minister's winding-up speech. I should have thought a little more of the speech of the hon. Member for Wimbledon if he had gone that distance because, taking 95 per cent. of his speech into consideration, I thought that it was a very rational and reasonable attack upon the Bill in respect of its introduction at this time and in this form.
  Mr. Black: I endeavoured to make clear that I agree with Clauses 2 to 6 and that I thought that Clause 1, much the most important, did rough-and-ready justice to the occupiers of retail premises. But I went on to say that I thought that the Bill could be made satisfactory only by the Government making up to local authorities the rate income which they would lose by reason of Clause 1, and I hoped that we might have some assurance from the Minister on that point.
  Mr. Ede: Does the hon. Member notice that the Money Resolution is so drawn that the Government could not do that in Committee even if they wished to do it?
  Mr. Black: It is always possible for a Government to find means of doing something if they can be convinced that it should be done.
  Mr. Williams: I must not continue to give way to the hon. Member for Wimbledon. He took long enough to deliver his original speech without my giving him opportunities to intervene and add to it.
  I want to make comments which have emanated from ordinary people in my constituency who are keenly interested in the net effect of this Measure if it is made law. These ordinary people are wondering when they will come to the end of the additional commitments which are being forced upon them while the present Government are in office. They see the cost of living going up every week. Most of them will be facing the possibility of substantial increases in their rent when the Rent Bill is passed, and now, on top of all that, they are being asked to pay a substantial amount of money to bring relief to people who are infinitely better off than they are, and whose profits are increasing almost every year. That is what the ordinary fellow in the street tells me.
  I have consulted a number of local councillors in Openshaw and in Fails-worth. This is their reaction. They are asking when the House of Commons, no matter what party is in office, is going to give local government a fair and square deal. They say that the Government are for ever vacillating and alternating between one policy and another and between one form of valuation for rating and another, with the result that they are
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  undermining the stability of local government finances and undermining the confidence of local government authorities in the stability of this House itself. We must be very careful in the House, because unless we have good relationships between central and local government it will be quite impossible for us to impose our wishes on the people in the country. This Bill is further evidence of the Government's playing ducks and drakes with local authorities.
  First, the Government told them that they would review all rating. That review has taken place and certain conclusions have been reached. I am quite sure that my hon. Friend the Member for Sowerby (Mr. Houghton) will say that those conclusions have been reached on very good evidence, examined by the Inland Revenue authorities. Yet, as soon as that evidence is taken and conclusions are reached, we have a fiddling Bill like this which interferes with the whole continuity of thought and legislative action that was proposed by those people. The local authorities are just beginning to wonder how much longer they can stand these vacillations on the part of the central Government.
  I will not make other points which will be purely repetitive, but I want to protest on behalf of associations representing all the local government authorities at the way in which the Bill has been introduced and at the Minister's conduct in connection with its introduction. Responsible authorities, representing the whole of local government in England and Wales, protest in particular against the way in which the Minister has refused to consult them in time for the consultation to be effective in building up the Bill and in presenting it to the House. I think it is scandalous.
  As a trade union officer of many years standing, I thought that the days had passed forever when authorities would refuse to consult their subordinates or those dependent on them. I remember that in my early days of trade union negotiations recognition was an indifferent affair and there was little consultation. I thought those days had passed, and that now no responsible Government, no responsible employer, would ever refuse to consult people so directly and keenly affected by legislation as the local authorities are in this case.

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  Not only have the Government refused point-blank to meet them and to discuss the terms of this Bill with them, but the Money Resolution has been drawn so tightly that any future consultation between the Minister and the local authorities will be nothing but futile talk. Moreover, we shall not be in the position to hear from the Minister tonight what were the views of those people and his reaction to them. I think that the local authorities have cause for strong protests against the manner in which the Minister has been dealing with them. Indeed, I do not know how we shall get the relationship to continue on a friendly basis, if this is the way in which Ministers and Government Departments are to deal with responsible local authorities, elected by men and women all over the country to look after their interests. That is my second point.
  My third point is this. If the Government want to bring forward fancy schemes of this kind after pressure of a political nature has been applied, they must think again. Nobody will be convinced by the argument of the Parliamentary Secretary in introducing this Bill that this is a method of assisting the little shopkeeper. As one of my hon. Friends said, the little shopkeeper has only been introduced into this argument in the same way as the little widow was introduced into the argument about railway stocks when we were talking about compensation.
  So far as I can see, no thought has been given to compensation for the local authorities. We have heard from the Parliamentary Secretary that this Measure is a little act of mercy. I have always associated mercy with some form of hardship, with some form of suffering. If anybody tells me here tonight that I.C.I., the Prudential and the big multiple stores are suffering hardship in any form, I should like to hear the evidence in support of it.
  No, this Bill must have been a backdoor method of repaying some sections of the community for their association with, and their support of, the Tory Party. There is an obligation upon the Minister, when he winds up the debate, to try to prove to the contrary, because the little shopkeepers of Manchester will get infinitesimal assistance from the Bill
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  —only a matter of a few shillings. On the other hand, I feel sure that the big stores and the big commercial interests, of which Manchester is full, will do very well indeed under the terms of the Bill.
  Now a few words about the situation in Manchester. I thought that the Parliamentary Secretary's speech was very weak, having regard to his long association with local government. If I may say so without being presumptuous, I thought his association with local government in Liverpool over many years was a distinguished one, and I thought he knew as much about local government as most people in Liverpool in his day.
  Mr. Houghton: Which side did he sit on?
  Mr. Williams: I had better not introduce that, it is well known. I am talking now about the hon. Gentleman's experience of local government. When the hon. Gentleman said in his speech today that the effect upon Liverpool was not £8 million, as had been suggested, but £800,000, he seemed to think that that was a mere trifle. I challenge the hon. Gentleman to visit some of the streets in Liverpool that he and I know, and to find out the effect of that upon the households there, where he was born, where he was brought up, and whose people he represented on the Liverpool Council in his early days upon it.
  Leaving Liverpool, the effect on Manchester is that 2s. extra will be added to the rates there. The present rateable value will be reduced from £1,265,881 to about £10,090,066, a reduction of £1¼ million. [HON. MEMBERS: "Oh."] I seem to have given the wrong figures. I had better give them again. [An HON. MEMBER: "No, give us the right ones] Yes, I want the people who are recording this to be quite clear and precise in what they are putting down. The present rateable value is £11,336,557. As estimated by capable people who have been used to estimating over many years, and whose estimates are never very far wrong, no matter how many unknown factors are introduced into them, there will be a reduction in rateable value in Manchester of about 11·15 per cent.
  The net cost to the householder in Manchester will be 2s. extra in the £,

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  and it will be almost the same in Fails-worth. That is a big amount in itself, but it is only half what he will have to pay in the next financial year, when he will have to pay another 2s. The increase in the rate for Manchester will therefore be 4s. in the £, and that 4s. will be paid for nothing extra in the way of expanded services but because, owing to Tory policy, owing to Tory action, the cost of living is rising, the cost of materials is rising, the cost of labour is rising. I am assured by people in Manchester who ought to know that what we shall be getting there for the 4s. extra will be less in value than before the increase.
  What about the expansion of services required in a progressive city such as Manchester? What about the development of some of the projects that we have had in mind in Manchester for many years? How are we ever to get to grips with those developments and that expansion if we have this form of legislation?
  I know that there are many other Members who want to discuss their own local aspects of the matter, and also perhaps the main principles concerned. I have no hesitation in saying that this Bill is untimely, it is unnecessary, it is not in the general overall welfare of the ordinary people of this country. It will not make any material contribution even to the small shopkeepers. The main, exclusive, deliberate intention of the Measure is to assist big business and commercial interests.
  8.10 p.m.
  Mr. Eric Johnson: I am very glad to have the opportunity of following the hon. Member for Openshaw (Mr. W. R. Williams) because our constituencies are neighbouring ones. It also gives me the chance to clear up the little bit of confusion about the figures relating to Manchester.
  Unlike the hon. Member, I have no experience of local government, and I am somewhat diffident about speaking on a subject of this kind, which is very vast and complex. However, it has always seemed to me, rightly or wrongly, that this greatly needed reform of local government was too large to be achieved in one Measure. My hon. Friend said that the Bill was an interim Measure. If that is so, and if, as we are told, it must be a gradual process, then it is inevitable that there will he "ins" and "outs", that a
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  change will bring benefits to one section of the community and disadvantages to another and that these may well be reversed when the next change occurs. There are obvious advantages in taking the cherry in one bite, if that can be done. It is, perhaps, not so easy to do that with an orange, but if it were possible in this matter, that ought to be done.
  I want to add a little to what has been said by the hon. Member for Openshaw about the effect on Manchester. I entirely agree that it will be very serious. He correctly stated that the rateable value of the whole city is £11,356,557, and the amount which Manchester will lose in rateable value is £1,265,861. The hon. Member became a little confused over it. I am not arguing with him about it; I am merely trying to get things straight for the record, as I am sure he would wish me to do.
  I also agree with the hon. Member that the effect will be an increase, for that reason alone, without considering any other expenses, of 2s. in the £. However. I feel that we must take a broader view of this matter, and I should like to ask the House to consider some figures in relation to Manchester. These figures are somewhat similar to those given by my hon. Friend the Member for Wimbledone (Mr. Black), but his figures, I suspect, were national figures while mine are purely Manchester figures.
  My figures relate to the percentage of the total rateable value which is applicable to domestic and commercial property respectively. In April, 1955, the percentage applicable to domestic property was 45·81 per cent., and to commercial property 33·86 per cent. In April, 1956, there was a complete reversal, the figures being 33·41 per cent. for domestic property and 45·29 per cent. for commercial property. The estimated figures, coming from the same source as those quoted by the hon. Member for Openshaw, are 37·58 per cent. for domestic property and 41·11 per cent. for commercial property.
  I would draw the attention of the House to the fact that, although the rateable value of Manchester will decrease this year, if the Bill becomes law, by some £1,250,000, there was an increase in the rateable value between 1955 and 1956 of no less than £4,500,000. If a

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  comparison is made between 1955 and 1957 instead of just between 1956 and 1957, it will be found that domestic property has on balance benefited fairly considerably as opposed to commercial property.
  I do not think that the Bill ought really to have come as any surprise to local authorities. It was as long ago as 6th December, 1954, that my right hon. Friend the present Minister of Defence, then Minister of Housing and Local Government, said in a Written Answer:
  "I can … give an assurance that, as soon as the effects of the forthcoming revaluation can be fully measured, the Government will review the position and will consider whether any changes are necessary."—[OFFICIAL REPORT, 6th December, 1954; Vol. 535, c. 22.]
  The Bill seems to me to be a fulfilment of that pledge.
  Mr. Lindgren: The hon. Gentleman says that was in 1954. Surely he means 1955.
  Mr. Johnson: It was 6th December, 1954.
  Mr. Lindgren: Then it was before the 1955 Bill?
  Mr. Johnson: Yes, my right hon. Friend was, I think, considering it at that time. Like hon. Members in all parts of the House, I am naturally very anxious that there should be a reduction in the rates, but I suggest that the local authorities were a little over-optimistic in reducing them to the large extent which they did last year. In view of my right hon. Friend's statement, it would have been more prudent of them if they had provided for such a thing happening.
  Mr. H. Butler: The hon. Gentleman said that he had never served on a local authority. Will he take it from me that it is illegal for local authorities to levy a rate which produces a sum of money in excess of their requirements? Unlike some businesses, local authorities cannot build up reserves for their activities.
  Mr. Johnson: I am prepared to accept the hon. Gentleman's correction. As I said, I have no experience, or very little, in these matters.
  Nonetheless, as a result of the Bill, Manchester's total rateable value will be reduced by 11·15 per cent., and that is very serious. The position is to some
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  extent aggravated—this is a matter to which no reference has so far been made—by the provisions of Section 1 (7) of the Rating and Valuation (Miscellaneous Provisions) Act, 1955, which deals with appeals. At present there are about 4,500 rating appeals outstanding in Manchester, and some £600,000 is being withheld from the corporation under the provisions of that Act. That is a very serious matter, especially as the outstanding appeals may take a number of years to determine. One need not enlarge upon the effect that that will have on the corporation's finances. I hope that my right hon. Friend will indicate that he is trying to find some means of overcoming that difficulty, which I believe to be a very serious one.
  There are two other matters to which I want to draw attention which concern Manchester very much. First, in the view of those who represent Manchester, the Bill emphasises the unfairness of the present method of using rateable value per head of population as the sole means of deciding entitlement to the Exchequer equalisation grant. If Manchester ranked for the grant, which it does not, the effect of the Bill would probably be that, the total rateable value being reduced, the city's Exchequer equalisation grant would be increased, and that would give the other ratepayers, at any rate, some measure of relief. But Manchester does not qualify for the grant. This means, as has rightly been said with reference to other places, that the burden of the relief given to shops and other commercial premises will fall upon householders.
  The other matter to which I want to refer is the rerating of industry, a very vexed matter indeed for a city like Manchester. It would be much fairer to the general body of ratepayers if industry were rerated. It would provide a substantial relief to the occupiers of shops and commercial premises, etc., without putting an extra burden on householders. Our criticism of this Measure is that it puts the extra burden on the householders. I hope that when my hon. Friend replies he will be abe to give some indication of the Government's intentions about both the Exchequer equalisation grant and rerating. Whether we take one bite at the cherry or three, all are essential and inescapable parts of the whole

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  scheme of reforming local government finance.
  Despite what has been said, I welcome the fact that the Bill does do justice to small shops, which were very hard hit by the last revaluation. There are a large number of small shops in my constituency and I know what I was told about revaluation last year and I know that the shopkeepers are very pleased with what has been done this year.
  I hold no brief for large commercial premises. I have none in my constituency, and I freely admit that the great financial gainers from the Bill will be large concerns and not small shops. I think that that is inevitable. If there could be a differentiation between the two—the hon. and learned Member for Kettering (Mr. Mitchison) suggested that it might be possible—I should not object. It would be a good thing, but I do not know whether it can be done. I agree that although the Bill helps small shopkeepers, it is possibly unduly kind to commercial premises which are getting on quite well.
  There is no doubt that local authorities are very concerned about the Bill's effects. Like other hon. Members, I wonder whether it is possible for the Government to have another look at the Money Resolution, as has been suggested in several quarters, to see whether something can be done to amend it to some extent. I agree that considered by itself—and we are wrong if we do that tonight—the Bill will put an extra burden on householders, although they will still have fared over the three years much better than occupiers of commercial premises.
  It is because I think that we must look at the picture as a whole—and I am not trying to run away from what I have said—that I believe we should support the Bill, and I shall support it. However, in doing so, I again express the hope that no time will be lost in pressing on with rerating and consideration of the Exchequer equalisation grant, which are absolutely essential for the reform of local government finance which we all want to see.
  8.23 p.m.
  Mr. Percy Morris: The hon. Member for Blackley (Mr. E. Johnson), the hon. Member for Wimbledon (Mr. Black) and the hon. Member for Ilford, South (Mr. Cooper), in company with a number of other hon.
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  Members who usually support the Government, have today had the unusual experience of criticising the Bill, emphasising that it is absolutely wrong in its fundamentals and suggesting that the Government are very unwise to try to solve a problem of this kind in piecemeal fashion.
  Mr. E. Johnson: I said that I should support the Government and I did not say that the Bill was fundamentally wrong. I made certain criticisms, but I said that we must look at the picture as a whole.
  Mr. Morris: I agree, but the inference of the hon. Member's observations is that he is willing to wound but afraid to kill. He should go into the Division Lobby and help to persuade the Government to withdraw the Bill, which is not only inequitable but iniquitous.
  It is frequently said that local government is the last bastion of democratic government, the handmaid of democracy. The refusal of the last Minister of Housing and Local Government to receive a deputation, representing the municipal corporations, the urban and rural district councils, and the county councils, is an affront to a large body of people who give devoted service to the public year in year out. They are entitled to be heard upon such an important subject as rating and valuation.
  Even if the Government had reached an irrevocable decision, it would not have hurt them to have received a deputation, if only to try to secure good will and co-operation in this matter. Unless the Government amend the Bill, I am afraid that the dangers pointed out by my hon. Friend the Member for Openshaw (Mr. W. R. Williams) will mature, namely, they will destroy the relationship between local authorities and the Government, thus making our work infinitely more difficult in future.
  I want briefly to put in a word for the blitzed towns. The task of reconstruction is not only difficult, but very expensive. Swansea has almost literally pulled itself up by its own shoe laces. We are not ashamed of what has been achieved, although a great deal more remains to be done. However, we are not the masters in our own house. The district valuer has to approve figures agreed to between the borough estate agent and the other

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  parties concerned. The assessment of shops, offices and other commercial property was fixed by the Inland Revenue Department. Owing to these properties having to be completely reconstructed, war damage compensation proved inadequate. New areas having to be found, the difficulties of these people were greatly intensified.
  I am not averse to affording a measure of relief to the shopkeeper, or even to theatres and to other parts of the entertainments industry, but it should not be given in this way. Our whole objection is to the manner suggested by the Government. We regard it as totally inequitable. Indeed, it has a measure of iniquity about it. Unless the Government do the sensible thing, the Bill will involve an increase in rates for practically every local authority in the country.
  I was surprised to hear the Parliamentary Secretary say that nobody is yet in a position to estimate what the figure will be. From his own experience of local government the Minister must know that this is the time of budget-making. The treasurers of the county and borough councils are now in a position to estimate what the new rate is likely to be, and they will be lacking in their duty if they do not warn their authorities that if the Bill is not amended it is bound to involve them in a substantial increase in rates. In Swansea, it will mean at least 1s. 4d. in the £.
  In view of these difficulties we ask the Government to have second thoughts about the Bill. Surely the Minister will not lose sight of the fact that practically every hon. Member who has spoken in the debate—
  Mr. Arthur Lewis: Is not my hon. Friend aware that the Tories are not a bit interested in this matter? During the last hour or so there have been only three or four back benchers on the Conservative side.
  Mr. Morris: That is true. I thought that there were no differences between the criticisms that we were offering and the criticisms that they were offering, and that the Government should withdraw the Bill. I thought the Government and Opposition supporters had reached the same conclusion, namely, that the Bill was not worth pursuing and should be withdrawn immediately.
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  The Minister should appreciate the fact that many of the hon. Members who usually support him are in a very critical mood towards the Bill—and not upon a mere detail, but upon fundamental principles. We beg of him to do something substantial in Committee to meet our objections. It would help him materially if he withdrew the Bill altogether. This week we have been told that he is putting his head in the sand in connection with the Rent Bill and that he is immersed in the details of rating and valuation. I think it was last Thursday that the Leader of the House said that he is now spending his time steeping himself in the affairs of Wales. He will be in a terrible stew before long—or perhaps it would be more accurate to call it a minestrone rather than a stew. If he is to do justice to the fundamental principles of the matter he should not be content with the trifling Measure now before the House.
  I suggest that the right hon. Gentleman will not reply to the three questions put by the hon. Member for Wimbledon. I do not believe that he will reply to a single question put to him about the wrongness of the Measure and the urgent need to fulfil the promise made over and over again by the Government to bring forward a Bill with a new look in matters of local government finance. Such a Measure is very much overdue in the interests of local authorities and the whole country, and it would be far more to the credit of the Government if they fulfilled that promise instead of tinkering with this great problem in this shocking manner.
  Mr. Percy Daines: On a point of order. There are only five Government supporters in the Chamber. It is unreasonable for an hon. Member who intends to support the Government to make his speech to such a thin House.
  Notice taken that 40 Members were not present;
  House counted, and, 40 Members being present—
  8.34 p.m.
  Mr. F. P. Bishop: am extremely grateful to hon. Members opposite for their efforts to ensure an adequate audience for me. The hon. Member for Swansea, West (Mr. P. Morris) will forgive me if I do not follow his argument too closely.
  Mr. Lewis: There are now only five hon. Members opposite present.
  Mr. Bishop: The hon. Member for West Ham, North (Mr. Lewis) is still here.
  What I wanted to do was to refer very briefly to a very important matter concerning Clause 1 which has hardly been touched upon. It has been suggested that the Government have very few supporters on their own side of the House, but I want to point out that, unlike hon. Members opposite and some hon. Members on this side, I accept the Bill as a necessary temporary and interim Measure. That does not mean that I do not share with nearly all hon. Members the view that a general review of local government finance should be undertaken at the earliest possible moment, and, also, that when it is dealt with it should include the question of the rerating of industry. It is not industry which is standing in the way of that re-examination which is now overdue.
  Like so many hon. Members, I received a document setting out the views of the local authority associations. I read it with great care, because it merits careful reading. It is an important expression of the views of highly responsible and important people. But there was one thing which I noticed was completely missing from this document and that surprised me. It was any reference at all to very recent history in this matter of revaluation. There is a schedule which sets out figures of a number of representative local authorities indicating the expected increase in their rates which will have to follow as a result of this Bill, if it becomes law.
  In that list I saw a number of figures for the County of Middlesex. I do not know whether I detected in those figures a reference to the Borough of Harrow, part of which I have the honour to represent. But I think it is probably true of Harrow. I have been in touch with officials of that borough to ascertain how this will affect it. As I understand, the borough will suffer a reduction of about £190,000 as a result of the provisions contained in this Bill.
  Mr. H. Hynd: Is that rates or rateable value?
  Mr. Bishop: In rateable value.
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  The effect of that may be, although I cannot be so exact as some hon. Members have been, an increase in the rates of probably—over 1s. Although these facts are serious for a borough council to have to face, they must be taken in association with what has gone before, and so recently, in the revaluation which took place last year. As a result of that revaluation the rates in Harrow came down from 19s. to 12s. 10d.; so that the increase which will now be necessary as the result of this Bill is only a very partial increase towards the figure that existed before last year's revaluation took place.
  Mr. Sparks: The hon. Gentleman gave us the figures of the rate for Harrow before the revaluation last year and what it is now. Surely he is aware that the rateable values, or the assessments, have increased considerably and that very likely the ratepayer is paying more than he paid under the old figure.
  Mr. Bishop: That is what I was about to say. The difference in the actual rate poundage is the reduction, of course, of the valuation, the reassessment that took place as the result of last year's Act.
  What I believe to be true—it is certainly true in Harrow—is that the great burden of that reassessment fell upon the small shopkeepers and the small businesses. It has been suggested that the large businesses are the main beneficiaries. That may be so in some areas; I do not know. But judging from all I have heard from the Harrow Chamber of Commerce, it is not true in Harrow. Until a complete review takes place—I join with other hon. Members in hoping that it will be soon—I think that this Measure is necessary to correct the results of last year's revaluation.
  I desire to refer not to those who are included, and will receive the benefits under Clause 1 of the Bill, but to those who are left out and who will get no benefit at all. When my hon. Friend the Member for Wimbledon (Mr. Black) gave a list of the various classes affected, I intervened to remind him that there was an additional class. There is a class which, under this Bill, seems to me to get the worst of all possible worlds. It was included in last year's Act and brought up to the full 1956 basis of valuation. It did not get the 20 per cent. reduction which Clause 1 provides for the shops and

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  those other hereditaments which are valued by reference to the figure of gross valuation, and as it had the burden of last year's Act and will not get the benefit of this Act it will also, of course, have to pay its share of the increased rates in order to make a contribution to many of those who are probably better able to bear the burden.
  Hon. Members: Who are they?
  Mr. Bishop: Some of them were mentioned earlier in the debate very briefly—the commercial sports grounds, playing fields, seaside piers, rubbish tips and sewerage works, and there may be others, but I want particularly to mention the case of advertising stations, poster sites, and hoardings.
  Mr. Arthur Lewis: Will the hon. Member also advertise the absence of hon. Members on that side of the House?
  Mr. Bishop: I have no interest whatever in this branch of industry, any more than I have in the rubbish tips or sewerage works, but it is a subject on which I have been given some information and one which I should like my hon. Friend to consider before we come to the Committee stage. I understood him to say that the reason those hereditaments which are assessed on the direct net value had been excluded from Clause 1 was that they already had the benefit of the allowance for repairs. I could not altogether follow that, because it seemed to me that whether one was rated on gross valuation and got an allowance for repairs, or whether one was rated on a direct net valuation after repairs had been excluded, it amounted to the same thing. Ultimately, one came to a net valuation on which the rates had to be paid.
  I believe that another reason has been given for excluding this miscellaneous group of people from the benefit of the Bill. It is that in many cases the actual rateable assessment has been the result of discussion and agreement and that some of them, at any rate, have not suffered so much in the increase of their burden as the shopkeepers and others who are getting the 20 per cent. reduction under Clause 1. This may be so in some cases. I am told that it is definitely not so in the case, for example, of the advertising stations.
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  My hon. Friend mentioned, I think, the figure of 125 per cent. as the increase in the assessment on shops. I am told that in the case of the two largest poster advertising firms the probable increase as a result of last year's Act was 167 per cent., and I am also told that if my hon. Friend inquires at the Ministry he will find that the Ministry itself has an increase of 149 per cent., based upon a sample including many of the smaller firms in the trade. This may well be a Committee point and I do not want to argue too long at this stage the case of a particular industry. I mention it because I know a little more about it than about the other groups which are also included in the miscellaneous class.
  I ask my hon. Friend to give the House an assurance that the Government will be prepared to consider Amendments in Committee to do justice to these people. My hon. Friend the Member for Wimbledon suggested that this group is not very important, but the fact that one is small does not mean that one should Cot have justice. They have not got it in the Bill, so I should be glad to have an assurance that the Government will look at the matter again when the Bill is in Committee.
  8.46 p.m.
  Mr. G. A. Pargiter: I would first deal with other aspects of the Bill than Clause 1, which is the iniquitous part of it. One or two other parts are useful but do not go far enough. I want to deal particularly with the Amendment which it is proposed to make to Section 8 of the Act of 1955 to remove the injustices under which local authorities suffer because of the relief from full rate payments of certain types of property mentioned in Section 8. These have hitherto been taken at their full value for the purposes of calculating the Exchequer equalisation grant.
  I would draw attention to what has happened in three counties. In Cambridgeshire the effect of the non-payment of the Exchequer grant on the effective rateable value means that the county has lost £230,000 in equalisation grant, a rate equivalent exceeding 26d. Caernarvonshire's losses are less, but are equal to a 5d. rate. In Cardiganshire the losses are equal to a rate of 19d. Those losses were created by Section 8. In future the

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  calculation will be on the reduced rateable value and not on the full rateable value and the reduction may remain effective for five years. For the future that position will be righted.
  I wrote to the Minister and asked him to be kind enough to look at the Money Resolution and see that it was so drawn that Amendments could be moved in Committee to remove these injustices for the past year. I did not get any change out of that because I heard nothing with regard to it. When I saw the Money Resolution I appreciated that no such relief would be forthcoming. I should like to move an Amendment in Committee to make that relief retrospective so that local authorities affected by the 1955 Act will be justly treated in regard to the Exchequer equalisation grant, if they were in receipt of it. I should be interested to hear whether the Minister has anything to say now which will give those counties, and to a lesser extent some other local authorities, some hope that they will get that to which they are justly entitled.
  I do not know whether the figure has been quoted of the extent of the shift of burden as a result of Clause 1. According to figures which I have—this is a rough calculation based on the present rate poundage—the transfer of burden as a result of that Clause will be about £30 million. It means that £30 million is to be transferred very largely on to the shoulders of domestic householders, to some extent on to industrial premises, and the not effect will be that the Exchequer will gain because, instead of paying that amount in rates, the shops and offices which gain by the transfer will be paying more in Income Tax. That seems to be what the Treasury is looking for—to get a little more directly out of would-be ratepayers for the benefit of the Exchequer. It seems to be a particularly mean piece of work on the part of the Minister concerned and also of the Treasury.
  It is not unfair to remember, also, that in the case both of derated premises and shops, offices, etc.—they have in effect a good advantage through what might be termed derating in another form. Rates rank as expenses for the purpose of the calculation of profits and, therefore, in the large majority of cases they benefit to the tune of 8s. 6d. in the £, whereas the
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  householder has to pay his rates out of his taxed income. The domestic householder is the only person who pays rates out of his taxed income. It is rather important to remember that. The Minister should remember it when considering transferring this additional burden.
  Something has been said about the householder and the transfer of the burden and what that means. I can quote figures for Middlesex, which are rather different from the figures which have been quoted. The net effect in Middlesex, having regard to the increased rate which will be charged, will be, for shops and offices, not a reduction of 20 per cent., but in effect a reduction of 15 per cent. Practically the whole main increase will fall on the householder. I have not the figure for industrial premises but an increase of 6 per cent. on the rates will fall on the householder, whatever the rate poundage may be. I will put that another way to show what the 15 per cent. reduction really means. These figures will be applicable in other parts of the country.
  For shop premises and offices the average reduction—we must remember that this is an average figure—will be about 6s. 9d. a week. That is the advantage they have. Is all this upset worth while for 6s. 9d. a week? The small shopkeeper will probably benefit only to the tune of 2s. or 3s. a week, but big industrial premises, blocks of offices and multiple stores will benefit to the tune of pounds per week as against the 2s. or 3s. a week for the small shopkeeper.
  One must assume that the Government are doing this deliberately because they are not interested in the small shopkeeper but are interested in the people who are their main support, the bankers, owners of large blocks of office property, insurance companies, etc. I have come to the conclusion that about the only way to do justice, following the failure of the Government to deal with derating in any way, is to have a little more de-rating. If it were in order, I would hope that someone on our Front Bench would look at the possibility of putting something in the Bill which would derate private house property so that the householder could also have an advantage. That would be a measure, not only of rough justice, but very real justice which would put the householder into a position

