Sitting of 8 December 1958

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF HEALTH

    Surgical Dressings (Supplies)
    Dr. D. Johnsonasked the Minister of Health whether he will sanction the use of Form E.C.10A by general practitioners in England and Wales to enable them to obtain supplies of dressings for emergency use in their surgeries.
    The Minister of Health (Mr. Derek Walker-Smith): So far this has not proved practicable, but I will consider the matter further when I have the report of the Committee on the Cost of Prescribing.
    Dr. Johnson: I thank my right hon. and learned Friend for his reply. Does not he agree that this difficulty in getting dressings at doctors' surgeries is a contributory factor to the number of unnecessary attendances at hospitals for minor accidents? Secondly, is he aware that the use of this form works satisfactorily in Scotland?
    Mr. Walker-Smith: It is a fact that this procedure is in force in Scotland, but in that case it is a continuance of a scheme which was in force before the National Health Service came into being—which was not the case in England. I will certainly bear in mind what my hon. Friend says.

    Bronchitis
    Mr. Ellis Smithasked the Minister of Health if he will state the national percentage of those who have suffered from bronchitis during the past ten years; and if he will give the same figures for the city of Stoke-on-Trent, Bournemouth, Salford, and Eastbourne.
    Mr. Walker-Smith: I regret that this information is not available.

    Consultants (Merit Awards)
    Mr. Ellis Smithasked the Minister of Health if he will state the total average amounts paid to medical men under the merit scheme since it was put into operation in Stoke-on-Trent, Manchester, Salford, and London, respectively.
    Mr. Walker-Smith: I regret that the information is not available.
    Mr. Smith: It should be available. Does the Minister agree that, from his experience, it is never good to administer a merit scheme in secrecy? Is he aware that this situation is causing great concern to the most conscientious medical people? If he agrees with that reasoning, is he prepared to give the matter his personal reconsideration?
    Mr. Walker-Smith: Two points are involved here. First, in regard to the availability of the information, I am sure that the hon. Member will agree that the assembly of this information would be a complicated and time-consuming task — [HON. MEMBERS: "Why?"]—because it would entail the examination of about 2,000 pay records over a period of nearly ten years, and would require consideration of the various types of consultant who have received merit awards for part of the period in question and then changed their districts, and so on.
    On the other aspect of the question, the hon. Member will no doubt be familiar with the views put on record by the Government to the Royal Commission, but when we have the Commission's Report we can look at all this in the context of what the Report says.
    Dr. Summerskill: Is the Minister aware that this is the only case, at least in his Ministry, where public money is distributed without this House having an opportunity of knowing how much is distributed, and why? If this is to continue, may I ask why general practitioners also are not given merit awards?
    Mr. Walker-Smith: The reason for the continuance of this scheme to date is that it has given broad satisfaction, at any rate to the profession concerned; and so far, even those who criticise it—I accept that they criticise in good faith—have not been able to find a satisfactory alternative method. Evidence has been given to the Royal Commission, not only by the Government but by the interests concerned, and we can consider this matter in the light of its Report, and having regard to the evidence.

    Chiropody Services (Old People)
    Mr. E. Johnsonasked the Minister of Health whether he has given further consideraiton to the proposals which have been made to him regarding the extension of chiropody services for old people; and whether he will make a statement.
    Mr. Walker-Smith: There are many competing demands and, so far, I have had to regard others as representing a more pressing need; but I am keeping in mind the possibility of extending this service.

    Maternity Services (Report)
    Mr. K. Robinsonasked the Minister of Health when he expects to receive the report of the Cranbrook Committee on Maternity Services; and when it will be published.
    Mr. Walker-Smith: I expect to receive the report within the next few days, and I will at once consider the question of publication.
    Mr. Robinson: Does the Minister realise that that is good news in view of the fact that consideration of the whole pattern of the maternity services in the future is awaiting publication of the Report?

    Local Authority Expenditure
    Mr. Blenkinsopasked the Minister of Health what additional local authority expenditure on mental health and welfare services has been approved for 1959–60 and 1960–61.
    The Parliamentary Secretary to the Ministry of Health (Mr. Richard Thompson): Included in the figures of relevant expenditure taken into consideration in fixing the proposed totals of general grant for the first grant period are estimated amounts for these services of over £900,000 for 1959–60 and over£1¾ million for 1960–61 above the estimated figures for 1958–59.
    Mr. Blenkinsop: Does the hon. Gentleman feel that these figures will make any kind of start possible in developing local authority services to provide for the number of cases which will, we hope, be able to come out of mental hospitals and deficiency institutions?
    Mr. Thompson:Indeed, I do. It is estimated that the rate of development for which these increases provide in each year is about two and a half times the annual development rate achieved in recent years. I think that that is sensible progress.
    Mr. Blenkinsop: As the Parliamentary Secretary knows, during the last few years there has been hardly any development at all. Why on earth should he try to confuse the House by talking about two and a half times the rate of increase when we all know that the rate of recent increase has been neglible?
    Mr. Thompson: I cannot accept that what is now spent on these services is

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    negligible, and I should have thought that a rate two and a half times greater is considerable by any standards.

    Cancer Research (Finance)
    Mr. Spriggsasked the Minister of Health if he will take steps to assume the financial responsibility for cancer research.
    Mr. Walker-Smith: The Government already expects to spend some £472,000 on cancer research in the current financial year, through the Medical Research Council.
    Mr. Spriggs: Although we appreciate the public is spiritedness of all those who collect for cancer research, does the right hon. and learned Gentleman not agree that the time has now come when his Minister should face full responsibility for cancer research finance in this country?
    Mr. Walker-Smith: The hon. Gentleman refers to the Minister. He will appreciate that it is the Medical Research Council, which is responsible to my noble Friend the Lord President of the Council, which, in fact, does this research. On the generality of the question, as I said in answer to Question No. 7, I feel that there is an important contribution to be made by voluntary efforts in regard to cancer research, and close co-ordination is practised in regard to it.

    Leucotomy
    Dr. D. Johnsonasked the Minister of Health what is the progress of the follow-up of post-leucotomy cases which was initiated by his Department in 1956.
    Mr. Walker-Smith: Analysis of the results of the follow-up has taken longer than expected but I hope will be completed shortly.
    Dr. Johnson: While I thank my right hon. and learned Friend for his reply, may I ask whether he is aware that there is very urgent need for guidance on the results of this operation in view of the mixed opinion as to its efficacy? Will he hurry the results forward as soon as he can?
    Mr. Walker-Smith: Yes. I can assure my hon. Friend that the matter is now at an advanced stage and that the major part of the work has been completed.

  MEDICAL RESEARCH

    Mental Health
    Dr. D. Johnsonasked the Minister of Health, as representing the Lord President of the Council, whether he is satisfied with the adequacy of the machinery in regard to the approval of mental health research; in particular, whether this is acting in sufficiently expeditious fashion; and if he will make a statement.
    Mr. Walker-Smith: Yes, Sir, the machinery provides for rapid and regular consideration by the Medical Research Council of proposals and of the advice tendered by the Clinical Research Board about them.
    Dr. Johnson: Is my right hon. and learned Friend aware that, despite what he says, we get complaints—one of which I have in my hand—that it sometimes takes not less than eighteen months to obtain a definite answer, yes or no, on a research project, and that delays of this kind are naturally frustrating? Will he look into this aspect of the problem in particular?
    Mr. Walker-Smith: I am not sure precisely what case my hon. Friend has in mind. I am, however, aware of two cases in which there has been unavoidable delay in research projects for personal reasons connected with the gentlemen who were put in charge of them. In the ordinary way the machinery for the consideration and approval of these projects is designed to be rapid, and is so in practice.
    Mr. Blenkinsop: Is the right hon. and learned Gentleman aware that we have recently lost a number of expert scientists and medical men who were doing research in this mental field—especially in schizophrenia—and that there is some anxiety about the trend for them to go to the United States because of the lack of resources here?
    Mr. Walker-Smith: In one of the cases to which I referred the professor in question took up an appointment in the United States. That was the reason for the delay I mentioned. But that action was taken for personal reasons, and I do not think that my noble Friend would wish to draw from that case general conclusions of the kind which the hon. Member has drawn.

    Cancer
    Mr. H. Hyndasked the Minister of Health, as representing the Lord President of the Council, what new steps he is taking to tackle the disease of cancer; how much he has spent from public funds on research into this disease during the last twelve months; and what amount has been contributed from other sources for this research in institutions for which he is responsible.
    Mr. Atkinsasked the Minister of Health, as representing the Lord President of the Council, what is the total of public funds to be spent on cancer research in this financial year, including both the block grant to the Institute of Cancer Research and any part of the general grant in aid to the Medical Research Council which is used for this purpose.
    Mr. Walker-Smith: In the current financial year the Council's estimated expenditure on cancer research from public funds is £472,470; in addition, it is estimated that some £26,500 from other sources will be expended by the Council, approximately half of which will be in the Council's own research units and groups.
    In addition to the Council's expenditure in this field, further research is supported from public funds in the National Health Service in the course of the treatment of patients; and in various university and medical school departments from University Grant Committee funds. It is. however, not possible to make a separate estimate of this expenditure.
    Every effort is constantly being made to achieve a break-through in this very difficult field, and the Medical Research Council will continue to develop its programme and to follow up every promising new approach.
    Mr. Hynd: I appreciate what is being done in this very important matter, but is the Minister happy about the fact that appeals have been made for private charitable contributions to such an important project? As American experience seems to prove that this disease can be cured if it is treated in the early stages, what is the Minister doing to encourage people to have an early check-up?
    Mr. Walker-Smith: I see nothing improper or unacceptable about private
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    organisations and private funds supplementing the public effort in this context. It seems that cancer research is the sort of thing which ought to attract private as well as public support, and there is close co-ordination regarding the common objects of research.
    Mr. Atkins: Is the Minister aware that expenditure of this nature is an investment in the future and will pay extremely good dividends? Will he so represent the matter when he asks—as I hope he will—his right hon. Friend the Chancellor of the Exchequer for an increased grant next year?
    Mr. Walker-Smith: The amount of money available is such that cancer research is not handicapped by lack of funds. It is the intractable nature of the problem which prevents progress being as fast as we would wish.
    Dr. Summerskill: Hon. Members will agree with the Minister that certain aspects of the increase of the incidence of cancer have proved intractable, but would not the right hon. and learned Gentleman agree that something could be done in one sphere with which he is closely associated, the relationship between cancer of the lung and pollution of the air? Will the Minister collaborate more closely with the Ministry of Housing and Local Government to press those who are not implementing the Clean Air Act?
    Mr. Walker-Smith: I am in consultation with my right hon. Friend regarding schemes under the Clean Air Act, and I certainly have regard to the importance of air pollution in this context.

    Expenditure
    Mr. Blenkinsopasked the Minister of Health, as representing the Lord President of the Council, whether he is satisfied with the amount of funds at present available for medical research; and what action he proposes to take to improve the situation.
    Mr. Walker-Smith: Yes, Sir; over the last ten years expenditure by the Medical Research Council has been more than trebled. The Council's resources are reviewed sympathetically each year in the light of new developments and new needs.
    Mr. Blenkinsop: Is the Minister not aware of the disquieting information about the number of specialists who are going over to the United States to do particular research because of the lack of resources in this country? Will he not carry out further investigations in view of the great desire that these very eminent men should, if possible, be enabled to do their work in this country?
    Mr. Walker-Smith: I am sure that my noble Friend will have regard to what the hon. Gentleman has said. The trend of resources available and of expenditure is, in fact, an upward and satisfactory one.

  HOSPITALS

    Stoke-on-Trent
    Mr. Ellis Smithasked the Minister of Health if he considered the suggestions for the modernisation of the hospitals and services made to him during his visit to the City of Stoke-on-Trent; and what action has been taken or is to be taken.
    Mr. Walker-Smith: The planning of capital developments in the hospitals in Stoke-on-Trent is a matter for the Birmingham Regional Hospital Board. The following schemes are in hand or under consideration: a twin operating theatre suite, an accident and casualty unit, a new out-patient department, an antenatal unit, and a new maternity block.
    Mr. Smith: I accept the answer, but will the Minister use his responsibility and influence to see that the new out-patient department, which we understand will be one of the most modern, is sited between the two hospitals? Has he considered the need for complete integration of the hospitals and for the centralisation of departments?
    Mr. Walker-Smith: The out-patient department is designed to serve both the North Staffordshire Royal Infirmary and the City General Hospital, and is, I think, a practical example of co-ordination. I am sure that the board will bear in mind the views expressed generally by the hon. Gentleman.
    Mrs. Slater: Is the Minister satisfied that the siting is correct? In view of the closeness of the hospitals and the
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    urgent need to make them one big unit, should not the question of siting be carefully examined? Will the right hon. and learned Gentleman look at this matter again, not only from the point of view of the need for an out-patient department, but the necessity for co-ordinating the work of these hospitals?
    Mr. Walker-Smith: These matters of siting are often difficult and must be looked at in the light of all the practical considerations involved. As the hon. Lady will know, in the first place this is a matter for the board to consider in conjunction with the hospital management committee and the hospitals concerned.

    Queen Mary's Hospital, Carshalton
    Mr. E. Fletcherasked the Minister of Health whether he has yet reached a decision with regard to the future of Queen Mary's Hospital for Children, Carshalton.
    Mr. Walker-Smith: Not yet. I realise the importance of reaching a decision as soon as practicable; but there are many important considerations to be assessed in relation to each other, and I must be careful to give due weight to each.
    Mr. Fletcher: While there may be a general case for integration, will the Minister bear in mind that there are powerful arguments in favour of special pediatric hospitals, both in the interests of child patients and the training of medical and nursing staffs? Will he bear in mind the weight of general medical advice on this subject?
    Mr. Walker-Smith: I have in mind the Report of the Royal College of Physicians and what it said about the value of separate children's hospitals and the siting of hospitals so that regular visiting by parents may be made easy. In addition, I must have regard to the welcome fall in the demand for accommodation and my duty to make the best possible use of the hospital accommodation available.