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  of something like parity with all the other beneficiaries to whom apparently the Government love to dole out benefits.
  I want to make it quite clear that the effect on the small shopkeeper will be that he, at any rate, will only benefit by the Bill to such a small extent that it is hardly worth while. The householder will be penalised, because he has to pay his rates out of his taxed income. The increase will be at least 6 per cent. in Middlesex, and we shall have on top of increased rates the increased cost of other services, because this trend runs right through the whole machine.
  Instead of the Bill being anything in the nature of a deflationary Measure, it will in fact be inflationary, because it will merely start further demands for wage increases. That is almost inevitable, in view of this Bill, the Rent Bill and other things, and we have to face up to that fact.
  Here we have a Government who have a dear money policy and claim to be pursuing a deflationary policy when the total effect of the majority of the things which they do are inflationary, because the only people who benefit from the deflationary things which they do are the bankers and the moneylenders, while others have to pay more money. Therefore, we have inflation in any case.
  We have in this Measure nothing of real value to the people of this country. It is a panic Measure, something which has been done against the advice of all the local authorities, because I am advised that, when they were communicated with on this matter before the Bill was introduced, they unanimously decided against anything of this nature being done at this stage. Yet the Minister at that time chose to flout the opinions of the local authorities and their associations, and that has done more harm to the relations between the Government and local authorities, as a result of this deliberate policy, and the panic way in which it has been rushed, than, anything else that could have been done.
  I am rather alarmed, because the net effect of what is now before us is undoubtedly that we are going to whistle for a long time before we get any real reorganisation of local government finance. I was optimistic enough to think that the
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  reason why the Minister was not bringing forward a debate on the White Paper on local government reorganisation was because he was about to tell us about the Government intentions on functions and finance. An hon. Friend of mine shakes his head.
  I have given up my optimistic approach to this matter, and I think that the Government have the deliberate intention of doing nothing at all. If they do nothing about local government finance and functions, the House will not be willing to do very much in regard to local government reorganisation, so that the Government get out of undertaking it by doing nothing at all, which is what we expect of them; but they have done it in a very clever sort of way.
  Another aspect of this Bill involves bad faith. In the Rating and Valuation (Miscellaneous Provisions) Act, 1955, it was proposed that the new valuation lists should be brought into force as they were, without appeals being heard. The appeals will be heard afterwards. What was intended was that when people, householders in particular, got their new rate demands, a great many of them when they found that the increase was not very large, would not appeal, in spite of the increased rateable value. Now, having got that part settled, we find that the Minister begins to whittle away the result then reached so that the householder will pay an increased burden, in the meantime being left without much chance to appeal or, at any rate, getting into the list very late in the day, and having to pay increased rates in the meantime, because he did not get his appeal in at the proper time.
  We can see in that a pattern running entirely through the machine, so far as the Government are concerned. It is the usual pattern—transferring burdens from those who have to those who have less, and it goes on. We have seen it happening in the past, and this is just another piece of it. This Bill is meant to be a little vote catching, because it seeks to help those whom the Minister fondly thinks he can look to for support—the business interests, and, to some extent, misguided small shopkeepers. In my opinion, it will not have that effect. What effect it will have will be to make more of the Government's own supporters more disgruntled than they are at present,

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  and we can only hope that we shall have the opportunity of proving it in the very near future.
  9.0 p.m.
  Mr. G. Lindgren: So that those who are associated with local government may really understand the interest of the Tory Party in the subject, we ought to place on record the fact that during the whole of the debate there have never been more than six Tory Members on the benches opposite, excluding, of course, the Minister and his Parliamentary Secretary, who have been most attentive to the debate, as one would expect.
  Mr. Lewis: To be fair, ought not my hon. Friend to point out that half an hour ago there was a count? Forty Members came to the Bar of the House and immediately withdrew. My hon. Friend ought to point out that they did get as far as the Bar.
  Mr. Lindgren: From bar to Bar is not very far, is it?
  Those hon. Members opposite who spoke left the Chamber soon after they finished speaking. One by one the attendance of hon. Members opposite has dwindled and at times there have been only two present. At the moment, there are three.
  Captain Richard Pilkington: We agree with the Government.
  Mr. Lindgren: There is a saying about some people rushing in where others fear to tread. Had the hon. and gallant Gentleman been here the whole time, instead of having crossed the Bar of the House only a few seconds ago, he would have known that every hon. Member from the Tory side has criticised the Bill, disagreed with it, and said that but for the Whips they would not have voted for it.
  Because local authority associations desire the interest of this House in local government they usually have a few hon. Members from each side of the House as vice-presidents. I am Vice-President of the Urban District Councils' Association, in the distinguished company of my hon. and learned Friend the Member for Kettering (Mr. Mitchison). The county councils, the A.M.C., the urban and the district councils, all have their various vice-presidents. During the debate I have looked for the attendance of those vice-presidents who are members of the party
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  opposite. Not one has been here. Is that the interest that the Tory Party takes in local government and the future services to be rendered to the people?
  It is usual in a debate such as this to say that we have had a good debate. From my point of view, I think that we have had a good debate. But I hardly think that it was a good debate from the Minister's point of view. It has been my privilege to be a Member of the House of Commons for a number of years and I have sat through many debates, but I have never sat through a debate on a Bill during which not one hon. Member on the Government side supported it. Every hon. Member opposite who has spoken has criticised the Bill—criticised it fundamentally. In fact, the hon. Member for Wimbledon (Mr. Black), who has now returned to his place, almost said that if it had not been for Clauses 2, 3, 4, etc., he would not have voted for the Bill.
  As those who have taken part in the debate are, for the most part, knowledgeable in local government, anything I say now must of necessity be almost in the nature of repetition. Therefore, what I propose to do is to try to ram home what I feel have been the most effective points which have been made, sometimes from this side of the House and sometimes from the other.
  The Government's case has been that the Bill is designed to correct what has been wrong in valuation as between domestic properties and shops, offices and other properties. That is really a hollow statement, so hollow that I even interjected during the speech of the hon. Member for Blackley (Mr. E. Johnson)—and I ought to apologise to him; I would do if he were here now—because he suggested on 6th December, 1954, as shown in column 22 of HANSARD, the then Minister of Housing and Local Government had promised to look at the question of shop rating. I interjected and said, "Surely the hon. Gentleman means 1955." I thought that it was after the 1955 Act had been introduced and the pledges the Minister gave then. But the hon. Member for Blackley was quite right; the promise to look at the matter was given in December, 1954.
  What have the Government done since? Although there have been a few changes of faces and shifts round of Ministers—not quite so many shifts in the Ministry

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  of Housing and Local Government as there have been in the Ministry of Defence, but very nearly as many—this Government have been in power since 1951. They brought in a Valuation for Rating Bill, in 1953. I took part in those debates. We then called attention to what was likely to happen in the matter of the basis of valuation as between shops and domestic properties. The Government did not correct it.
  Mr. Ronald Bell: Surely the hon. Gentleman must remember that he and his colleagues did this in 1948.
  Mr. Lindgren: The hon. Gentleman is completely wrong. The 1948 Local Government Act gave a basis for domestic valuation and it gave a basis of current value; of course, it gave a different one, because there were different considerations as between shops and offices. Under the 1955 Act to which we now come, the Government changed that basis for domestic properties and made it the 1939 valuation.
  Mr. Bell: I am sorry to interrupt the hon. Gentleman again, but it is a matter of fact. What he says is not correct, as I think he knows. The current rental value for shops was introduced in the 1948 Act, and the 1939 value for domestice hereditaments was introduced in the 1948 Act. All that the 1955 Act did was to substitute a notional tenant for the notional cost of building.
  Mr. Lindgren: If we are to have it right, let me say that ever since the Rating and Valuation Act, 1925, it has been current value for shops. Under the 1948 Act, for domestic properties, we then made, I will agree, a complicated formula, taking into consideration cost of construction and all the rest. The Government then changed that basis in the 1955 Act and brought it to 1939 values, and that is where it came in.
  Mr. Bell: That is not so.
  Mr. Lindgren: Whether it is true or not, it is a matter of fact. [Laughter.] I make that crack to the hon. Gentleman because he is a lawyer, and there is a lot of difference between law and fact; but let us forget that for a moment.
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  We had the Rating and Valuation (Miscellaneous Provisions) Bill, 1955, just before the General Election. There was the same criticism. I took part in it and I said that it would be very difficult for a valuer to go round and assess 1939 values, taking into account the then methods of transport and all the rest of it, and bring out a figure. The Government did nothing with it. We had a General Election, and the Government came back and brought in the same Bill, almost immediately afterwards. In fact, it is the only time that I have ever taken part in a Second Reading debate on one Bill in two different Parliaments.
  The Government have had ample opportunity, if they really wanted to do so, to deal with the question of the difference between the 1939 valuation basis for domestic properties and the current value basis for shops, business premises, and the rest.
  I mentioned earlier the absence of hon. Gentlemen opposite from today's debate. I would say this, too, so far as the Tory Party as a party is concerned, and not referring to certain members of the party who have taken part in local government outside, that the party generally, its Central Office, the present Government and previous Tory Governments, have never had any love for local government as such. They have never desired to see it prosper. They have given lip service to a strong local government system, but they have not at any time been prepared to help it to work in a satisfactory manner. At all times, Tory Governments have done everything possible to hinder the satisfactory development of local government.
  I say quite bluntly that since 1951, for local government officers and for members of local authorities, local government has been a nightmare. A local authority has not known from day to day how it would continue. Twelve times—thirteen, including today—interest rates have changed. As everyone knows, a considerable amount of the rate levy which a local authority has to make has to be collected to meet interest charges on loans for works which an authority has undertaken from time to time.
  During the whole time since 1951, the Government have been urging local authorities to go forward on this or that

  717
  proposition and this or that type of activity, but hardly has a local authority made a start before it has been cut off, whether in housing, education, highways, or any other activity. Local authorities simply have not known from day to day where they were going, or how they would be able to operate on a satisfactory and efficient basis.
  Those in local government know that the desire of every authority is stability. A local authority can only go ahead if it can programme its work, if it can make plans with certainty a year or two years ahead and if it has some certainty that the conditions operating at the completion of a project will be something like the conditions ruling at the start of the project. In the last few years, local authorities have decided to build schools, undertake housing activities—
  Mr. Archer Baldwin: And they have done it.
  Mr. Lindgren: "And they have done it," the hon. Member interjects, but under the worst handicaps which local authorities have ever had to contend with. When they have contemplated a project, the interest rate was at a certain figure. When they decided to go to tender, it had changed. When the tenders came in, it was different again. When work started, it had changed once more, and before the contract had finished there was yet another change. Under the Tory Government, a local authority has not finished a contract under the same conditions as those under which it was started.
  As my hon. Friend the Member for Hackney, Central (Mr. H. Butler) said earlier, local authorities are pledged, quite rightly, to budget from year to year for their expenditure. They have only to collect from ratepayers within the year the money that they will spend during the year. They accumulate a working balance, it is true, but they do not have vast reserves. They have simply not known what to do or how to do it.
  Contrast that with the opportunities for local government during the time of the Labour Administration. For councillors and local government officials, it was a paradise of stability. [Laughter.] The hon. Member for Wimbledon laughs, but will he ask the treasurer of the Surrey County Council when he had any
  718
  sleepless nights under a Labour Government? The treasurer knows that during the whole time from 1945 to 1951, in spite of all the difficulties of the postwar period, his rates of interest never fluctuated from 2½ or 3 per cent. The Government told local authorities before they started what their programme of work would be.
  Mr. Black: If the rates in the period which the hon. Member mentioned were 2½ per cent. to 3 per cent. then they did fluctuate.
  Mr. Lindgren: The hon. Gentleman for Wimbledon is the great financial wizard and property owner. Really, I wonder how such people ever get there. [An HON. MEMBER: "They inherit it."] Would the hon. Member tell the House whether his period of office as chairman of the finance committee or as chairman of the county council were easier under a Labour Government, with rates of interest at 2½ per cent. to 3 per cent., or under a Tory Government since 1951, when interest rates, including today's fluctuation, have changed thirteen times? If he says that he has been easier in mind under a Tory Government, he is the only local government administrator who would say it. As I have said, the programme of works under a Labour Government was on such a basis that local authorities knew where they were going and what they would be able to do.
  I come now to the serious question of relationships between local authority associations, the Minister, and Government Departments. I have been in direct association with local government for 30 years. Certainly, that is not as long as the association of my right hon. Friend the Member for South Shields (Mr. Ede), but for me thirty years is a very long time. I should have had to be in local government at a very early age to have been associated with it for very much more than thirty years. However, thirty years gives the opportunity to become acquainted with the general relationship between Government Departments, local authorities and local authority associations. I say without any pleasure at all that local authority associations have never been so universally and completely opposed to a Government as they have been to the present and the previous Tory Government.

  719
  Local government is a partnership. It is for the central authority to make the possibilities and for the local administration to take advantage of the possibilities and do the work in the field on behalf of the central authority. There cannot be good work when that partnership is on one side a very unhappy one. The local authorities have the hardest task of all. All would agree that it is far easier to make an Act of Parliament than to set out to do the practical work on the ground within the local authority areas, and if we are to have effective work there must be a harmonious relationship between the central and the local authority. It is no credit to a Government or a Minister that these relationships are now in at least a state of discord.
  The Bill is opposed by every local authority association. I have never before had such a postbag from individual local authorities. There is not a right hon. or hon. Member opposite who will vote for the Bill tonight who can say that he has been asked to vote for it by a local authority. There is not a single one, not even the hon. Member for Leominster (Mr. Baldwin). If every one of their local authorities has told them they ought not to vote for the Bill, why are hon. Members opposite going into the Lobby tonight to vote for it?
  Lieut.-Colonel Cordeaux: Some of us think that by doing so we shall be according some justice to the small shopkeepers in our areas.
  Mr. Lindgren: I do not say it with any pride at all, and I hope that the day will change, but at present the vast majority of county councils and of county boroughs in the country are Tory controlled. The majority of urban districts and of municipal boroughs in the country are Tory controlled. The majority of rural districts are Tory controlled. Almost the entire sphere of local government is under the control of members of the party opposite, yet they are all opposed to the Bill.
  Mr. Baldwin: The hon. Gentleman has issued a challenge. I have in my possession a letter from one of my urban district councils asking me not to accede to the request of the County Councils' Association.
  Mr. Lindgren: The hon. Member often puts the cat among the pigeons. I think that he has been interested in pigeons at various times, if not with cats with guns. Everyone in his area will now want to know who is the blackleg among his local authorities.
  Let us consider why the local authority associations are opposed to the Bill. They are opposed to it because it redistributes the rateable value within an area and it increases the rates of the local authority from 1s. 4d. up to 2s. 6d. in the £. I see the noble Lord the Member for Hertford (Lord Balniel) sitting opposite. He has the distinction of representing me in this House, though he is not here with my support. I live in his constituency, in Welwyn Garden City.
  I have had a copy of a letter from the Clerk to the Urban District Council which asks the noble Lord to vote against the Bill. Although I am not the Member for the constituency, I shall vote against it. [An HON. MEMBER: "Do you expect your Member to do so?"] Yes. The rates in my town are going up by Is. 7d. in the £. The house in which I live has a rateable value of £39. If I can work it out, thirty-nine times 1s. 7d. is nearly £3 2s. Can the right hon. Gentleman tell me why I should pay £3 2s. more and Woolworth's £3 2s. less? Is the right hon. Gentleman going to the Treasury to assist me and my colleagues on this side of the House, who will pay this extra charge, in getting an increase in salary to meet the additional costs which are arising from the actions of the Government?
  It is true that this Bill gives relief to shops, but it gives that relief to offices, banks, business premises, public houses, cinemas, and also to Government offices. A great deal has been said about shops, and the little shopkeeper. I say to the hon. and gallant Member for Nottingham, Central (Lieut.-Colonel Cordeaux)—I do not say it offensively—that it is humbug to talk about the little shopkeeper. If the Government really wanted to help the little shopkeeper, the man who has a shop at the street corner or the old lady with the baby linen shop, to which the hon. and gallant Gentleman referred, why do not the Government bring in a Bill containing Clause 2, 3, 4, etc., but with Clause 1 exempting 20 per cent. of rateable values below £50 or even £100? Those are the shops owned by the little

  721
  shopkeepers, the £50s the £75s. Very few have a rateable value of £100 even in London, let alone in Nottingham.
  Lieut.-Colonel Cordeanx: Perhaps the hon. Gentleman will go down Alfreton Road and Radford Road, in Nottingham, and tell them that the Bill is all humbug.
  Mr. Lindgren: I did not say that. I said, and I did not mean it offensively, that the hon. and gallant Gentleman and his hon. Friends are humbugs in saying that the Bill will help little shopkeepers.
  The trading profit of Universal Stores last year was £20 million, and after deduction of tax and depreciation £7½ million was left. Is that a little shopkeeper, like the old lady with the baby linen shop? Does it want a subsidy of 20 per cent.? Woolworth's, with 912 shops in the country, had a trading profit last year of £23 million, and, after deduction of tax and depreciation, £10 million remained. Does Woolworth's want a 20 per cent. subsidy? Marks and Spencer had a trading profit of £12 million and a net profit of £5 million. Does it want a subsidy of 20 per cent.?
  When we were giving subsidies in respect of food and council houses, the Tory Party said that we should not give subsidies to both old-age pensioners and millionaires. However, when it comes to a subsidy in respect of rates, hon. Gentlemen opposite say. "We will give it to the little old lady in the baby linen shops and also to Woolworth's and Marks and Spencer, although their profits amount to millions."
  Lient.-Colonel Cordeaux: The point I was trying to make earlier was that the only way in which we can give rough justice to the small shopkeeper at present is by Clause 1 of the Bill, which gives those advantages to the other people to whom the hon. Gentleman has referred.
  Mr. Lindgren: If the hon. and gallant Gentleman and his hon. Friends wanted to help those people, all they needed to do was to bring in a Bill to provide that shop properties of a rateable value below £50 or £100 should be relieved of 20 per cent. of their assessments.
  If hon. Gentlemen opposite really believe that this is a method by which they should relieve large-scale shopkeepers while not in any may tackling the problem of rerating and local government finance, what is the urgency for it?
  722
  If one's profits are £20 million gross, or £10 million or £5 million net, it is not urgent that this should come about in April. The Parliamentary Secretary stated, and we have no reason to disbelieve him, that in a matter of weeks we shall have a comprehensive statement on behalf of the Government on the future of local government finance. If that is true, why not delay this Measure for a year? Why does the Minister not agree to accept an Amendment to the Bill to give relief to the very small shopkeepers about whom hon. Gentlemen opposite are so concerned?
  I hope that the House, because it is concerned with the future of local government, will not give the Bill a Second Reading but will vote for the Amendment. Hon. Gentlemen opposite will say that we are going to misrepresent them; but there is no misrepresentation in telling the truth. I shall go out in the town where I live, in the constituency of the hon. Member for Hertford, and say bluntly that, as a result of the Government's action, the rates there will go up by 1s. 7d. in the £ and that this has been done deliberately so that relief can be given to Woolworth's and Marks and Spencer and other big multiple stores. [HON. MEMBERS: "And the breweries."] I shall even go further and say that the Government are giving relief to banks, breweries, cinemas, and dance halls. Why should such relief be given?
  If hon. Members opposite do not believe that that relief should be given, they ought to vote for the Amendment. Equally, we shall say with equal truth that this is a further deliberate action by the Government to lower the standard of life of the ordinary people. Having put up the prices of food, having increased rents, they now increase rates on the basis that if the workers have to meet these extra demands out of their wages they will have less for other things.
  For the ordinary worker there is only the wage packet. If more of it goes in rent, food and rates there is less for other things and a consequent lowering of his standard of living. Those of us in the trade union movement will not stand idly by and see the standard of living lowered. If the Government keep on raising prices and costs we shall fight for increased wages and the Government will not achieve their plateau of price stabilisation.
  9.30 p.m.
  The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): The hon. Member for Wellingborough (Mr. Lindgren) has painted an unrecognisable picture of the feeling which Socialist local authorities had for the Socialist Government of 1945–50. I was the leader of the opposition in a Socialist local authority at that time. I cannot quite recollect the enthusiasm with which London County Council welcomed the reduction of about £2 million in Exchequer grants imposed upon it by the Local Government Act, 1948, nor will hon. Members on either side of the House easily recollect the keenness with which the local authorities of those days welcomed the manner in which the Socialist Government snatched away from local authorities control of their gas undertakings, control of their electricity undertakings, and control of their hospitals.
  This is a highly complicated Bill, on which we have had a most interesting debate. When my hon. Friend the Parliamentary Secretary rose to move the Second Reading, you, Mr. Speaker, adjured hon. Members to "pass out quietly". I felt sure that you were wishing to facilitate, not to discourage the speech of my hon. Friend. He explained this complex Measure to the House with a clarity that was not assisted by many interruptions. The hon. and learned Member for Kettering (Mr. Mitchison) then rose to pour lukewarm water on the Bill. He failed to be able to lay hands on the evidence which he wanted from time to time as it was scattered on the Dispatch Box, and ultimately he even mislaid his own Amendment.
  Clause 1, the main Clause of the Bill, arises from an undertaking which my right hon. Friend the present Minister of Defence gave to the House on 6th December, 1954, when he said:
  "… as soon as the effects of the forthcoming revaluation can be fully measured the Government will review the position and will consider whether any changes are necessary."—[OFFICIAL REPORT, 6th December, 1954; Vol. 535, c. 22.]
  It was impossible to review the position until after 1st April, 1956, because that was when the revaluation became effective.
  Many references have been made during the debate to the thoroughgoing
  724
  review of local government finance which the Government have had in hand over a period. Before that review could be carried very far, it was obviously essential to see how the new valuation lists were going to work out, and that was not possible before December, 1955. It was also obviously necessary to look at the pattern of rates based on the new lists after April, 1956. That is why it was essential to carry on this review over a period. It could not have started years ago, as some hon. Members have suggested. It was necessarily linked in time with this revaluation, which all those concerned with local government regard as a turning point in the history of local government finance.
  My right hon. Friend the Minister of Defence, who was my distinguished predecessor in this office, worked extremely hard upon this comprehensive examination of the somewhat abstruse problem of local government finance, and, in the course of his examination, certain facts emerged. First, it was clear that there were at least three grave injustices in the system as it was operating, in the current year, 1956–57.
  One of those injustices was that the operation of Section 8 of the 1955 Act was causing quite indefensible anomalies in a limited number of local government areas. The outstanding cases were Cambridgeshire, Cardiganshire, and Caernarvonshire, because of the university and college buildings which provide a substantial part of the total rateable value of those areas.
  The second injustice—although perhaps in this case "injustice" is not the right word, and "anomaly" would be better—was that the 1956 reductions in rate poundages were going to result, directly because of a formula in the 1948 Act, in the British Transport Commission and the electricity and gas undertakings contributing considerably less than their fair share towards local government expenditure.
  The third injustice was that shops and offices and the like alone were rated at 100 per cent. of the full current value, when no other class of ratepayer was paying on that basis. The householder was paying not upon the current value but upon 1939 values; industry was paying on current value, but only at 25 per cent. of the full rating, and agriculture was not rated at all. Shops and offices

  725
  had, as it were, been singled out for specially severe treatment.
  It is quite undeniable that all these three anomalies need to be corrected immediately—and by "immediately" I mean from the beginning of the next financial year, 1st April, 1957. That is the reason why this short and limited Bill was presented on 21st December, 1956—
  Mr. Wade: In his three instances did the right hon. Gentleman include the derating of industry?
  Mr. Brooke: —to deal with these three injustices. I was about to say that no hon. Member in his senses could imagine that Parliament could consider comprehensive Government proposals for the reorganisation of local government finance and pass those proposals into law, after discussions with local authority associations, in time for local authorities to frame their budgets in March for the year 1957–58. It was quite out of the question.
  Every hon. Member knows very well that the House does not refrain from quick ad hoc action to remedy an obvious injustice at the earliest possible date, even though we may well need later, when there is more time, to examine in full detail the major problem against which these limited injustices may seem to he comparatively small. Nevertheless they are severe indeed for those who suffer from them. I shall have something to say about the longer-term future before the end of my speech, but here and now I should like to deal with the points raised on the Clauses of the Bill. I will leave the major proposal in Clause 1 to the last.
  As to Clause 4, which principally concerns the three counties which I have mentioned, I think it was the hon. Member for Caernarvon (Mr. G. Roberts) who raised the question whether the effect was going far enough to make good the loss of Exchequer equalisation grant. The figure of £28,900, mentioned by my hon. Friend the Parliamentary Secretary, is in fact the first estimate of Exchequer equalisation grant for 1957–58. The final figure may be different, I cannot say. The final figure often differs from the original estimate.
  The hon. Member for Huddersfield, West (Mr. Wade) asked whether Clause 4
  726
  applied to the discretionary remissions which local authorities might grant to charities and the like. No, it does not. It applies only to those reductions of the rate charges which are, as it were, automatically made by Section 8 of the 1955 Act. The point is that Clause 4 restores fairness where there was unintended unfairness, but I cannot hold out any hope of restrospection. I agree that there is a great deal of work to be done in recasting the Exchequer equalisation grant. But I cannot hold out hope to those affected, that this particular and limited alteration can be retrospective.
  Mr. Pargiter: The Minister admits injustices and refers to quick action being taken to remedy them. Here we have an injustice which he is prepared to admit, yet he is not prepared to remedy it in respect of the immediate preceding period. Does he consider that fair?
  Mr. Brooke: I have some consideration for the local authorities, and it is upsetting if we go backwards in these matters—
  Mr. Pargiter: And give them more money?
  Mr. Brooke: —and try to alter the arrangements for budgets and estimates already drawn up.
  There has been rather less said than I expected on Clauses 2 and 3, which are concerned with the great public utilities. My hon. Friend the Member for Aylesbury (Sir S. Summers) had something to say about that, and I should like to assure him that the new figure for the British Transport Commission does not represent any element of subsidy to the Commission. The deterioration in the financial circumstances of the Commission would in any case have had the effect of reducing the assessment on its undertaking, if the assessment had been made in the normal manner by reference to the undertaking's accounts and its ability to pay. The Government have taken all that into reckoning in securing that it pays only the same amount next year, and neither more nor less than it is paying this year. This is a measure of justice, and there is nothing in the nature of a subsidy in it.
  My hon. Friend also suggested that the electricity industry was having its payment for next year frozen at the level of

  727
  last year's payment. That is not so either; it will be paying as much next year as if there had been no revaluation of its properties. It will bear its share in the increase in the total levy in rates and its payment will also reflect any increase in the amount of electricity sold.
  I was asked whether these great industries had been consulted. The nationalised boards were consulted and the associations of local authorities also were consulted. It is not wholly surprising, and it will not startle the House, when I say that the nationalised boards said that the figures in question were too high for them to pay and the associations of local authorities said the figures were too low for them to receive.
  I must not go so far as to suggest that there is any chance of agreement between the two bodies. Great effort was made to secure agreement but it has not been successful, and I must not confirm any hope of amicable agreement between the payers and the recipients. I think that it will be understood on both sides of the House that in these circumstances it is the duty of Parliament to impose a settlement, and this is the settlement which we suggest.
  Mr. Mitchison: They agreed to disagree with the right hon. Gentleman—both of them.
  Mr. Brooke: I am not at all sure that they were not somewhat grateful to the Government for making up their mind and putting a figure in the Bill that went neither as far in one direction or in the other as might have been suggested.
  The hon. and learned Member for Kettering raised one or two specific points. He said that Section 14 of the Local Government Act, 1948, required the Minister to cause the investigations to be made in the year of the first revaluation. That is so, but the Act does not say that the investigations are to be completed before the end of that year. I can say that a great deal of investigation of all these matters has been going on. The hon. and learned Gentleman went rather further astray when, if I understood him aright, he suggested that the amount of the relief given by Clause I would be about £219 million.
  Mr. Mitchison: If I conveyed that impression it was not what I intended to
  728
  convey. The point is that £219 million is the rateable value upon which the reduction will be made, and the transfer is the transfer of that amount of rateable value. I agree with the right hon. Gentleman, thinking over it, that I did not make myself quite clear but that is what I intended to say, and I am sure that he understood me.
  Mr. Brooke: I understood the hon. and learned Gentleman perfectly. I understood him to say that £219 million was the amount of relief that someone was going to get away with, and I felt that it was only just that I should point out that the correct figure is £44 million, so that when the hon. and learned Gentleman was instructing us he was exactly £175 million wrong.
  Even though hon. Members opposite differ in their views as to the way in which the situation should be corrected, I do not think any of them would seriously deny that there was a measure of injustice to shops and offices and the like, in being singled out to be alone fully rated on current values. What the Government have put into Clause 1 is what we believe to be a fair and just remedy which ought to be adopted at once.
  Mr. J. T. Price: The right hon. Gentleman has offered a challenge to the House, and I am going to take up his challenge. I say to him, in reply to that challenge, that if in fact the average increase of the rateable value of these properties that are now being given relief is 120 per cent., it is known to his Department and to anyone interested in local government that many of the properties have in fact increased in value over 1938 by 400 per cent. and in some cases 500 per cent. and that in fact they are under-assessed.
  Mr. Brooke: I had better address myself to the four or five specific criticisms that have been made against Clause 1. My hon. Friend the Member for Aylesbury and my hon. Friend the Member for Harrow, Central ((Mr. Bishop) suggested that certain other classes of hereditaments ought to have been included in the relief and they asked me to consider that point. I will naturally consider any Amendments that they may think of putting on the Paper, but I cannot give any undertaking that I will accept Amendments. I will certainly examine very carefully -what they have said.