    Clinical Experiments (Parental Consent)
    Mr. Swinglerasked the Minister of Health if he has considered the report, sent to him by the honourable Member for Newcastle-under-Lyme, of a clinical

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    experiment in which mentally defective children in hospital were used as matched controls; whether parental consent was obtained before the children were so used; and what assurances were given that no harmful effects would result.
    Mr. Walker-Smith: I have seen the report, and I regret to find on inquiry that parental consent was not obtained as it should have been before the drug was administered. I am assured that a single dose as given in this case has no harmful effects.
    Mr. Swingler: Did not the Minister note during the debate in the House in February, 1945, to which I referred him, that I drew the attention of the then Minister of Health to a similar case of children in hospital being used as "guinea pigs" for scientific experiments involving the injection of drugs without there being any parental consent? Is not this very wrong, and as this is the second case which has occurred, should not the Minister issue some guidance to hospital authorities, as there are many who have the strongest possible objection to children being used in this way, especially when adults can volunteer for the purpose?
    Mr. Walker-Smith: Guidance has been issued on this matter in the form of the Medical Research Council memorandum which was sent to the hon. Member on the earlier occasion and which, as he may know, has since been published. In regard to adults, in this case the drug was in fact first tried out on the doctors who were to carry out the trials on the children.
    9. Mr. Swinglerasked the Minister of Health to what extent his regulations permit the use of children in hospital for clinical experiments with or without parental consent.
    Mr. Walker-Smith: Investigations of this kind involve medical and ethical problems which are not susceptible of control by regulations. It is, however, my view that parental consent should be obtained, and I will draw the attention of responsible officers of hospital boards to this matter again.
    Mr. Swingler: While thanking the Minister for that reply, may I ask whether
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    it is not regrettable that this case should have occurred, in view of the fact that the previous Minister of Health gave the same reply about two and a half years ago about parental consent being obtained if such experiments were necessary? Will the right hon. and learned Gentleman now make this instruction very emphatic to hospital authorities so that no further cases may occur?
    Mr. Walker-Smith: I will certainly try to ensure that the requirement is brought to the notice of all concerned. Having said that, I reiterate that no harm was done and that this was a valuable and useful experiment.
    Mr. Mayhew: While the Minister very rightly agrees to look carefully at the point raised by my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler), may I ask him to bear in mind that a number of very promising research projects involve free access to patients? While he will look carefully at the matter, may I ask that he will not prejudice the success of those very important researches?
    Mr. Walker-Smith: My general policy, in harmony with that of the Medical Research Council, is that there should be the greatest possible freedom from detailed supervision in clinical research in hospitals for the reasons that the hon. Member for Woolwich, East (Mr. Mayhew) has given. I do not regard that as incompatible with abiding by the view I have expressed about parental consent for these cases.

    East Kent
    Mr. P. Wellsasked the Minister of Health what he intends to do to relieve the shortage of hospital accommodation in East Kent.
    Mr. R. Thompson: It is for the South-East Metropolitan Regional Hospital Board in the first instance to consider whether additional accommodation is needed. I am informed that it has reviewed the South East Kent area and does not consider any is needed at present; and that it is now reviewing the Canterbury area, where 20 additional beds have recently been opened.

    Kent and Canterbury Hospital
    Mr. P. Wellsasked the Minister of Health the average waiting period for entry to the Kent and Canterbury Hospital of patients needing an operation.
    Mr. R. Thompson: The average varies according to specialties, and for cases other than emergencies ranges from an average of four weeks for gynaecology to 59 weeks for orthopaedic surgery.
    Mr. Wells: Is the hon. Gentleman aware that a consultant of this hospital recently stated that the hospital was in a state of chaos, that patients were scattered all over the top floor, that one woman had been moved twice in 48 hours and died, and that a patient making application now for admission would have to wait until May or June before having any hope of admission; is he further aware that the chairman of the group hospital board recently stated that no improvements would be made until four or five years had elapsed? Cannot the hon. Gentleman give a more hopeful answer than that?
    Mr. Thompson: I am aware of the report to which the hon. Gentleman referred, but I am bound to say that the figures for this hospital relating to patients on the waiting list—of course, not to emergency cases—do not, taken as a whole, compare unfavourably with others in the region.
    Mr. Wells: The position is still very unsatisfactory.

    Medway Area
    Mr. Wellsasked the Minister of Health if he has considered the complaints made at the annual general meeting of the Rochester and Chatham Division of the British Medical Association concerning the shortage of beds for acutely ill patients in the Medway area, including Sittingbourne and district, of which a copy have been sent to him; and if he will make a statement.
    Mr. R. Thompson: I am aware of the need for more acute beds in this area, and the regional board is examining the possible use of the Royal Naval Hospital. Chatham, which will become available in 1961, to supplement the existing resources.
    Mr. Wells: In view of the shortage which undoubtedly exists in this area and of the danger to life that is involved, will
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    the Minister give this matter his personal attention?
    Mr. Thompson: Certainly.
    Dr. Summerskill: Would the Minister consider setting up machinery comparable to the emergency bed service, which will enable waiting cases to be transferred immediately to beds available in hospitals?
    Mr. Thompson: I shall want a little time to consider that question, in consultation with the regional board. A certain number of civil patients are already treated in the Royal Naval Hospital, Chatham.

    Senior Registrars
    Mr. K. Robinsonasked the Minister of Health if he will make a statement on the present position regarding time-expired senior registrars, indicating what proportion have been recommended for and have received permanent appointments.
    Mr. Walker-Smith: I explained my proposals in regard to time-expired senior registrars in my reply to the hon. Member on 21st April. Hospital boards have so far formulated proposals for 24 designated posts of which two are about to be approved and 22 are under consideration.
    Mr. Robinson: Is that not a very small proportion of the whole? Why is progress so slow? Does the Minister not appreciate that a very great deal of anxiety and hardship is entailed?
    Mr. Walker-Smith: It has always been envisaged that there would be only a limited number of designated posts. The hon. Member will recall that I used that phrase, or words to that effect, in my answer on 21st April. In regard to slow progress, it is a fact that two regional hospital boards and five boards of governors have not as yet replied, but I have reminded them of the urgency of doing so.
    Mr. Blenkinsop: Does not the Minister feel that the time must come in a registrar's career when he needs some kind of certainty about his future?
    Mr. Walker-Smith: A good many of us in other fields of activity want certainty as to our future on both sides of the House. We do our best for these people.

    Mental Hospital Staffs (Salaries)
    Mr. K. Robinsonasked the Minister of Health if he is aware that the practice of relating the salaries of nursing and other staff in mental hospitals to the number of occupied beds may penalise those hospitals pursuing a progressive policy of rehabilitation and discharge of patients; and if he will initiate steps to remove this anomaly.
    Mr. Walker-Smith: Arrangements agreed by the Whitley Councils concerned provide some protection for existing staff whose salaries would otherwise be affected when there is a permanent reduction in the number of beds. While some anomalies may remain, it is difficult to find alternative arrangements which do not create further anomalies.
    Mr. Robinson: Would not the right hon. and learned Gentleman agree that one ought to try to encourage rather than to discourage mental hospitals to discharge patients? To what extent is there protection for the existing staff, and why cannot that protection be made permanent and complete?
    Mr. Walker-Smith: I agree with the hon. Gentleman that it is good that patients should be discharged, subject always, of course, to the clinical facts of the case in question. In regard to safeguards, these are applied to safeguard the position of people already in the hospital employment in these circumstances, but, of course, in future appointments regard must be had to the new salary scales appropriate to the diminished responsibility which they carry.
    Dr. Summerskill: Would not the right hon. and learned Gentleman agree that, in the light of the new approach to mental disease, this method of remuneration surely places a premium on lack of initiative?
    Mr. Walker-Smith: No, I do not think so. It is necessary to have some sort of index by which salary scales can be adjusted, and it is true in regard to future appointments that, if we happily have a smaller number of patients to take care of and fewer beds in hospitals, the task is likely to be less onerous to that extent.

    Royston David Thornhill
    Mr. G. Thomasasked the Minister of Health whether a place in a South Wales hospital has now been found for Royston David Thornhill of Rampton Hospital.
    Mr. R. Thompson: Yes, Sir. He will shortly be transferred to Hensol Castle Hospital.
    Mr. Thomas: Is the Parliamentary Secretary aware that it has taken his Department a very long time in this case and that it has treated this individual as though he were a criminal?
    Mr. Thompson.
    Mr. Thomas: I happen to know the facts; it is no good the Minister shaking his head. Is he aware that I earnestly hope that nobody else will receive the same sort of treatment from his Department that this unfortunate man has had?
    Mr. Thompson: I cannot quite accept that. Owing to difficulties in finding alternative accommodation, it is not always possible to move patients from State institutions as rapidly as we should like. In this case, the Welsh Regional Hospital Board was able to find a place in five to six weeks.
    Mr. Dodds: Does the hon. Gentleman not appreciate that when I visited Rampton in July this man had already been told for twelve previous months that he was going out? Does not the hon. Gentleman think that is much too long?
    Mr. Thompson: There is still a question of finding somewhere to send him.

    Mr. A. H. Barber
    Mr. Haleasked the Minister of Health what steps he has taken, since his letter to the Manchester Regional Hospital Board last July, to obtain suitable employment for Mr. A. H. Barber; and how many posts Mr. Barber has been offered.
    Mr. Walker-Smith: So far as I am aware, Mr. Barber has not applied to fill any consultant vacancy in the hospital service.
    Mr. Hale: Does not the Minister think that is a somewhat contemptible answer in view of his assurance to the House in July that he directed the Board that it

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    was under a moral obligation to offer this man employment? Is it actually a fact that no offer has been made to this very distinguished gynaecologist?
    Mr. Walker-Smith: Before making that charge, the hon. Member—who, after all, has legal qualifications and some legal experience—should study the statutory basis on which we have to act in this matter. If he will study the Appointment of Specialists Regulations, 1950, he will see that they require that consultant vacancies to the hospital service must be advertised, that an appointments advisory committee must be appointed to select from the applicants those who are suitable, and that a board may only select a person who has been so selected by the appointments committee. It follows from that that it is not possible to offer employment. The post must be advertised, application must be made, and then the moral obligation to which I referred comes into being.
    Mr. Hale: Is the right hon. and learned Gentleman aware that a distinguished High Court judge, who possibly possesses greater legal qualifications than either of us, made an order that he was entitled to be reinstated after consideration of the Regulations to which the Minister has referred?
    Mr. Walker-Smith: The hon. Member cannot have looked at the report of the case for some time. The distinguished High Court judge made no such order.
    Mr. Hale: Yes he did.
    Mr. Walker-Smith: On the contrary, he made the finding that his employment had been unlawfully terminated and gave him damages in respect thereof, but was not able to order reinstatement.
    Mr. Hale: He said he was entitled to reinstatement.
    Mr. Haleasked the Minister of Health what replies he has obtained from the Manchester Regional Hospital Board to his request, made in July last, that it should accept a moral obligation to assist Mr. A. H. Barber, gynaecologist, to obtain suitable employment.
    Mr. Walker-Smith: The board has agreed to my suggestion.
    Mr. Hale: Is it not a fact that the right hon. and learned Gentleman is really deceiving the House in this matter?
    Hon. Members: No.
    Mr. Hale: Oh, yes; I say it deliberately. The Manchester Regional Hospital Board first adjourned consideration of his letter from time to time and as long as it could. Is it not a fact that the Minister knows the Manchester Regional Hospital Board made it constantly clear that it had not the slightest intention of lifting a finger to secure the reinstatement of this gynaecologist because it is still activated by the venom which made it contest the action?
    Mr. Walker-Smith: I think the hon. Member is getting extravagant in his language. It is not proper, having made a mistake himself—of which I make no criticism—to take it out of the Board in revenge. The board, as he knows, in answer to my letter, has accepted the moral obligation in this sense, that if the appointments advisory committee finds Mr. Barber equally suitable with any other applicants, then the circumstances must weigh the moral obligation in his favour. That is the most the Board can do, and that it has said it will do.
    Mr. Haleasked the Minister of Health what replies he has made to representations received from the Oldham Corporation and the Oldham Trades and Labour Council calling attention to the lack of sufficient gynaecological service in Oldham, and to the necessity for the full use of available local expertise.
    Mr. Walker-Smith: I am sending the hon. Member a copy of the reply that has been sent to Oldham Corporation. I have not received any representations from Oldham Trades and Labour Council.
    Mr. Hale: Is the right hon. and learned Gentleman aware that this gentleman is deprived of the opportunity of taking any part in the gynaecological work of the local hospital, that there is a long waiting list of cases, that complaints have been sent by Oldham Corporation and other authorities, that there is inadequate gynaecological consultative opportunity, and here is a man available and responsible for the corporation's pre-natal service who is debarred from taking part in the work of the hospital purely because of the hostility his action caused?
    Mr. Walker-Smith: No, it is not a case of that. Perhaps the hon. Member will be good enough to study the letter which I am sending to him. Then, if necessary and useful, we could have a word about it in the light of the difficulties and complications which exist.
    Dr. Summerskill: Without entering into the legal points, may I ask the Minister to use his good offices in this matter, having regard to the long list of gynæcological cases awaiting consideration for treatment in the Northern area? We have heard of many in Birmingham and the Midlands as well as in the North, and I understand that no one has criticised this man's skill as a gynæcologist.
    Mr. Walker-Smith: Fifteen beds and additional operating sessions were allocated to the consultant gynæcologist in the spring of this year, with the result that the waiting list, I am glad to say, has been substantially reduced and the board hopes that the rate of reduction will be continued in future.
    Mr. Hale: In view of the unsatisfactory nature of the three replies to my Questions, I beg to give notice that I shall take the opportunity of raising the matter on the Adjournment.

    Maternity Services, Staffordshire
    Dr. Strossasked the Minister of Health (1) whether he is aware that, owing to the shortage of maternity beds in Stoke-on-Trent, many mothers are discharged from hospital two or three days after their delivery; and what immediate and long-term proposals he has in mind for improvement of the service; and
    (2) what funds are immediately available to the Birmingham Regional Board which can be used to improve the maternity services in Stoke-on-Trent and North Staffordshire; and whether, as the problem is so urgent, he will make available all reasonable financial help both for immediate short term aid and a long-term solution.
    Mr. R. Thompson: My right hon. and learned Friend is aware of the shortage of maternity beds in this area. The regional hospital board has in hand a scheme for providing 18 additional antenatal beds as soon as possible, and longterm proposals for a new maternity block
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    are being considered. It is for the board to determine what proportion of its available funds can be allocated to meet the needs of this area having regard to other urgent requirements elsewhere.
    Dr. Stross: Does the Minister know that we are profoundly aware of the urgent need, spread throughout the region, and that in no way do we accuse the regional board of having any ulterior motives in the matter, but I think he is also aware that this is a very serious matter indeed in North Staffordshire? May we have it on record that the Answer given by the Minister to my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) about the building of a new maternity block will be given urgent priority, for it is to take four years to build?
    Mr. Thompson: I can certainly give a very sympathetic consideration there.
    Dr. Strossasked the Minister of Health the number of maternity beds available per 100,000 of the population in Liverpool, Manchester, Birmingham, Stoke-on-Trent and North Staffordshire.
    Mr. R. Thompson: The figures are approximately: Liverpool 72, Manchester 55, Birmingham 52, Stoke-on-Trent 49 and North Staffs, including Stoke-on-Trent, 33. The hospitals in these towns serve a wider area.
    Dr. Stross: Do not those figures highlight the fact that this is an urgent matter? Whilst accepting that the Minister and the Department have sympathy with our plight, has it been noted that we have actually fewer beds for the whole of North Staffordshire than we had before the war for the City of Stoke-on-Trent itself? May we have an assurance now that the action which is to be taken to increase the number of beds will be put in hand forthwith?
    Mr. Thompson: It is difficult to make precise comparisons of the beds position since the area served by any particular hospital is not precisely defined. In answer to the second part of the hon. Member's question, a scheme to provide ante-natal beds in Stoke-on-Trent at a cost of £49,000 is in the capital programme of the board, and sketch plans are being prepared.