  729
  A number of hon. Members suggested that Clause 1 was of no value to the small people and that the big people were going to get a lot of money out of it. The hon. Member for Wellingborough seemed to be a little out of date in his ideas about the normal assessment of shops now. The average rateable value of shops in the new lists is about £132. That is an average for no fewer than 674,000 shops and makes it quite clear that the vast majority of the money will go to a very large number of people who have small shop properties.
  Mr. Lindgren: What the right hon. Gentleman says about the average values is fictitious. The new values of the shops are in Bond Street and the like. The right hon. Gentleman knows that the rateable value of the average backroom shop is between £50 and £100.
  Mr. Brooke: In giving these figures I am seeking to give the House all the information that I can.
  Other commercial properties affected by the relief have an average rateable value of about £96 and there are no fewer than 883,000 of them. That does not suggest that everybody who is to get the relief is of the stature of a large combine.
  A further criticism was that all loss of rateable value should be made good by a compensating Exchequer grant. I have no recollection that the counterpart of that argument was used when we had the tremendous increase in rateable value in 1956 and when the product of a 1d. rate went up by about 70 per cent. I cannot recollect local authorities coming to the Government and suggesting that they would willingly sacrifice Exchequer grants.
  Under Clause 1 there is a 7 per cent. reduction in rateable value, but no reduction of Exchequer grant whatsoever. All that is said in Clause 1 is that in future the sources from which local authorities will raise their rate revenue will be somewhat shifted. When hon. Members say that rates will go up by 1s., 1s. 6d. or 2s. 6d. I would remind them that we cannot isolate Clause 1 from all the other causes that affect rateable value. The total rateable value is not going to be 7 per cent. lower but more like 2½ per cent. lower.
  730
  Then there were criticisms that the Bill was unfair to householders. I paid special attention to it because we are anxious to be fair to everybody. [Interruption.] Yes, and we are extremely anxious to be fair to householders. In fact, I am very happy that in the last year or so householders have had so large a part of the rate burden lifted off them. [HON. MEMBERS: "Oh."] Two years ago, of the total rateable value 60 per cent. was in the householder section, and about 33 per cent. in the shops and miscellaneous section. If the Bill goes through as it stands, the figures for 1957–58 will be 52 per cent. for the householders and 36 for the shops and miscellaneous properties.
  The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. L. Jeger) instanced the case of London and suggested that that was a particularly hard one. In London under the old lists two years ago householders provided 42 per cent. of the rateable value. Under the new list for 1957, if this Bill goes through, they will provide 33 per cent.
  I come to what I think has been the major issue underlying this debate. Hon. Members have made their local, or, I might almost dare to say, their political, arguments against the provisions of the Bill. They have said that some people are going to suffer. They have perhaps emphasised that and failed to stress sufficiently the great measure of justice that it does in correcting unfairnesses which numbers of people are at present suffering.
  I have some knowledge of local government. I would not dream of claiming that this Bill was a solution of the problems of local government finance. In the earlier part of my speech I explained the circumstances which led to the introduction of the Bill. I explained that it was quite impossible within the time set between gaining the experience of the 1956 revaluation and the present to bring forward to Parliament, discuss with the local authorities and pass into law, far-reaching changes in the system of local government finance which could come into force by 1st April, 1957.
  That is what has thrown us back, and I think quite rightly thrown us back, on this limited Bill to correct immediately certain undeniable injustices. There has been a sort of undercurrent of insinuation

  731
  that the Government wish to use this Bill as an excuse for putting off indefinitely to the Greek Kalends, the Ides of March, or whatever other phrase the hon. and learned Member for Kettering cares to use, the real task which we all know lies ahead of Parliament. The hon. Member for Southall (Mr. Pargiter) said he thought he would have to whistle for a long time before anything happened and he thought that it was the intention of the Government to do nothing at all.
  This review of local government finance is now completed. It is a subject which I have been trying to study since I was appointed to my present office three and a half weeks ago. I do not think the hon. and learned Member for Kettering demurred when I asked him the other day to give me just two or three weeks
  to bring my mind fully to bear on it. What I want to tell the House at the conclusion of this debate is that I shall be ready to make a general statement on the question of local government finance and on the Government's review of it early next week. That will be a general statement, after which we shall be able to discuss with the local authorities in detail many of the major questions which we all have to face. I hope that in the light of what I have said both sides of the House will accept that this limited Bill, this ad hoc Bill, to correct certain injustices, should go through quickly.
  Question put, That the words proposed to be left out stand part of the Question:—
  The House divided: Ayes 206, Noes 165.

  Division No. 56.]

  AYES

  [10.0 p.m.

  Agnew, Sir Peter

  Doughty, C. J. A.

  Jones, Rt. Hon. Aubrey (Hall Green)

  Aitken, W. T.

  du Cann, E. D. L.

  Kaberry, D.

  Allan, R. A. (Paddington, S.)

  Duncan, Capt. J. A. L.

  Keegan, D.

  Amery, Julian (Preston, N.)

  Eden, J. B. (Bournemouth, West)

  Kerby, Capt. H. B.

  Amory, Rt. Hn. Heathcoat (Tiverton)

  Errington, Sir Eric

  Kerr, H. W.

  Arbuthnot, John

  Farey-Jones, F. W.

  Kimball, M.

  Armstrong, C. W.

  Fell, A.

  Kirk, P. M.

  Ashton, H.

  Finlay, Graeme

  Lambert, Hon. G.

  Atkins, H. E.

  Fisher, Nigel

  Lambton, Viscount

  Baldwin, A. E.

  Fletcher-Cooke, C.

  Langford-Holt, J. A.

  Balniel, Lord

  Foster, John

  Leather, E. H. C.

  Barber, Anthony

  Fraser, Hon. Hugh (Stone)

  Leavey, J. A.

  Barter, John

  Fraser, Sir Ian (M'cmbe & Lonsdale)

  Legge-Bourke, Maj. E. A. H.

  Baxter, Sir Beverley

  Freeth, D. K.

  Legh, Hon. Peter (Petersfield)

  Beamish, Maj. Tufton

  George, J. C. (Pollok)

  Lindsay, Hon. James (Devon, N.)

  Bell, Philip (Bolton, E.)

  Gibson-Watt, D.

  Linstead, Sir H. N.

  Bell, Ronald (Bucks, S.)

  Gomme-Duncan, Col. Sir Alan

  Lloyd, Maj. Sir Guy (Renfrew, E.)

  Bennett, F. M. (Torquay)

  Gough, C. F. H.

  Lloyd, Rt. Hon. Selwyn (Wirral)

  Bevins, J. R. (Toxteth)

  Gower, H. R.

  Low, Rt. Hon. A. R. W.

  Bidgood, J. C.

  Graham, Sir Fergus

  Lucas, P. B. (Brentford & Chiswick)

  Biggs-Davison, J. A.

  Grant, W. (Woodside)

  Lucas-Tooth, Sir Hugh

  Birch, Rt. Hon. Nigel

  Grant-Ferris, Wg. Cdr. R.(Nantwich)

  Macdonald, Sir Peter

  Bishop, F. P.

  Green, A.

  Mackeson, Brig. Sir Harry

  Black, C. W.

  Grimond, J.

  Mackie, J. H. (Galloway)

  Body, R. F.

  Hall, John (Wycombe)

  Macmillan, Rt. Hn. Harold(Bromley)

  Boothby, Sir Robert

  Harris, Reader (Heston)

  Macpherson, Niall (Dumfries)

  Bossom, Sir Alfred

  Harrison, A. B. C. (Maldon)

  Maddan, Martin

  Boyle, Sir Edward

  Harvey, Air Cdre. A. V. (Macclesfd)

  Maitland, Cdr. J.F.W.(Horncastle)

  Braine, B. R.

  Harvey, John (Walthamstow, E.)

  Manningham-Buller, Rt. Hn. Sir R.

  Braithwaite, Sir Albert (Harrow,W.)

  Harvie-Watt, Sir George

  Marlowe, A. A. H.

  Bromley-Davenport, Lt.-Col. W. H.

  Heald, Rt. Hon. Sir Lionel

  Marshall, Douglas

  Brooke, Rt. Hon. Henry

  Heath, Rt. Hon. E. R. G.

  Maude, Angus

  Brooman-White, R. C.

  Hesketh, R. F.

  Mawby, R. L.

  Browne, J. Nixon (Craigton)

  Hicks-Beach, Maj. W. W.

  Maydon, Lt.-Comdr. S. L. C.

  Bryan, P.

  Hill, Rt. Hon. Charles (Luton)

  Mott-Radclyffe, Sir Charles

  Butler, Rt. Hn. R. A. (Saffron Walden)

  Campbell, Sir David

  Hill, Mrs. E. (Wythenshawe)

  Nairn, D. L. S.

  Cary, Sir Robert

  Hill, John (S. Norfolk)

  Neave, Airey

  Channon, Sir Henry

  Holt, A. F.

  Nicholson, Godfrey (Farnham)

  Clarke, Brig. Terence (Portsmth, W.)

  Hope, Lord John

  Nicolson, N. (B'n'm'th, E. & Chr'ch)

  Cole, Norman

  Hornby, R. P.

  Osborne, C.

  Conant, Maj. Sir Roger

  Hornsby-Smith, Miss M. P.

  Page, R. G.

  Cooper, A. E.

  Howard, Hon. Greville (St. Ives)

  Pannell, N. A. (Kirkdale)

  Cooper-Key, E. M.

  Hughes Hallett, Vice-Admiral J.

  Partridge, E.

  Cordeaux, Lt.-Col. J. K.

  Hughes-Young, M. H. C.

  Pickthorn, K, W. M.

  Craddock, Beresford (Spelthorne)

  Hulbert, Sir Norman

  Pilkington, Capt. R. A.

  Crosthwaite-Eyre, Col. O. E.

  Hylton-Foster, Rt. Hon. Sir Harry

  Pitt, Miss E. M.

  Crouch, R. F.

  Iremonger, T. L.

  Pott, H. P.

  Currie, G. B. H.

  Irvine, Bryant Godman (Rye)

  Powell, J. Enoch

  Dance, J. C. G.

  Jenkins, Robert (Dulwich)

  Price, David (Eastleigh)

  D'Avigdor-Goldsmid, Sir Henry

  Johnson, Dr. Donald (Carlisle)

  Price, Henry (Lewisham, W.)

  Deedes, W. F.

  Johnson, Eric (Blackley)

  Prior-Palmer, Brig. O. L.

  Profumo, J. D.

  Stanley, Capt. Hon. Richard

  Vaughan-Morgan, J. K.

  Raikes, Sir Victor

  Steward, Harold (Stockport, S.)

  Vickers, Miss J. H.

  Ramsden, J. E.

  Steward, Sir William (Woolwich, W.)

  Vosper, Rt. Hon. D. F.

  Rawlinson, Peter

  Stoddart-Scott, Col. M.

  Wade, D. W.

  Redmayne, M.

  Storey, S.

  Wall, Major Patrick

  Rees-Davies, W. R.

  Stuart, Rt. Hon. James (Moray)

  Ward, Rt. Hon. G. R. (Worcester)

  Renton, D. L. M.

  Studholme, Sir Henry

  Ward, Dame Irene (Tynemouth)

  Ridsdale, J. E.

  Summers, Sir Spencer

  Waterhouse, Capt. Rt. Hon. C.

  Robertson, Sir David

  Taylor, William (Bradford, N.)

  Webbe, Sir H.

  Robinson, Sir Roland (Blackpool, S.)

  Teeling, W.

  Whitelaw, W.S.I. (Penrith & Border)

  Roper, Sir Harold

  Temple, J. M.

  Williams, Paul (Sunderland, S.)

  Ropner, Col. Sir Leonard

  Thomas, Leslie (Canterbury)

  Williams, R. Dudley (Exeter)

  Russell, R. S.

  Thompson, Lt.-Cdr. R.(Croydon. S.)

  Wills, G. (Bridgwater)

  Scott-Miller, Cmdr. R.

  Thornton-Kemsley, C. N.

  Wood, Hon. R.

  Sharples, R, C.

  Tilney, John (Wavertree)

  Woollam, John Victor

  Shepherd, William

  Turner, H. F. L.

  Yates, William (The Wrekin)

  Simon, J. E. S. (Middlesbrough, W.)

  Turton, Rt. Hon. R. H.

  Speir, R. M.

  Tweedsmuir, Lady

  TELLERS FOR THE AYES:

  Mr. Oakshott and Mr. E. Wakefield.

  NOES

  Ainsley, J. W.

  Grey, C. F.

  Peart, T. F.

  Allen, Arthur (Bosworth)

  Griffiths, David (Rother Valley)

  Pentland, N.

  Bacon, Miss Alice

  Griffiths, Rt. Hon. James (Llanelly)

  Plummer, Sir Leslie

  Baird, J.

  Griffiths, William (Exchange)

  Popplewell, E.

  Bellenger, Rt. Hon. F. J.

  Hall, Rt. Hn. Glenvil (Colne Valley)

  Price, J. T. (Westhoughton)

  Bence, C. R. (Dunbartonshire, E.)

  Hamilton, W. W.

  Proctor, W. T.

  Benn, Hn. Wedgwood (Bristol, S.E.)

  Hayman, F. H.

  Randall, H. E.

  Benson. G.

  Healey, Denis

  Rankin, John

  Beswick, Frank

  Hewitson, Capt. M.

  Redhead, E. C.

  Blackburn, F.

  Holman, P.

  Reeves, J.

  Blenkinsop, A.

  Holmes, Horace

  Reid, William

  Blyton, W. R.

  Houghton, Douglas

  Roberts, Albert (Normanton)

  Boardman, H.

  Hubbard, T. F.

  Roberts, Goronwy (Caernarvon)

  Bowden, H. W. (Leicester, S.W.)

  Hughes, Cledwyn (Anglesey)

  Robinson, Kenneth (St. Pancras, N.)

  Bowles, F. G.

  Hughes, Hector (Aberdeen, N.)

  Rogers, George (Kensington, N.)

  Boyd, T. C.

  Hunter, A. E.

  Ross, William

  Braddock, Mrs. Elizabeth

  Hynd, H. (Accrington)

  Royle, C.

  Brockway, A. F.

  Hynd, J. B. (Attercliffe)

  Shinwell, Rt. Hon. E.

  Broughton, Dr. A. D. D.

  Irving, Sydney (Dartford)

  Short, E. W.

  Brown, Rt. Hon. George (Belper)

  Isaacs, Rt. Hon. G. A.

  Shurmer, P. L. E.

  Burton, Miss F. E.

  Janner, B.

  Silverman, Julius (Aston)

  Butler, Herbert (Hackney, C.)

  Jeger, George (Goole)

  Silverman, Sydney (Nelson)

  Butler, Mrs. Joyce (Wood Green)

  Jeger, Mrs. Lena(Holbn &St. Pncs. S.)

  Skeffington, A. M.

  Callaghan, L. J.

  Jones, Rt. Hon. A. Creech(Wakefield)

  Snow, J. W.

  Castle, Mrs. B. A.

  Jones, David (The Hartlepools)

  Sorensen, R. W.

  Champion, A. J.

  Jones, Elwyn (W. Ham, S.)

  Soskice, Rt. Hon. Sir Frank

  Chapman, W. D.

  Key, Rt. Hon. C. W.

  Sparks, J. A.

  Chetwynd, G. R.

  King, Dr. H. M.

  Stones, W. (Consett)

  Clunie, J.

  Lawson, G. M.

  Stross, Dr. Barnett(Stoke-on-Trent, C.)

  Collick P. H. (Birkenhead)

  Lever, Leslie (Ardwick)

  Summerskill, Rt. Hon. E.

  Collins, V. J. (Shoreditch & Finsbury)

  Lewis, Arthur

  Sylvester, G. O.

  Corbet, Mrs, Freda

  Lindgren, G. S.

  Taylor, John (West Lothian)

  Cove, W. G.

  Lipton, Marcus

  Thomas, George (Cardiff)

  Craddock, George (Bradford, S.)

  Mabon, Dr. J. Dickson

  Thornton, E.

  Daines, P.

  MacColl, J. E.

  Tomney, F.

  Dalton, Rt. Hon. H.

  McKay, John (Wallsend)

  Turner-Samuels, M.

  Davies, Harold (Leek)

  McLeavy, Frank

  Viant, S. P.

  Davies, Stephen (Merthyr)

  MacPherson, Malcolm (Stirling)

  Warbey, W. N.

  Deer, G.

  Mahon, Simon

  Weitzman, D.

  de Freitas, Geoffrey

  Marquand, Rt. Hon. H. A.

  Wells, Percy (Faversham)

  Delargy, H. J.

  Mason, Roy

  Wells, William (Walsall, N.)

  Dodds, N. N.

  Mitchison, G. R.

  Wheeldon, W. E.

  Dugdale, Rt. Hn. John (W. Brmwch)

  Dye, S.

  Monslow, W.

  Wigg, George

  Ede, Rt. Hon. J. C.

  Morris, Percy (Swansea, W.)

  Wilkins, W. A.

  Edwards, Robert (Bilston)

  Moyle, A.

  Willey, Frederick

  Edwards, W. J. (Stepney)

  Mulley, F. W.

  Williams, W. R. (Openshaw)

  Evans, Albert (Islington, S.W.)

  Noel-Baker, Rt. Hon. P. (Derby, S.)

  Williams, W. T. (Barons Court)

  Evans, Edward (Lowestoft)

  Oliver, G. H.

  Willis, Eustace (Edinburgh, E.)

  Fernyhough, E.

  Oram, A. E.

  Woof, R. E.

  Fienburgh, W.

  Orbach, M.

  Yates, V. (Ladywood)

  Finch, H. J.

  Oswald, T.

  Younger, Rt. Hon. K.

  Fletcher, Eric

  Owen, W. J.

  Zilliacus, K.

  Fraser, Thomas (Hamilton)

  Pargiter, G. A.

  Gaitskell, Rt. Hon. H. T. N.

  Parker, J.

  TELLERS FOR THE NOES:

  Gordon Walker, Rt. Hon. P. C.

  Parkin, B. T.

  Mr. Pearson and Mr. Simmons.

  Grenfell, Rt. Hon. D. R.

  Paton, John

  Bill accordingly read a Second time.

  Committed to a Committee of the whole House.—[Mr. R. Thompson.]

  Committee upon Monday next.

  RATING AND VALUATION [MONEY]
  Considered in Committee under Standing Order No. 84 (Money Committees).—[Queen's Recommendation signified.]
  [Sir CHARLES MACANDREW in the Chair]
  Motion made, and Question proposed,
  That, for the purposes of any Act of the present Session relating to rating and valuation, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act in the sums payable out of such moneys for the year 1957–58 or subsequent years under Part I of the Local Government Act, 1948, or the Local Government (Financial Provisions) (Scotland) Act, 1954, as amended by the Valuation and Rating (Scotland) Act. 1956, being provisions—

  (a) reducing the rateable value of any hereditament;

  (b) increasing the rateable value of any hereditament which a Gas Board is treated as occupying under section six of the Rating and Valuation (Miscellaneous Provisions) Act, 1955; or

  (c) reducing for the purposes of Part I of the Local Government Act, 1948, the rateable value for an area by reference to the reduction in the amount of rates chargeable in respect of hereditaments to which section eight of the said Act of 1955 applies.—[Mr. H. Brooke.]

  10.11 p.m.
  Mr. G. R. Mitchison: This appears to me—though I stand to be corrected, without sitting down for the purpose—to be a very limiting Money Resolution indeed. I cannot, of course, ask the Minister for any more than his intentions in the Money Resolution; he cannot rule upon it. But I want, first, to raise one very broad question with him. A few minutes ago, the whole House heard an extremely interesting statement from him, that before we come to the Committee stage of the Bill, when the Money Resolution will fetter our discussions, he proposes to announce his intentions about local government finance at large.
  That will, no doubt, include the matter of Exchequer grants, upon which he is bound to make investigations in the year ending 31st March; and the Statute, as he will remember, says "make" them, not "begin" them. Since the right hon. Gentleman is, no doubt, accomplishing his statutory duty, it appears that one of the subjects upon which he will lay his
  736
  proposals very shortly, before we get to the Committee stage, is the whole matter of Exchequer grants, and, presumably, financial relations generally between the central Government and the local authorities.
  These matters will, no doubt, affect considerably the question that has been raised during the Second Reading debate once or twice, namely, whether the central Government are prepared to make contributions similar to those made when industry was derated in 1929, when they took the form of a block grant, towards the additional burden which will be put on the local authorities by Clause 1 of the Bill.
  The first question I should like to ask the Minister is whether, if I have stated the position more or less correctly, he really wishes to proceed with this limiting Money Resolution, and the Committee proceedings which will no doubt follow after it, so soon as next week? In the circumstances, would he not be better advised, so far as money matters are concerned, to take the two things together and see whether, in the light of the proposals he is to table, he could not make a contribution towards local government expenditure?
  The next question I wish to put to him, still arising out of this Money Resolution, is this. It seems to me that it will be open, on this Resolution, to introduce Amendments reducing the rateable value of any hereditament, but, unless I am quite wrong, increasing the rateable value of any hereditament is confined only to the somewhat limited category of cases of hereditaments which a gas board is treated as occupying. Interesting though that particular category of hereditaments no doubt is, would it be admissible, under this Money Resolution, to deal with the question of rerating of industry, upon which, no doubt, he will lay his proposals, I think he said, in two or three days? If not, would he not be prepared to reconsider the possibility of that question being raised during the Committee stage of this Money Resolution?
  10.15 p.m.
  There is still another question. This relates to the, if I may so call them, university counties, the three of them—the three C's. I do not want to go into it on the Money Resolution—I doubt

  737
  whether I should be in order in doing so—but the fact is that the university counties feel that they have been rather badly treated because of the operation of Section 8 of the 1955 Act and the lack of retrospection in the provisions of this Bill. The Minister, in a moment when he was feeling, I think, a little bit harsh, rather turned that aside, but it is a question that one would like to have raised in Committee and it is a question which is, after all, very much a Committee point. I may be wrong, but it looks to me as if this Money Resolution might preclude even that matter being raised.
  Lastly—and this is the last point, the right hon. Gentleman will be glad to hear—about the hereditaments which a gas board is treated as occupying, may I enlarge the subject a little bit? About gas generally, there is the question of the treatment of gas in Wales. I do not want to go into it in detail; I mentioned it on Second Reading and it was discussed at some length on the 1955 Bill. What it really turns on is the question of what is manufacturing gas and whether certain processes in dealing with gas ought not to be treated as manufacture; and if they are treated as manufacture, it has a considerable effect in favour of some authorities under the rather complicated formula which is to be amended by the Bill. Is it intended that that question, too, should be open to us?
  Generally, while one recognises that, on a Bill that raises money questions a Money Resolution may, perhaps, be tight, I trust that the right hon. Gentleman will agree with me when I say that that does not apply with nearly the same force to Money Resolutions which are primarily concerned with local authority expenditure and where a Money Resolution is needed only because of the provisions of the Local Government Act and the corresponding Scottish legislation.
  Is it not drawing a Money Resolution very tight indeed, when local authority expenditure is the primary matter, if the questions which I have been putting to the right hon. Gentleman are all, or the majority of them, incapable of being dealt with by reason of this Money Resolution? I have had occasion to raise questions about the tightness of Money Resolutions before and on that occasion, as on this, the Leader of the House was present.
  738
  That happened to be a case about slum clearance compensation coming from the same Ministry. In that case, the Money Resolution was so very tight that the Government got hung by their own rope and had to come back for a second Resolution.
  As the present Minister was Financial Secretary to the Treasury at the time and has had to initial all these things, I am sure that he remembers it very well indeed. In the light of that, could he not make certain that the noose is a little looser this time so that he will not hang us and will not run any risk of strangling himself when he comes to deal with the questions which his hon. Friends want to raise?
  Mr. Glenvil Hall: I wish to support my hon. and learned Friend the Member for Kettering (Mr. Mitchison). This Financial Resolution is, of course, the part of the procedure which has exercised the minds of local authorities perhaps even more than has the Bill, for the simple reason that unless we are quite certain what we are doing when we pass the Resolution, and see, as a Committee, that it is drawn in the widest terms, the Committee stage of the Bill will be largely annulled.
  We have all the evening before us; indeed, the night has scarcely begun. It is fortunately possible in Committee for Ministers, as well as hon. Members, to speak as often as they catch your eye, Sir Charles. I wonder, therefore, whether at this stage, in addition to replying to the questions put to him by my hon. and learned Friend the Member for Kettering, the Minister will be good enough to tell us exactly what Amendments are possible under this Financial Resolution. Just how far can we go in improving the Bill and helping householders and local authorities under the Resolution?
  If we shall not be able to do anything more than appears to some of us to be possible at present, it is time that the Committee did something about it, because every one of us represents an area where the local authority dislikes the Bill, and especially Clause 1, extremely. Therefore, if we want to serve our constituents to the best of our ability and do our duty as Members of Parliament, we ought to