    Regional Boards (Capital Expenditure)
    Mr. Chetwyndasked the Minister of Health the additional allocations to each regional hospital board of the extra £1,750,000 for capital expenditure before 31st March, 1959.
    Mr. Walker-Smith: As the Answer comprises a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Chetwynd: Can the Minister give one figure—that for the Newcastle Regional Hospital Board—and say whether that figure will be adequate to cover the very urgent development at Stockton-on-Tees?
    Mr. Walker-Smith: The figure in the Newcastle region is £105,000 in respect of its share of this extra money. In addition, as the hon. Member may know, the Newcastle region benefits from the special bonus which some regional hospital boards get, and also in the current financial year it is getting about one-fifth of the central funds available for hospital building.
    Dame Irene Ward: Is that sum going to help us catch up on the backlog, because if I assessed what the Question meant, it was whether we are going up the ladder, and to ensure that there is constant improvement?
    Mr. Walker-Smith: My hon. Friend can take it that there is a steady and satisfactory upward progression in this region.
    Following are the figures:

    TABLE

    REGIONAL HOSPITAL BOARDS

    Estimated Sums from additional allocation to be devoted to capital works

    Newcastle

    …

    105,000

    Leeds

    …

    121,000

    Sheffield

    …

    138,000

    East Anglian

    …

    30.000

    N.W. Metropolitan

    …

    125,000

    N.E. Metropolitan

    …

    71,000

    S.E. Metropolitan

    …

    110,000

    S.W. Metropolitan

    …

    225,000

    Oxford

    …

    55,000

    South Western

    …

    140,000

    Birmingham

    …

    66,000

    Manchester

    …

    104,000

    Liver pool

    …

    107,000

    Wales

    …

    100,000

    (Teaching hospitals

    …

    217,000)

    The sum available for capital expenditure was part of a larger sum and a measure of discretion was left to boards in dividing it between capital and revenue expenditure. The figures for capital are therefore not strictly comparable.

    Mental Hospitals (Discharged Patients)
    Mr. Doddsasked the Minister of Health, in view of the decision in the High Court on the illegal detention of Miss Kathleen Rutty, which resulted in her discharge as a mental defective, and the subsequent review of those mental defective patients detained under the same Section of the Mental Deficiency Act. 1913, how many patients have been discharged as a result of this review; how many are still detained under this particular section of the Act; and why they have not yet been released.
    Mr. Walker-Smith: So far 1957 have been discharged; 3,078 are still detained because they are unfit for discharge or have nowhere suitable to go.
    Mr. Dodds: is the right hon. and learned Gentleman aware that I am delighted that nearly 2,000 people who had been wrongfully certified have now been allowed out? Does he not think it a terrible indictment that a country such as ours should detain 3,000 people who have never been certified, and should do so largely because we have no other place for them than mental institutions? I ask the Minister to undo some of the wrong which has been done. Is it not possible to give them some special rehabilitation courses to help to smooth their way back into the community?
    Mr. Walker-Smith: We do not know, of course, that all those cases are similar to the Rutty case, because we do not know the facts which were before the court. The board is not in a position at any time to know the facts before the court at the time of their admission. These are cases which appear on the face of it to have some similarity, but I am sure that what the hon. Member has in mind is that the basis of the Rutty decision was on the construction of the words "found neglected" and, as he will appreciate, there is no doubt that many of these 3,000 people are in need of care and treatment for their mental condition.
    Mr. Dodds: Yes, but not in mental institutions.
    Sir G. Nicholson: Is my right hon. and learned Friend aware that the anxiety and shame expressed by the hon. Member for Erith and Crayford (Mr. Dodds) is widely shared on this side of the House?
    Mr. Walker-Smith: I hope that before my hon. Friend uses those expressions he will study the facts and will realise what was the basis of the Rutty decision. I shall be very happy to discuss the matter with him if he so desires.

    Miss Kathleen Rutty
    Mr. Doddsasked the Minister of Health how long Miss Kathleen Rutty was detained as a mental defective; what money was given to her on discharge; and what compensation has since been paid to her.
    Mr. Walker-Smith: From 21st June, 1948, to 21st February, 1956. The answer to the second and third parts of the Question is, "None."
    Mr. Dodds: If people have been found to have been held illegally, why is some money not given to them when they are allowed out into the community to help them thoroughly to rehabilitate themselves?
    Mr. Walker-Smith: At the time of the lady's discharge on 21st February, 1956, she was on licence in the care of her half-brother and in remunerative employment at the time, and therefore she did not require a grant from the hospital. She has, in fact, made no claim for any compensation.

    Cane Hill Mental Hospital
    Mr. Doddsasked the Minister of Health what was the daily average during 1957 of patients employed in the laundry at Cane Hill Mental Hospital; what were the maximum weekly rates of payment to male and female patients so employed; what is the maximum number of hours per week a patient can work in the laundry; how long the present scales have existed; and what action is being taken to improve the present unsatisfactory cash payments and tobacco allowances where work of a reasonably high standard is achieved.
    Mr. R. Thompson: 53. Occupation is essentially a part of treatment and remuneration as such is therefore not payable. Male patients do, however, receive a weekly allowance of up to 2 oz. of tobacco and female patients of up to 6s. in cash, as an incentive. Patients may attend the laundry for up to 38 hours a week, but none in fact attends for as long as this. The tobacco allowance has existed for
    24
    many years, and the present scale of cash rewards was introduced during 1955. In a few cases this has been raised to 7s. 6d. a week.
    Mr. Dodds: Is the Parliamentary Secretary aware that in the evidence before the Royal Commission there was reference to the work done in the laundries? Would it not be wiser to put away some of the money which these people should be earning until the day when they get out? How can the Parliamentary Secretary refute the allegation about cheap or slave labour if the rates paid are 6s. a week to a woman and 2 oz. of tobacco to a man? Is it not time this was investigated?
    Mr. Thompson: As I have said, payments are made not as remuneration for work but in respect of patients who undertake and persist in an activity which is desirable from the point of view of their own cure and well-being. The adequacy of the payments must be judged by whether they fulfil this function and not by commercial standards of what patients would earn outside.
    Mr. G. Thomas: Is the Minister aware that this practice of employing people who are mentally sick for this work, while understandable from a physical point of view, is causing a considerable amount of concern to those who realise that when many of these patients eventually are able to go back into the community they have no resources with which to face the world?
    Mr. Thompson: It is our desire to return as many of these unfortunate people to the community in the end as are equipped to go there, but I must point out to the hon. Member that it is very generally agreed that work is a valuable part of the treatment.

    Selly Oak Hospital, Birmingham
    Mr. V. Yatesasked the Minister of Health what was the cause of the delay by the Birmingham Regional Hospital Board in replying to his request, made over nine months ago, for further information concerning the proposed new out-patients' department at Selly Oak Hospital, Birmingham; whether he has yet made a further request for a reply; and when he expects to announce the authorisation of this urgently required new building.
    Mr. R. Thompson: It has been necessary for the board to consider this scheme in relation to other hospital facilities in Birmingham, including two other major schemes under consideration: during this time its headquarters medical staff has been severely depleted. The Ministry's officers have been in touch with the Board on several occasions about this scheme. I cannot yet say when sketch plans will he approved.
    Mr. Yates: Is it not unreasonable that the Ministry should permit a delay of over nine months considering plans for an out-patients' department which has been approved in principle for some years and which was officially approved two years ago? Is not this delay quite intolerable?
    Mr. Thompson: As I have said, there are good reasons for it. The Board's establishment of headquarters medical staff is five. From December, 1957, to June, 1958, there were only two. Another two took up their duties on 26th September and 1st October, respectively.

    Little Bromwich Hospital, Birmingham
    Mr. V. Yatesasked the Minister of Health how many patients in Birmingham are awaiting operations at all hospitals; in view of the fact that additional operating theatre facilities at Little Bromwich Hospital, Birmingham, have been approved in principle, why sketch plans have been under consideration for over nine months; when these plans will be approved; and how long it will be necessary to wait before this building is commenced.
    Mr. R. Thompson: The waiting list for all surgical specialties is 11,331; it has been necessary to discuss with the Board several features of the plans involving detailed consideration by the Ministry's professional advisers and those of the Board. This scheme is proving specially difficult and matters have not yet reached the stage when I can say when these plans will be approved or when building work will commence.
    Mr. Yates: Did I understand the Minister to say that there were 11,000 cases in which people are waiting for operations? At the hospital at Little Bromwich, referred to in the Question, in
    26
    the last three months there have been over 200 operations in excess of the number five years ago. Is the Minister aware that this treatment of Birmingham is abominable?
    Mr. Thompson: My answer related to the position in Birmingham as a whole, which is what the hon. Member asked. I would point out that the waiting list is for admission to beds and that not all patients admitted will necessarily have operations.
    Dr. Summerskill: Will the Minister break down the number of 11,000 and tell the House what are the main conditions from which these people are suffering who have to wait in this way?
    Mr. Thompson: Not without notice. The surgical specialties of this hospital are general surgery, ear, nose and throat. traumatic and orthopædic surgery, ophthalmology, dental surgery and gynæcology.
    Dr. Summerskill: Is the Minister considering the suggestion which I have made this afternoon that he should see whether some of these cases could be transferred to other hospitals?
    Mr. Thompson: I will certainly look at that, as I said the other day. A good deal of co-operation is already in existence.

    Dental Hospital, Birmingham
    Mr. V. Yatesasked the Minister of Health when the recommendations of the University Grants Committee, received by him on 18th February, regarding the proposed new dental hospital in Birmingham, were approved; and whether all necessary sanctions have now been made to enable the building of this hospital to be commenced without further delay.
    Mr. R. Thompson: The recommendations of the University Grants Committee covered a wider field, but agreement on the student entry on which this hospital should be planned was reached last spring and my right hon. and learned Friend has recently received revised sketch plans, which are being considered as speedily as possible.
    Mr. Yates: Is the Minister aware that the information which I have is to the effect that the final plans were approved in the spring and that no alterations have been proposed? Is he aware that I am

    27
    informed that if this is not put forward within the next month this hospital cannot be built to accommodate the cases until 1962?
    Mr. Thompson: I cannot quite agree with the hon. Gentleman's assessment of the timetable. Revised sketch plans were received from the board of governors on 13th October. These are being examined by the Ministry's professional advisers with a view to assessing the portion of the cost which the University Grants Committee will be asked to bear.
    Dr. Summerskill: Can the Minister tell the House why he allows the delay, in view of the fact that there is a widespread shortage of dentists and that we are told time after time that this is related to the shortage of training facilities?
    Mr. Thompson: As the right hon. Lady well knows, we have accepted the recommendations of the McNair Committee in this respect.
    Mr. Yates: In view of the totally unsatisfactory nature of the Minister's answers to all my Questions on this subject, I beg to give notice that I will take an early opportunity of raising the matter on the Adjournment. The Ministers should come to Birmingham.

    Teaching Hospital, Fulham
    Mr. M. Stewartasked the Minister of Health what proposals he has received from the governors of Charing Cross Hospital concerning the size of the teaching hospital which it is proposed to establish in Fulham; and what reply he has made.
    Mr. Walker-Smith: I have today received the board's proposals, which involve providing 1,082 beds. These proposals will now be considered and discussed with the board as soon as possible.
    Mr. Stewart: Is the Minister aware that the Governors have expressed the view that something like that number of beds will be required if the hospital is both to perform its teaching function and meet the needs of the locality? Does he not appreciate that if he does not accept those proposals the whole plan will become more unacceptable both to the governors and the people of Fulham than it is at present?
    Mr. Walker-Smith: The basis of the figure will, of course, have to be studied with the board of governors and the regional hospital board. The hon. Gentleman will recall that we are seeking to provide in this new Charing Cross Hospital a service for the Fulham area which will compare favourably with that which the rebuilt Fulham Hospital would have given.
    Mr. Stewart: But will the Minister recollect that when this matter was discussed earlier in the House his Parliamentary Secretary spoke of a hospital having something like 700 or 800 beds, and that that smaller figure caused a good deal of alarm?
    Mr. Walker-Smith: Yes. My advisers have hitherto taken the view that a smaller number than the figure at present put forward by the board of governors would be appropriate. That is one of the things which we must study together in looking at the plans.

    Admissions
    36. Mr. Blenkinsopasked the Minister of Health what is the latest available figure for those waiting for admission to hospital; and how this compares with twelve months previously.
    Mr. Walker-Smith: At the end of June, 1958, there were 442,000 names on the waiting lists of N.H.S. hospitals in England and Wales. This figure was about 1 per cent. higher than that for June, 1957.
    Mr. Blenkinsop: Is the Minister aware that there is great anxiety about the fact that during the last two years there has been a steady increase in the waiting list as compared with experience during some years before? What action is he taking to try to secure a correction of this very disquieting tendency?
    Mr. Walker-Smith: No, Sir; it has not been a steady increase. The figures fluctuate somewhat. Indeed, the figure at 31st March this year, for example, was slightly lower than the figure at 31st March, 1957. In regard to the previous years to which the hon. Gentleman referred, he will be glad to know that the figures are, of course, a good deal lower than they were when he himself was concerned with these matters.
    Mr. Blenkinsop: But does the right hon. and learned Gentleman not regard it as a really serious matter that, after a great number of years during which more facilities for capital expenditure have become available, one would have thought, so little has been done to overcome the problem of these very serious waiting lists?
    Mr. Walker-Smith: We are making steady and not unsatisfactory progress. We are spending a steadily increasing amount on capital development for hospital construction and improvement. It is true that these things fluctuate. If the hen. Gentleman checks his recollection, he will find that the waiting list was higher when he left the Ministry of Health than when he entered it.

    Northern Region
    Mr. Greyasked the Minister of Health if he will give the approximate number of persons waiting for hospital beds in the Northern Region; and how many of these have been waiting for three months, six months, nine months and for longer periods, respectively.
    Mr. R. Thompson: Information in the precise form requested is not available, but of the 24,000 people awaiting admission on 31st August about 13,000 had been waiting less than 4 months, 6,000 between four and 12 months and 5,000 over a year.
    Mr. Grey: Could the Minister tell us how this compares with the rest of the country?
    Mr. Thompson: If the hon. Gentleman is speaking in terms of the national average, the Newcastle Regional Hospital Board's waiting list is almost identical, per thousand of population, with the national average.
    Dr. Summerskill: Can the hon. Gentleman say whether the breakdown of these figures gives a result comparable with that in the Midlands?
    Mr. Thompson: Not without notice.