  739
  see, before accepting it, that the Resolution leaves us room to make improvements in the Bill on the lines desired by our local authorities and our constituents.
  I suggest to the Minister, therefore, that it would lessen the time that we may spend on the Financial Resolution if he indicated to us, first, what is possible under the Resolution and, second, if very little is possible, how far he is willing to go in taking the Resolution back and bringing in another to meet what is obviously desired in all quarters of the Committee.
  The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): I hope that the Committee will address itself to the Money Resolution in the light of the statement that I made to the House at the conclusion of my Second Reading speech, a few minutes ago. I indicated then not only that this was an ad hoc, limited Bill, which we would have to consider in Committee, but, also, that early next week I intended to make to the House a comprehensive statement about local government finance.
  I must advise, or warn, the Committee that a great deal of work is to follow from that for all of us who are interested in local government finance and the proper relationship between central and local government. These are matters which cannot be cleared up in a day or a week. They will need very thorough consideration.
  Mr. Glenvil Hall: We are not concerned with that tonight. All we are concerned with at the moment is a Money Resolution and what is possible under it. Any statement which the right hon. Gentleman may make next week—and we shall be very interested in it—is in the future. We want to know now whether he will be good enough to tell us what we are entitled to do under this Resolution.
  Mr. Brooke: I will, of course, answer the questions which the right hon. Gentleman has asked. All that I was doing in my preamble was to ask the Committee to consider the Resolution in the light of the rather important statement which I made to the House a little while ago.
  740
  The hon. and learned Member for Kettering (Mr. Mitchison) asked, in the circumstances, whether I wished to proceed with the Resolution. He hinted that I might be better advised to seek to combine this Bill with anything that might come out of my general statement. I have explained why I could not do that. It is quite unthinkable that a statement of any importance on local government finance, given to the House in mid-February, can be translated into law in time for local authorities to base their budgets upon it for the financial year beginning April, 1957. The reason why we are taking this Bill of a limited character is to remove certain injustices in time for the local authorities' next financial year.
  Mr. F. Blackburn: Since this is an interim Measure, it would not affect a proposal that the Minister intends to put forward next week if he altered the Financial Resolution so that Amendments could be moved by the Government to make up the losses to local authorities. It would not affect the general principle.
  Mr. Brooke: It is better to do these things one by one. Now the hon. Gentleman has raised a new point. I was trying to go through, one by one, the questions put to me by the hon. and learned Member for Kettering.
  I have explained why, if we are to correct these anomalies, it is not possible to hold this over and combine it with any larger Measure.
  The second question which the hon. and learned Gentleman put to me was whether it would be practicable, within this Money Resolution, to bring in Amendments that would have the effect of rerating industry generally. The answer is, no. That is part of the much larger set of questions which we have to consider, and I am sure consider at length, when the time comes.
  Mr. Eric Fletcher: On a point of order, Sir Charles. Is it really right for the Minister to usurp your functions and tell us what Amendments will be in order and what will not be in order in Committee?
  The Chairman: It does not matter. My word will be law in the end.
  Mr. Brooke: Sir Charles, you know that I would not wish to question or dispute anything you said, but these inquiries had been addressed by the hon. and learned Gentleman to me and not to you, and I was, therefore, seeking to perform an act of courtesy by replying. If I go wrong, I feel sure you will correct me.
  Mr. Mitchison: It was the right hon. Gentleman's intentions about which I was asking questions, Sir Charles. It is often advisable to do so.
  Mr. Brooke: The third question I was asked was whether it would be practicable to move Amendments that would give the benefit of increased equalisation grant retrospectively to what we may call the university counties. Sir Charles, I must not usurp your functions in any way, but in my judgment it would not be possible under this Money Resolution either to do that or to make a number of other changes that it may be well worth while discussing at the appropriate moment about the Exchequer equalisation grant.
  The Committee will remember that I did not seek to suggest that the grant was perfect in all respects except this one. I certainly would not sustain that argument. But here is one glaring anomaly which we must put right straight away. The correct thing, I submit, is to do this, and to do this as from 1st April, 1957, and then in due course extend our review to all the questions on that complicated grant that may arise in our minds.
  The fourth question the hon. and learned Gentleman put to me was whether certain technical problems that are in his mind about processes of gas manufacture could be discussed under this Money Resolution. That, Sir Charles, is a question I feel very much inclined to leave to you. I do not think that either you or I would care to answer it until we saw the Amendments on the Order Paper.
  I think that I have answered the major part of the question raised by the right hon. Gentleman the Member for Colne Valley (Mr. Glenvil Hall). I must make it clear that this Money Resolution—for which I have some responsibility, as the Committee has perceived, in two different places or capacities—is certainly not intended to be a restrictive Resolution which does not allow one to discuss anything in Committee. It is drafted, and I say that frankly, with the idea that it applies to an ad hoc Bill which, I should
  742
  say, by common consent, now that it has received a Second Reading, the Committee would agree should have its final form settled as rapidly as possible for the benefit of local authorities. I am not seeking to cut out debate on the larger questions altogether. I am saying only that we should deal first with this and then proceed to the larger matters afterwards.
  10.30 p.m.
  As far as I can judge, this Money Resolution would allow Amendments to be moved to alter the amount of the reduction in rateable values provided for in Clause 1 of the Bill; Amendments could be moved to alter the classes of property which should be entitled to the Resolution. There are wide issues which can be discussed. I can assure the Committee that the Money Resolution is not designed to put all Amendments out of order, but only to draw the distinction between the limited intention of the Bill and the larger questions which we shall have to debate later.
  Mr. Mitchison: The right hon Gentleman said Amendments could be moved to alter the rateable value of any hereditament. The word used in paragraphs (a) and (c) of the Money Resolution is "reduce." Am I right in thinking that one is allowed to suggest any Amendments which would take more money away from the local authorities but not any Amendments which would give more to the local authorities except in respect of hereditaments which a gas board is treated as occupying?
  Mr. Glenvil Hall: I would put one further question on the same theme. I think that my hon. and learned Friend the Member for Kettering (Mr. Mitchison) put to the right hon. Gentleman the question that I am about to put afresh. The right hon. Gentleman said it would be possible to move Amendments dealing with classes of property. That, I suppose, would include also Amendments dealing with, say, the reduction in the limits of rateable value to which the percentage applies. Would it? In other words, the shops which are higher rated hereditaments could be taken out of the Bill by Amendments if so desired?
  Mr. Brooke: You, Sir Charles, are a much better guide to the Committee in these matters than I, but in reply to the

  743
  hon. and learned Gentleman the Member for Kettering I would say that I do not think that I said that Amendments could be moved to alter the rateable value. I certainly intended to say that Amendments could be moved to alter the amount of the reduction in the rateable values specified in Clause 1 of the Bill, and also to alter the classes of property which should be entitled to that reduction.
  Mr. Blackburn: While recognising, Sir Charles, that the ultimate decision rests with you, I would ask the right hon. Gentleman whether it will be possible to move an Amendment to Clause 4 so that Exchequer equalisation grants can be paid direct to the district councils and not to the county councils. I do not see that that would increase the cost to the Government.
  Mr. E. Fletcher: We have had a most unfortunate speech from the Minister, and I am not surprised that the Leader of the House went out in disgust while the Minister was speaking. I gather that he has gone out to consult the Chancellor of the Duchy of Lancaster, who stayed here for the first part of the Minister's speech and then also left the Chamber.
  This is a most serious situation. What did the Minister say? He attempted to justify a very tightly drawn Money Resolution which will, as he admits, circumscribe very seriously the ambit of debate in Committee on the Bill and the nature of the Amendments which we can table. He seeks to justify that on the ground that the Bill is, as he says, an "ad hoc, limited Bill." The Bill, however, affects every ratepayer and every local authority. Every Member of Parliament has received letters of protest from every local authority, including his own, and from the associations which represent the local authorities.
  Those letters, in terms, have asked me and my hon. Friends to protest about the unnecessarily restricted nature of this Financial Resolution. It cannot be justified on the ground that the Bill is an ad hoc, limited Bill. We may have a statement by the Minister next week. I am very glad to hear that we are, but that has no relevance whatever to the function of this Committee in debating the provisions of the Money Resolution.
  744
  The Minister must be aware of the feeling from the criticism that he has heard during the Second Reading, not only from these benches but in speech after speech from hon. Members opposite. Many hon. Members opposite abstained from voting, and that is why the Government's majority was so small. We shall not know the exact number of hon. Members who abstained until tomorrow, but I hope that it is enough to shake the Government and, certainly, to shake their apparent complacency about the terms of the Financial Resolution.
  I am glad that the Government have suspended the Standing Order so that this matter can be fully ventilated tonight. It will be a serious matter if the Financial Resolution is not redrawn and resubmitted, or else very substantially amended.
  During the Second Reading debate we heard speech after speech pointing out how all local authorities have protested against the loss of revenue they will suffer as a result of the Government's proposals. I recognise that the House has given a Second Reading to the Bill, and that the Minister has sought to justify his proposals in Clause 1 on the ground that some injustice is caused to a certain class of shopkeepers as the law stands. That may be. Let us assume that for a moment. The next question is: how is that loss of revenue to local authorities to be made good?
  There are various ways—by Exchequer grants, or by a process of partial re-rating of industrial hereditaments. There is no reason why industrial hereditaments now derated by 75 per cent. should not have their derating benefits reduced to 70 per cent., 65 per cent. or whatever the appropriate figure is to enable local authorities to recoup what they have lost. Although the Bill has been approved on Second Reading, the Committee will desire to consider Amendments directed towards the best method of making good the loss of revenue.
  The object of our protests is this. There is no good reason why the Committee should be deprived of the opportunity of considering alternative remedies, but the Minister, as he admits—he appeared to glory in it—has deliberately framed the Financial Resolution, first as Financial Secretary, and then as the Minister, in

  745
  order to curtail Amendments of the kind the local authorities want. There is no real justification for that.
  It seems to me to be treating the Committee with contempt. It represents an unjustifiable stranglehold on discussion. It deprives us of the opportunity of ventilating the very problems which we ought to ventilate in Committee. It seems to me that the mere fact that the Minister will make a statement next week, giving us some outline of his general ideas about the reorganisation of local government finance, is in itself a reason why we should not be fettered in the Committee stage but should have the advantage of tabling and debating Amendments.
  There the matters should be discussed and voted upon. If the Government do not like the proposals they will no doubt use their majority to defeat them. But discussion ought not to be stifled. I protest most emphatically against the Minister's proposition that because this is, as he says, an ad hoc, limited Bill—it will affect all local authorities and ratepayers in the country—the Financial Resolution should be drawn in this tight, circumscribed form which will stifle discussion and amendment in Committee.
  It is a most undemocratic, unnecessary and reactionary method, and it is deserving of censure. It will be bitterly resented by local authorities throughout the country, and I hope that, in view of the protests which my right hon. and hon. Friends have made, the Minister will think very seriously before pressing the Committee to pass this Financial Resolution this evening.
  Mr. Sidney Dye: As a representative of the more rural side of England I should like to add a word to the debate, since most of the speeches so far have been made by hon. Members representing large towns and cities. The county councils have wanted a chance of discussing with the Minister items concerning the Bill, and they are very concerned that the Financial Resolution will not enable them to advise their Members of Parliament upon Amendments to the Bill because of the tightness with which the Resolution is drawn.
  That is very unfair, because the Minister and the Government have imposed something upon local authorities which it
  746
  was really for them to consider. All that the Bill does is to alter the incidence of rating as between different sections of the community. That is a matter upon which those authorities who have to levy and collect the rates ought to have been consulted. They were not consulted, and they feel very aggrieved about it. The Minister now says, "Oh, do pass the Bill. Let us get it through quickly, and next week I will tell you a secret"—a secret which local authorities have been asking for information about for such a long time. They have been engaged in negotiations for months and years. They have had promises made to them that the principles upon which local government finance will be settled for many years ahead will be made known to them.
  The Minister says, "I will not tell you the whole secret next week, but I will let the House have a glimpse of what lies before it." But with the Bill as it is, with the Financial Resolution drawn as tightly as it is, and bearing in mind the speeches both of the right hon. Gentleman and the Parliamentary Secretary, there is every indication that the Bill will be operative for four years. Because of that fact it will decide how the incidence of rating is affected over that period. There is, on the other hand, the indication that whatever the Minister reveals next week will not become operative for another four years.
  The Minister, knowing quite well that the County Council Association were astounded when the Bill was introduced, and that the other associations had never been consulted about the matter, and also realising that he was interfering with rating, which was the province of the local authority associations, really ought to give the House of Commons a chance to examine thoroughly and amend the Bill in a way which would meet the wishes of those associations.
  The right hon. Gentleman said, "Let us get it through quickly, for the benefit of the associations." Matters have been hurried in the past and as many anomalies have been caused as have been wiped out. How many anomalies arise under the Bill? We have been informed that one of the anomalies which it seeks to put right relates to Cambridgeshire, where a rate of 2s. 2d. in the £ had to be levied to make good the absence of rates from the universities and the

  747
  equalisation grant which should have been paid, but was not. We have already heard of local authorities who will be adversely affected by as much as 2s. 1d. in the £ in the current year, on the best estimates which have so far been made. When representatives of local authorities have had a better chance of investigating the consequences of this Bill, there may be just as big or bigger anomalies discovered which should be put right; but which cannot be put right because of the tightness of the Financial Resolution and the speed with which the Minister wants to get the Bill through the House.
  10.45 p.m.
  The right hon. Gentleman knows that next week the Norfolk County Council must fix the rate for the county. On the best advice received so far the Council will have to raise the rate by 1s. in the £. That is for an agricultural community. So far, the argument has been that under this Bill the residential properties have been under-rated in relation to the shops. That is not so in Norfolk. There the increase in the rateable value of residential properties in many cases was as great as that of the shops.
  The more the country has the chance of examining this Bill, the more anomalies may be found. If the Financial Resolution is broad enough, it may be possible to put some of them right. The County Councils Association and individual county councils feel aggrieved that after only one year of the operation of the new valuation the Government throw this at them and say, "You are making your rates for the next financial year. This will cause you to place a bigger burden upon a section of the community which never expected it."
  Mr. E. Partridge: They did expect it.
  Mr. Dye: No, with respect, they did not. What they expected was that if the Government proposed to alter the law with regard to valuation, they would provide the money to make good the deficit, as had been done on previous occasions.
  We ask for a chance to move an Amendment to Clause 1 to enable Her Majesty's Government to find money from the Exchequer so that local authorities do not have to find this additional
  748
  money from that section of the community which not merely have to pay higher rates, but shortly will be confronted with higher rents as well. Surely the Minister will listen to reason and will consider the effect of the Bill and the Financial Resolution on the country as a whole. Surely he will take back this Resolution, redraft it, and give the Committee a chance to consider it again so that it may be fairer in its effect upon the ratepayers.
  Mr. Douglas Houghton: The Minister has very heavy burdens just now, almost all inherited from his predecessor. I am sure that the Committee wishes to show him due consideration; but we feel that we are being rushed.
  The Bill was published before Christmas, but only today have we been able to come to grips with it. The unusual thing that happened today in the announcement of the business for next week was that the Committee stage of the Bill was announced before the Second Reading had begun. That is almost presumptuous in a Government so lacking in public confidence.
  Mr. E. Fletcher: It is even worse than that. It was announced even before the House had decided to take the Committee stage on the Floor.
  Mr. Houghton: I am sure it was worse than I thought.
  The Chairman: However bad, it does not come under the Financial Resolution.
  Mr. Houghton: We should postpone further discussion of this Resolution until we have heard the promised announcement about the future of local government finance. The Minister has plainly stated his intentions, but the Resolution was drafted so as to be extremely narrow, to prohibit widening the scope of the Bill, extending the relief to local authorities, or providing any means whereby compensation should be given to them for the loss of revenue on account of the reduction in rating assessments upon shops and miscellaneous properties. It gives us very little room to manoeuvre in Committee.
  We might be more tolerant if we knew what the Minister was going to say about local government finance. He would find us more agreeable in regard to the Money

  749
  Resolution if we knew more about his intentions on the wider aspects of local government finance; for example, if the rerating of industrial properties formed part of the statement. That would alter our attitude. We might also know more of the Minister's mind about equalisation grants and other provision by the central Government for local government finance. In other words, if the Financial Resolution could be put against the background of our knowledge of the Minister's intentions on the wider issues, that would be of great advantage.
  The Minister rather suggested that there was a glaring anomaly which must be put right at once, and the Financial Resolution was the instrument, leading us to the Committee stage, which the Minister wants brought on next week. I have sat here all day waiting to hear more about the glaring anomaly. I heard something about anomalies, but they did not seem to be very glaring. If I had had an opportunity, I might have examined that proposition carefully, but we shall have two hours to do so in the Committee next week.
  We are not prepared to accept the note of emergency which the Minister has struck. Will the Minister tell us when he proposes to make his promised statement? Will it be before or after the Committee stage of the Bill? I presume, and hope, that it will be before, since the Committee stage is fixed for next Thursday. Will the right hon. Gentleman postpone further consideration of the Money Resolution until he has made his statement? He may find that it will take only a short time to do as we suggest, without it being necessary to postpone the Committee stage of the Bill; and if it left the Committee and the House in a happier frame of mind that would be a a very good thing.
  The Minister has enjoyed astonishingly little support the whole day from his own back benchers. For a long time there was the Parliamentary Secretary, the Parliamentary Private Secretary to the Minister and an inconsequential Whip—they were the only Members on the opposite benches for a long time this afternoon. In fact, the benches there were so bare that one of my substantial hon. Friends from this side, my hon. Friend the Member for West Ham, North (Mr. Lewis), went across and sat there.
  Mr. E. Partridge: He wanted to be in good company. That was the reason.
  Mr. Houghton: I have said my piece and I am sticking to it.
  The Minister cannot feel reassured after his experience today. More speeches from hon. Members opposite have opposed the Bill than have supported it. I plead not only on behalf of my hon. and right hon. Friends, but on behalf of hon. Members opposite who expressed disquiet about the Bill. I sincerely hope that my plea will meet with some response.
  Mr. F. Blackburn: It is important that the Minister should get to bed early, because he has a very heavy programme. He has to deal with the Rent Bill, the Committee stage of the Rating and Valuation Bill, the statement he is to make on a general review of local government finance, and he will have a heavy day on Monday as Minister for Welsh Affairs. Of course, he could shorten the proceedings by saying that he will take back this Resolution. The more one examines it the more restricted it would appear our debates next Thursday will be.
  I should like an answer to the question I put to the Minister about Clause 4 of the Bill and amendments of the Exchequer equalisation grant. The Minister knows that the grants are paid to the county councils. That means that the highly-rated industrial areas are, in effect, subsidising the more prosperous residential areas of the counties. I do not see that the cost to the Government would be increased if they paid out direct to the district councils. I should like to hear the right hon. Gentleman's view upon that.
  On the subject of Clause 1, I would say to the Minister that, if the Government think it important to make some contribution to the shopkeepers and the business establishments, then it is the Government's job to meet any grant they make. They should not throw the burden on the local authorities. As the Money Resolution stands, the Committee will be precluded next Thursday from doing anything about that. The Bill does not even have the merits of the Local Government Act, 1929, which made provision for a block grant from the Government to meet the deficiencies of the local authorities.

  751
  Surely, the same sort of principle should have been applied here. The Money Resolution is drawn in such a way that that would not be possible. I ask the Minister to take it back.
  The Minister said he would make his statement early next week, and I take that to mean that he will do so fairly early next week so that we may be able to study those suggestions which he is to put forward for the reform of local government finance. We should have that opportunity, because they could possibly have an effect upon the Amendments which would be moved next Thursday. Since the Money Resolution is so restrictive, I ask the Minister to take it back and have second thoughts about it in order to give the Committee a chance to deal with the problem before it.
  11.0 p.m.
  Mr. Ede: Sir Charles, I do not want to act on the assumption that you will, of necessity rule out of order any particular Amendment which may be moved. I am quite sure that, when the time comes, you will consider every Amendment which is submitted to you on its merits, and that statements made this evening, by one side or the other, that this or that cannot be discussed, will not influence you if you think it is in order under the Standing Orders.
  I wish to deal with the point which was made by the right hon. Gentleman, that this is an ad hoc temporary Bill. I wonder exactly how temporary it is going to be. I agree with what my hon. Friend the Member for Norfolk, South-West (Mr. Dye) said. On what the right hon. Gentleman told us today, I cannot see that it will be possible for the Bill to be brought to an end by his larger amendments in under the four years. I think that this Bill will remain the law of the land until the second valuation under the new Act.
  I put this to the Minister. When he says, as he seems to do, that any effort to pay compensation to the county councils and the other local authorities for their loss of revenue would be out of order, is that on the assumption that it will be for longer than until the year 1957–58 that they will have to bear this burden? He has had considerable local
  752
  government experience. I dare say that he has noticed, as all other people who have been associated with local government know very well, that one gets no thanks for putting down the rates, but if one puts them up, even if one does not put them up as high as they were before, one gets a considerable amount of grumbling. It is, therefore, the desire of every local authority that it should be able to budget for some years ahead and that it will be able to run, as we used to say, on an even keel without having to go either up or down.
  The effect of the Bill, unless compensation is paid to the local authorities, must inevitably be that they will have to increase the rates as a result of Clause 1. I do not think there is a single local authority in the country which thinks that, as a result of all the machinery of the Bill, it will have a higher rateable value next year than it had this. Therefore, there will be, all the time that the Bill lasts, the certainty that rates will be higher than they would have been if the Bill had not been introduced.
  The four local authority associations have asked the Minister that the precedent of 1929 should be followed. They are going to lose rateable value owing to the action of the Government on an issue on which they have not been consulted. This is the Government's action, for which the local authorities have no responsibility at all. I would have thought, therefore, that it was the duty of the Government to see that their action shall not put the local authorities in the difficulty of having to raise rates because of their action.
  It all depends on whether we can move an Amendment to Clause 1 whether this point can be raised in Committee. The right hon. Gentleman himself is proceeding on the assumption that we shall not be able to do so. I want to make it quite clear, Sir Charles, that I am not of necessity accepting that argument as final and that what you say will be the law with regard to the conduct of the Committee. Therefore, Sir Charles, I hope you will not think that anything I am now saying to the Committee will preclude me from arguing to you next Thursday afternoon that such an Amendment is in order. What decision you will come to, of course, will be a matter for your ripe and considered judgment.

  753
  I am the President of the County Councils Association, a post which I do not owe to my political convictions. I must tell the Minister that the opinion of the county councils, most of whom have very large majorities from his own political party, is unanimously against this proposal. The cost of Clause 1 to the county borough which I represent will be £75,000; that is to say, on the assumption that everything else remains the same as it is in the current financial year, next year's produce of the rates will be £75,000 less than this year. That amount must be raised, because no one imagines that any local authority will be able to reduce its total net expenditure next year. With the increases in salaries that we know have already been granted, that is quite impossible for anyone to contemplate.
  This must mean that there will have to be very considerable increases in rates, and the Government themselves ought to shoulder the amount that is due to their own deliberate action in this Bill. If they will not do that, they ought at least to give us the possibility of raising the issue and voting on it, so that the local authorities shall be able to hear from the Minister a detailed justification on this point and hon. Members, in all parts of the House, shall have the opportunity of giving a considered vote on this issue.
  I hope that the right hon. Gentleman's prognostication that this will be out of order when we get into Committee will be proved to be wrong, but I am quite sure that he has been well advised. After all, he is the sole author of this Financial Resolution. I imagine that nobody was more surprised than he was when he found that, having drafted the Resolution, he had provided all these safeguards to uncomfortable positions for himself when the House reassembled.
  The right hon. Gentleman has been concerned in the Bill from the first. Some people have expressed their sympathy with him for having had it foisted on him, but his is one of the three names on the back of the Bill. He was prepared to assent to it when he thought he would still be Financial Secretary to the Treasury, or if promotion was to come to him it would be in some more exalted office than the one he now has. He might even have thought that he would become Chancellor of the Exchequer. I ask him
  754
  to be certain that we shall have the opportunity next Thursday of being able to deal with this particular matter that arises on Clause 1.
  Mr. Herbert Butler: We ought to reinforce the plea that has been made, particularly in view of what the Parliamentary Secretary said when he introduced the Bill. The hon. Gentleman apparently was under the impression that local authorities were not in a position to know the implications of the Bill. The situation at the moment, as far as I can judge it, is that all the local authorities are against the Bill. After the Minister has made his statement early next week on the financial arrangements for local authorities, it will be impossible for those authorities to draft the necessary Amendments to the Bill which they may desire as a result of the Minister's statement.
  Therefore, without any knowledge of what the Minister will say, the Bill has been foisted upon them. They have never been consulted. The local authority associations have gone on record against the Bill and, at a meeting on 4th February, all the Metropolitan boroughs, through the Metropolitan Standing Committee, were against it. Now the local authorities are hamstrung by the Financial Resolution and prevented from stating their point of view in the House. The partnership which hitherto existed between the local authorities and the Minister has been broken by the Minister's every action.
  I hope, therefore, that the Minister will reconsider this matter. No hon. Member opposite has said that he is in favour of the Bill. Every hon. Member who has graced the Chamber with his presence during the debate and has spoken has said that even if the Bill is passed it should include something else, and every something else to which hon. Members opposite have referred is barred by the Financial Resolution. Seventy per cent. of local authorities happen to be Conservative in outlook and representation, and I hope that the Minister will realise that he cannot continue to over-ride local authorities which play such a big part in the life of the country. I appeal to the right hon. Gentleman to withdraw the Resolution and give local authorities the opportunity to consider these matters and express their views in the House. If that

  755
  happened, the Government would be doing something constructive instead of destroying the country's democratic institutions.
  11.15 p.m.
  Mr. H. Brooke: This is really not so sinister as it has been made to sound. The hon. Member for Sowerby (Mr. Houghton) asked me when I was going to make my statement. The Leader of the House announced that the Committee stage of the Bill would be taken on Thursday. If I remember my words correctly, I said that I intended to make a statement early next week. I would certainly count "early next week" to mean before Thursday.
  A number of hon. Members have asked whether the Amendments in mind will or will not be in order. I will certainly not go down that dangerous path any further. I leave the rest to you, Sir Charles. I would say, in passing, only that one or two topics that have been mentioned seemed to me not only outside the Money Resolution but remote even from the Long Title of the Bill.
  The President of the County Councils Association, a body for which I have a great respect, which I also hold for the right hon. Gentleman the Member for South Shields (Mr. Ede), has asked me whether this Bill will become, so to speak, "permanent unawares". I think he will appreciate that Clause 1 cannot last beyond the next valuation in any case, and I cannot plan the future business of the House to specify on what date legislation arising out of my statement next Tuesday might be carried through the House, or when it might come into effect. But I can say that I am not seeking to throw dust in the eyes of the House when I tell them that I am to make a comprehensive statement, and that I think it will give both Parliament and the local authorities a great deal to discuss, examine and eventually to decide.
  I am not seeking to run away from any of these questions. If I were, I should try to put off this statement for as long as possible. But I am concerned about the position in which local authorities find themselves at this moment. They have to make their rates. There may be differences of opinion
  756
  on this Bill, but now that I have undertaken to make a general statement raising wider issues, I trust that the Committee will agree that the direct obligation on us all is to try to deal with this Bill in an expeditious manner.
  The right hon. Gentleman the Member for South Shields said that there would be widespread increases in rates. One must, of course, beware of the fallacy of confusing an increase in the rate poundage, with an increase in rate revenue. There is nothing in the Bill which takes one penny of Exchequer grant or other income away from local authorities. All it will involve for them is a shift of the sources within their own area from which their rates will be drawn.
  Mr. Mitchison: If that is so, why does the right hon. Gentleman want a Money Resolution at all?
  Mr. Brooke: Because there are certain other matters that arise under the later Clauses of the Bill. I am speaking of Clause 1. I have been so generous in my framing of this Resolution in a dual capacity so as to leave wide open to amendments in Committee, both the amount of the reduction which we should make by Clause 1 and the categories of property which will qualify for relief. This is not a tight Money Resolution in any sense. We are being quite honest and straightforward in bringing this forward. All I am seeking to do is to establish a distinction between this short-term action, which it is essential to take in the interests of justice, and the longer-term review of local government finance which we all are well aware lies immediately ahead.
  Mr. Mitchison: I am sorry to press the right hon. Gentleman. He made a statement just now of which I hope he has realised the implications. He explained that Clause 1 would make no difference whatever to the Exchequer equalisation grant one way or the other. If so, it appears to me that so far as Clause 1 is concerned no Money Resolution would be necessary, and that if a Money Resolution is introduced relating to anything in Clause 1 it is solely for the purpose of limiting discussion and not for any purpose of a proper Money Resolution.
  If that really is the case—I hope the right hon. Gentleman will correct me if

  757
  I am wrong—I may have to ask you, Sir Charles, whether, on the analogy of the criminal law, under which, when one is charging a person with a crime, one can introduce other charges to prove what, I think, is called system or habit, I should be in order in referring to the numerous closures, Guillotines and other instruments to torture the Opposition to which the Government appear rather suddenly to have resorted with a zest and enthusiasm I should hardly have expected of them. However, I do not feel called upon to do that if the position which I have stated is in any way wrong. If it is wrong, I can be corrected. If not, what is the right hon. Gentleman's excuse for this remarkable proceeding?
  In the light of that, I really put this as a very serious question. I know it is late, but I do. In the light of that, I wonder if the right hon. Gentleman would reconsider the system of this Money Resolution tonight. Let me tell him what my reasons are. The statement about the Committee stage of the Bill was made today in the ordinary statement on the course of business next week. None of us knew at the time that the right hon. Gentleman was going to produce out of the bag the cat which has been dormant there for so long. That cat has been sleeping in that bag, growing, no doubt, in size—let us hope in wisdom, too—month after month and year after year. To produce this miserable, temporary little varmint of a Bill just now, just before the great cat itself is coming out, is somewhat inappropriate.
  The right hon. Gentleman has his Bill on Second Reading. Could he not be content with that? Could the right hon. Gentleman not give us an opportunity of considering our attitude towards it and give the local authorities, which really have had an extraordinarily raw deal over this, the opportunity of considering their attitude to it and the Financial Resolution by, for the moment, withdrawing the Money Resolution and omitting to hustle us into Committee proceedings on the Bill next week, to which we made no protest today because we did not know about the right hon. Gentleman's intention to make a general announcement on local government finance?
  I know that Ministers occasionally become—proud and obstinate are not too
  758
  strong words. I am sure they are inapplicable to the right hon. Gentleman. However, I do ask the right hon. Gentleman to consider what he is doing about the Bill if he persists with this Money Resolution now, despite the weighty protests he heard from my right hon. Friend the Member for South Shields (Mr. Ede) and the County Councils Association just now, and does that at a time when the attitude of the Opposition towards the Bill is bound to depend to a considerable extent on his statement to be made in a day or two. The back of the Opposition is always up, we know, but is it really worth putting up the backs of the already harrassed, over-burdened and somewhat resentful local authority associations any more for the sake of correcting what the right hon. Gentleman thinks is one anomaly just before he attempts to correct a number of others?
  Mr. E. Fletcher: Might I add a word to what my hon. and learned Friend the Member for Kettering (Mr. Mitchison) has said and make an appeal to the Minister? In view of what has been said, will he not allow the Committee to postpone any decision until he has had an opportunity to consult the Leader of the House? The Leader of the House is very sensitive to the convenience of hon. Members. We shall be in a very real difficulty here. The Minister told us in his Second Reading Speech, and has since referred to it again, that he is to make a very important and far-reaching statement next Tuesday, one which all interested in local government will await with great expectations.
  This is not a matter which affects merely Members of the Opposition, but Members of the Opposition are in a difficulty. Partly because of the apparent ambiguity about the terms of the Financial Resolution, until we have heard the Minister's statement next Tuesday we shall be in very real difficulty about the nature of the Amendments that we wish to table for the Committee stage.
  If it had been known when business was announced this afternoon—no one on the Opposition Front Bench was aware of it—that the Minister was to make his far-reaching pronouncement next Tuesday, I very much doubt whether it would have been thought consonant with the

  759
  wishes or convenience of the House that we should have to take the Committee stage of the Bill on Thursday. This is peculiarly a matter in which all hon. Members are largely dependent upon the details and information which they get from their local authorities. It is particularly a matter on which the associations of local authorities and each local authority will wish to reflect after learning of the Minister's statement on Tuesday. The Minister knows the feeling almost of indignation with which the local authorities regard the Government's conduct so far.
  There is an opportunity here for the Minister to consult the Leader of the House. It is the responsibility of the Leader of the House to guide the House on this matter. I have no doubt the Leader of the House had a very good reason for going away, but it is a little unfortunate that we have not the benefit of his guidance at this moment. In his absence we can only ask the Minister to take the responsibility for a decision which I am sure the Leader of the House would take if he were here.
  Question put and agreed to.
  Resolved,
  That, for the purposes of any Act of the present Session relating to rating and valuation, it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act in the sums payable out of such moneys for the year 1957–58 or subsequent years under Part I of the Local Government Act, 1948, or the Local Government (Financial Provisions) (Scotland) Act. 1954, as amended by the Valuation and Rating (Scotland) Act. 1956, being provisions—

  (a) reducing The rateable value of any hereditament;

  (b) increasing the rateable value of any hereditament which a Gas Board is treated as occupying under section six of the Rating and Valuation (Miscellaneous Provisions) Act, 1955; or

  760

  (c) reducing for the purposes of Part I of the Local Government Act, 1948, the rateable value for an area by reference to the reduction in the amount of rates chargeable in respect of hereditaments to which section eight of the said Act of 1955 applies

  Resolution to be reported upon Monday next.

  SUNDAY CINEMATOGRAPH ENTERTAINMENTS
  Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Abertillery [copy laid before the House, 31st January] approved.—[Mr. Simon.]
  Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Bedwellty [copy laid before the House, 31st January] approved.—[Mr. Simon.]
  Order made by the Secretary of State for the Home Department, extending Section 1 of the Sunday Entertainments Act, 1932, to the Urban District of Sidmouth [copy laid before the House, 31st January] approved.—[Mr. Simon.]

  COAL MINING (SUBSIDENCE) [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to provide for the execution of remedial works and the making of payments in respect of damage caused by subsidence resulting from the working and getting of coal, it is expedient to authorise the payment out of moneys provided by Parliament of the remuneration of any assessor summoned, and the expense of any remit made, by a court in proceedings under the said Act.
  Resolution agreed to.

  REMAND CENTRES
  Motion made, and Question proposed. That this House do now adjourn.—[Mr. Wills.]
  11.30 p.m.
  Mr. Charles Royle: There seems to be no association at all between the question of rating and valuation and the subject that I want to raise tonight. I want very briefly to deal with the question of the provision of remand centres. As I go along I hope, for the sake of the record, that I shall be able to say exactly what I have in mind. Before so doing, however, I should like to express my thanks to the Joint Under-Secretary of State for staying here to give some reply to what I have to say.
  The question of the establishment of remand centres under our penal system has been raised several times quite recently in this House. My right hon. Friend the Member for Grimsby (Mr. Younger) has referred to it in the form of a Question, and my hon. Friend the Member for Eton and Slough (Mr. Brockway) and I have also raised the matter. On the last occasion that I asked a Question along these lines I was told by the then Home Secretary—Major Lloyd-George as he then was—that the difficulty was one of finance. He gave figures ranging from £400,000 to £700,000 as the cost of establishing a remand centre. I will come back to that point in a moment.
  It is desirable to refer briefly to the history of the matter. The Criminal Justice Act, 1948, did many things, including one or two things in reference to this subject. Section 48 of the Act says:
  "The Secretary of State may provide—

  (a) remand centres, that is to say places for the detention of persons not less than fourteen but under twenty-one years of age who are remanded or committed in custody for trial or sentence;

  (b) detention centres, that is to say places in which persons not less than fourteen but under twenty-one years of age who are ordered to be detained in such centres under this Act may be kept for short periods under discipline suitable to persons of their age and description."

  Section 27 of the Act says:
  "Where a court remands or commits for trial or for sentence a person under twenty-one years of age … who is not released on
  762
  bail … the following provisions shall have effect"—
  and I will refer only to paragraph (c), which says—
  "it he is not less than seventeen years of age … and … a remand centre is available for the reception from that court … he shall be committed to a remand centre, instead of being committed to a prison."
  My final quotation is from Section 17 (2), which says:
  "No court shall impose imprisonment on a person under twenty-one years of age unless the court is of opinion that no other method of dealing with him is appropriate …"
  Subsection (3) says that if the court does impose imprisonment it must state the reason for its opinion that no other method is appropriate.
  That Act was put on the Statute Book in 1948, more than eight years ago, and during the whole of the time since then nothing has been done to establish remand centres. I want briefly, but forcefully and sincerely, to say that that is causing terrible concern amongst magistrates, recorders, and anyone who has to deal with young people. Our concern grows into anxiety as the days go by, because of the difficulties in which we are placed in dealing with these young people.
  My hon. Friend the Member for Widnes (Mr. MacColl) is as concerned as I am, in his capacity as a justice of the peace, and particularly in relation to his work in the juvenile courts; and I hope to leave time for him to have an opportunity to catch your eye, Mr. Speaker, before the Joint Under-Secretary replies.
  I do not want to weary the House with a lot of figures, but I should like to quote one of two from the 1955 Report of the Prison Commissioners. In 1954, taking young people between the ages of 14 and 21 there were 2,476 young people committed to prison on remand before conviction and for trial. They were not subsequently sent to prison and many were discharged completely. I suggest that that is a serious matter. I have not added up the figures but they mean that since the passing of the 1948 Act more than 20,000 young people have served a few days or weeks in prison awaiting trial or before conviction.
  In this enlightened age surely we have different ideas than that even for a few

  763
  days we should cause young people to be contaminated by hardened criminals, as they are in many cases. It could easily help to turn these young people into criminals themselves. In their Report, the Prison Commissioners state:
  "It is unfortunate that economic conditions have prohibited the provision of the remand centres envisaged by the Criminal Justice Act of 1948 which would remove the greater part of these young people from prison."
  I believe that some magistrates are so concerned about the situation, and are so determined that under no circumstances will they send young people to prison, even on remand, that they have been tempted to, and actually do, send them to detention centres in sheer desperation. It is a fact, and I think that the Joint Under-Secretary will confirm it, that young prisoners are often held on remand at Wormwood Scrubs awaiting detention.
  I was told by the former Home Secretary that the real problem is economic. It always has been and it looks as though it always will be. I hope that tonight we may get assurances from the hon. and learned Gentleman, and I make this suggestion. At the moment there are four functioning detention centres, so far as I can make out. I am not sure of the figure and it may be three, with one on the stocks. I understand that in the Estimates for 1957–58 two more are provided for, if the money is available. They are to be in the north of England. These are provided for in Clause 18 of the 1948 Act.
  I was a member of the Standing Committee which dealt with that Measure, and I remember that we talked about short sharp treatment for the worst of the young offenders. We always regarded it as something of an experiment. I wish to ask whether the Home Office still regards it as an experiment. It has established three centres, and another is on the stocks, and I desire to know whether the Home Office regards that as a sufficient experiment. Detention centres were only to be used when other methods were not available. Very well; push those on one side and give us, in place of what is intended for detention, one or two remand centres. This is a matter of observation rather than of detention.
  The previous Home Secretary said that the cost would be £400,000 for a small remand centre and £700,000 for a larger
  764
  one, and £150,000 for the conversion of some old house into a detention centre. That is far too much money to be talking about. I cannot see the necessity for so much expenditure for the establishment of remand centres. I recognise at once that these buildings must be secure and that there must be no question of escape, but the figures given by the former Home Secretary seem very high. Suitable buildings could be found and made secure against escape, and observation and classification could go on in a satisfactory way. If two cannot be provided with the money that one has in mind, then in place of the two detention centres give us one in London and one in another area, where Cheshire, Lancashire and Derbyshire meet. I have heard it suggested that the Government intend to build a new prison at Everthorpe for 300 men, at a cost of £800,000. Remand centres costing £700,000 seem out of all proportion.
  I would end by quoting a resolution passed unanimously at the last annual meeting of the Magistrates' Association:
  "Since much of the value of the alternative to prison is lost if they have to spend a period in prison, while such alternatives are considered or awaited, this Magistrates Association urges the Government to set up remand centres as provided for in the Criminal Justice Act, 1948."
  I appeal to the hon. and learned Gentleman for a change of heart and immediate action in this respect.
  11.43 p.m.
  Mr. David Gibson-Watt: I am glad of the opportunity at this very late hour to add my voice to what the hon. Member for Salford, West (Mr. Royle) has so very well and in such detail already expressed. This is a question in which both sides of the House should take part.
  I would reiterate two things: young people should not be sent to prison in company with hardened criminals while they are awaiting judgment. Secondly, I utterly agree with the hon. Gentleman that the need for detention centres would not be so great if these remand centres were created. I wish to take up no more valuable time, except to add to the plea to my hon. and learned Friend in the hope that it may have some influence in the provision of remand centres.
  11.45 p.m.
  Mr. James MacColl: The experience of most people dealing with juveniles is that unruliness is often a sign of acute mental disorder and maladjustment. There is nowhere now between a remand home and prison to which a youngster of 15 or 16 years of age who has made the remand home too hot to hold him can go. That is one of the most urgent reasons for establishing remand centres.
  The only other point I want to mention is the case of the lad on probation, who may have been put on probation on a two-year order at the age of 15. At the age of 17 he quarrels with his father, runs away from home, commits no offence but a breach against the condition of leading an industrious life. He goes back, but if the remand home will not have him there is nowhere to put him except prison. It is that kind of case which makes the remand centre a most urgent need. We are experimenting with detention centres. Let us learn more about how to use them.
  11.51 p.m.
  The Joint Under-Secretary of State for the Home Department (Mr. J. E. S. Simon): The House will be grateful to the hon. Member for Salford, West (Mr. Royle) for initiating a debate on this matter. He modestly refrained from reminding the House that he is a Vice-Chairman of the Magistrates' Association and speaks with very great authority on these matters. I am very grateful for the intervention of my hon. Friend the Member for Hereford (Mr. Gibson-Watt) and of the hon. Member for Widnes (Mr. MacColl), who also has great experience of this problem.
  The hon. Member for Salford, West gave the legal background to this problem, and I am gratefully relieved from taking up the time of the House on that aspect. The hon. Gentleman and his hon. Friend the Member for Widnes mentioned the three types of institution—detention centres, remand homes and remand centres. All three have one purpose in common—namely, to provide facilities alternative to prison for the treatment of young people who have fallen into trouble.
  Detention centres are set up under the Criminal Justice Act, 1948, to provide short periods of detention for young
  766
  offenders. They provide a brisk régime of hard work and strict discipline; in other words, they provide a method of treatment after trial and conviction. But remand homes and remand centres, as their names suggest, are intended to serve an entirely different purpose. They are for the detention and observation of young persons before trial or sentence.
  The remand homes are provided for the safe custody of children and young persons up to the age of 17. The main purpose of the remand centre is to receive young persons who are between 17 and 21, but in addition there are three other classes which it receives. The first is the one referred to by the hon. Member for Widnes—young persons between 14 and 17 who are too unruly or depraved to be sent to or kept in a remand home. Secondly, they take young persons between 14 and 17 who are remanded in custody far an inquiry into their medical or physical condition and for whom no suitable facilities are available in a remand home. Thirdly, they take or are due to take young persons between the ages of 16 and 17 on whom reports are required as to their suitability for Borstal training.
  As the hon. Member for Salford, West pointed out, there is a real need for such facilities. My figures are slightly different from his. According to my researches, in 1954 there were 2,539 young persons between 14 and 21 who were committed to prison on remand who were not subsequently sent to prison on conviction.
  Mr. Royle: Those are higher than my figures.
  Mr. Simon: Yes. Of these, no fewer than 314 boys and 8 girls between 14 and 17 were received into prison because they were too unruly or depraved for custody in a remand home—and that is the problem to which the hon. Member for Widnes referred.
  There is no doubt that far too many untried adolescents are being received into prison because there is nowhere else to keep them. That is highly undesirable from more than one point of view. In the first place, it is bad for the boys and girls; prison is the wrong place for them, as my hon. Friend pointed out. In some prisons, the facilities for segregation are necessarily limited, and even if there is no actual contact with other prisoners,

  767
  the whole atmosphere of a local prison is a most undesirable one for young people. In the second place, the presence of these young people contributes significantly to the serious problem of overcrowding of our local prisons.
  It will thus be apparent that there is no difference of view between the hon. Member for Salford, West, who raised this matter, and the hon. Members who supported him in his plea, on the one hand, and the Government and the Prison Commissioners, on the other, as to the desirability of establishing remand centres. The difficulty all along has been lack of resources. When the 1948 Act was passed, the Prison Commissioners found a number of new duties imposed upon them at a time when the call which they were able to make on the limited national resources was of necessity limited, and priorities had to be determined to ensure the best use of the available resources.
  The most urgent need, as I am sure the hon. Gentleman would agree, was the provision of new prisons and Borstal institutions. When I say that the new prison at Everthorpe, which was mentioned by the hon. Gentleman, is the first new prison to be built in this country for nearly fifty years, the House will appreciate the urgency of the matter. I know, too, from his interventions in the debates on the Homicide Bill, that the hon. Member for Salford, West, like many hon. Members, attaches great importance to the new psychiatric prison which is to be built at Grendon Underwood—it is in fact to be started this summer, as we have heard.
  The hon. Gentleman did suggest, or imply, that the resources devoted to detention centres should have been devoted to the provision of remand centres, at any rate now. If one could accept the view that, to carry out the intentions of the 1948 Act, it was more important to provide remand centres than detention centres, then his argument has some force. I am prepared to admit that it is a view which he is well entitled to hold. But I know that he will be the first to recognise that there are strong arguments on the other side, arguments which I submit are conclusive.
  First and foremost, detention centres were set up under the 1948 Act to provide a new method of treatment for con-
  768
  victed offenders between the ages of 14 and 21. They were one of the various alternatives to imprisonment—this is an important matter—provided by the Act in the hope that, when they were sufficiently developed, it might be possible to put an end to sentences of imprisonment on all persons under the age of 21 by magistrates' courts.
  I know the hon. Gentleman looks forward to that moment, and that seems to me really to answer the point which he made, that we have two more detention centres in the immediate programme to be built in the North of England, because if we are to have an order putting an end to sentences of imprisonment by magistrates' courts, it is essential that the total programme of detention centres covering the whole country should be completed.
  In any event, the relative costs of the two types of establishment really make any argument in favour of the priority of detention centres to a large extent academic. Detention centres can be provided by adapting existing buildings at comparatively low cost, as the hon. Gentleman himself pointed out. I have the figures. In fact, four centres have so far been provided, complete with staff housing, for less than £300,000.
  On the other hand—the hon. Member disputed this, but it is a fact—remand centres must be buildings specially designed and erected for their purpose. They must be of maximum security, as the hon. Member recognised, comparable with a prison in that respect. They must provide facilities—this is the important part—for observation and examination by specialised staffs and for visits by friends and legal advisers.
  Further, it is highly desirable, on grounds of economy of staff and premises, that remand centres should be combined with observation and classification centres. They would thus provide facilities for the medical, psychiatric and social examination, not only of young persons on remand, but also of adult persons awaiting sentence and of convicted prisoners, with a view to providing a better system of classification than is available at present. Of course, all those three types of service would be provided in different and quite separate parts of the institution.

  769
  The Prison Commissioners estimate that seven centres will be required, the total cost of which would be over £7 million. Even without the observation and classification wings, which would, obviously, be highly desirable, the cost would be over £4 million. However that sum may look from the point of view of a spending Department, from the point of view of the Treasury, which has to consider every demand on the national economy—security, the social services, such as education, housing, hospitals, and a rising consumption, not only for the wage earner but for the retirement pensioner and others in a similar position—the sum is obviously a very large one.
  That is not to say that the need is not a real one, and I end, as I began, with
  770
  an expression of gratitude to the hon. Member for Salford, West for initiating this debate, because he has reminded the House and the country that we are here concerned with human beings who may have fallen foul of the law but who are of an age at which there should be every hope of their redemption, and who are therefore urgent claimants on our sympathy. When I say "our sympathy," I do not forget the story of the Quaker who, when he was told by a friend that he felt for the poor, said, "Where do you feel? Do you feel in your pocket?"
  Question put and agreed to.
  Adjourned accordingly at two minutes to Twelve o'clock.

TRADE AND COMMERCE
  Exports to China (Diesel Engines)
  Exports to China (Diesel Engines)
  Hire Purchase (Finance)
  Hire Purchase (Finance)
  Gloving Industry (Representations)
  Gloving Industry (Representations)
  Key Industries Duty
  Key Industries Duty
  Imperial Preference
  Imperial Preference
NATIONAL FINANCE
  Premium Savings Bonds
  Premium Savings Bonds
  Purchase Tax (Administration)
  Purchase Tax (Administration)
  National Insurance Contributions (Tax Relief)
  National Insurance Contributions (Tax Relief)
  Bank Rate
  Bank Rate
AGRICULTURE, FISHERIES AND FOOD
  Dehydrated Foods
  Dehydrated Foods
  Norway Spruce
  Norway Spruce
  Pest Destruction Officers, Warwickshire
  Pest Destruction Officers, Warwickshire
  Research Projects
  Research Projects
  Bulls (Licensing Scheme)
  Bulls (Licensing Scheme)
  Land Drainage (Report)
  Land Drainage (Report)
  Wissington Light Railway
  Wissington Light Railway
  Rabbits
  Rabbits
  Slaughterhouses
  Slaughterhouses
  Sugar
  Sugar
  Farm Buildings (Design)
  Farm Buildings (Design)
  Egg Marketing Board (Secretaryship)
  Egg Marketing Board (Secretaryship)
  Egg Marketing Scheme
  Egg Marketing Scheme
EMPLOYMENT
  Wages (Payment by Cheque)
  Wages (Payment by Cheque)
  Aircraft Workers, Coventry
  Aircraft Workers, Coventry
  Dundee
  Dundee
  Leyton
  Leyton
  Messrs. Briggs (Dispute)
  Messrs. Briggs (Dispute)
HOME DEPARTMENT
  Homosexuality and Prostitution (Report)
  Homosexuality and Prostitution (Report)
  Passports (Continental Excursions)
  Passports (Continental Excursions)
  Air-raid Shelter, Long Lawford
  Air-raid Shelter, Long Lawford
  Smoking (Theatres and Public Transport)
  Smoking (Theatres and Public Transport)
  Police (Powers of Search)
  Police (Powers of Search)
  Shops (Closing Hours)
  Shops (Closing Hours)
  Public Houses, Carlisle (State Management Scheme)
  Public Houses, Carlisle (State Management Scheme)
  Office Workers (Report)
  Office Workers (Report)
EDUCATION
  Comprehensive Schools
  Comprehensive Schools
  Primary and Secondary Schools
  Primary and Secondary Schools
  Science Graduates (Teachers)
  Science Graduates (Teachers)
  Secondary School Places, Wales
  Secondary School Places, Wales
  Dagenham (Free Milk)
  Dagenham (Free Milk)
  National Museum of Wales Schools Service
  National Museum of Wales Schools Service
  Art Students
  Art Students
  FORMOSA (BRITISH SHIPPING)
  FORMOSA (BRITISH SHIPPING)
  SUEZ CANAL AND EGYPT
  SUEZ CANAL AND EGYPT
HOUSING
  Council Estates, Liverpool (Building Standards)
  Council Estates, Liverpool (Building Standards)
  Rent Bill (Deputations)
  Rent Bill (Deputations)
LOCAL GOVERNMENT
  Water Supplies, Wales (Advisory Committee)
  Water Supplies, Wales (Advisory Committee)
MINISTRY OF SUPPLY
  Arms Expenditure Cuts (Employment)
  Arms Expenditure Cuts (Employment)
NORTHERN RHODESIA
  Secretary of State's Visit
  Secretary of State's Visit
MINISTRY OF HEALTH
  Poliomyelitis Vaccine
  Poliomyelitis Vaccine
  HOUSE OF COMMONS CATERING
  HOUSE OF COMMONS CATERING

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

WHEAT IMPORTS
3.6 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, with regard to wheat imports into the United Kingdom, they will indicate the latest available figures showing—

(a) Proportion of Canadian origin against all others;

(b) Average price paid for:

(i) Canadian;

(ii) all other origins.]

LORD CHESHAM: My Lords, in the month of December, 1956, wheat of Canadian origin formed 46·6 per cent. of all wheat imported into the United Kingdom. The average price was £31 Is. per ton c.i.f., compared with £28 11s. for wheat from other sources overseas.
LORD BARNBY: My Lords, I thank the noble Lord. Can be give an indication if that figure for December approximates with the figures for the total year.
LORD CHESHAM: My Lords, I will give the noble Lord the figures for the total year, and he can make his own deduction. For the calendar year, 1956, the percentage of wheat of Canadian origin was 55 per cent., at an average price of £29 8s., as against £27 2s. for wheat from other sources.

BRITISH CONSULATE-GENERAL AT NICE
VISCOUNT ELIBANK: 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 whether, having regard to the fact that
600
the British Consulate-General at Nice was to be closed on 31st January, and that the Marseilles Consulate is held to be an inadequate substitute, they will set up a Consulate at Monaco to provide consular facilities for British residents and British trading interests on the French Riviera.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE EARL OF GOSFORD): My Lords, Nice is not the only post, nor the French Riviera the only area, to be affected by the search for economies in Government expenditure overseas. Her Majesty's Government do not accept the thesis, referred to by the noble Viscount, that Her Majesty's Consulate-General at Marseilles is an inadequate substitute for Her Majesty's Consulate-General at Nice. The possibility of setting up a Consulate at Monaco has been most carefully considered; but this course has been rejected, since Her Majesty's Government are confident that Her Majesty's Consul-General at Marseilles will be successful in his efforts to meet the reasonable requirements of British residents and interests on the French Riviera. Given a fair trial, this arrangement should be successful.
VISCOUNT ELIBANK: My Lords, I beg to thank the noble Earl for his Answer. May I ask him whether Her Majesty's Government will not reconsider this matter, and whether they will bear in mind that British trading and residential interests on the Riviera are unanimously of the opinion that the proposed consular facilities at and from Marseilles will be totally inadequate, and that without consular facilities at Monaco, or elsewhere, actually on the Riviera, there will be grave inconvenience and a distinct danger that British industrial interests, which now show a considerable profit to the London insurance market, may be replaced by American and German interests?
THE EARL OF GOSFORD: My Lords, I cannot possibly give any hope to the noble Viscount of a reconsideration of this decision. In regard to his remaining remarks, I will bring them to my right honourable friend's attention, though I know that he is fully aware of them and has taken them into full consideration in the decision to which he has already come.

HOMICIDE BILL
Brought from the Commons; read1aand to be printed.

SUNDAY ENTERTAINMENTS ACT, 1932
THE MINISTER OF EDUCATION (VISCOUNT HAILSHAM): My Lords, this is the first of three similar Motions standing in my name on the Order Paper. It may be the desire of the House that I should say what I have to say on the first and, if your Lordships accept that, that I should move the other two formally. I have no doubt that to most of your Lordships the procedure under this Act is more familiar than it was to me. Broadly speaking, the procedure originates in a resolution before the local authority, which goes before a town meeting; then, if either side complains of the result of the voting of the town meeting (which almost always the beaten side does), there is a local poll, and if that yields a positive result, an Order has to be laid for positive approval before both Houses of Parliament. In all these three cases there was a local poll, after the early procedure had taken its devious course. In each case the local poll supported the proposal by a substantial majority—in the two Welsh cases by an overwhelming majority; in the Sidmouth case by rather less. I think I have now said enough. I beg to move.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Abertillery, be approved—(Viscount Hailsham.)
LORD BURDEN: My Lords, is it possible for the noble and learned Viscount to say whether the Order also includes details of the amount, in each instance, that the local authority are taking from the cinema people by way of Sunday entertainments tax?
VISCOUNT HAILSHAM: My Lords, the Order does not so specify. This is a matter which, as the noble Lord is aware, has already been canvassed, and I think cm the 20th of this month the House will have an opportunity of discussing it more appropriately, perhaps, than in connection with the present
602
Orders which do not really raise the topic.
On Question, Motion agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move the second Order.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Bedwellty, be approved—(Viscount Hailsham.)
On Question, Motion agreed to.
VISCOUNT HAILSHAM: My Lords, I beg to move the third Order.
Moved, That the Order made by the Secretary of State for the Home Department, for extending section one of the Sunday Entertainments Act, 1932, to the Urban District of Sidmouth, be approved.—(Viscount Hailsham.)
On Question, Motion agreed to.