R.A.F. STATION, NORTH PICKENHAM (DEMONSTRATION)
Mr. Dye(by Private Notice) asked the Secretary of State for Air why demonstrators were able to enter upon the Royal
30
Air Force Station at North Pickenham on 6th to 7th December, hindering the workmen from carrying on their normal duties, what action he intends to take to avoid similar occurrences, and whether he will make a statement?
The Secretary of State for Air (Mr. George Ward): Work is being carried out by contractors within a fenced area at the Royal Air Force Station at North Pickenham. Since 11th November, the site has been picketed from time to time by demonstrators but without incident. From preliminary reports I have received, 60 to 70 demonstrators, who had previously publicised their intention of coming to the site, appeared at the entrance of the station last Saturday afternoon.
In the presence of the civil police the demonstrators were warned not to enter Air Ministry property. Nevertheless, they forced their way through the perimeter barrier at a number of places, causing minor damage to property. A similar occurrence took place yesterday. On both days the demonstrators were removed from the site by the civil and R.A.F. police. Work was hampered for several hours each day.
I understand that on Saturday, the police were able to prevent a serious clash between contractors' employees and the demonstrators. Although a number of minor incidents took place, no arrests were made.
Mr. Dye: In view of the fact that these demonstrators have been in this neighbourhood for some time, endeavouring to cause a stoppage of work by picketing and, having failed to do it by those means, by going on to the site, is it not time that workmen engaged in this work should be protected against intrusion by people who desire, for political purposes, to bring about a stoppage of work?
Is the right hon. Gentleman aware that these same demonstrators have said that they are going to do the same thing at Watton, in Norfolk? Does he not think that it is time that proper security arrangements were made, so that no unauthorised persons can enter upon Air Ministry property for this purpose?
Mr. Ward: While the contractors are on the site there is only a temporary fence, and it is not too difficult for a

31
large enough number of determined people to breach it. But as soon as the contractors have finished, a proper, high security fence will be erected round the site. Meanwhile, we do the best we can, with both the civil and Royal Air Force police, to stop these incidents. I am expecting a full report in detail of what happened and I shall then certainly consider what steps we can take to prevent further occurrences of this nature.
Commander Scott-Miller: Would not my right hon. Friend agree that the methods employed by these demonstrators were quite unconstitutional, to say the least, and served only as an embarrassment to those working on the site and to those whose duty it is to preserve law and order? In view of that, would it not be better to ensure that similar occurrences cannot take place, by building adequate fencing on the site first instead of leaving it until the work is practically completed?
Mr. Ward: I will certainly consider that suggestion. Of course, it is not very easy to get the contractors' machinery on and off the site if there is a very high security fence round it, but I will see what further measures we can take to add to the security of the sites while these installations are being built.
Mr. S. Silverman: Has the right hon. Gentleman's attention been drawn to a number of detailed and circumstantial accounts which purport to show that in the act of removing these trespassers from the site a good deal of unnecessary violence was used; that women and elderly men were seized—some of them were seized—and thrown into pools of mud, cement and water; that one lady was prevented for ten minutes from leaving; and that a number of them had to be treated in hospital for the removal of pieces of cement, many of them in the eyes? Will the right hon. Gentleman make inquiries and see that no undue violence is allowed or encouraged against these people, who are honest and conscientious and who are endeavouring to draw public attention to a situation which really has not got the support of many people in this country?
Mr. Ward: As I have said, I am expecting a detailed report of exactly what happened. But I think I can say
32
with assurance that these people offered a great deal of violent resistance to the police and that I do not think that more force was used than was necessary to remove them from the site.
Mr. Silverman: How does the right hon. Gentleman know?
Sir T. Moore: May we assume that there was the usual notice at this establishment stating that trespassers would be prosecuted? If so, may we be told whether these trespassers will be prosecuted?
Mr. Ward: The demonstrators were given a warning in the presence of the civil police not to enter the site, but in spite of that they forced their way in. That is just as effective as any notice. On the question of prosecution, I am considering whether or not any action should be taken, but I think that if similar demonstrations take place we shall have to take action.
Mr. Paget: Have not the demonstrators at least succeeded in demonstrating that the sites of this alleged deterrent are very well known? What in the world is the use of a deterrent which can certainly be knocked out before it can possibly go off, unless we propose to be the aggressors?
Mr. Ward: I do not think that that much wider question arises out of this one.
Mr. Dudley Williams: Will my right hon. Friend make it clear to the Service personnel concerned and to the police that the overwhelming majority of people in this country have every confidence in the way they perform their duties?
Mr. Ward: I am grateful to my hon. Friend. I am sure that that is already the feeling among the people.
Mr. Chetwynd: As this organisation seems to know the locations of these stations, is it not high time that the House of Commons was told about them, too?
Mr. Ward: No, Sir; I think there is a very great difference between the forced entry of one or two sites by these demonstrators and official confirmation of the sites by the Air Ministry.
Mr. Grimond: Arising out of the question asked by the hon. and learned Member for Northampton (Mr. Paget) and the last question, surely the Minister will now

33
consider whether he should go on building these installations. If he wants them, had they not far better be put on ships at sea?
Mr. Ward: These form a valuable part of the Western deterrent, and we shall certainly continue to build them undeterred by any demonstration of the kind that we saw during the weekend.
Mr. Dye: Will the right hon. Gentleman see that the further report to which he referred is made available to the House, to make it plain that undue force was not used by the local or other police engaged on that site against any of the demonstrators? [HON. MEMBERS: "How does the hon. Member know?"] I was there.
Later—
Mr. S. Silverman: On a point of order, Mr. Speaker. I do not regard the Answer that the Minister gave to my hon. Friend's Private Notice Question as in any way satisfactory, and I should like to give notice that I will endeavour to raise it on the Adjournment at the earliest possible moment.

QUESTIONS TO MINISTERS
Mr. Emrys Hughes: May I ask, Mr. Speaker, whether the Foreign Secretary has asked permission to answer Question No. 53?
Mr. Speaker: I am afraid not.

LOCAL GOVERNMENT (GRANTS)
3.41 p.m.
Mr. Speaker: Before I call the Motion on the Order Paper, I would ask whether it is convenient for both sides to take the General Grant Order and, at the same time, discuss the Grants and Rates (Transitional Adjustments) Regulations. It seems to me that that might be a convenient course, but I do not wish to take it if it is against the interests of either party. Is it agreed that these two Motions be discussed together?
Hon. Members: Yes.
The Minister of Housing and Local Government and Minister for Welsh Affairs (Mr. Henry Brooke): I beg to move,
That the General Grant Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved.
I am grateful to you, Mr. Speaker, for suggesting that with this Order we might discuss the Grants and Rates (Transitional Adjustments) Regulations, as they are closely related. In view of what you have said, I shall endeavour to cover both of them in my speech.
In the two years that I have been Minister I have found that there are two facets of the duties of the Minister of Housing and Local Government that hardly lend themselves to romantic phrase or poetic fancy. One is expounding local government finance, and the other is opening a sewerage works. I shall endeavour today to be as lucid as I can. These are complicated matters, and I shall be grateful for the attention of the House as I endeavour to bring to its notice what appear to me to be the most significant points. If there are questions to be raised, my hon. Friend the Parliamentary Secretary will be glad to try to answer them later in the debate.
This is, of course, the first General Grant Order to be made under the 1958 Local Government Act. It prescribes the totals of general grants to county councils and county borough councils for each of the next two years. It proposes that those grants be fixed at £393 million for 1959–60, and at £414 million for 1960–61. The same Order prescribes the details of

35
the formula for distributing these amounts between all the different receiving councils.
I am sure that hon. Members on both sides will find it easy to recollect that most of the Opposition case against the general grant was based on the argument that it would be used for making reductions—swingeing reductions—in Exchequer grants, and for cutting down education and other services. The hon. and learned Gentleman the Member for Kettering (Mr. Mitchison)—who, I hope, will be taking part in the debate—was full of suspicions and sinister conjectures earlier in the year and said, even as late as the Third Reading of the Bill:
"… I regard this Bill as an attempt to relieve the taxpayer at the expense of the ratepayer, and at the expense of the people who are benefited by the local government services which constitute the relevant expenditure under this Bill."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 329.]
I shall be intrigued to see whether he repeats that today, for this Order fulfils the Government's assurance and refutes every one of his conjectures. The grants for which it makes provision represent contributions by the Exchequer to the cost of local services that are fully fair to the taxpayer and to the ratepayer alike. The whole plan rests on firm and sure foundations—the estimates of local authority expenditure, of developments in the services, and of all the other matters that Section 2 of the Act requires us to take into account.
The figures and the basis of the estimates are fully set out in the Report that I laid before Parliament, accompanying the Order. If I went into every figure this debate would become an arithmetic lesson. We all want to avoid that, so I will seek to confine my speech to a few of the most significant figures.
In this current year—1958–59—the old specific grants, which are henceforth to be superseded by the new grant, are estimated at £363 million. If Parliament now approves this Order, the Exchequer will be providing £30 million more than that next year, and £51 million more the year after. Hon. Members will find a useful table in paragraph 15 of the Report, which compares grant with expenditure over a number of years. It shows how, under this Order, the share
36
of the cost falling on the Exchequer is being maintained.
The grants that are now proposed will meet 55·5 per cent. of the estimated expenditure for 1959–60, and 55·6 per cent. for 1960–61. But that, of course, is not the whole story. To make a fair comparison with earlier years, one must also take into the reckoning the new extra income to local authorities that will come from rerating industry to 50 per cent. Of this additional income, £10 million will accrue to the local authorities, and £20 million to the Exchequer which, simultaneously, will drop £15 million in tax revenue. Hon. Members will recollect that all this was fully explained in the White Paper of July, 1957.
A sum of £6¾ million towards this £20 million falls to be deducted from general grants. That was set out in paragraphs 30 and 31 of last year's White Paper. This deduction of £6¾ million, therefore, represents grant income that is replaced by additional rate income as a result of Government action, and if this £6¾ million is added back to the general grant the resulting total is seen to be 56½ per cent. of the estimated expenditure for each of the two coming years. That is, in fact, higher than the grant percentage for any of the previous five years shown in the table on page 5 of the Report, and the House may care to know that it is actually the highest percentage ever attained.
I go further than that. The comparison has so far taken account of the additionel rate income only to the extent that it has been set off against general grant. The comparison I have just made leaves out of account the net gain of £10 million a year to the local authorities from the rerating of industry. When account is taken of all the financial provisions of the 1958 Act the effect of this General Grant Order is to make available to local authorities, in 1959–60 and in 1960–61. an income larger by at least £10 million each year than they would have had if there had been no Act and no Order—and £10 million is equivalent to a 4d. rate over the whole of England and Wales.
The Act and the Order, therefore, will enable local authorities to meet their estimated expenditure in the next two years by levying rates which, on the average, will be 4d. in the £ less than they otherwise would have been. I invite hon. Members to judge whether this affords

37
any evidence of transferring burdens from taxpayers to ratepayers, as the Opposition said we intended to do.
Mr. J. A. Sparks: Before the right hon Gentleman finishes, I wonder whether he could give us some idea of the burden on the ratepayer. It seems to me that, despite all these savings, the burden on the ratepayer will increase considerably.
Mr. Brooke: The Government are planning for an expansion of the services. We are also setting up a sounder system of local government finance which will make every local authority more anxious than ever to obtain value for money.
The House will find set out in the Report the manner in which the estimates of expenditure taken into account in fixing the grant was arrived at. We started from the local authorities' own figures. We asked the local authorities to submit estimates of their expenditure on the services concerned for the years 1959–60 and 1960–61, together with supporting information showing the developments for which they were providing in the figures. These estimates, therefore, take fully into consideration the authorities' own plans. They reflect the authorities' own assessments of the progress likely to be made in maintaining and developing their services during those two coming years. The estimates we thus obtained from the local authorities amounted to £697·1 million for 1959–60 and £732·5 million for 1960–61.
These estimates were examined by each of the various Government Departments, and it quickly became apparent that they had been framed in a realistic and responsible way. We made few reductions in them. The kind of reduction we made was where the total of all local authorities' estimates of additional staff recruitment was in excess of the number of potential recruits likely to be available. We had to make adjustments for considerations of that sort.
We then held consultations with local authority representatives, during which the figures were modified again, and in the end the total reductions below the local authorities' own estimates amounted to not much more than half of 1 per cent.: we accepted the local authorities' own total estimates with hardly any change.
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It was not solely a matter of making reductions, but also a matter of making increases. It was apparent to us that in some respects the local authority estimates were too low, in which case we added something. Amounts were also added for the expansion of some services over and above what the authorities allowed for, and also for developments which have occurred since the local authorities made their estimates. The House knows that one example is the new basis for compulsory acquisition of land provided for in the Town and Country Planning Bill. Sums were also added for wage increases which have been settled, or which have become foreseeable since the original estimates were made by the local authorities. These additions, also, were discussed with the representatives of the local authorities.
The net result of all these calculations and discussions was to increase the estimated expenditure for 1959–60 from the local authorities' own figure of £697·1 million to £707·8 million and for 1960–61 from their figure of £732·5 million to £744·3 million. These are the figures which were finally taken into account in fixing the grant totals.
Mr. C. R. Mitchison: Would the right hon. Gentleman find it convenient to give a semi-breakdown of those increases? I gather that the local authorities' returns were to be in by the middle of August.
Mr. Brooke: I am anxious to help the House as much as I can, but I think that it would be better if I went straight forward and set out the whole story. Hon. Members on both sides of the House will, no doubt, have questions to ask, and I am sure that my hon. Friend the Parliamentary Secretary will do all he can to answer them when he winds up the debate.
As I said, those were the figures which were finally taken into account in fixing the grant totals, and they compare with the estimated expenditure in this current year of £644·1 million. Compared with this year the figures show an increase in 1959–60 of £63 million, which is nearly 10 per cent., and in 1960–61 of £100 million, which is over 15½ per cent. These figures show what nonsense has been talked by the Opposition and their friends about cutting down services. Once

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again, as with the Rent Act, they have been creating fears which are completely groundless.
I want at this point to explain the position about teachers' salaries in relation to the figures in the Order. At the time the figures were being considered and we had our final consultations on them with the local authorities' representatives—as required by the Act—both sides of the Burnham Committee contemplated a flat 5 per cent. increase to operate from an early date, which was to be followed by a later review of the existing Burnham scales. As the House well knows, members of the National Union of Teachers recently rejected the recommendation of their executive in favour of the 5 per cent. increase; but the preparation of this General Grant Order, the complicated calculations of the distribution formula and the statutory consultations with the local authorities' representatives—with the associations of local authorities—and with the London County Council, had all been completed.
The Government then had to consider what was the right course. The delay which would have ensued if we had at that point reviewed the Order and under-taken fresh consultation with the local authority associations, as we should have had to do under the Act, would have created great difficulty for Parliament, if not for the local authorities, too; because the General Grant Order has to be submitted to and approved by Parliament and it has to be in force in time for the authorities to be notified of their individual grants by the beginning of January. We all have to keep to a timetable. The local authorities must have time to draw up their own budgets and get council approval of them in time to fix their own rates for the ensuing year.
It seemed best to leave the figures in the Order unaltered and publish it without delay, but with this explanation. The figures in the Order have been arrived at on the basis of the 5 per cent. increase in teachers' salaries which was proposed, but nothing in the Order prejudices either way the further deliberations of the Burnham Committee, nor does the Order prejudice the decisions which my right hon. Friend the Minister of Education will have to make if the Burnham Committee decides to submit fresh recommendations to him.
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If teachers' salaries are increased by less than 5 per cent. over the period April, 1959 to March, 1961, compared with the present level, this will be taken into account in any future review of the grant for those years. But these matters are purely hypothetical, and I hope that the House will feel that it was wiser to proceed with the Order as it stood than to cause the delay involved in fresh consultations with local authority associations, to make sure that the House had time to consider the matter and approve the Order before we rose for the Christmas Recess.
Subject to that explanation, the Order takes full account of pay increases which have come into effect since the estimates were prepared or which can be foreseen. But nothing is included in the Order for possible further increases in the price level of goods and services, or for any other unforeseeable increases. That means that the increases in the grant total are, in the main, genuine increases for development of the services.
The House already knows the strong and fearless Measures which the Government have taken to squeeze inflation out of the economic system. We intend to keep this dragon of inflation underfoot. If there are other pay increases which cannot at present be foreseen, or increases in the prices of materials and services, local authorities will not necessarily be left to bear them unaided; there is machinery in the Act for an amending Order if there is an unforeseen increase in the level of prices, costs or remuneration, and if its effect on the cost of providing services is of such magnitude that it ought not to fall entirely upon local authorities.
In circumstances like those the position would have to be reviewed. We should then take into account what I mentioned earlier—the outcome of the pay increase for teachers. We should also have to consider what savings had been secured mean-while by the development of new techniques and greater efficiency. The whole position is clearly laid down in Section 2 of the Act.
Referring again to the Report which I presented to the House along with the Order, paragraphs 17 to 31 contain an impressive list of coming developments which have been taken into consideration by the Government on mental