TRANSPORT (RAILWAY FINANCES) BILL
3.17 p.m.
Order of the Day for the Second Reading read.
THE PARLIAMENTARY SECRETARY, MINISTRY OF DEFENCE (LORD MANCROFT): My Lords, two months ago, your Lordships debated the Government's White Paper entitled Proposals for the Railways. The noble Lord, Lord Lucas of Chilworth, was pleased to call it a very searching debate. It was, indeed; and it is for that reason that I am not proposing to search again to-day over the ground that your Lordships traversed on November 27 last. The White Paper is, however, the background against which this Bill must be judged.
I would briefly remind your Lordships of the main points which emerge from the White Paper. The British Transport Commission, in their part of the White Paper, made a frank and detailed review of their financial position and of their future prospects. They have incurred substantial losses, and they foresaw that they must continue to do so for some years. But they thought that by about 1962 they should, by their own efforts, have overcome their financial difficulties. Meanwhile, there lay ahead a tough

603
period, and in that period the situation must be tackled with urgency and with decision if it was not to become irretrievable. The physical needs of the railways would, and could, be met by the Modernisation Plan, but some action outside the Commission's own powers was necessary on the financial side. For this reason, the Commission urgently recommended to the Government that some financial plan should be adopted which, while it avoided any idea of subsidy, would place the Commission's undertaking on a firm basis during the critical years of reconstruction. They deliberately requested that any relief temporarily accorded to them, should be strictly limited, both in time and amount.
The Government, in their part of the White Paper, naturally agree with the Commission that the rôle of British Railways in our country's economy is a vital and indispensable one. They are satisfied that the measures which the Commission are taking should enable them to overcome past handicaps and provide the country with a modern and up-to-date transport system—a system, moreover, which will pay its way. In the view of the Government, it is in the basic national interest that the railways should be put in a position to achieve this result. The Commission and the Government are both agreed that subsidy would provide no answer to the fundamental problems of the railways, The object of this Bill, therefore, is to help the Commission to survive the transitional period without subsidy. It has been drafted so as to enable the Commission to set up financial targets within their own organisation and thereby preserve the financial self-discipline which is essential to their recovery.
The proposals of the Government fall broadly into two parts, and they receive rather differing treatment under the Bill. The first part of their proposals concerns the interest payable on sums borrowed to finance the Railways Modernisation Plan. Before some of the items in the Modernisation Plan have begun to earn revenue, these interest charges will be a heavy burden in the Commission's revenues. To ease this burden, we propose that the purposes for which the Commission are already authorised to borrow under the 1947 Transport Act should be expanded
604
temporarily to include the payment of interest on capital moneys borrowed by the Commission for British Railways.
This arrangement has two sorts of time limit attached to it. In the first place, the capital borrowings to which it will apply are confined to borrowings in the ten years up to the end of 1965. By then the Modernisation Plan will be well under way, and should be paying, even after providing for interest. In the second place, the Commission will not be allowed to borrow to meet interest, beyond the end of the third year, after the year in which they borrowed the capital. Let me give an example. Let us suppose that in this current year, 1957, the Transport Commission borrow £x for British Rail ways. Then they will be able to borrow to pay the interest accruing on this £x in the years 1957, 1958, 1,959 and 1960 only.
In commercial concerns, the practice of capitalising interest on expenditure which will not fructify for some years is, as your Lordships will realise, well recognised. With such concerns the period is, I believe, usually the construction period of each separate asset, With the Railways Modernisation Plan, however, it would obviously be a practical impossibility to segregate the assets and to deal with them separately, or to determine how much of the cost of each asset was to be financed by borrowing and how much from internal funds. The expedient has therefore been adopted of striking an average, which will give a result broadly similar to that which would have been obtained by calculating precisely the unproductive period of each asset.
The period provided in the Bill is not in the Government's view ungenerous to the Commission, and the Commission themselves, I understand, regard it as a reasonable one, While a large main-line electrification scheme might take five or six years to complete, other schemes, such as the purchase of diesel trains, wagons and coaching stock, will obviously begin to earn revenue after much shorter periods. Any borrowings made under these provisions will be from sources which normally provide the Commission with their capital funds and will count against the limit of £600 million laid down by the Transport (Borrowing Powers) Act. 1955. So much for the first main purpose of the Bill, which your Lordships will find expressed in paragraph (a) of subsection (1) of Clause 1.

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I now turn to the second part of the Government's proposals. It may help your Lordships to understand this rather complicated Bill if I emphasise that this second proposal is quite separate from the one I have just been talking about. It concerns the deficits incurred by the Commission on British Railways in 1956 and likely to be incurred in the next six years. This proposal is to give the Commission powers to borrow, by means of special advances, derived from the Consolidated Fund, the sums required to meet, first, the deficits on revenue account of British Railways during the years 1956 to 1962 inclusive, and secondly, the payment of interest on the special advances. This interest must, however, accrue not later than the end of the fifth year after that in which each special advance was made, but the Commission cannot borrow to meet interest accruing after 1964.
These powers to borrow by special advances to meet the railway deficits and interest on the special advances have not the same parallel, in normal practice, as borrowings to meet interest on capital monies borrowed. They are therefore treated differently. The money will be provided by the Government and will not count against the borrowing limit of £600 million fixed by the 1955 Act, to which I have just referred. The total amount which may be borrowed to meet the annual deficits on British Railways is, however, limited to £250 million. This is the kind of figure at which the Commission estimate the accumulated deficit will stand before they begin to reap any substantial benefit from their Modernisation Plan.
The sums which the Commission will be allowed to borrow by special advances from the Consolidated Fund will not be measured by the size of the revenue deficit incurred by British Railways taken by itself, Any surplus earned by the rest of the Commission's undertaking will be deducted from the purely railway deficit in fixing the amount to be borrowed. This provision was inserted quite deliberately, because the whole object of the Bill is to help the railways, which are the chief loss-makers. It is, in the Government's view, only right that the Commission should be required to use up any surplus they have earned on their other activities to meet railway
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deficits before they make use of the special loan facilities from the Consolidated Fund. The limiting period of 1956 to 1962 for the Commission's borrowing in respect of deficits, and the limiting period of five years in respect of interest on the deficits, have been fixed in the light of the Commission's estimates of the rate of improvement of their financial position. That is in paragraph (b) of the same subsection. Rates of interest on the advances to the Commission will be determined by the Minister, with the approval of thy Treasury. They will be based, broadly on rates of Government credit current at the time.
I must now turn to the important question of repayment of the loans. As I have already emphasised, both the Commission and the Government are determined to avoid any element of subsidy. Your Lordships will see that Clause 2 of the Bill firmly establishes the Commission's obligation to repay the advances. There is, however, considerable flexibility as to the method and timing of the repayments, to fit changing circumstances. Except for the initial repayments, which the Commission are required to make before the end of the seventh year—the amount of which is left to the Commission's discretion—control rests with the Minister and the Treasury. The Commission are required to begin repayment not later than the seventh year after the year to which an advance relates. This means that repayment of the first advances must begin in 1963. These provisions (like the date beyond which the Commission will no longer be able to obtain special advances) are related to the probable date by which we all hope the Commission should begin to get out of the red. They are given a target at which to aim. On the other hand, the discretion left to the Commission as to the timing and amounts of the initial repayments in respect of each advance may well prove useful to them if they should, happily, have a windfall or, on the other hand, if progress to the turning point is not quite so rapid as we all hope.
After the seventh year, control passes to the Treasury and the Minister. It should titer he easier to make a more realistic assessment of the Commission's capacity to repay advances and to determine whether the period should be, say, fifteen or twenty-five years. The advances

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relating to each year will be the subject of separate directions. There is, therefore, considerable scope for varying directions in respect of later advances, according to the development of the Commission's financial position. If, after a direction has been given, circumstances should vary either way, the direction can be varied to meet the new circumstances.
May I now deal briefly, and as simply as I can, with some of the accounting provisions which the Bill contains, The Commission are anxious that their revenue account should not show a heavy and increasing balance of deficit, either during the period of reconstruction or for some time afterwards. If it were not for the liability of the Commission to continue paying interest on their issued capital, which is all fixed-interest-bearing, the problem would be of an entirely different character. In similar circumstances, an ordinary company with equity stock would declare no dividends for the time being. Its shareholders would raise hopeful eyes to their reward in the future. Having regard to the future prospects of the railways, it is reasonable that the Commission should be allowed to transfer to what is, in effect, a suspense account, the railway deficits they will incur, after paying interest on British Transport Commission stock, during the reconstruction period, as well-as the additional interest they have to pay through borrowing to finance these deficits. Consequently, Clause 3 of the Bill requires the Commission to carry to a Special Account the deficits on British Railways and the interest which can be met out of moneys borrowed under the Bill. There has also to be carried to this Special Account the accumulated deficit on the Commission's revenue account at the end of 1955.
The total amount carried to the Special Account is to be reduced by such amounts as the Commission think fit. These amounts must not be less than the amounts which the Commission are required by the Bill to repay. In addition, the Minister, with the approval of the Treasury, can direct that the amount standing in the account in respect of the deficit up to the end of 1955 shall be reduced by such amount as they think fit. The gradual process of reduction will continue until the Special Account is extinguished. The Special Account has the merit of providing a simple way of
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modifying, in order to take account of the new arrangements, the Commission's general duty under the Transport Act, 1947. Under Section 3 of the Act, the British Transport Commission have a general duty so to conduct their undertaking, and to levy such charges, as to secure that the revenue of the Commission is not less than sufficient for making provision to meet charges properly chargeable to revenue, taking one year with another. This Bill modifies that duty to the extent that, in making this calculation, the Commission are not required to have regard to any amounts for the time being standing in the Special Account.
I do not, of course, want to give your Lordships the impression that this Bill in any way leaves the Commission without financial obligations in respect of the railways. On the contrary, the Commission will have a duty to repay moneys advanced to them; to keep within the ceiling of £250 million imposed on the special advances to meet deficits; and gradually to clear off the amounts standing in the Special Account. The arrangements are, I hope your Lordships will agree, flexible enough to ensure that, as the financial position of British Railways improves through modernisation and other measures, as the period during which the Commission can make transfers to the Special Account comes to an end and as the amounts standing in the Special Account become smaller and smaller, so the general duty of the Commission to break even progressively stiffens until it is ultimately as unqualified as it was under the 1947 Act.
Clause 4 defines "British Railways" for the purposes of the Bill. It is the Government's intention that the facilities for which the Bill provides should apply only to the railways as generally understood and to those activities which are incidental to the running of the railways. The Commission's accounts show separately the results of the various activities in which they are engaged, and therefore this definition should give rise to no practical difficulties. If, however, there should be any doubt whether some part of the Commission's undertaking is or is not part of British Railways, for the purposes of the Bill, the question falls to be determined by the Minister.
That, then, is the Bill which we have before us to-day. It is, as your Lordships

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will, I know, by now agree, a complicated Bill, but this is inevitable if we are to enable the Commission to tackle their problems, as they should do and as they themselves earnestly want to do, on a sound commercial basis, and also to preserve a proper sense of financial discipline within their undertaking. An out-and-out subsidy, which would have been much easier for me to explain, simply would not do this. Indeed, as the Commission themselves say in their Memorandum, to rely, in effect, on an indefinite subsidy would be disastrous to the self-respect of the undertaking, disastrous to their urge towards efficiency and disastrous to the basis of their relations with the public who now own them.
It is easy, my Lords, to deride British Railways and to make jokes about them, as is our custom with other time-honoured institutions like plumbers and mothers-in-law. I, however, am one of those who believe that, with all their faults, British Railways are, on the whole, providing a much better service to the community than the community is always prepared to admit—and that despite appalling difficulties, few of which are of their own making. In the course of the two and a half years in which I had the honour to represent Wales as Under-Secretary of State at the Home Office, I travelled nearly 30,000 miles on 13ritish Railways. I must confess that I saw remarkably little of the dirt, discourteousy and delay which some people, unhappily, seem to experience whenever they travel by train. But it is no use blinking the fact that, again for reasons largely outside then, control. British Railways have fallen sadly behind the times, particularly in the matter of equipment. From my own experience, however, it seems to me that most—I repeat most—of the men and women working on the railways are doing everything in their power to put matters to rights. It does not however rest wholly in their power, Hence this Bill.
It is no use thinking that, without some such measure as this, we can see the major improvements for which the Modernisation Plan provides: improvement of the speed and reliability of freight services by fitting all wagons with continuous brakes by new and extended marshalling yards and modernised railheads; and, on the passenger side, the achievement of faster, cleaner and more
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punctual services through electrification and other measures. In short, we cannot hope to see the restoration of our railways to their old and proud position of world pre-eminence, unless the British Transport Commission are given this means of bridging the few anxious years that he ahead. I therefore commend to your Lordships this means of so doing and trust that you will give the Bill a Second Reading.
Moved, that the Bill be now read 2a.—(Lord Mancroft.)
3.35 p.m.
LORD LUCAS OF CHILWORTH: My Lords, before I deal with the Bill before your Lordships' House, may I offer a word of welcome and commendation to the noble Lord who has moved its Second Reading? This is the first occasion on which he has had to stand at the Government Dispatch Box and speak upon transport matters. The noble Lord has tackled many tough assignments. Believe me, he has got one now of the toughest character, but if he tackles it with the charm and efficiency with which he has moved the Second Reacting of the Bill, I do not think any noble Lord, wherever he sits in your Lordships' House, will have the slightest complaint. The noble Lord has, of course, been optimistic—one of the things that I think anybody who talks on transport matters requires above everything else is optimism. But maybe he has been over-optimistic.
I do not intend to go back and traverse old ground, but the simple, unvarnished truth of what the noble Lord is doing this afternoon is to ask your Lordships to pass a Bill which will underwrite the losses of British Railways to the tune of £320 million. Of course, £320 million is a lot of money in any language, and that is the minimum. That is the amount written in the Bill—£70 million up to date and £250 million in the next six years, when it is hoped that the British Transport Commission are going to enter a balance and start to make a profit. As the noble Lord said, that is what they say they will do. But I have sufficient experience in the world of industry and commerce to know that I have made my fortune many and many a time on paper, but each time somehow, something has happened to disappoint me. So I am going to ask your Lordships to look at this a little more critically.

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At the present time this country is facing a terrific problem. We are grappling with this problem of defence expenditure. That sum of £1,500 million has got to be reduced. At the present time it is proposed to spend £1,200 million upon the railways. We are going to spend money on the modernisation of the coal industry. The Central Electricity Authority have plans for spending millions of pounds that will eventually take traffic away from the railways, because, instead of transporting the coal from the mines to the power stations, they are going to build the power stations at the mines and transport the current on 175-foot pylons all over the country. Then we have facing us the colossal expenditure of atomic energy stations. Then we have the roads.
I am not going into the virtues of any of those things. There is, by the way, one matter which your Lordships sometimes lose sight of and about which I asked a Question, the Answer to which appears in the OFFICIAL REPORT of January 22. I had it in mind then to ask how much had been spent on the hydro-electric scheme in Scotland. The answer is shocking. It adds up to £150 million. That may be good. But do you not think it is time that we asked ourselves whether we are shovelling all the taxpayers' money on to the right heap, and whether we are getting value for the money? It may be that we are. The noble Lord comes here this afternoon with a most optimistic picture. He asks the taxpayers of this country to underwrite £320 million on the basis of what I have termed an optimistic forecast. My Lords, we have been through a trial period, because, unfortunately, fortuitous circumstances have led us during the last week or two into an era where we have more than ever to depend upon the railways.
What are the facts? Do they teach us anything? When we were debating this matter last on November 27, I ventured to make a few observations in which I questioned whether the assumptions upon which all these proposals are based were valid. The British Transport Commission estimate that, by modernisation, they are going to increase their passenger traffic—I think I am right in saying but the noble Lord will correct me if I am wrong—by somewhere in the
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region of £33 million per annum, and freight by £55 million per annum. I ventured to say that those estimates were unrealistic; that the assumptions upon which these financial estimates were based would never be reached. I am confirmed in that opinion. I remember saying that those assumptions lost sight of the evolution of the industrial set-up in this country. Time goes on. The fabrication in our industries is such that short, door-to-door conveyance is the method of the future. I said that railway transport of freight within a radius of forty miles had practically disappeared.
What has been the experience during the time of petrol rationing? The Times has asked a lot of questions; the Manchester Guardian has replied to most of them. The Manchester Guardian said only yesterday that the railways will never carry the traffic because road transport is preferred. The percentage increases are very low—this, in spite of the fact that there was every indication that the Government by the way the petrol rationing scheme was first operated, were using the policy of forcing traffic on to the railways. In what other way can you interpret the Ministry of Transport edict that no supplementary petrol would be given to road hauliers until half their basic ration had been used? The Minister said in another place only the other day that to-day the railways were being run more efficiently than ever. I beg to question whether that is an accurate statement. The noble Lord has just said that when he travelled 30,000 miles he could find nothing wrong with the railways.
LORD MANCROFT: No, I did not say that.
LORD LUCAS OF CHILWORTH: Or that what was wrong was so trivial that it really did not add up to very much. That is the impression I got.
LORD MANCROFT: I said that my impression was that it was not anything like as bad as everybody else seems to find it.
LORD LUCAS OF CHILWORTH: It depends on what the noble Lord's feelings are. I suspect that his version of it, speaking from the Government Dispatch Box, is slightly different from what it would be if he happened to be in Opposition. He should consult his noble friend

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Lord Swinton, about the inefficiency. I remember Lord Swinton's tirades in 1947 and 1953. Bin let us have a few facts. Every day I travel over a hundred miles to come to your Lordships' House, and all but twelve of those miles are covered by train. I travel from Oxford to Paddington. Only four times this year have I arrived at my destination at the same time as the timetable stated that I should. On only six occasions have I been less than twenty minutes late; on one occasion I was an hour and three-quarters late; on another, over an hour late, and on another three-quarters of an hour late. That is for a journey of fifty-three miles. One night I sat in a Paddington to Oxford express train for one hour and twenty-three minutes at Maidenhead station. It took the railway authorities all that time to remove the last but one coach from the train because it had developed a hot axle-box. Every morning I walk on to Oxford station sand I ask the ticket collector, "What is wrong to-day?" On Tuesday last he said, "I'm sorry, sir, but it is three-quarters of an hour late already and has not arrived yet." I said, "What's wrong?", and he replied, "Oh, the engine has broken down. They have had to put a goods engine on." That train arrived at Paddington station an hour late. The week before that he said, "It has got a bad steamer to-day." is that efficiency? That is my own personal experience.
Before I leave the passenger aspect—the noble Lord knows the journey I am describing—may I say that if the noble Lord would travel in some of these trains he would hear a number of business men from the Midlands, and what they say would not marry up with what he has said. One said to me recently, "I have given up making any engagements in London before midday, because I cannot keep them. "On the occasion that I am speaking about I was coming up to your Lordships' House to attend a Committee, and I had to keep six people waiting for an hour. Is that efficiency?
VISCOUNT ESHER: Perhaps the noble Lord should not have nationalised these things.
LORD LUCAS OF CHILWORTH: I am not talking about what should have been done. Perhaps the noble Viscount
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could make a helpful remark as to what should have been done in the situation which would have faced any Government in 1947, when the railways were completely bankrupt. Nationalisation of the railways—if he wants to discuss that—had been the policy of all Governments, even that of Mr. Winston Churchill, right the way back for as many years as I can remember. So the noble Viscount's remark was not very helpful.
Now, my Lords, I had some goods sent to my house. There were three small packages. They had to travel only forty miles. They came by rail and it took exactly three, weeks for them to travel those forty miles. They were all despatched at the same time, on the same day, and arrived at intervals of two days three weeks afterwards. So I thought I would make other inquiries, because my industrial contacts were telling me that the cost in freight for goods that now have to be transferred from road to rail is frightening. I have here some figures. I have had them all checked and authenticated. I will take only a few examples: Food, bacon and butter in bulk, 50 per cent. increase in freight rates; mixed groceries in privately-owned containers, same type as railway containers, increase 100 per cent.; textiles, Manchester to London, 50 per cent. increase; bricks, Bedford to London, an increase of 17s. 6d. per thousand; concrete blocks, 200 per cent. increase; consequent increase in the cast of building small house entirely of concrete blocks, £50. The correspondence in The Times is illuminating. Cost of furniture removal from Darlington to Peterborough: by road, £82; by rail, £145 10s. Fifty tons of metal: quotation by British Road Services, £1 14s. 6d. per ton; by British Railways, £5 9s. per ton.
Then, take speed. I have had this checked. The average road journey of heavy consignments from the north of England to London is 48 hours. The present average time by rail works out at ten days—five times as long. What is the cause of that? It is no good the noble Lord saying, "The7e is nothing to grumble about." These are facts, not airy theories. The truth is that the railways are not attuned, mentally or physically, to do this work. I believe that is well illustrated by the letter in The Times written by the Public Relations Adviser to the British Transport

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Commission. I will read it to your Lordships:
"While British Railways are endeavouring to the fullest extent to offer competitive rates, rail transport is pre-eminently suitable for the mass movement of goods and merchandise in full wagon and full train loads. Individual cases are bound to occur where it is more economical for comparatively small lots of traffic to be carried by road rather than by railway. … In some recent cases, mentioned by your correspondents, it would appear that they were quoted the appropriate ordinary rates on the books, whereas it is usually possible for the railways to quote fully competitive rates for traffic in truck-loads."
Will somebody tell that gentleman in the British Transport Commission some of the facts of life? The vast bulk of British industry—other than the minerals traffic—people who manufacture goods in this country do not manufacture 10-ton loads once in six months. That is why road traffic has gained such an ascendancy—because the average piece of freight in this country is small. This gentleman goes on to say:
"In every case where a trader is contemplating diversion of traffic to rail, we suggest that the local goods agent or district commercial officer be fully consulted on all aspects of the trader's requirement, so that the most advantageous rates can be quoted according to the circumstances of the traffic."
When I started in industry and commerce I was told that if I wanted to sell anything I had to go out and sell it; that I could not afford to sit down and wait for the customer to come to me. Here it is said: "Better rates are available than those quoted if people will only go and see the Commission." But I thought the railways wanted to get business. Which brings me to the point I made in your Lordships' House on November 24 last: a live, dynamic, commercial instinct is needed within the railways. The noble Viscount, Lord Esher, spoke of nationalisation. Do not forget that when the road haulage industry was nationalised we took over many thousands of lorries and thousands of men who had been connected with those lorries and had built up their little businesses from small beginnings by dint of going out and getting the traffic.
That is the fundamental reason why I tell the noble Lord, Lord Mancroft, quite frankly, that what we are debating to-day is whether to put off the evil day for another six years before we have to decide what we are going to do. Is this to be a
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subsidy or is it not? I must speak the truth as I see it, and I believe that there is not a hope of a chance of these deficits ever being wiped off. I do not want to deny the railways a modernisation plan, but such a plan will not do this. The railways must modernise their attitude of mind. It is not enough merely to spend £1,200 million on new equipment. As I have said, chromium-plated trains will not do what live men will do. What we have to do is to persuade the railways to spend money on men. Men are the secret of all this. Because if we continue with the present "dead beat" system on the railways, no painting of trains in different colours or putting men in different coloured uniforms will ever succeed.
I know that this is a delicate matter, but I want to ask the noble Lord to consider it. Why is it that though we have here an industry with a turnover of £700 million a year, employing 800,000 souls, the top executives are the worst paid in this country? I am told—perhaps the noble Lord will tell me if it is wrong—that it is because of the edict of the Treasury that the Chairman and top executives of the British Transport Commission can only be paid rates equivalent to top-ranking civil servants. I want to ask the noble Lord whether that is true. I have also heard it said: "Of course, if you paid commercial salaries, if you competed for top executives with Imperial Chemical Industries, the Imperial Tobacco Company, Unilever, or any organisation of that kind, there would be trouble down below." I contest that. I would say that some of the most contented staffs in this country are those who work for the Imperial Tobacco Company, those who work for I.C.I. and those who work for Unilever. Why? Because they are amongst the highest paid. I have never heard anyone connected with any of those staffs question what Lord Dulverton got or what Lord Heyworth got or what Lord McGowan got. Indeed, speaking from my own experience in industry, it is those who get high salaries who know the value of high wages. If you are going to pay top executives mean salaries you are going to get mean minds.
I want to say to the railways and to the trade unions: you have to bring a new thought into this matter. I was speaking the other day to one of the finest fellows on the railways that I know: he

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is a chief ticket collector, and he has done forty-five years in the railway service. He has now got into the high-ranking salary bracket of £7 10s, per week. He has never had a rise in all his forty-five years of service that his union did not get for him. In such a case there is no incentive at all. The only people on the railways who have any incentive are the porters: they get it, via the pockets of the passengers, in tips. I have been told for years that it is impossible to bring incentives into railway employment. I do not believe it. The same was said of industry generally years ago, but it has proved to be entirely wrong. Incentives exist in every branch of industry, and until there is a different outlook, right from the top to the bottom of the British Transport Commission, the expenditure of this money—this £1.200 million which is to be paid for modernisation of the railways—will never be worth while, because men matter more than machines.
My Lord, I have taken the liberty of saying these things because I believe them to be true. They are based on my own experience in industry. I want to ensure that if a man is the best ticket collector, or if a man is the best inspector, he will get a better wage than the worst people in such jobs. He certainly does not do so to-day: all are paid at the same rate. I can well imagine that if I had tried to work on that system in my business I should have gone bankrupt years ago. The same I feel is true of the noble Earl, Lord Woolton.
THE EARL OF WOOLTON: I never tried it.
LORD LUCAS OF CHILWORTH: It is a most "dead-beat" policy. And then wonder is expressed why the railway unions have a perpetual wage claim in! Can we really wonder at it? Every employee in private enterprise industry has a perpetual wage claim in, for he is always struggling to impress upon those above him that he is worth more money than he is getting. But that sort of effort is useless on the railways. No matter how a man strives, he gets a rise only when his union gets it for him. Do you think that a modernisation scheme will work when conditions like that exist.
Of course, we shall give this Bill a Second Reading. It may be that some of your Lordships will still be in this House
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in six years' time, when repayment of this underwriting becomes due. I hope that shall still be here. If I am, I shall be able to remind your Lordships of what I have said to-day. With the competition that the railways will have to face in the future, with the natural tendency that exists—except in the case of long hauls—for people in trade to have their goods carried from door to door, it is impossible to put the clock back. That is not the fault of the railways; it arises from the size of this country, and from the fact that to have goods manhandled from the Factory floor to a truck, from the truck to a wagon, from the wagon again to a truck, and from the truck to the factory floor, all in the course of a journey of twenty or thirty miles, is more than British industry can stand.
I have quoted figures, if the noble Lord would like me to give him fuller details, I shall be happy to do so. They are based on present day statistics of road and rail, and they show that, on the average, there is a 50 per cent, increase in charges for everything that is put on the railways. It costs 50 per cent. more than to have the goods sent by road. It really is necessary that there should be some commercial instinct in this business. Such an instinct must be stimulated. There must be this change from the top of the British Transport Commission right the way down to the bottom. There is nothing wrong with the men, but for years they have been dead-beaten and frustrated. Why is it that, of all industry, the railways are more troubled than any other by discontent about wages? It is for the reason which I have just given. So I take it upon myself to say these things.
As I have intimated, we shill give this Bill a Second Reading. We wish it well; we wish the railways well. They are an essential part of the economy of this country. But do not think that the railways can do a job in respect of which the economics of this country are so strongly against them. Undoubtedly much of the traffic which now goes by rail will go back to the roads when petrol rationing ends. More goods traffic will go back, and so will more short-distance passenger traffic that is, of course, un less the Government make that physically impossible by never going back to unlimited supplies of petrol. There is

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undoubtedly a field for the railways, but let them be really efficient in that field. Do not let the Government try to bulldoze things on to a method of transport which is out of date so far as the requirements of modern British industry are concerned.
4.8 p.m.
LORD HURCOMB: My Lords, I suppose it might be thought that I ought myself to be among the people who find it easy to understand the provisions of a Bill of this kind, since I have been steeped in its subject matter for a good many years. I should like to thank the noble Lord who has moved the Second Reading for the clarity with which he brought out its main structure and provisions. I am sure that he cannot have found it easy to do that on coming to do it for the first time.
No one disputes the necessity for the Modernisation Plan if the railways are to fulfil their function, or to get near to fulfilling their maximum function. And no one can dispute the need for some relief to the British Transport Commission from their statutory obligations if the Plan is to proceed. Not everyone, of course, will agree that the Plan in itself will be found, six years, fifteen years or twenty years hence, to have disposed of the transport problem. I remain of opinion that that problem was not just conjured out of existence by the 1953 Act—indeed, the necessity for this Bill is proof enough of that. Things might—and in my opinion they would—have looked a little different and rather better if the Government had seen their way at once to provide the capital necessary for re-equipping the railways and to refrain from insisting on the mistaken policy of intensifying competition between road and rail and on breaking up the national road haulage organisation which was beginning to operate successfully.
That, however, is not the point this afternoon: it is the situation that has, in fact, been created that we have to face—the situation with which this Bill sets out to deal. Though the Bill does not in any fundamental sense reorganise the finances of the British Transport Commission, I support it because it relieves the Commission from the statutory predicament in which, through no fault of their own, they find themselves placed. And it does so without abandoning the important
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principle that, over a period, the Commission must pay their way and keep their finances in balance. In effect, the Bill says that the principle of solvency and the basis of being self-supporting may be regarded as satisfied and maintained if the balance is achieved, not, as hitherto, taking one year with another, but taking one decade, or rather more than a decade, with another. If we are not careful, in order to achieve that balance, we may be taking one generation with another, and that is an unfortunate stretching of a very sound principle. But I agree with the merit of seeking to retain it.
What is the only practical alternative, especially as it is outside present policy to depart from the encouraging of road competition? As the noble Lord, Lord Mancroft, said, the alternative is a subsidy, and to that many strong and, in the view of many of us and certainly in my view, fatal objections can be urged. One great merit of this Bill is that, even though all that the noble Lord. Lord Lucas of Chilworth, has said turned out to be true, in form it does not depart from that principle, the adherence to which at this moment, I think, is absolutely essential, if that is once admitted, the actual methods adopted in the Bill seem to be apt for their purpose. There is no escape from carrying forward deficiencies and borrowing the amount required to meet them. It is regrettable that not only the deficiencies themselves, but also the interest on the deficiencies, which is going to amount to many millions of pounds, has to be accumulated and held over for liquidation at some time in the distant future. But again, apart from a subsidy, what is the escape?
The other relief offered to the Commission is permission to capitalise interest, and that, I think everyone is agreed, is legitimate in the circumstances and backed by ample precedents which Parliament has made in dealing with statutory authorities, quite apart from what may be the practice in large commercial concerns. So I would say that the scheme, as a device for financing the deficiencies for the next few years, is well devised. Indeed, I think its authors are to be congratulated upon its ingenuity. While it makes no difference to the burdens which eventually will have to be repaid, it does relieve the Commission from a very real predicament, as I said just now.