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illness and mental deficiency. For example, the recommendations of the Royal Commission will call for a considerable expansion of the mental health services provided by local authorities. It is envisaged in the Order that in each of the next two years development of these services will proceed at two-and-a-half times the present rate.
Mr. A. Blenkinsop: Instead of using percentages, would it not be rather more helpful to give the actual figures of increase, showing what they are rising from and what they are rising to?
Mr. Brooke: I was anxious not to prolong my speech overmuch. I was solely inviting the attention of the House to those passages in the Report where the essential facts are summarised. Needless to say, further information can be obtained from my right hon. and hon. Friends, but the essential facts are clear.
Our estimates also provide for continual expansion and improvement of other local health services than the mental health service. They provide for more and better welfare centres, more district nurses, health visitors and home helps, and midwives. Developments are also planned for in the local welfare services, not only for the old and infirm, but also for the handicapped, on whose needs the Piercy Committee reported.
I now turn to education, because that accounts for about 85 per cent. of the estimated expenditure on all general grant services for the two-year period. With only the slightest modifications, the Government have accepted the forecasts of local education authorities for the whole of this expenditure, which shows an increase over the probable level of expenditure during the current year of over £50 million in 1959–60 and £82 million in 1960–61.
Last week my right hon. Friend the Minister of Education published a White Paper, "Secondary Education: A New Drive", which has been acclaimed far and wide throughout England and Wales. It is in the field of capital investment that these new plans of my right hon. Friend will call for an expansion of programmes already laid down. In the matter of expenditure, they will make themselves felt by some increase in loan charges in the latter part of this two-year
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general grant period. The estimates of expenditure we have adopted and the general grant that we have fixed are fully adequate to provide for their implementation. My hon. Friend the Parliamentary Secretary to the Ministry of Education is here and will be ready to explain the position more fully if it is desired.
The Government knew that the new plan comprised in the White Paper was coming, and took it into account. Not only have we provided for development of the services in the Act; in this Order, made under the Act, we have given positive and vivid proof of what we mean.
The Order also contains the formula for the distribution of the total general grant among all the different local authorities. It will be remembered that the White Paper of July, 1957, gave an illustration of the way in which the formula might be drawn up.
Mr. Mitchison: The right hon. Gentleman is the Minister who is responsible for fixing the amounts. How much did he allow for the additional loan charges in respect of the White Paper which has just appeared?
Mr. Brooke: Either my hon. Friend the Parliamentary Secretary to the Ministry of Education or my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government will be very happy to deal with that matter when he speaks, but I think that it is wiser for me to make my speech in my own way, since there is a great deal of ground to cover. After that, hon. Members who have questions to ask will ask them, and they will be fully answered.
I now want to complete my exposition of the grant Order, which I must do by referring also to the formula arrangements. The formula in the 1957 White Paper obviously would not do now, because the formula now has to distribute totals more than £100 million greater than the total assumed, for illustration purposes, in the White Paper. The earlier 1957 formula met with a fair level of acceptance, but in the course of later discussion and debate some useful suggestions and criticisms of it were made, and we have tried to meet them where we thought they were well-founded.

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The Order therefore embodies a number of changes which the Government believe to be improvements on the original. These changes have been fully accepted by the representatives of the local authority associations, which confirms my view that they are improvements. The effect of the changes is not very great; the formula still follows the original lines of the earlier illustration. All this is explained—lucidly, I hope— in paragraphs 32 to 35 of the Report.
I ought to add that, with the help of the local authorities' expert advisers, tests were made to see the overall effects of the whole of the changes put together. An individual change in the formula might well be an improvement and yet, when a number of different changes—all singly thought to be improvements—were aggregated it might have been that the resultant total of changes produced a less satisfactory result.
The tests which we were able to make with the help of the experts established that the general effect of the formula changes that are now incorporated in the Order, far from worsening the actual distribution to local authorities, was to help those authorities which did less well under the 1957 formula used in the earlier illustrations. So, in the light of all that, the changes seemed to be sensible, both when they were judged individually and when they were tested collectively.
When the Bill was before the House I remember several hon. Members, including particularly my hon. Friends the Members for East Grinstead (Mrs. Emmett) and Crosby (Mr. Page), pointing out that, unless up-to-date figures of population were used for the grant calculations, authorities which had rapidly increasing populations might suffer. I thought that that was a valid point, and I am glad to say they will find that the Order provides that the final calculations for each year are to be based on population and other figures current for that year. Figures of population at June, 1959, and of school children at January, 1960, will be used for the final 1959–60 calculations; and so on.
One consequence of this is that the grant will have to be calculated and paid on a provisional basis in the first instance, using the latest available figures. That is
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formally provided for in separate regulations which were made on 20th November, called the General Grant (Calculation) Regulations, which do not require an affirmative Resolution of the House.
The figures of individual grants, shown in the supplement to the Report which we have published, are for this reason provisional figures, too. They will need to be revised as soon as population and other figures for 1950–60 are available.
Mr. A. E. Cooper: Will my right hon. Friend tell the House at what part of the financial year it is proposed to make any payments to local authorities?
Mr. Brooke: That has been agreed with the local authorities. I understand that it will probably be on a quarterly basis, but it has also been provided that there will be a transitional arrangement for a period of eight years from the present scheme, under which they get 90 per cent. of the estimated total during the year in question, under an escalator system which will go up from that over a period of years until they get 100 per cent. The ultimate aim is to ensure that the local authorities will get 100 per cent. of this new general grant during the year in which it is due to them.
Before I sit down I want to say a word or two about the second Statutory Instrument which we are discussing at the same time, the Grants and Rates (Transitional Adjustment) Regulations. This is a separate instrument which, unlike the General Grant (Calculation) Regulations, requires an affirmative Resolution of the House. The principles of the transitional scheme, hon. Members will recollect, were laid down by Section 15 of the Act.
Briefly, they are that authorities which are estimated to lose from the financial provisions of the Act are transitionally to receive contributions from authorities which are estimated to gain, and the contributions are to be proportionate to the gains. Gains and losses are to be calculated by estimating what the effect of the financial provisions of the Act would have been on the financies of rating authorities if the Act had been in force in 1957–58. One hundred per cent. of the losses are to be made good in the first years, 1959–60, and 90 per cent. of the losses in 1960–61. Of course, fresh regulations will be needed after that.

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These transitional Regulations, therefore, are concerned only with the rather technical details of the method of estimating gains and losses, and with the provision for making adjustments where rating areas are affected by any boundary changes. I can assure the House that all these technical details have been discussed fully with the local authority representatives and have been agreed with them. For myself, I am not aware of anything in these transitional Regulations to which I ought to invite the attention of the House, but my hon. Friend will be very pleased to answer any questions.
The main question before the House today is the rightness or wrongness of this General Grant Order. The partnership between central and local government is now put on a new financial footing. It is a basis which, I am sure, will strengthen the responsibility and the independence of local authorities. We have had very frank and friendly discussions with the representatives of the authorities in framing this Order and I think that that is a good augury for the success of the new partnership.
The representatives of the County Councils' Association, of the Association of Municipal Corporations, and of the London County Council have said to me that they welcomed the attitude of the Government Departments in the statutory consultations that went on, in the use of the local authorities' estimates, and in our readiness to disclose all relevant information for discussion across the table. Although, naturally, they had certain reservations, they said to me that in reporting to their respective bodies the discussions on this first general grant they proposed to tell them that within the context of the Act the result, taken as a whole, was one which they regarded as fair and reasonable.
I am content to rest on that as a tribute to the Government's honesty of purpose and of performance, and I commend the Order to the House.
4.18 p.m.
Mr. Michael Stewart: As the Minister reminded us, this is the first General Grant Order that the House has had to discuss. It represents a new departure in Parliamentary procedure and, among other things, it takes the place of such discussions as might otherwise have occurred in the House on the
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Estimates of the Ministry of Education. It is encouraging, therefore, to see that Ministry represented in the debate, if only in a subordinate capacity, for its rôle under this now arrangement must inevitably be that of second fiddle to the right hon. Gentleman the Ministry of Housing and Local Government.
I shall have occasion to refer to the education service fairly frequently in what I have to say, for it is agreed that the education service is the one mainly affected by this General Grant Order and by the whole procedure of block grant. But if it is the one mainly affected, it is by no means the one only affected, and if my hon. Friend the Member for New-castle-upon-Tyne, East (Mr. Blenkinsop) is able to catch your eye, Mr. Speaker, I know that he will wish to say something about the local health and welfare services. Also, there are many others of my hon. Friends who will wish to draw attention to many of the services, education and the rest, affected by this Order.
The Minister gave himself a glowing testimonial to his work and told us that what we had to consider was the rightness or wrongness of this General Grant Order. If I may correct him, that is a slightly misleading account of the proceedings. We are not at the moment discussing the principle of whether local finance ought to be run on a block grant or a percentage grant basis. If we were, I can assure the Minister that there would be a very great deal that would be said on this side of the House and we should have no reason to withdraw or modify any of the criticisms which we made when the Bill was under discussion.
Strictly speaking,—as it was put by the rather modified testimonial which the Minister quoted from one of the local authorities—we are discussing in the context of the Act a particular amount designated in this Order. But, even so, before we subscribe to the view that we can accept with any enthusiasm the amount mentioned in that Order, we have to notice, to a limited extent, the way in which the principle of block grant affects our judgment of this absolute amount.
In the first place, we have here an amount of grant based on an assumption that the local authorities will spend certain moneys on certain services. But it is of the nature of the case that this House has no certainty that the money will be

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spent on those services, and that is the more likely to be so if, between the time when the grant was assessed and the time when the local authorities have to face the situation in the coming year, certain other expenditures have been added to those which they must meet out of the rates.
First, there is legislation to be considered, such as the House Purchase and Housing Bill, which will require local authorities to make a considerable number of grants. Those grants will attract Exchequer grant outside the purview of this Order. But it will not be 100 per cent. grant. The making of those grants will involve a rate-borne expenditure, and if we try to find out how much and consult the financial memorandum of the Bill concerned we find merely the airy phrase that no estimate can be attempted. What will happen if that expenditure proves to be very considerable? The local authorities will have to meet an expenditure which was not at all in their view when they were drafting their estimates for expenditure for these services, on the basis of which this grant was made. There is nothing, in the nature of the Order, to prevent them, when they are faced with that situation, deciding that the simplest way of meeting their difficulty is to cut down on some of the services to which this general grant is supposed to relate.
That is one of the things that we have to bear in mind, and it is an inescapable criticism of any General Grant Order whatever the amount it may actually contain. Then we have to bear in mind, also, that prices and costs may vary during the two years of the General Grant Order, and we are told in this Order that nothing is included for such possible increases; if they occur the local authorities have to do their best to meet them by making economies. But already, when they drew up their original estimates for the making of the Order, they were asked to be most careful, so there cannot be very much margin for them there.
Perhaps we shall be told that the Government know of their certain knowledge that there will be no increase in costs and prices during the next two years. I can only say that previous recent experience is not encouraging on that point. Let us take a recent two-year period, from January, 1956, to January, 1958. During
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that time the index figure of retail prices rose by 8 per cent. By June, 1958—two and a half years from January, 1956—there had been a rise of 10 per cent., and the halt in that process since then has been secured only in connection with policies which have meant stagnation and rising unemployment.
Are the Government to continue to apply that kind of remedy to rising prices? If not, what guarantee is there that prices and costs will not rise in the two years which this Order has to run in the way they did in the two years from January, 1956, to January, 1958? Also, if such an increase occurs, how is it to be met? Is a rise in costs of 8 or 10 per cent. to be met by marginal economies made on estimates that have already been most carefully considered? That is another point that we have to bear in mind on any general grant Order irrespective of the amount which it contains.
In addition, we are told that some provision has been made for increased remuneration. If I followed the Minister aright, the estimates by the local authorities of what they would want were made on the assumption that teachers' salaries would go up by 5 per cent.
Mr. H. Brooke: No. When the local authorities made their estimates they had no knowledge of that, but subsequently the two sides of the Burnham Committee agreed to recommend a 5 per cent. increase and the Government added in the requisite amount before arriving at the final figures which they put before the local authorities.
Mr. Stewart: I understand that. I find it rather alarming. I hope that the Minister will correct me if my interpretation of this rather important point is wrong.
The local authorities first put in an estimate which assumes expenditure of £697 million. That had allowed for all the matters described in paragraphs 7 to 12. At the end of the day the Government ended by estimating expenditure at £707 million. There had been an increase over what the authorities estimated of £10 million. The Minister now tells us apparently that included in that £10 million is a 5 per cent. increase on the salary bill of teachers. A 5 per cent. increase on the salary hill of teachers is more than £10 million. It is probably about £12 million.

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I understood the Minister to say just now that the 5 per cent. increase in teachers' salaries was not included in the authorities' estimate of £697 million. It must, therefore, be tucked in between the £697 million and the final £707 million which the Government have agreed. I do not follow how one tucks a 5 per cent. increase in teachers' salaries into only £10 million. If I am wrong about this, perhaps the Minister will explain it.
This is more than a little disquieting. It means that the Minister has not been quite so generous as some of his remarks might have led the House to suppose. The only persons who can answer effectively, for they know what the facts are, are the Minister or, in view of the Minister's reaction to questions, possibly the Parliamentary Secretary. Let us be quite clear about this. According to what the Minister has told us, the increase in teachers' salaries is tucked in between the £697 million and the £707 million, and it is difficult to see how one tucks a 5 per cent. salary increase for teachers into £10 million.
Even apart from that, what is now the position of the local authorities? There is a deadlock in the salary negotiations. The teachers are not at present getting the 5 per cent. more. In what position have the local authorities now been placed? They are given a considerable temptation to go on being obstinate. The longer the deadlock persists the more they are in a position of having received a general grant on the assumption that the salaries would go up by 5 per cent. and not having to pay that 5 per cent. increase. If, on the other hand, their solution to the deadlock is to make a better offer than 5 per cent., they do it knowing that the whole of the extra increase will have to come out of the pockets of the ratepayers.
This bears out one of the general criticisms of principle which we have made of the block grant—that it repeatedly places local authorities which want to be generous in a more difficult position than local authorities which want to be mean. I cannot believe that the Ministry of Education is altogether happy at this juncture, when so much of its White Paper proposals depends upon getting enough teachers, and when local authorities are being placed in a position in
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which there is a positive financial temptation to behave in an ungenerous manner towards the teaching profession. These are certain general criticisms of principle that would, I think, apply in the case of any general grant. They are connected with the very nature of the block grant itself.
Now I wish to turn to the actual amendment, and the very interesting, and I agree lucid, explanation of bow it was arrived at, which the Minister gave us. I understand that the first step in the procedure was to ask the local authorities—and how generous it sounds—what, in fact, they felt they would need next year and the year after. That request was made to them by Circular 34 of the Ministry of Housing and Local Government, issued on the 29th May this year. Various matters of detail were referred to, and it was pointed out that they must make an estimate of the development of the services in the two years concerned.
We are told that the information which the Departments—that is, the central Government—needed on this matter was the councils' "sober estimate of what they will achieve." I wonder a little at the choice of adjective. Does the Minister feel that the affairs of town and county halls are usually conducted in an atmosphere of drunken frenzy? However, the councillors, aldermen and municipal treasurers removed the vine leaves from their hair and gat down to making the estimates. When they made the estimates—and I shall comment in a moment on the general Governmental and financial climate in which they had to make them—certain very small modifications, we are told, were made in paragraph 7. I think it is agreed that there is nothing very much to argue about one way or the other in the modifications in paragraph 7.
Then the Government made allowances for some of the results of their own legislation, took an optimistic view of the future of the price levels, allowed for the expenditure on welfare of the handicapped—because that was the cheapest way they could find of complying with the recommendations of the Piercey Committee—and, finally, decided that the local authorities should not get more than one-third of the benefits from rerating, and so arrived at a total figure.

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That, broadly, has been the procedure, and it is the first step which, overwhelmingly, determines the amount—the "sober estimate" by the councils of the development of their services in the next two years; but what was the atmosphere during those summer months of 1958 when they were making their estimates?
The circular went out on 29th May, and it was suggested that they had better get the estimates done before July, when they went into recess, and, in any case, their answers must be in by 15th August. In assessing what their services were likely to be and what the costs were likely to be, at that time, so far as education was concerned, they were still governed by that gloomy document, Circular 331, issued on 30th October, 1957. We have just been told in a recent circular that by stages Circular 331 is to disappear; but at this time, when the authorities were making their "sober estimates", their considerations were still governed by Circular 331, which was concerned with capital expenditure.
What we want to notice about capital expenditure is that, if an authority's capital expenditure is restricted, that restricts the scale on which its services will be continued during the next few years. If an authority cannot start a new school next year, expenditure on maintenance will not be in existence in the coming years. When the Government asked them in October, 1957, to restrict their capital expenditure, that meant that it would restrict their ordinary revenue expenditure in the coming years, and it was in the atmosphere that they had to make the "sober estimate" of what the development on their services would be.
What were the things on which they were to restrict their capital expenditure? They sound oddly like the recent educational White Paper in reverse. They were rural reorganisation, special schools, school clinics, school meals, physical training and recreation, and, in general, almost anything that the Ministry could think of at the moment. When the local authorities were doing that, in January, 1958, came Circular 334, telling them directly to restrict their ordinary current expenditure out of revenue. They were to do that, for examule, on awards to students, the furniture and equipment of schools, and, one of the paragraphs of
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the circular said, in effect, that they were to see whether there was anywhere else where they could do it, and, if so, to do it.
The Government's position, then, is this. They tell the authorities at the turn of the year that they are to cut down their capital projects and their revenue expenditure this way, that way and the other way. By so doing, they conditioned the authorities' whole idea about the development which they would be allowed to make in the next two years. When they have got them into that state they then ask them for their "sober estimate" of what they think their services will be, and, on the basis of that "sober estimate", proceed to give them a general grant. Having done that, they tell them that their services are to be developed in the most magnificent manner between now and the next General Election.
I have referred to the education circulars, but, as the House will know, at the same time, comparable circulars were going out from the Ministry of Housing and Local Government, affecting almost every kind of local government expenditure, some of which is outside the purview of this Order, but some of which lies very much within it. So I say, first, that on this suggestion that the authorities were given what they wanted, their answer was very largely conditioned by the Government's own actions. Secondly, even if that had not been so, there is a bigger question of public policy involved here, and it is that the real judgment on what the community needs to spend on education, on local health services, welfare and many other things, cannot be adequately pronounced by adding up the estimates of the local authorities.
The question of what kind of educational service this country ought to have is ultimately a national question, and the responsibility for answering that question was very plainly put by Section 1 of the Education Act on the Minister of Education himself. What has been happening in the last few years, and is still happening, is that in response to the inevitable needs of a modern State, the country has been developing its educational expenditure, its health expenditure and its social expenditure in many directions. However, while it has been doing

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that, it has been facing one difficulty—that an excessive proportion of that expenditure has been placed on local authorities whose means of collecting revenue have been far too narrow for the task imposed on them.
I have said in education debates before that we are in danger of reaching a situation in which the nation as a whole, measured by its capacity to produce wealth, can afford a considerable educational advance, but, owing to the peculiarities of local finance, chairmen of local finance committees are compelled to say that they cannot afford the advance—and in that context to say it with truth.
There has been one possible remedy for that, to consider whether other sources of revenue could be found for local authorities. Everyone who studies these matters must have been heartened to read the words:
"Methods of raising local revenue … must then be overhauled "
Those words come from the Conservative Party election manifesto of 1951. Since then, those methods have not been so much overhauled as overlooked.
The situation has been such that the structure of local government finance has not been capable of bearing the burden which the needs of the community have been imposing upon it. When the Minister keeps on telling us how much money he has given in his General Grant Order, we should remember how much of the improvement in the social services will have to come out of rates, as is shown by the figures at the bottom of page 5 of the Report on the General Grant Order.
It is because of that situation that over recent years, to solve the problem of the difficulties of local finance, we have been so arranging our affairs that progressively the proportion of the cost of the services borne by the Government has been rising. That fact, too, is brought out in the figures at the bottom of page 5—rising from 55·6 per cent. in 1954–55, through 55·8 per cent, 56·1 per cent., 56·2 per cent., 56·4 per cent. and 56·5 per cent. The achievement of the Minister is that he has brought to a stop that gradual rise in the proportion of social service expenditure borne by the Exchequer.
The right hon. Gentleman comments with pride on the fact that the percentage of that social expenditure borne by the
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Exchequer in 1959–60 is higher than it was for 1958–59. However, as I have been pointing out, that was an inevitable development if the country wanted the education service it needed. The Government had either completely to revise local finance, or accept the fact that a bigger and bigger proportion of such expenditure had to be paid by the Exchequer.
The rise was an inevitable development. What the Minister has done is to make a smaller rise for the first year than has been the case in previous years and to bring the process of growth to a stop in the second year to which the Order refers. There is not so much in that percentage figure which is favourable to the Minister as he supposed.
I want to mention another matter connected with the future development of education. Neither the Report on the Order nor the Minister has been clear on this matter. The local authorities were asked to make estimates, and then certain adjustments were made—some up and some down—in the end resulting in a figure of £10 million higher than that at the beginning, that figure determining the volume of the grant. That comes after we are told, in paragraph 17, that the provision made in the general grant takes full account of the need for further development of the services.
To carry that further, we are told, in page 9, paragraph 32 of the White Paper, "Secondary Education for All: A New Drive", that
"In fixing the grant for the first general grant period the Government have taken account of the policies proposed in this White Paper".
At what stage did the Government take account of those policies? When they made their "sober estimates" between May and July, 1958, did the local authorities know of the provisions of the Government's White Paper? Did they enjoy that private view of the Government's financial intentions which, up to now, we have always supposed to be the prerogative of the Conservative Central Office?
We ought to know these things, and the question I am asking is plain. When the local authorities made their estimates, which made a total of £697 million, did they know of what the Government have since made public in the White Paper on education? If they did, this is a rather curious way of proceeding.

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One would have thought that if the Government's intention had been as firm as that a White Paper could have been laid before the House at that time. I find it a little difficult to believe that the local authority estimates of what would be needed, estimates which were made in the middle of the summer, could have been made in the light of a White Paper published early in December.
I have no doubt that we shall be told that as soon as the local authorities put in their estimates the Government made allowance for the new developments foreshadowed in the White Paper. In that case, we are entitled to ask for how much the White Paper is responsible. If the White Paper on secondary education had not been issued, by how much would the general grant have been decreased in the two years for which it is to run? By how much would the £600 million and the £632 million for education have been reduced if there had not been a White Paper on secondary education? That will give us some estimate of how seriously the Minister of Education's White Paper ought to be taken.
There is one possible comment which the Government may make on that. It is that the White Paper on secondary education is concerned with developments which will occur in the future and that inevitably not very much of such expenditure can fall within the first years of the operation of the Order. However, that is not satisfactory. Let us take as an example the matter of teachers' supply. Reverting to the Government's statement that they are examining developments in education, in paragraph 20 of the Report they say:
"It has been assumed that net recruitment of teachers during each of the two years will fall within the limits suggested by the National Advisory Council. …"
If that is so, it is rather depressing. It is true that the Government have just taken measures to increase the size of teachers' training colleges—after having been implored for four years by hon. Members on this side of the House to do so. We admit that those measures will not produce more teachers for some time beyond the period covered by the Order. Are we to understand that no other measures are to be taken which would be more immediate in their effect to increase the supply of teachers? Is it not
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to be part of the attempt to implement the White Paper on secondary education to persuade, urge and cajole local authorities into doing everything they can to employ every suitable part-time teacher on whom they can lay hands?
Since there is a bottleneck in the training colleges, is nothing to be done to get more people into teaching direct from universities? Those are the things which could be done to produce an immediate effect, but if an immediate effect is produced, the cost ought to be allowed for in the General Grant Order. However, it is clear from paragraph 20 of the Report that no such allowance is made. The Government must agree that we have some reason for concern on this topic.
There is one other general consideration which we have to bear in mind when assessing the value of the Order. It is that by the time the two years to which the Order refers are over, a General Election will have come and gone. This is the pre-election General Grant Order, and that is one reason, of course, why none of us during the debates on the Bill ever doubted that the Minister would make a brave showing in the first Order that he produced.
Mr. Graham Page: The hon. Gentleman should look back at his own words.
Mr. Stewart: I will quite happily do so. We are quite aware of the way in which the Government proceed, and if the hon. Gentleman will listen for a bit he will see what I mean.
The point I am making is that we now have an Order which is the last one before a General Election, and, therefore, we cannot take it as any assessment of how the Government are going permanently to use the powers to make general grants. We are entitled to be suspicious when we compare the Government's pre-election and post-election behaviour in certain other fields.
I will not labour now, for example, the contrast between the spring and autumn Budgets of 1955, but I think it pertinent to point out that in December, 1954, a few months before the last General Election, we had Circular 283 coming out of the Ministry of Education. That circular told local authorities to go ahead with rural reorganisation, with physical training and recreation, with the

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provision of school meals, and, in fact, with most of the things on which the subsequent circular told them they had better slow down.
That circular was issued a few months before the 1955 election. Less than a year after that election, on 17th February, 1956, the local authorities were told with regard to all educational building projects that there must be a control of starts, a postponement. Later in 1957 and early in 1958 there followed Circulars 331 and 334. to which I have previously referred.
If we turn to housing, we find that just before the General Election of 1955 local authorities enjoyed an Exchequer subsidy of £22 1s. on every dwelling which they built. By November, a few months after the election, that subsidy had been cut in half, and by the next year it had gone. During that same period, due to interest charges. the cost of building an average house had gone up by nearly 50 per cent.
The present Prime Minister, who at the time was Minister of Defence, said proudly in December, 1954, just before the election:
"We have built in this year"—
that is, 1954—
"350,000 houses. I prophesy that that figure will continue."
In the next year the figure had fallen to 317,000 and in the two subsequent years to 300,000 and, apparently, by the end of this year it will have fallen to 280,000.
Mr. Page: It never got down to the hon. Gentleman's figure of 200,000, did it?
Mr. Stewart: I suggest to the hon. Gentleman that he should acquaint himself with the political history of the years 1939-1951. He will be aware that there was a war going on at the time.
Mr. Page: I am sure that the hon. Gentleman would not like it to go on record that there was a war going on between 1939 and 1951. At any rate, we have heard that story so many times.
Mr. Stewart: The reason why the hon. Gentleman has to hear it so often is that he does not understand it when told the first time.
Mr. Page: It does not impress me.
Mr. Stewart: There is no sort of comparison between what can be done in the field of housing thirteen years after a great war and what can be done four or five years after a great war. That is a very elementary point.
What we are now discussing is something even more grave. We are discussing the infallibility of the Prime Minister, and that, of course, is a matter of grave concern to all right-minded people. The right hon. Gentleman's prophecy was that 350,000 houses would continue to be built, The figure is now 280,000. Almost from the moment that the right hon. Gentleman made the prophecy up to now the figure has gone down. But the prophecy was made a few months before a General Election, and that, perhaps, accounts for it having been made.
It is not unreasonable, in view of the two Budgets of 1955 and the records of the education policy and the housing policy immediately before and after elections, that we should look at the first General Grant Order, which is a pre-election grant order, with a certain degree of reserve. We note the claims which the Government make about the amount involved in this Order, but we remember their past conduct shortly before elections. We observe that, when all is said and done, a growing rate burden is being placed upon the local authorities. There is still no solution of the fact that if our social services and our education are to develop properly a greater proportion of their cost must be borne by the central Government.
It is difficult to relate the amount in the General Grant Order, and what is said about the way that it is calculated, to the rather vague and general pro-phecies of advance to be made in education and in other fields. It is, therefore, with a great deal of reserve that we have listened to the case which the right hon. Gentleman has attempted to make today.
4.56 p.m.
Mr. Nigel Nicolson: In spite of all his energy and ingenuity the hon. Member for Fulham (Mr. M. Stewart) has found it difficult to conceal the embarrassment of the Opposition over the disparity between their past claims and the reality which they see before them in this Order. I, like many of my hon.