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It lifts from their shoulders the incubus of having to show a heavy working loss on their business in their annual accounts, and though that relief may be more a psychological one than, ultimately, a financial one, nevertheless it is real. By lifting that incubus from their shoulders, it will make it more difficult for the critics in so many quarters, who are always anxious to denigrate the management of our nationalised public utilities, to throw stones at the Commission and say, "You are making a heavy loss". They generally also say, "You are making it at the expense of the taxpayer"—which, of course, is not really correct, and never was, More important than that, perhaps, the removal of this incubus should be good for the morale both of the management and of the men all down the line. It seems to me that the Commission are entitled to expect more than ever from every member of their staff individually and collectively, through the elaborate machinery of consultation which has been established, united and enlightened acceptance of changing technical conditions; and on that many financial consequences may depend.
There is one ether point on which I should like to comment. The total deficiency accrued in the Commission's accounts up to the end of 1955 is to be carried to the new Suspense Account. But noble Lords will have noticed that thereafter only the deficiencies in respect of British Railways may be so treated. That means that the rest of the British Transport Commission's activities, treated as one business, must continue to pay their way, taking one year with another. In that respect the Bill has not departed at all from the principle of the 1947 Act; and this covers not only road haulage, the docks, the canals and, I hope, the catering services, but also London Transport. London Transport is excluded from the provisions of the Bill: it must pay its way, taking one year with another. It never was true that London was "salted", as used to be said in favour of other sections of the Commission's business. Quite the contrary: large numbers of Londoners were carried at fares below cost. I am glad that the Government think that wrong, and though I cannot help remembering that they "wobbled" a hit on that question three or four years ago, nevertheless they have now come down on the sound side.
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I am far from criticising their present attitude or the provisions of the Bill in this respect. Nevertheless, is it not time that something more was said about the capital liabilities of London Transport? London Transport serves an enormous proportion of the total population of the country, and serves it very well; but there are many directions in which Londoners are entitled to somewhat better services, always on the principle that they will pay for them, if they are provided. I think that that mates up with something which the noble Lord, Lord Lucas of Chilworth, said. The capital liabilities in respect of London Transport ought not to be left out of account in considering what will be the future capital requirements of our economy as a whole.
In particular, there are two or three items of London Transport's undertaking which seem to me to call for some fairly early treatment. Fortunately, it was possible after the war, in the early days of the Commission, to renew the bus fleet without delay. That was a great asset and advantage. But how long are North and North-East London to go on waiting for the new tube? In the proposals which had the privilege of submitting to the previous Government some years ago, that tube was known as "Route C". It has now been more attractively labelled the "Victoria Tube". But I wonder whether giving it a "local habitation and a name" has made it yet anything more than an "airy nothing".
Another part of London Transport undertaking which must receive some attention before long is Lots Road Power Station. Its modernisation has long been overdue, and, when it is undertaken, must swallow up a good many millions. In that connection, I should like to ask this question. When it is undertaken, by whom is it to be undertaken? Will it be by London Transport, or by the new generating authority, as might be more appropriate? But in one way or another there is a big capital liability ahead in respect of that power station. My point is that heavy liabilities which must exist ought not to be left to come in at the end of the queue, for London Transport is an important part of the Commission's total undertaking, although it is left out of the Bill that is now before

623
your Lordships. I do not expect a reply to these questions from the noble Lord this afternoon, but possibly he may be able to say something about some minor reliefs to which I did refer in our last debate. Is it possible to give the Transport Commission and the railways, in particular, some relief in respect of their old and anomalous obligations in regard to bridges on public highways and to level crossings? Those will not amount to a vast amount of money, but they do amount to something, and absorb the time of their staff.
Apart from such points and from the machinery of the Bill, I agree with the noble Lord, Lord Lucas of Chilworth, that it is important to realise the extent of the burdens which are being transferred to the future. It is all the more important to do so, as he said, in view of the general economic difficulties which this country is going to face in the next few years. At the moment, the railways are, no doubt, benefiting from the restrictions on road transport; but on their own computations—which, by the way, assumed that they would be free to adjust their charges in their own discretion without any intervention from the Government, and assumed, also, that the general economic conditions of last autumn would continue to prevail; in other words, that there would be no further inflation—they are expecting to accumulate a deficiency of between £300 and £400 million, purely on revenue account, a figure which I think would have shocked your Lordships had it been mentioned two years ago.
I do not know whether the noble Lord in his reply will wish to tell your Lordships what, in the present view of the Government, is the maximum figure to which these deficiencies are likely to amount, or what is likely to be the period in which they will be liquidated. The proposals of the Government have, to some extent, varied the estimates in the table set out by the Commission in the White Paper. Generally, I think, though the ultimate result will be much the same, they will give more relief to the Commission in the early years, but will defer and prolong the rate at which the accumulated deficiency will be paid off. I think that is the general effect.
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For my own part, I wish the Modernisation Plan every success. I am satisfied—though I think that in some respects the original calculations were optimistic; not so much in regard to their ultimate effect, as to the pace at which the benefits will accrue—that in general the Modernisation Plan must secure large economies in the cost of railway operation, and also considerable results in increasing receipts, more especially from passenger traffic. On the goods side, there are other factors which I presume were fully taken into account by the Commission. There is a possible change in the movement of coal, and there is the fact that so much of the movement of general merchandise which is in the hands of "C" licence holders is there not on account of price, or of service, in the narrow sense, but because the movement of the goods under the immediate eye of the man in charge of the factory is part of the manufacturing process. That is a factor which even an active commercial policy on the part of the railways is going to find difficulty in overcoming. Nevertheless, I agree that the Modernisation Plan will improve the financial prospects of the railways substantially.
But, when all that is said and done, I could wish that the present proposals did not cast quite so heavy a burden on quite so distant a future. What really is accomplished by carrying forward revenue deficiencies of hundreds of millions in the hope of liquidating them, if all goes well, in fifteen or twenty years? By doing so, no doubt we extricate the Commission from the immediate impasse in which they are placed by circumstances and by their statutory obligations, and we give them an easement, to which they are fully entitled, as the noble Lord, in quoting their own Memorandum, said, during these critical years of reconstruction. Yet I feel it would be a mistake to suppose that that is a complete solution, or that we shall really solve the economic problems underlying the transport situation by a scheme of deficiency financing of this kind, however apt, however ingenious, and however flexible. I think the provisions to which the noble Lord referred, and described so clearly, for keeping a control over the future as it develops are most necessary, and I hope they may be found to be sufficient to prevent us from drifting again into a

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position which, by its magnitude, becomes completely unmanageable.
I hope the noble Lord, Lord Mancroft, will, at any rate, agree that what we must not do is to rest on the assumption that all is going to be well, if everything goes well, some fifteen or twenty years hence, when very few people who are now responsible will be here to answer for the results. It is important not just to wait five or six years, but every year, as well as in four or five years' time, to make a close review both of the absolute figures and, what is more important, of their trend, and not to push the problem now facing us always into a more distant future.
4.32 p.m.
LORD MONKSWELL: My Lords, the Bill before us is concerned with the spending of vast sums of money, and I suppose that it conies under the heading of a Money Bill. In that case we can do nothing to alter it. All we can do is to offer criticism. That is essential, and it is impossible, unless there is that freedom, to criticise the details of the Transport Commission's scheme. I hope that this freedom will not be denied me, though I rather gathered, from the remarks of the noble Lord who introduced the Bill, that the Government "swallow" the Transport Commission's programme as it stands. It seems to me that that is quite an impossible way to start upon it.
We are presented with a scheme which is described as railways "modernisation." It was originally to cost £1,200 million, though I understand that the cost has since gone up. Most of the developments promised were things that would have had to be done anyhow, like improved signalling, a smoother permanent way, and that sort of thing. The two promises that stand out above anything else are the improved goods traffic and the supersession of the steam locomotive, The information available with regard to the latter—except for the huge sums that are to be spent upon it—is extremely vague. The recasting of the goods services in a country like Great Britain, where trade of such a retail character has such a strong hold, is so technical and so controversial that I cannot express any strong opinion on it.
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But the matter of the supersession of the steam locomotive is quite a different thing. It must be responsible for quite half the total proposed expenditure, and the advantages are of the most doubtful and shadowy kind. It is true that in many foreign countries electrification has made considerable progress, but these are mostly countries where there is plentiful water power, In the United Sates, where they have diesel traction, the oil companies are all-powerful. In all cases, there is an extraordinary reluctance to publish the comparative results. Even now, British Railways are saddled with two kinds of electrification and a good deal of diesel traction; and other things like gas turbines and straight atomic energy, are coming along. The Government do not really know what they want at all, yet apparently they are so anxious to give the impression that they are doing something that they are rushing the country into this enormous expense, which is exceedingly likely to have no effect except that of increasing inflation. If the Government are determined to spend all this money, it would be much better to put it into the roads, which will be of some use to us all.
4.37 p.m.
LORD BUIZDEN: My Lords, I stand here quite unrepentant and unashamed as an ex-railwayman, still convinced that, given certain conditions, the railways have a great future in this country. My noble friend Lord Lucas of Chilworth is away for a moment or two, and therefore I do not want to go into any great detail with regard to his criticisms. But one or two things I am bound to say. The first is with regard to railways going out looking for business. In every district throughout the country, some of the keenest and brightest young men have been put of this job of development, and I venture to say that if, suddenly, there is a change—as there has been a change, owing to petrol shortage—and goods have to travel by rail, instead of, as previously, by road, those goods have travelled without the railway industry having an opportunity of quoting special rates for the particular consignments. On that point, I would ask those in charge of the business of quoting special rates whether they might not consider the procedure to be adopted. At present, a figure is quoted;

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then, if that figure turns out to be too high, the representative has to bring that information back, when a lower figure is quoted, and so on. From my own experience, I know that in that backwards and forwards business traffic is often lost, because in the interval it has gone by road. I suggest that the lowest possible figure should be given to the railway representative, and that he should have discretion as to how he handled that figure.
We have had instances of delays by railway. The figures which the noble Lord gave in regard to the time taken in transit by full load traffic I would categorically dispute. It is not in accordance with the facts as I under stand them to be. I know there are delays, but if it were possible for me to check up the number of parcels that might go astray in road transport clearing houses, where parcels are aggregated and then passed on from one firm to another, the instances my noble friend gave of small parcels being delayed could be easily paralleled with goods delayed by roads.
Turning to the salaries of the top executives, I do not know—I am not party to Cabinet secrets—but, if my memory serves me aright, I believe my noble friend was Parliamentary Secretary to the Ministry of Transport when the railways were brought under national ownership. I should have thought that the Minister of Transport together with his Parliamentary Secretary would have had sonic knowledge of, and some say in, the rates of pay which were fixed for the higher executives. Bearing in mind the experience of the Co-operative Movement in regard to rates of pay, I do not know whether my noble friend's chief, the Minister of Transport, had any say in the rates which were fixed for the high executives in the British Transport Commission, or whether they were left entirely for the Treasury to fix. How is it that in British electricity the rates of pay paid to, the higher executives are comparable with the rates of pay and salaries in outside similar competitive employment? Did the Minister in charge of that particular nationalisation Bill see to the fixing of that figure, or why was the Treasury more lenient in that connection than in others?
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As regards the purposes of this Bill, I feel we must accept it as long overdue justice. I wonder how many noble Lords remember that before 1939, out of their very meagre resources, the railways of this country spent on modernisation and re-equipment a sum of no less than £200 million, an expenditure which enabled the railway companies to take the strain when war broke out in 1939. As one who was engaged in the railway service during the major portion of that war, I can assure your Lordships that it was a strain meeting the air raids, and dealing with the traffics which had to be carried and got to their destinations in spite of the air raids. In order to use that £200 million for re-equipment and modernisation, the railways had to screw their shareholders down to the lowest possible figure of dividends. With what result? I have always regarded the second agreement which was forced on the railways by the Government in 1941 or 1942 as distinctly unfair to the railway interests, in any case. I believe I am correct when I say that the result of that agreement was that over £100 million found its way into the pockets of the national Exchequer.
I am sure that a moment's reflection will allow your Lordships to see that, when the railways were handed back again under the Transport Act, after the strain of war conditions, the fact that they had not been able to spend anything on capital equipment and the fact that the permanent 'way, rolling stock and everything had been run down owing to war-time conditions, meant that the new Transport Commission had a tremendous job to face. I am not overstating the case when I say that from 1939 right up to date—and in this the Labour Government have to take their share of responsibility—the railways of this country and British transport have been starved of capital development. I wonder whether the deadening psychological effect on men and women of working under such conditions as I have described has ever been realised.
Everything was in a dilapidated condition. In any case, the condition of the stock, the permanent way—and the offices, too, as I know to my cost added enormously to the problems of the normal day-to-day working. It is a curious psychological fact that, within the last—

629
few months or so, now that conditions have been made better—with good lighting, and painting, the rooms for the staff have been brought up to a modern decent standard—there has been a tremendous improvement in the morale of the staff employed. But I am bound to say that among certain sections of the staff, the discipline—or perhaps I ought to say the lack of discipline—is really deplorable. It does not apply to all the men in the particular sections. There are various reasons for it. Perhaps the frustrating conditions which I mentioned a little while ago have some bearing on it.
On the other hand, there are other reasons. I believe—and here my noble friend was getting along the right lines—that, although it is always difficult to discuss wages and salaries without turning them into political questions, the differentials between the basic rates and the rates of those in supervisory positions to-day are quite inadequate. In many instances, it does not pay a man to take promotion. If, on top of that, he has to face, in a supervisory position, the problems which arise from full employment, where on, the slightest reproof a man will say. "Give me my cards"—and, believe me, it is not said quite so politely as that —a man will not take a supervisory position. Therefore, I want to assure your Lordships that those conditions which I have mentioned are breaking the hearts of railwaymen of 45 and upwards. They know it: they see the causes of it, and deplore it bur. with the material which they have to handle, they can do nothing about it at all.
My Lords, it seems to me that the proposals before us to-day are a challenge to the railway industry. If I may just follow up the Point made by my noble friend Lord Hurcomb as to the finances. I would suggest that at the appropriate moment, not toe far ahead, there ought to be an inquiry into the financial structure of the industry, and also an inquiry as to what services are provided by the railways for strategic reasons and maintained at a loss, and whether other services which are rendered to the Government are adequately paid for. I would suggest that the efficient working of a railway system in time of war is as essential as the provision of aeroplanes and things of that kind.
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I should like to suggest that in these brief five years an attempt be made to bring a new spirit into the railway industry. It seems to me that now, under conditions of nationalisation, the three great trade unions in the railway service should have a far wider and responsible position, and should not simply regard it as their job every year to submit a claim for improved wages or salaries. In the Press the other day there was a paragraph which rather took my eye. It said that the General Secretary of the National Union of Railwaymen—a man for whom I have the utmost admiration—after turning down the Commission's latest offer of a wage increase, hurried off to a meeting of the Railway Productivity Council. Important as that work at the top may be, it is not there that the work will be done. I venture to suggest that the challenge has got to be met during the next five years, and that every railway employee ought to be a publicity officer for his industry. I believe that, latent in the rank and file of the railway service, there are still men and women of good will. If they were harnessed to the cause or working and co-operating at all levels to restore the prosperity of the railways, that could be done.
I suggest that the vast number of noncommissioned officers of the trade union movement in, the railway service, such as the branch committee men, the collectors and the executive committees—all men and women to whom the rank and file look for leadership in many things, because, after all, in any movement, whether in the church or in a trade union, only an active minority do the work and they are looked to for light and leadership—should be fully seized of the responsibility of restoring the prosperity of our railway industry. If that could be done, if the three trade unions co-operated in that way, I believe that a marvellous change could be effected in managing the railways of to-day. Perhaps I might continue my speech after the Royal Commission.
THE EARL OF ONSLOW: My Lords, I am obliged to the noble Lord. Perhaps he would carry on afterwards. I would suggest that the House adjourn during pleasure for the Royal Commission at five o'clock.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION
5.0 p.m.
The following Bill received the Royal Assent:
Ghana Independence.
House adjourned during pleasure.
House resumed.

TRANSPORT (RAILWAY FINANCES) BILL
5.12 p.m.
Debate resumed.
LORD BURDEN: My Lords, I have been trying to suggest that the forces of good will in the railway services should be mobilised by and through the "noncommissioned officers" of the three great railway trade unions. After all, this is not entirely a novel idea. I remember that after the General Strike of 1926 the London, Midland and Scottish Railway Company attempted something along the same lines. But I have in mind something far bigger and more continuous than that which the L.M.S. attempted to do then. I know that what I have suggested will be opposed by the Communists, the near-Communists and fellow-travellers as "class collaboration". I suggest that it is nothing of the kind. Railwaymen must realise that there is not a bottomless purse from which they can accept monies in vast sums as a subsidy to the railway industry. They must realise that if they themselves are not prepared, in these five or six brief years, to put the industry on a sound financial footing, then the railways will go the way of the stage coach; the rails will be torn up and the main lines will be allocated to fast-moving motor traffic. But before that comes about, the challenge should be accepted by all railwaymen. They must realise that their industry is faced with highly organised competition from the road transport industry. That industry is alive and active and is always conducting a high-powered campaign in every quarter to discredit the railways and railway transport. Railwaymen should measure up what it is that they are opposed to. I could say more, but at this late hour I will refrain.
There is, however, just one point which I should like to make. I know that
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London Transport is outside the scope of this measure. But I confess that I have always marvelled at seeing in the trains of London Transport, and now also in the buses, advertisements for road passenger transport which is competing with British Transport. The undertakings advertised are in no way associated with British Transport. I do not know whether this is an instance of altruism on the part of London Transport, or whether the advertisement department takes the view that, "Money does not smell in any case." But I confess it irks me, as a railwayman, to see those advertisements. It maybe that the plea which a Member of your Lordships' House puts to these railway unions, and particularly to my own old trade union—the old Railways Clerks' Association, now the Transport Salaried Staffs Association—will fall on deaf ears. Be that as it may, I am convinced that, unless something along the lines I have suggested is done, the railways will cease to function and will be only an exhibit of a great industry which has failed to satisfy and to serve the public because of the inertia of those employed in it.
5.17 p.m.
VISCOUNT STONEHAVEN: My Lords, I should like briefly to congratulate the noble Lord, Lord Mancroft, upon the lucidity of his explanation of this Bill—he even made me think that I understood it. That may be rather dangerous but the noble Lord will have the opportunity of putting right anything upon which I may go wrong. The impression I got was that, in a more lowly sphere, one might say that the railways were "asking for a sub." We are not giving them money permanently. Eventually, it is to be paid back, for it is a loan. But I think one is justified in asking what security we have that this money ever will be, or ever can be, paid back. I am completely satisfied that the recent modernisation plan will give the railways great technical efficiency, and I regard that as very desirable. But it certainly appears to me not to emphasise the equal necessity for building up commercial efficiency. I admit that the plan does not ignore it altogether, but it does not seem to me to put upon it the real emphasis which I think should necessarily be laid on that point. The two things do not necessarily go together.

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Without wishing to say whether the timing was good, I would point out that railwaymen have recently secured an increase in wages. Whatever anyone thinks about it, they have secured that increase, and one must realise that already because of that increase, the forecasts made by the railways in connection with the modernisation plan have now gone completely adrift. I think it would be futile to imagine that in the next five years there are not going to be other, and probably substantial, wage increases granted, and we must look carefully into whether the railways are going to be able to repay this money at the specified date or will have to borrow again, and re-borrow and re-borrow in a vicious circle. It seems to me that the railways are still tainted with the Victorian outlook of the days when they had a monopoly and had to compete only with horse traffic and when the problems with which they are faced to-day never occurred.
LORD BURDEN: My Lords, may assure the noble Lord that that is absolutely incorrect? There is to-day on the railways a spirit alive to the need of competition. Some people may have a Victorian outlook, because they are still living in the Victorian era, but they are not the railwaymen.
VISCOTNT STONEHAVEN: I am glad of the noble Lord's intervention. The point I was trying to make is not that the railwaymen were necessarily to blame. It is often the case that the customers they are dealing with still have a Victorian outlook, and between customer and railways the net result is that we are not getting the modern outlook which is necessary.
I come to the question of the extra traffic which petrol rationing has diverted to the railways. I am told that from the railways' point of view the figures have been disappointing. The increase of general merchandise traffic has been 9 to 10 per cent.; of minerals, about 4 per cent., and of passengers, 15 to 20 per cent. These increases have not taken up anything like the railways' existing capacity to deal with extra traffic. It is worth leaking at some of the reasons for this, some of which were brought out at a recent conference of the Transport Central Joint Commission. The following bodies were represented—the
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British Transport Commission, British Railways, British Road Services, British Transport Waterways, the Federation of British Industries, the Association of British Chambers of Commerce, and the National Union of Manufacturers. I think that these organisation represent the authoritative opinion of both sides, and the conference showed that the railways are endeavouring to get down to this problem.
I should like to summarise, briefly, the conclusions to which the conference came, The industry and commerce side said that they were opposed to diverting traffic to the railways because they found it led to excessive breakages, excessive times in transit, delays and excessive costs of packing. Even after rates had been adjusted, they still remained uneconomic, and the extreme case was given of certain goods whose transit was 450 per cent, more expensive by rail. The transport side said that industry and commerce often assumed that the rate would be high without bothering to find out. They said that the rates they would adjust would be those which they regarded as commercial rates and they could not necessarily match the market value rate. I thoroughly agree that rate-cutting for the sake of rate-cutting is a futile occupation, but I must also point out that the railway rate for demurrage is just as futile. Twenty-eight years ago, when I first started work, that rate was 3s. a day for an ordinary wagon: today it is exactly the same. In those days one day was given to clear the wagon: it is the same now. I say without hesitation that the railways should triple the rate, but give customers two days to clear. I think that industry would squeal—but let it. It is an unsatisfactory and unnecessary obstacle against which the railways have to work.
I would ask my noble friend who is going to reply if he can give me an assurance which would largely satisfy my mind. The merchandise that is being carried by the railways now is being carried by rail because that is the most efficient and most economic method; otherwise it would be going by road. If we accept that certain traffic is suitable for handling on the railways, I should like to know whether the increased traffic which is forecast lies in the normal growth of the traffics which the railways

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are handling at this moment. For instance, I think that traffic in coal is going to increase, because it is estimated that the output of our power stations is going to be stepped up, and a large amount of their coal is carried by rail now. Rationalisation and modernisation is bound to add to costs, including service costs, and I should like to be assured that so far as anyone can tell, rates will not have to be increased to such an extent that that will drive suitable traffic away from the railways. If I could have that assurance, my uneasiness about the working of this plan would be considerably allayed. The sooner the railways can make a decent profit the better, and I think that the first call upon that profit is decent wages. The railways are doing a good job. They have a light, but they are hiding their light under a man-sized bushel. Their publicity somehow or other lacks—
LORD BURDEN: Punch.
VISCOUNT STONEHAVEN: —Not necessarily punch, but popular appeal. I think that we must also be sure that publicity and punch are not directed to the sort of traffic that is not suitable, and never will be suitable, to the railways.
5.30 p.m.
LORD MANCROFT: My Lords, this evening's debate has shown a marked degree of agreement, so much so that there is little left for me to say, and I do not propose to take much time in saying it. I think noble Lords are generally agreed that the Bill that we are discussing—and, after all, it is the Bill and not the modernisation scheme which we are discussing—is both drastic and revolutionary but it is a drastic situation that the Bill is trying to meet. I agree that it is an easy measure to criticise. It is easy to maintain that some of the targets are over-optimistic and that some of the proposals show a good deal of optimism in the minds of those who have made them. If it is over-optimistic, or if it is over drastic, what is the alternative? That is the question that must be asked, and several of your Lordships have asked it this afternoon. The noble Lord, Lord Hurcomb, asked it, and nobody speaks with more authority on this matter than he does: if I may say so, he made a
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most helpful and statesmanlike speech on the subject. He has said that the only alternative is a subsidy. My noble friend Lord Stonehaven referred to it as a "sub", and said that he thought he saw a subsidy rearing its ugly head in the clauses of this Bill. I was at pains to point out that the difference between a subsidy and the proposals of this Bill stands out quite clearly.
Even if this Bill is drastic, it does contain, as the noble Lords, Lord Lucas of Chilworth and Lord Burden, made clear, a challenge, and unless the railway industry as a whole accepts this challenge, this Bill, when it becomes an Act, will fall to the ground. I liked the expression used by the noble Lord. Lord Burden, when he said that each and every railwayman in the 800,000 of them must be a railway publicity officer. I hope that his old colleagues will follow the noble Lord's wise advice. The scheme will not work unless the men and women in the industry respond to the challenge which this Bill now gives to them. They now have something concrete to work for.
I sympathise with the noble Lord, Lord Lucas of Chilworth, in his difficulty about the Oxford route. I know that that has been a route where there has been complaint in the past, and I think the noble Lord has had some correspondence with the Commission about it. I am sure he will agree with me as to this. How can the men working on that line really put their backs into their work if they realise that they are dealing with out-of-date stock and equipment? Surely, it is this new scheme which will give the incentive to give a better service.
LORD LUCAS OF CHILWORTH: I agree with the noble Lord. As he said, this is a challenge. What I am asking the Government to do is this. In this imperfect world they are in competition—they are selling a service—and they must work on commercial lines. They are not working on commercial lines.
LORD MANCROFT: I fully agree with the noble Lord when he says that the Government, the railways and the porters must work on lines of dynamic commercial enterprise and go out and get the trade. I hope that, to a degree, the railways are already working along those lines, but I should not deny that there is room for improvement. I am sure

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that Sir Brian Robertson would be the first to express the wish that the dynamic leadership which he is seeking to give to the railways will be more closely followed by some of his subordinates. I agree with my noble friend Lord Stonehaven as to the need for enterprise in getting the goods. But when we are talking about the problem of road against rail, I am sure both my noble friend and the noble Lord, Lord Lucas of Chilworth, will agree that there is no point in the railways' going in search of business which obviously will not be profitable.
I will not occupy your Lordships' time further. We are agreed on the main principles, and I am sure we agree on this last principle: that, drastic though this Bill and the problem may be, and revolutionary as ate the proposals, even the most pessimistic of us hope that they will work and will prove a success. If they do not, the blunt fact is that we shall be faced with national disaster. We may as well realise that.
On Question, Bill read 2a; and committed to a Committee of the Whole House.