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Friends, heard day after day in Standing Committee prophecies made by hon. Members opposite that the General Grant Order when it came to be laid before the House would prove beyond doubt that the object of the Conservative Government, and of my right hon. Friend in particular, was to transfer the major burden from the taxpayer to the local ratepayer.
Hon. Members opposite went on to deduce from this supposition—it was no more than that—that the local government services, and education in particular, would suffer greatly in consequence. They prophesied that the local councils would have to choose thereafter between cutting down their local services and immeasurably increasing the rates. All these prophecies have been shown to be utterly without foundation.
A great deal more money in total is being made available by the Exchequer to local authorities. The percentages of expenditure which are to be rate-borne and Exchequer-borne are, if anything, to the benefit of the local ratepayer. In every individual service my right hon. Friend has been able to show that the local government service will be improved and not harmed by these alterations.
I will go further than this. It became increasingly plain to me during the long passage of the Bill through Parliament that my right hon. Friend the Minister was being particularly fair in redistributing what there was to give to the local authorities as between the traditionally Conservative local authorities and the traditionally Labour local authorities. If we were to compare those two groups we should find that, on balance, it is the constituencies and authorities represented by Labour councils and Labour Members of Parliament which stand to benefit most. Why, otherwise, are the benches opposite so empty? Why has not every single local authority which felt itself aggrieved been in touch with its local Member of Parliament over the weekend and insisted upon his attendance here this afternoon?
There are very few Bills which come before Parliament which directly affect every single constituency in the country. This is one of them.
Mr. E. C. Redhead: Is the hon. Gentleman aware that
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the generality of municipal authorities, certainly the municipal treasurers, were unaware of the fact up to three days ago that this matter was to be considered by the House today and that until very late in the week it proved exceptionally difficult for them to obtain copies of the Order?
Mr. Nicolson: The hon. Member's authority must be as alive to what is going on as has been my own local authority, and so would the hon. Member have been. I obtained a copy of the General Grant Order within an hour of its being available in the Vote Office. I am sure that the hon. Member did the same. I immediately got in touch with my local authority. We had discussions on it over the weekend and I have come here this afternoon to give my authority's views upon it. Why could not every hon. Member have done the same? Even if hon. Members had been too lazy, surely their local authorities would have taken the trouble to find out how the Order affected them?
The hon. Member for Walthamstow, West (Mr. Redhead) may not know that I was one of those few Members on this side who strongly objected to certain details of the original general grant formula. In fact, I carried my objection so far as to divide the Standing Committee on the point against my own party. Later, on Third Reading in the House, my right hon. Friend the Member for Blackpool, North (Sir T. Low) and about fifteen other Members, all Conservatives, representing mainly seaside resorts, went into the Lobby against my right hon. Friend the Minister.
I wish to thank my right hon. Friend the Minister for having retrospectively met our point of view. He has changed the weighting in the formula so as to improve the share of the Exchequer grant which will go to local authorities like my own. The change was not an insignificant one. My right hon. Friend reduced the rate product deduction from one shilling to ninepence; and, secondly, he so altered the method of arriving at the supplementary grant for education that no authority in the country is now excluded from this supplementary grant.
That means a very great deal indeed to us in terms of money. In the case of my own authority, the latter provision means £37,000, and in the case of Black-pool, £152,000, over and above what it

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was suggested we should receive in the first two hypothetical illustrations. In fact, goods have been delivered which are infinitely better than the samples.
We were led up to the stage which we have now reached by two separate hypotheses. The first was given in an annexe to the 1957 White Paper, and during the passage of the Bill through Committee another hypothetical illustration was published. Neither of those examples gave us any idea of the extent to which, either individually or collectively, our local authorities would benefit. It is a remark-able virtue of my right hon. Friend that he concealed his best goods and kept them out of the shop window at the moment when he needed to display them most.
The General Grant Order is an excellent one. It benefits us all and it benefits the constituencies of hon. Members opposite even more than it benefits the areas of hon. Members on this side. I hope that if ever a Labour Minister of Housing and Local Government has to lay a similar Order before the House, he will give such a weighting to the variable parts of the formula that it will benefit all authorities equally, irrespective of party, in exactly the same way as my right hon. Friend.
I have two questions to put to my hon. Friend the Parliamentary Secretary. The first deals with the transitional scheme. In his opening speech, my right hon. Friend the Minister said that the Statutory Instrument was extremely complicated. It certainly is far too complicated for me to follow precisely. Am I correct in assuming that the figures published in the Supplement concerning the General Grant Order will not be varied downwards when the transitional scheme is put into practice? In other words, it will be possible, I understand, for an authority which eventually is to be a gaining authority not to gain quite so much in the first and second years. Is it possible, however, for an authority like my own, which will probably be a slight loser on balance, to receive in cash less than the figures that are mentioned in the Supplement relating to the Order?
My second question is rather more fundamental. My right hon. Friend the Minister made considerable reference to paragraph 7 of his Report, "Local Government Finance", in which it is stated that
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the Government arrived at their total figure for the general grant by asking local authorities to submit their estimates. Paragraph 7 states that
"The Government have accepted the figures returned, subject to certain modifications which represent only a very small proportion of the total."
In his speech, my right hon. Friend told us that that proportion was less than one-half of one per cent.
My question is this. The total is built up in that way, but the sum so arrived at is then re-divided according to a formula which does not have so precise a relationship to the needs of the particular authority. Each authority states that it requires a certain amount for education, for provision for the old people, for health and fire services, and so on, and presumably each authority has put in those figures to the nearest £10 or £100. Those figures are then accepted after a certain amount of analysis, but the money which a local authority actually receives need not bear much relation to the detailed demands which it has submitted. The total sum is re-divided according to a national formula, whereas the total sum to be divided is arrived at by adding together the detailed requirements of each authority separately.
If I have that aright, there seems to me to be a slight change of focus halfway through the process. It could so happen that, because of the operation of the formula, an authority might receive less than it required and much less than the Minister had agreed that it needed. This is a fundamental point which I do not remember having been brought up while the Bill was passing through Parliament. I certainly would like to know from my hon. Friend the Parliamentary Secretary whether my assumption is correct.
Before I sit down, I wish to repeat my congratulations to the Government upon the Order and to convey my special thanks to my right hon. Friend the Minister for amending the formula to meet the points which I and other hon. Members put to him.
5.9 p.m.
Mr. George Thomas: The hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) made a speech which was not in harmony with his usual attitude to questions discussed in this House. It is not normally given

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to the hon. Member to be quite so fulsome to Ministers, and I have no doubt that his constituents will be well pleased with what he has done this afternoon.
The Minister made a speech in which he created, or tried to create, a general atmosphere that now all is well with the local authorities; that they are well pleased; that they are taking off their coats and getting down to work, and that the main battle of the block grant may be regarded as a matter of history. No doubt the right hon. Gentleman will have read the Schoolmaster—if he is as enlighthened as some people believe him to be he will have done so—and so he will know that, after the publication of this White Paper, the Schoolmaster published a leading article entitled "Smoke Screen". I believe that the view of the National Union of Teachers, of which hon. Members know that I am a member, will be the view of educationists throughout the country. A note of scepticism and alarm has been sounded. The Minister has based the amount of the grant on present levels of prices, costs and remuneration. As my hon. Friend the Member for Fulham (Mr. M. Stewart) reminded the House in his masterly speech, nothing is allowed for further increases in the cost of educational material.
Surely the Minister knows that for a long time we have enjoyed low import costs and this has helped to keep other prices stable. Commodity prices in the world markets have been running at a low level during the past two or three years. Now the indications are that they will rise and, inevitably, we are bound to feel the effect of higher prices here at home. The benefit of the fall in commodity prices has been withheld from the British people, but I have not the slightest doubt that increases in commodity prices will be passed on. Therefore, there is at once cause for alarm.
Local authorities are told that they will have to meet any increase in the cost of the education service by making economies. In what are they to economise? My hon. Friend the Member for Fulham suggested that the local authorities have already made serious economies in the education service. For the past seven years there has been an atmosphere of economy. Education has been on the defensive since 1951, as the Minister well
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knows. We started with an appeal from the right hon. Lady the Member for Moss Side (Dame Florence Horsbrugh) when she was Minister of Education. She asked us to reduce estimates by 5 per cent. The President of the Board of Trade, when he was Minister of Education, also created an atmosphere of depression, and it was only just before the General Election that he relieved it. Immediately after the election the teaching profession once again found itself fighting for the elementary necessities in education.
The Minister is quite right in saying that the percentage found by the Exchequer and the percentage found by the rates will be largely unchanged, but this leaves a tremendous burden on local authorities which the right hon. Gentleman ought to be relieving. I believe that education cannot survive as an efficient service on the present formula. It is no use expecting local authorities to be able to raise 50 per cent. and more of all the requirements of the service out of the rates. That is quite beyond local resources. The emphasis should be shifted. We should get a greater percentage from the Government.
I was intrigued by the question addressed by my hon. Friend to the Minister about the amount of £10 million. The Minister said that there would be £10 million more grant than would have been the case had no Act been passed. He also told us that account had been taken of the new plan announced by the Government for an expansion of the education service, and that the 5 per cent. increase in teachers' salaries was also included in the Estimates. Surely the Minister knows that a £12 million increase was estimated for teachers—that was the amount they refused. The arithmetic must be wrong somewhere, and I hope that before the end of the debate either the Minister or myself may be enlightened about where the other £2 million has gone.
Suppose that in the Burnham Committee there is an agreement between local authorities and teachers for a 10 per cent. increase—or rather, suppose there is another meeting of the Burnham Committee. Will the local authorities take part in that meeting not knowing whether they will get a grant on the amount of any increase on which they may come to terms? Will those negotiating for the

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local authorities wonder whether, if they agree to a 10 per cent. increase in teachers' salaries, they will get only a 7 per cent. increase in grant? This is a vital matter for the teaching profession. I hope that we shall be given a satisfactory answer, and that some information will be provided to show local authorities where they stand.
It is interesting to note that, for the first time, the major influence in deciding teachers' salaries is transferred from the Ministry of Education to the Minister of Housing and Local Government, as we forecast in the debate on the general principle of this question. In passing. may I say that the Minister of Education has been put in an almost impossible position, because the major policy of his Department regarding this grant is decided by the Minister of Housing and Local Government Earlier this year the Minister of Education slashed the estimates for school building submitted to him by local authorities. We badly need a new grammar school at Canton in the City of Cardiff— —
Mr. Robert Jenkins: Did the hon. Gentleman say "grammar school"?
Mr. Thomas: We propose to extend the grammar school service for young people, and we need expanded grammar school facilities in Cardiff, West.
The Minister has told us that we must wait, that we cannot have these extra facilities, and that the overcrowding must go on. What about the lag in fulfilling the requirements for school buildings? It makes nonsense of the Report issued parallel with the White Paper in which reference is made to £300 million extra for next four years. We could use half of that amount next year to carry on with delayed school building. I say to the Minister that his estimate for education is grievously short of what is required for art expanding service. During the next decade we shall undoubtedly have to expand enormously our education facilities in order to hold our own.
The Minister says in paragraph 20 of the Report that he has taken account of the need for additional teaching staff. We are estimating for 12,000 extra teachers every year towards the end of this block grant period. The National Advisory Council on the Training and Supply of Teachers, which seeks to influence the Minister and guide him in the
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matter of teacher recruitment, has warned him that he will need not 12,000 but 16,000 teachers. What is the aim? It is to reduce the size of classes by 1968 to what the 1944 Act said they ought to be. We cannot have an extensive service of that scope within the estimates that the Minister is now submitting.
I realise that on this issue the general principle has been decided by the House, but I warn the Minister that he is creating frustration in the teaching profession by pursuing this policy. He is building up resentment which cannot but be harmful to the educational service. I believe that these estimates will place an impossible burden upon local administration. An expanding local government service requires an altogether new formula of finance. Much more help will have to come from the Exchequer. I forecast that long before two years are over these estimates will be exhausted and that someone will have to come to the Dispatch Box with a supplementary estimate so as to help local authorities.
5.22 p.m.
Mr. Bryant Godman Irvine: I should like to follow the hon. Member for Cardiff, West (Mr. G. Thomas) in his remarks about education, but I am sure he will appreciate why I am not in a position to do so. For the same reason I shall not comment upon much of what. was said by the hon. Member for Fulham (Mr. M. Stewart). Even though it is not strictly relevant to the debate, I would remind the hon. Member that I was fighting the election in 1951 in London. I do not recall his Government then putting forward the defence which he put forward today that the war made it impossible to build more than 200,000 houses each year.
I am glad to be called this afternoon, Mr. Speaker, because I spent three days trying to catch your eye in order to say something in the debates on the Local Government Bill and the White Papers. I had no success on those occasions. When the White Papers were first published, I discussed them and the principles set out in them with representatives of all my local bodies. As a result, I had some matters to place before the Minister and to ask him to consider. I am grateful to all concerned, and particularly to the Bexhill Chamber of Commerce, for the meeting they organised to enable me to

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discuss these matters with those who were interested. As I failed to put these matters to the Minister on the Floor of this House, I tried to do so by correspondence. This did not appear to be entirely successful, so the Minister was good enough to see me and discuss the matters which were worrying my constituents.
There were people who criticised me about that time for supporting the Minister without putting to the House the points which were worrying my constituents. These people had made no approach to me and had not defined their objections to the Bill. I have again discussed with representative bodies the White Paper before us today. I am glad to tell the Minister that the difficulties have been overcome and that I am now unable to find any criticism to put before him. I therefore want to thank him for the way in which he was willing to consider the matter and for the result.
There is one other matter. I have to look at every proposal which is put forward in this House in its effect on those living on small fixed incomes. One brief advantage of these proposals is that the Chancellor of the Exchequer is able to budget accurately each year. That is also an advantage to everyone, and not least to those living on small incomes. Another advantage in the proposals is that they place the responsibility fairly and squarely upon the local authorities. It will soon become quite clear which authorities are not carrying out those responsibilities better than others. That will be an advantage to people who have to consider very carefully what they have to spend and will give them a better control over those who are spending money for them.
The way in which the hon. Member for Fulham criticised the Minister's speech means that he trusts neither the Government nor the local authorities. He did not trust the Government because he thought this was a pre-election proposal and he did not trust the local authorities because they might not spend the money on the things on which it should be spent. If we are not able to trust as many people as that there is no good future for any of us. I trust the Government and I trust the local authorities. I am glad to have the opportunity of thanking the Minister for the way he has handled this
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problem and of congratulating the Government upon the Local Government Bill.
5.27 p.m.
Dr. Horace King: My comment on what the hon. Member for Rye (Mr. Godman Irvine) has said is that I share his sympathy for the people living on small fixed incomes; but I fear that if the general grant continues through the years ahead the people who will be hit most and hardest will be those on low fixed incomes because, whereas taxes are graded according to income, rates bear inequitably on poorer people.
I have been asked by the Southampton Labour Party to protest against the Minister's action in giving the Press details of the general grant before the local authority have seen them. The Minister is usually a model of courtesy; our quarrels have always been political and not personal. I know, for instance, that the local authorities have appreciated the way in which the Minister has met them, listened to them and made concessions. I hope the Minister will agree that it is wrong that finance committee chairmen should first hear the details of the general grant through the Press or on radio. It may be that Southampton is alone in this experience, and therefore ask the Minister to look into that protest.
The Government are adept at changing both Ministers and policies. But in Housing and Local Government the Minister remains; the policy it is that changes. The Minister is now being congratulated on making a general grant large enough not to impose in the first two years any shifting of the incidence of rate and tax burdens which he advocated in his White Paper of 1957. Today's general grant reveals the Minister as Mr. Hyde pretending to be Dr. Jekyll. In 1957 the aim of the Minister's policy, as shown in paragraphs 26 and 27 of his White Paper, was ultimately to correct the disparity between rate increase and tax increase, which was grieving the Treasury so much. The House will remember how we debated this at that time.
Yet now the Tory Press is cock-a-hoop because in the first two years the Minister runs away from his own policy and praises the general grant because the percentage of the general grant is the same