COMMONWEALTH SETTLEMENT BILL
5.35 p.m.
Order of the Day for the Second Reading read.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (THE EARL OF HOME): My Lords, this is a short Bill, but I hope that it is a good and a useful one. Its purpose is to give the Government statutory authority to make any arrangements which may seem to be expedient or wise to encourage emigration from the United Kingdom to the different Commonwealth countries. I do not think this is an occasion when it is appropriate to debate the whole range of problems connected with emigration from the United Kingdom, but I am anxious that there should he no doubt whatever about Government policy: it is to encourage a regular flow of United Kingdom citizens to make their lives in. and to identify their lives with those in, other Commonwealth countries.
There are social and economic reasons why the export of emigrants from the
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United Kingdom to the Commonwealth leads to the strength of the whole Commonwealth association. Naturally, in any emigration policy there must be a balance of age groups. There has been a balance in the past, and in spite of recent developments that balance still remains; on the whole, a cross-section of the British people are leaving this country every year. It is true that the young and the energetic go first—that is only natural—but very soon, when they make good, they send for their families and their relations; and, as I have said, the result is that a cross-section of United Kingdom citizens are going away to other Commonwealth countries every year.
At what sort of emigration should we aim? In deciding this question we have had valuable assistance from the Overseas Migration Board Report. I should like to pay tribute to the work which those who served on that Board put into the Report. They have assessed the needs of Commonwealth countries who are importing immigrants from this country, at the rate of about 200,000 a year, and that is the number which they consider the Commonwealth countries are capable of absorbing. They have taken into account the compensating intake of immigrants into the United Kingdom from Europe and other sources, and they have come to the conclusion that it should be our aim to bridge the gap between the average emigration figure for the eight years before 1956—which was about 124,000 a year—and the 200,000 which they estimate the Commonwealth countries would wish to absorb.
There are indications that we are making steady progress. About a year ago an increase began to show itself in applications for emigration to Commonwealth countries, and since then the momentum has increased. There have been some rather alarmist reports lately which have suggested that we are losing too large a proportion of our young and skilled men There are no statistics which would support that concern, and, to some extent, the stories have been exaggerated. What is happening, so far as we can estimate it, is this. It looks as though at present the rate of emigration is approaching the figure of 175,000 to 200,000 a year, which is the figure named by the Overseas Migration Board as being desirable.

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So far as finance under this Bill is concerned, all the other countries of the Commonwealth except Australia prefer to keep a complete control over their immigration policies. So that, so far as the spending of money under the Acts preceding this Bill is concernd, up to date it has really been spent under two heads, and both of them in respect of Australia. The first has been help towards what is known as the Assisted Passage Scheme and the second has been help towards those voluntary associations who send children out to Australia. In the Explanatory Memorandum to the Bill your Lordships will see the amount of money which has been spent under these two headings between 1952 and 1956. The Overseas Migration Board recommended two things in the main: first, that we should encourage migration (and that, as I have said, is the Government's policy), and, secondly, that we should continue to finance these two schemes—namely, the Assisted Passage Scheme and the various children's schemes. That also we intend to do.
There are two other features of the Bill which I might bring to your Lordships' attention. You will see that the ceiling of expenditure has been put at £1,500,000 a year, and it will be possible to spend that amount of money each year. This ceiling is set because it may be that we shall want to adjust our practices, and it will leave a certain amount of elbow room to do so. Secondly, the period for which this Bill is to run is limited to 1962. We thought that that was wise. Things in this modern world change so quickly, and needs change so quickly, that Parliament might want to adjust its policy, and we thought that Parliament should not be tied by Statute for too long.
I hope your Lordships will feel that this Bill, so far as the principle is concerned, is an earnest of the fact that we do encourage emigration from the United Kingdom to the Commonwealth. We think it is a good thing. We have provided the expenditure which is practicable, and at the present moment emigration figures seem to be running at about the level which the Overseas Migration Board indicated could well be stood by this country. We have, however, left sufficient flexibility to adjust our policy should further needs arise. I do not
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think I need to say more in commending the Bill to your Lordships, and I beg to move that it be read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Home.)
5.42 p.m.
THE EARL OF LUCAN: My Lords, it seems that little need be said on the Bill from this side of the House, except that, with one or two qualifications, to which I will refer later, we agree with the policy that Her Majesty's Government in this country should encourage emigration. We agree that the scheme should be limited in time, and limited to a ceiling of money. We notice that the actual expenditure has never approached anywhere near the limit of money set, but the practice followed by the Government is one that can commend itself to all of us.
As to the two qualifications to which I referred, I should like to make one thing quite clear. On the quality and the type of migrant, whilst it is clearly to the advantage of the receiving country that they should be selected and that they should be young and fit, from the point of view of this country we must recognise that Commonwealth migration means a draining away of the best elements in this country. If migration takes away the young, the fit and the skilled, naturally that will alter the balance in this country between the young producers and the elderly and the infirm. There would come a time when the balance would be so seriously upset that a depleted labour force would be maintaining an unduly high proportion of elderly and infirm. We know that our population is, in any case, an ageing one, and we think that the Government should ensure that their migration schemes do not upset the balance here—in other words, that the receiving countries should agree to a balanced intake of migrants. They should take family groups, the dependants as well as the wage-earners; they should take elderly dependants and not only young children. I hope that the Minister will be able to assure us that those considerations are understood and accepted by the receiving countries.
The second qualification is in respect of those self-governing countries in which there is a multi-racial problem. Much could be said about the advantages that have accrued to countries, in Africa and elsewhere, through the settlement of

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Europeans with their skill, capital and so on in the past, or even in the present. But what is important is how migration would appear to the bulk of the inhabitants of those countries. Let us face the fact that in Central Africa, and in other countries with racial problems, any steps by the Government of the United Kingdom to assist the migration to those countries of people of European stock would cause suspicion and fear. For that reason, I would say that the Government should not assist migration to countries where the policy has not the acceptance of a democratically elected majority of that country. Figures were given in another place concerning Southern Rhodesia, and they showed that the numbers of people assisted to emigrate from this country were really negligible—they were numbered in dozens, rather than hundreds. I hope that the Government will assure us that there is no intention of stimulating artifically the movement of Europeans to Central Africa. With those qualifications, I would say that this Bill has our support.
5.48 p.m.
LORD BARNBY: My Lords, fortunately this is not a subject of Party politics; it is not a partisan matter. The Secretary of State found no necessity to deal with aspects and details of migration but in the clear recommendation which he made to the House, he categorically asserted that it is the policy of Her Majesty's Government that on this matter they adopt a positive, and not merely a passive, attitude. I emphasise that because there has been in the past considerable concern about the attitude of the Government towards migration. It is further natural that the Secretary of State should not have felt it necessary to go into detail, because, in recommending this Bill to another place, the Parliamentary Secretary made a full and effective statement. Seeing that he is new to the office, he must be congratulated on the manner in which he indicated a grasp of the subject. But this is a moment in world affairs when there is necessity to recognise that the development of the Commonwealth—and that implies the white Dominions—should receive emphasis. We see changes as a result of the nuclear structure without the ordinary layman being able to find what interpretation to put upon its related effects.
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Further, the Government have virtually now committed the country, as, it is understood, to a European Free Trade Area, subject to certain reservations. Presumably, the enthusiasts will contend that that will involve a free movement of populations within the area. That seems to suggest an appreciable possibility of inflow to this country. There are many who feel that that would be an advantage to this country. Through the generations, the inflow from other parts of Europe has proved to be to our advantage. The noble Earl who has just spoken emphasised the importance of balancing the outflow, also concern at our losing too many trained men. I am inclined to dismiss that because, through the last 150 years during which the white Dominions were built up, those who left this country proved themselves the best. So, had we not had that migration, we should not have had the Commonwealth to-day. Those who are timid and. faint-hearted about what we can spare are surely wrong.
I recommend that incentives to additional child allowances might be timely. The Committee on Population have reported on the proportion of people that might suitably be parted with from this country. That figure is much lower than that of the Migration Board, the body to which the Secretary of State referred as the official body which advises him in this matter Issue can be taken with their figures of a maximum of 200,000 a year. There are many who feel that that figure might well be exceeded, and perhaps be 240,000. There are many who think the conclusions of the Migration Board are too conservative; that they are not imaginative enough; that they should go much further.
On that point, I will quote from the speech made by a member of the Board, Mr. Aitken, in another place, on the Second Reading of this Bill [OFFICIAL REPORT (Commons), Vol. 563 (No. 38), col. 5981:
"… they will only be accepted as the very beginning of a much more dynamic and constructive attitude toward; migration."
I had the honour, before the war, of serving on a board of a similar character which existed then. Looking back, and reading the reports to which we, as members, subscribed, I can hardly believe now that we could have been so conservative and so insufficiently far-seeing. So

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it may well be that the existing Board may follow the mistake of its predecessor.
There is a massive body of public opinion that is taking a great interest in migration. It is in step with the changing times. I would cite the Migration Council, whose composition is of energetic Members of both Houses of Parliament, of leading industrialists, of public personalities in many walks of life, and of writers of all kinds. They are in constant contact with the Migration Commissioners of the Dominion Offices in London, and their mission is to alert public opinion. I should like here to say that they have experienced receptiveness and consideration by the Secretary of State. They feel that, through the contacts they are permitted to have with the Commonwealth Relations Office, they are the better able to fulfil their mission. They also support the work with which the office is charged.
The Secretary of State referred to the amounts spent. This has annually fallen far short of the amounts Parliament has voted. It is felt that larger amounts could be effectively expended. Surely the difference between an average of under £200,000 and the £1,500,000 which is voted represents a small amount relative to the development of the Commonwealth which should be taking place. The concluding words of the Secretary of State, happily, said that there would be flexibility should need arise. We hope that it will commend itself to him that larger amounts be spent.
Here I am going to quote again from Mr. Aitken's speech (Col. 600). He said:
"The first Minister for Commonwealth Relations with enough fire in his belly' and stoutness of heart to tackle the Treasury on this issue will do a great job for Britain."
The present Secretary of State fulfils those requirements and, should he, in his wise judgment, feel it necessary, I am sure that he would have no hesitation in pressing the Treasury. The British origin content of the inflow into the Dominions at present is too low. Canada is down to about 30 per cent., and without quoting more figures, there is a strong concern about that. Only recently Ministers in Australia have said that they would willingly have 100 per cent. of British origin migrants. Let us hope that a more imaginative programme here will come nearer to fulfilling their hopes.
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Among speeches made in another place I would mention those of Mr. Aitken, Mr. Fisher and Mr. Nicholson, who made various suggestions which will doubtless have been brought to the attention of the Secretary of State by his advisers. There was also an impressive contribution by Mr. Shinwell, Minister of Defence in a former Administration. He used his varied experience of Government office to assist observations on his first visit to Australia and New Zealand. He came back impressed with the need for more being done. I will not venture to trouble the House by quoting again from that debate—
THE EARL OF HOME: I do not want to interrupt the noble Lord, but it is the practice here not to quote from speeches made in another place unless they are made by a Minister. I should not like to spoil what he is saying, but he has done that twice.
LORD BARNBY: I readily accept the correction. Sometimes those who, like myself, have been in another place, are inclined to overlook this when speaking here. I was, I think, referring to Mr. Shinwell, who is a Minister.
THE EARL OF HOME: No, he is not a Minister; he is on the wrong side.
LORD BARNBY: An ex-Minister.
THE EARL OF HOME: That is not good enough.
LORD BARNBY: I am permitted to refer to his enthusiasm for this cause. At any rate, suggestions were made in another place to the provision of additional media through which finance for Commonwealth development should be furnished. The existing bodies and their character were discussed in your Lordships' House last week and it would be superfluous to refer to them now. But the real, pivotal point about migration is the capacity of the receiving countries to finance expansion of population.
One suggestion which seems to have merit is that the building societies in this country should be encouraged, by tax concessions—of course, that would be a matter for the Treasury—to take part in the provision of houses supplementary to what are available, say, in Australia. In Canada the position is different. But in both Dominions, and in New Zealand,

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too, it would not be a loss to this country if British capital were encouraged to invest in real estate. The investment would be repayable over a period of time by the migrants who would occupy those houses. That would constitute what, above all, is wanted now—rivulets making a stream of remittances back to this country, particularly from the dollar area. Concern about the adequacy of the existing machinery was recognised by the Secretary of State, who has indicated that currently he is in process of consulting the Dominions to see whether something additional can be set up. Admittedly, there has recently been a stepping-up in the rate of applications for migration to Dominions. But surely that is no ground for complacency.
My Lords, I urge again, with all the force I can command, that there is no let-up in the policy of encouraging this outflow at the utmost rate at which it can be achieved. Above all, I urge this on the grounds of commercial self-interest. An increasing population in the Dominions means increased buying power by our most important overseas purchasers. A high British content in the population of the Dominions is the greatest safeguard for our future trade. In the past there has been opposition to migration on varied grounds. I do not omit selfishness on the part of those who, wanting workers, say that it is wrong to permit anybody to go out of the country. There is nonsense by those who would pour ridicule by insinuating thoughts of mass movement of millions of people. It is with the conviction that, as the Secretary of State has assured us, the Government mean to adopt a more active attitude, that I have great pleasure in supporting this Bill.
6.8 p.m.
LORD MILVERTON: My Lords, I support this Bill, and naturally am most anxious, like everybody else, to welcome it. In so doing, however, I should like to make one or two remarks, with a brevity suitable to the hour of the evening. It is obviously to our advantage to continue to assist in the expansion of these Commonwealth and Empire territories. It is not a one-way traffic in benefit; it is a two-way traffic, and the benefit is mutual. Btu it is also true that superficially, looking at the figures on the out-
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side of the Bill, they seem to be very small in relation to what we imagine to be the needs. The noble Earl who moved this Second Reading explained why they appear to be rather small. In any case, the human contribution is what matters; the financial contribution is only supplementary and incidental to that.
I certainly hope that in the future the administration of these funds will be directed with perhaps more drive and enthusiasm titan has been shown in recent years, and they should obviously be implemented with vision and with a suitable collaboration with representatives of the recipient countries who, after all, are the chosen arbiters of what these countries need. They ask us to help them only to get what they want, and it is surely not for us to try to dictate to them what they should want or what we think we should supply them with. The noble Earl, Lord Lucan, referred to what is generally mentioned in this connection—the desire to have a suitable cross-section of the people sent to these territories. I very much doubt whether this is a suitable subject for any rigid planning. As I view the question, one must leave all that to natural forces. The countries want key men and they generally want younger men and skilled men; but if they are satisfactorily supplied, then inevitably older people, their relatives, will go with them. If they do not there is nothing we can reasonably do to insist that a certain number of them should be taken.
One realises that these countries want to industrialise themselves and may ask largely for technicians, engineers and people with professional qualifications. On the other hand, many of these countries need farmers. But there is a curious split feeling over this matter. Practically every country in the world, not excluding relatively undeveloped countries, suffers from two complementary things; first, there is jealousy about land and land ownership and about the taking of land by immigrants; and secondly, and coupled with that, there is a world-wide tendency for people to leave the country and go into the towns. I emphasise again, however, that those are problems which are not ours but are for the recipient territories; and it is not for us to interfere in them. It is not what we want to send but what they want to receive which matters.

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The other point mentioned by the noble Earl, Lord Lucan, was whether we can spare these people. If I may say so with respect, I believe that here again there is rather a confusion of thought. It would be lamentable to put any obstacle in the way of anyone who wants to go abroad in this manner, and presumably nobody proposes to do so. In any case, that would be to turn the United Kingdom into a kind of close human reserve; and, apart from that, it would be a gross infringement of individual liberty. The question is, are we to encourage them? We need not seek an answer to that. Presumably the reply is emphatically, "Yes." And encouragement should stop only at the limit of the absorptive capacity of the recipient country. Again, the recipient country is fully entitled to take a selective attitude towards the immigrants it wants. But if the figures of the Overseas Migration Board are taken—say 200,000 persons a year—surely such a human investment is well within our means and likely to bring the most valuable returns to us.
It may be that we can ill afford to lose some of the highly-skilled men or some of the spirit of competent enterprise which goes with them; but surely the way to level up that difficulty would be to deal with the appalling lack of any incentive to be enterprising which is throttling the capacity of the best citizens of all ages and of all classes in this country. Penal taxation and vexatious restrictions naturally drive enterprising men to seek their fortunes abroad, and what will be our loss will be the recipient countries' gain. The real question then is, not "Can we spare them?" but "Can we afford to drive them away in this fashion?" That again is another question.
The noble Earl, Lord Lucan, referred to a matter on which I should like slightly to join issue with him: the necessity to pay respect to what he considers the adverse opinion about European immigration in countries where there is a multi-racial community. It seems to me that that attitude argues a terrible lack of faith in ourselves, our country and all that we have stood for up to date in these countries, all that has made these countries the land of promise which they are to-day. It is surely a bad idea that one should bow to ignorance and prejudice instead of trying to eliminate
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the conditions which give rise to ignorance and prejudice; and the best way to eliminate those conditions is to send to these countries men trained in our best traditions who are able to teach the people and to bring them on to see where their true advantages lie. I believe that one needs to tincture a sentimental attitude towards the citizens of backward countries with a little economic realism. Surely if we want our standards of value to prevail we must provide the men and women as well as the capital to ensure progress on those lines. If we are unable or unwilling to provide these things no doubt they will get them elsewhere, and it may be that they will get them from sources which we should deplore.
I should very much question, too, the idea that opinion, say in Africa, is averse to such immigration. There is a small group of educated élite who naturally want, and have ambitions to get, complete power in these territories for themselves. I am not for a moment condemning that, but merely stating it as a fact. But they do not necessarily represent even the majority of the educated classes. The people who are in favour of such immigration are not generally so vocal; it is only the adverse criticisms that we hear. In any case, who is to be the judge of what African opinion is? I have yet to know any African country where anyone who was really conversant with it would be so rash as to say with any definiteness what was the African opinion of that country. I need not go into that in any detail, abut the bulk of the people are not generally sufficiently informed on such questions as this to have any valued judgment whatever. They will listen, perhaps, to the most plausible orator that they happen to hear, or just will not understand any questions asked of them about it. But I am sure there is a large number of Africans who realise that the quickest way to the self-government they want is to welcome the help and assistance, in every direction, of Europeans who come to that country. I appreciate that that is a relatively minor matter in relation to this Bill, which chiefly applies to countries where there is not a multiracial question. I have great pleasure in supporting the Second Reading of the Bill.
6.19 p.m.
LORD BIRDWOOD: My Lords, I will detain your Lordships for only one

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moment. I have the privilege of serving on the Migration Council, under the chairmanship of the noble Lord, Lord Barnby, and I should like to support him in the view he has expressed in asking that perhaps some rather more positive direction can be given by Her Majesty's Government. As I understand it, the position is that there is a maximum of something like £1,500,000 a year, of which an average of £150,000 is spent, and it seems to me that the extra money which we are, apparently, allowed could be spent to some advantage. But I am not going to follow your Lordships who have spoken on the technical details involved. I will confine myself to putting what I make no apology for calling "the idealist view" of migration.
When, on August 15, 1947, quite suddenly, two new nations joined the family of Empire and Commonwealth in equal partnership, something very fundamental and profound happened overnight. A community of some 70 million Anglo-Saxons was transformed into a partnership of 475 million, of whom 400 million were Asians. And, of course, the process goes on. I do not suppose any of us were not stirred by the significance and meaning of that great transformation, not only for the rest of the Commonwealth but also for a watching world outside, in terms of racial relationship and the general progress of the world. At the same time, I feel that it would be wrong if we did not take every measure we could to strengthen the bonds between the Anglo-Saxon founder members of the Commonwealth, because if anything should happen to destroy Anglo-Saxon unity within the Commonwealth, one could say that the Commonwealth as a whole would most certainly disintegrate. It is because see in these measures the prospect of holding the Anglo-Saxon element within the Commonwealth together that I believe them to be for the benefit of the Commonwealth as a whole.
I would say just one word on migration to the Commonwealth from countries in Europe outside this country. Take the case of Canada. I stand open to correction, but I understand that migration to Canada is at the moment running at the ratio of about two Europeans to one Englishman. As time goes on, by the turn of the century, that might result in very significant figures in Canada, perhaps threatening to alter the complexion
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of that great Dominion. At the same time, I suggest that what really matters is not who goes in—it does not matter whether he is a German or a Pole or a Czech—but what happens to him when he gets there, and what he becomes. If he is prepared to become a loyal citizen of the Commonwealth, to offer loyalty to the Crown, I can see no reason why we should put any limitation on migration from sources other than this country, provided that alongside that migration there is all the time an injection of the necessary blood from this country to keep the balance. I think it was Field-Marshal Smuts who said of the Commonwealth that it sought neither standardisation nor denationalisation, but only the richer, fuller and more individual life of the component nations. It is in the belief that a stream of migrants from this country contributes to that richer and fuller life of the Commonwealth that I would always support this measure.
6.25 p.m.
LORD STRATHEDEN AND CAMPBELL: My Lords, I should not like this Bill to go forward without telling my noble friend what a tremendous encouragement it will be, and has been, to the voluntary associations who assist the migration of children. There are, as my noble friend possibly is aware, difficulties now in arranging for the migration of children. I will not go into the matter now—the moment would not be appropriate. But it is most heartening to realise that the Commonwealth Relations Office recognises the value of these children as reinforcements to the population of the Commonwealth, arriving, as they do, at an age at which they can be completely assimilated into the life of those countries. There is one point which may arise in future upon which I do not expect, and cannot possibly expect, an answer from my noble friend to-night. But the conditions relating to the migration of children are changing, and in view of this if there should come a time when The present rules governing the awards of these grants do not absolutely apply, I am sure that he will, as he said in his speech, keep a flexibility of mind in dealing with and, no doubt, overcoming any difficulties which might arise. My Lords, I warmly support the Second Reading of this Bill.
6.27 p.m.
THE EARL OF HOME: My Lords, I am glad that the noble Earl, Lord Lucan, was able to support the Bill on behalf of the Opposition, and it is encouraging that all of your Lordships who have spoken have agreed that the principle of United Kingdom citizens emigrating to Commonwealth countries is a good one, and one that should be sustained and encouraged. The words of the late Field Marshal Smuts, which Lord Birdwood quoted, are very appropriate. We believe that the inclusion of a larger percentage of British people from the United Kingdom in the Commonwealth countries does bring to the whole association a richer and fuller life. Lord Lucan said that migration must not take away only the young and the tit. We are keeping a very careful watch on that point. There is, as yet, no evidence at all that the family element which has prevailed in emigration so far is being upset. Indeed we keep in very close touch with the Commonwealth Governments on this matter, with a view to ensuring that a cross-section of the population of the country migrate from this country, and they co-operate with us in seeing that that is achieved. So far as emigration to multi-racial countries is concerned, we have not done much except to assist a few children to go. I do not know whether the Governments concerned will, in the future, have any scheme to put forward, but if they have we shall, of course, give it most careful consideration. Up to now, as I say, we have not done very much except to assist a few children.
Lord Barnby asked that the Government should not be complacent in this matter—I think he urged the Government to use a little more imagination. If the measure of imagination is spending large sums of money, I can be as imaginative as anyone else. But there are certain practical considerations which have to be taken into account. We in this country have had for some years since the war a condition of full employment. In every Commonwealth country there has been a measure of inflation, so they have had to put a limit on the numbers of people they
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can take in. In our own financial circumstances, following the war, we must check our expenditure to that which is necessary and which gives us the results. And it is the results that matter—I am sure that the noble Lord, Lord Barnby, and other noble Lords will agree with that. On the emigration figures, it seems to me that last year the momentum increased, and the figures are rising fast. It seems to be a natural move; and if this is a natural move, and people are leaving this country because they think they will find good prospects in the Commonwealth countries—well, good luck to them! If we can attain without subsidy all the figures indicated by the Overseas Migration Board, all the better for everybody; but as I have said, we have deliberately left a margin in the Bill. We have put the ceiling at £1,500,000, so that, should the need arise, we can exercise the necessary flexibility.
I am glad that my noble friend Lord Stratheden and Campbell said a word about the emigration of children and the work done by the voluntary associations. Last year, I had a chance of seeing for myself something of these children in the places set aside for their education. Although, no doubt, there can be improvements—after all, there can be improvements in many of the schools which look after children here—I was immensely impressed by the free and healthy life these children were enjoying and, what is more, by the percentage of successes in after-life which the children who come from these schools have had in Australian society. If any variations are needed in our practice here, and in the rules governing the emigration of children, I hope that when my noble friend has made up his mind what improvements might be made, he will consult the Commonwealth Relations Office; and if we can give any help, we certainly will do so. I do not think I need say anything more, except to repeat that we believe that within the framework of this Bill we can encourage a migration policy which will be useful both to this country and to the Commonwealth.
On Question, Bill read 2a: Committee negatived.

BUSINESS OF THE HOUSE
6.32 p.m.
THE EARL OF HOME: My Lords, before the House adjourns, I should like to tell your Lordships that it has been agreed to take the next stages of the Transport (Railway Finances) and Commonwealth Settlement Bills, which are expected to be formal, before the Committee stage of the Shops Bill next Tuesday. It is expected to adjourn the Committee stage of the Shops Bill, to which there are a great number of Amendments, at about 7 o'clock and to resume the Committee stage on the following Monday, February 18, at 2.30 p.m. I thought that it might be useful for your Lordships to know that.

HOUSING BILL [H.L.]
Order of the Day for the Second Reading read.
EARL FORTESCUE: My Lords, on behalf of the noble and learned Viscount the Lord Chancellor, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Earl Fortescue.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

  MIGRATION TO AND FROM BRITAIN
  MIGRATION TO AND FROM BRITAIN
  U.K. MEMBERSHIP OF INTERNATIONALL ORGANISATIONS
  U.K. MEMBERSHIP OF INTERNATIONALL ORGANISATIONS