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as that of the percentage grant it destroyed and because local government finance, which the Minister boldly set out to reform in 1957, is now no worse off than before he started. This afternoon the Minister modestly agreed with the Tory Press. Even if the Tory Press were right, certain comments ought to be made.
In the Third Reading debate on the Minister's otherwise excellent Local Government Bill, I congratulated those who had fought in this House and in the country against the introduction of the general grant—men like Sir Ronald Gould and Dr. Alexander and my hon. Friends so ably led by my hon. and learned Friend the Member for Kettering (Mr. Mitchison). I said in that debate:
"one of the results of the fight upstairs, and the campaign in the country … has been to step up the size of the block grant."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 290.]
The hon. Member for Bournemouth, East and Christchurch (Mr. N. Nicolson) has himself shown that his opposition in the earlier stages helped to secure some minor concessions for Bournemouth. If he and Bournemouth can be bought for £37,000 and change their minds from the attitude taken by the city fathers of Bournemouth when the block grant proposals came before them, they may well have another change of mind when they realise the total implications of the new grant. Last week the able chairman of Southampton Finance Committee was perfectly right in saying that the general grant would have been much smaller if it had not been for the very strong criticisms that were made throughout the country against the original block grant proposals. So the opposition can to some extent claim a victory today in the size of the grant we are discussing, but that is very small comfort.
After all, everybody knew that the Minister dared not cut the percentage of the grant in the first year in the face of the opposition of every educationalist in the country, in the face of the opposition of every good Tory who serves on education committees and in other forms of local government, especially as the new grant would come into operation exactly in election year, and especially as the Government have already abandoned the harmful restrictive policy they were pursuing when he first brought the block grant proposals to the House and have now started on a spending spree.
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We must remember when we look at the size of the grant that for years local authorities have been asking not for the same percentage but for more financial help. The increasing costs of local government services, especially if we and the Government mean what we and they say about education, threaten the whole structure of local government finance in the years ahead. What local authorities will need in the years ahead will not be less, not the same, but either much more financial help, or some new source of local means for raising revenue.
Let us examine the grant itself. It has been arrived at by the old percentage method. The local authorities sent in estimates, the Minister looked at them and made only minor changes, worked out a percentage in the old-fashioned way, and arrived at his general grant. There was no other way in which he could work. He has not the knowledge of the local circumstances, just as he has not the knowledge of all Ministries connected with local government services. But he has actually cut the percentage. In the last three years the percentage has advanced steadily. It was 56·1 per cent., then 56·2 per cent., this year it is 56·4 per cent., and now he cuts back the percentage for 1959 to 55·5 per cent. and for 1960 to 55·6 per cent. "But," says the Minister, "I am really giving local authorities the old percentage because I am not taking from them the £¾ million I ought to take from rerating. Ministers are entitled to £20 million out of £30 million that has come from local authorities' rerating, but I am taking only £13¼ million out of my new deficiency grant and leaving the local authorities with this extra £6¾ million."
Local authorities believe, and I also believe, that they were entitled to the whole of the benefits of the new rerating finance, not just part of it. Rerating was not an exercise to benefit the Treasury, but was introduced in the first place to put right an injustice in local rating and to provide local authorities with a new source of finance. Moreover, the rerating £6¾ million which the Minister proudly displays in his memorandum and in his speech today is not going to benefit all local authorities equally. Bournemouth will get little out of it— —
The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): The hon. Member keeps repeating the figure of £6¾

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million, but the actual amount which goes to the advantage of local authorities is £10 million.
Dr. King: I hope the Minister will understand in time what I am saying. The figure is neither that mentioned by the Parliamentary Secretary nor by myself, but £16¾. I am speaking at this stage of the £6¾ million which is at the bottom of page 5 of the White Paper, the amount of rerating money which the Minister includes to raise the percentage from 55·6 to 56·5.
Mr. Bevins: The hon. Member got it wrong. The £6¾ million is the amount by which the general grant is shaved, but it still leaves the local authorities with £10 million net.
Dr. King: I am afraid we are at cross purposes. I am being much kinder to the Minister than the Parliamentary Secretary is. If one shaves the general grant by £6¾ million one is assuming that the local authorities will get £6¾ million, but if that is not so the position is worse. I assume that the local authorities are to keep £10 million of the £20 million and the argument of the Government in not stepping up the general grant to the equivalent percentage for last year is that there is also the £6¾ million of the rerating money. It is the argument of the Government in the White Paper, and perhaps we can return to it when the Minister replies to the debate.
In any case, whether the figure is £6¾ million, £10 million or £16¾ million, of the rerating money by which the Government are cutting down the deficiency grant, neither of those sums, none of this money, is to be distributed regularly as between local authorities. All local authorities are to get the basic grant, as shown in the White Paper, of 55·6 per cent.—at least I hope so—but there may even be authorities which do not get as much as that. Many are by no means going to get the new percentage of 56·5 per cent. which the Minister proudly displays at the bottom of the table on page 5 of the White Paper. That is because some will not get any share of the proceeds of rerating and the share of the old Exchequer equalisation grant—now the new deficiency grant for others—has been savagely cut to meet the demand of the Minister for the £13¼ million, which both
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the Parliamentary Secretary and I agree he is taking.
It is no consolation to badly hit local authorities to be told that there is an overall gain to local authorities by the £10 million rerating money referred to by the Parliamentary Secretary. It is no consolation to such authorities even if this year they are offered as a temporary sop 100 per cent. compensation for the loss they are to suffer under the new proposals, and 90 per cent. compensation next year. The Minister is artful. He divides local authorities in order to reign over them. We have had a practical example of it in the erratic behaviour of Bournemouth in the various debates on the general grant. He counts on the backing of the fortunate local authorities who can see in the years ahead some gain, as against the unlucky ones who see even the temporary compensation rapidly fading away after the first two years.
Who are to be the unlucky authorities? In the main, they are those which bore for 50 years the inequitable burden which the rates system imposed on places such as Merthyr Tydvil and Stoke—a burden which my right hon. Friend the Member for Ebbw Vale (Mr. Bevan) eased in the equalisation grant. Some portion of that burden is put back on to those authorities in the new arrangement and reduced size of the deficiency grant. These are the authorities which contribute the bulk of the Ministers £13¼ million difference between the Exchequer equalisation grant and the deficiency grant. Indeed, there are also places like Bournemouth who will find, when they examine the implications, that there is exceedingly little for them and other towns with few industries out of the re-rating of industry.
My criticism of the grant is much more fundamental than anything I have said so far. First, the grant itself makes the Minister almost a dictator over local authorities. They make their estimates. His is the power to allocate to help meet the cost of their services whatever sum he likes. The sum bears no relation to the specific demand of any specific authority for a specific service. Any local authority will receive for education not a grant to meet what it thinks it ought to have for education but what the average amount over the country estimated for education

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has been, subject to the formula for distribution.
Parliament cannot amend these figures this afternoon. It cannot amend the details, it cannot alter the weighting system, it cannot alter the share-out. This is an Order; we can only accept it or reject it. Indeed, we cannot even reject it, because if we did we should be depriving the local authorities of their money. The Minister says to Parliament, "I have spoken. You must take it or leave it." This is indeed local government by the Treasury. All the great schemes of other Ministers, including the exciting new White Paper on education, have to go through this Minister's censorial control.
Local authorities are faced with new expenditure, as the Report points out, on the welfare of the handicapped and on mental health—a vast programme of which nobody yet knows the shape. It could not have been in the minds of the county and borough treasurers at the time of their estimates or in the Minister's mind when he decided the grant. It is not even shaped in the mind of Parliament yet. There are to be new extensions in local health, maternity and welfare services, new costs in planning and even new expenditure on acquiring sites.
The Government claim that they have allowed for all these factors, about some of which local authorities knew nothing when making their estimates and about which nothing was known when the general grant was fixed at 55·6 per cent. Surely it is clear that whatever increases under these headings had not been foreseen by municipal and county treasurers or even by the Treasury itself when making the estimates for the next two years, or whatever increases are imposed by the Government's new policy in the months ahead, will have to be met either by increasing the rate burden or out of the fortuitous incidence of the fractional benefit which they will get from new re-rating finance.
Mr. Raymond Gower(Barry): The hon. Member has noticed the additional power which the Minister has.
Dr. King: I will come to that. These expenses must be met by local authorities either by increasing the rates or, if they are fortunate enough to get it, out of the benefit of the incidence of re-rating—unless the Government increase the grant.
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Moreover, although the Government have increased the size of the grant, even the Government do not claim that the per centage has increased. The grant is up because the estimates are up. The ratepayers must find their share of the extra cost. They must match the Government's extra £30 million in the first year with £33·7 million of their own and the Government's £81 million over the two years with £82·9 million of their own in extra rates. Incidentally, this extra £82·9 million of rate-borne expenditure shows how comparatively small is the gain of £10 million from the re-rating of industry.
Worst of all, the grant is based on estimates which did not and could not take account of increased costs of goods and services. On this, in paragraph 9 on page 4, the Minister says:
"it is natural that public authorities will seek. as they normally do, to meet increases by economies and that they will constantly improve efficiency by the use of new techniques."
As a local government man I protest against this statement that new economies and new efficiencies can be found in local government. Local councillors and local government officers seek, and have achieved by any comparison which anyone cares to make, efficient and economical local government administration. If I have any criticism of local government at the moment it is that economies in house standards and school standards, on instructions from the Government, have been pursued too far. What the Government are saying in that paragraph to local authorities is that if prices rise, services must be cut or rates must carry the extra burden.
Coming to the point made by the hon. Member for Barry (Mr. Gower), it is true there is a saving Clause in the parent Act—Section 2 (4). This reads:
"If it appears to the Minister that during any grant period any unforseen increase has taken place in the level of prices, costs or remuneration, and that its effect on the cost of providing the services …. is of such magnitude that it ought not to fall entirely on local authorities, the Minister may by order … increase the annual aggregate amount of … grants."
The statement does not contain a single guarantee. When we were discussing the Bill, local authorities pressed that a guarantee should be written into it, and we tried in vain to do so. I am sure that

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I am expressing the view of all local authorities on this point when I say that the attitude of local authorities to both the Minister and the new grant will be determined by the way in which he interprets that subsection.
I try to be fair when I attack the Government, and I therefore say that I was pleased to note that the Minister took the initiative when he increased the grant to meet certain extra costs, such as the proposed 5 per cent. increase in teachers' salaries. At least, I was pleased until I heard his own figures this afternoon, but we shall probably have some clarification of the figures at the end of the debate.
I would, however, point out that teachers have rejected the offer of 5 per cent. The Government and local authorities must take note of this unprecedented action and of the determination of the teaching profession at the moment that, in addition to the tributes of words which have been given to them by Parliament and local authorities, they shall get for the first time an adequate professional salary. Even if they succeed in their demands a teacher will only be getting one-third of the income of a doctor, one-third of the income of a lawyer, one-half the income of a dentist, oculist or industrial scientist. Yet if they get any measure of their demand the sums involved must throw out of gear the general grant, or heavily burden the local authorities.
I was very glad to hear the Minister approach this question in such a forthright way and say that, just as he told the Press that he would downgrade the grant if the rise in the teachers' salaries were less than 5 per cent., so—or so I understood him to say this afternoon—he is prepared to upgrade it by whatever addition to 5 per cent. is secured in the negotiations between the teachers and the local authorities in the Burnham Committee.
Nevertheless, it is on education that the grant is most disappointing. If we compare the Report with the thrilling document "Secondary Education for All" produced by the Minister's colleague the Minister of Education, what a contrast we find. The Government White Paper merely says:
"… The main task here will be to maintain and where possible improve standards …"
Primary schools get merely a factual reference.
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Compare this with the exciting panorama in the Minister of Education's new pamphlet: end of the all-ages school; give the secondary schools all the resources they need; we cannot afford to waste any potential source of skilled manpower; every child to go as far along the road as his ability or perseverence can carry him: replace old out-of-date secondary schools; a minor works programme to improve obsolescent schools; new primary schools where necessary; twelve thousand new extra teachers from new extra training colleges; a vast technical education programme at all levels to advanced technology—and all to come out of the general grant. It is the contrast between the expansionist programme revealed in that White Paper on Education and the entirely opposite picture that we get in the General Grant Report that very much frightens me.
Last week, it was pointed out by Dr. Alexander that whereas the speed of educational expenditure has been accelerated in the last two or three years, this new grant marks a slowing down. Educational expenditure has advanced by 9·3 per cent., 15 per cent., 13 per cent., and 9·2 per cent. in the last four years. The figures for the next two years are 8·2 per cent. for 1959 and 5·5 per cent. for 1960. We have a right to an explanation of the constrast between the acceleration implicit in the White Paper on secondary education and the deceleration in this general grant.
On the one hand, the Minister of Education says "Advance education." On the other hand, the Minister of Housing and Local Government says "Slow down, or, at any rate, if you carry out the programme you will have to step up the rates." We have the right to ask which of the two voices we are to believe. The most charitable view is that the Minister of Housing and Local Government drafted the whole of the general grant proposals while the document on secondary education was still in the melting pot.
I urge the Minister to study the pamphlet "Secondary Education for All." If he believes in it, as, I believe, the Minister of Education believes in it, then some time within the next two years this general grant will have to be modified, not only to meet the first taste of the capital expenditure foreshadowed in

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the White Paper on education, but the increased annual charges that are also mentioned in it. I urge the Minister to interpret flexibly and generously the powers Parliament has given to modify this general grant, wherever circumstances warrant it, to meet new costs, to meet new expansions of important services, and, above all, to make possible the full implementation of the White Paper on Education.
5.54 p.m.
Mr. Roderic Bowen: On the Third Reading of what is now the Local Government Act, 1958, the Parliamentary Secretary said that
"… local government needs are such that large-scale financial support from the centre is quite inescapable. … "—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 247.]
What I am concerned about is how far local authorities whose needs are especially great are affected by this financial rearrangement, and to what extent the scale of assistance they have hitherto received from the central authority will be affected. I represent an authority which has very serious financial problems in carrying out local government functions, and its position is shared by the other authorities in mid-Wales.
If anyone has any doubt as to the difficulties that those authorities have to face, I will give one or two illustrations. The cost per thousand of population to my county council of the welfare services is double that of the average for all other county councils in England and Wales; for education, it is one-third higher than that average, and for highways, it is three and a half times that average. That cost, of course, is met partly out of rates and partly out of Government grants.
We have been given to understand by the Minister and by one or two other speakers opposite that the financial position of local authorities generally will be improved by this General Grant Order, and I want to examine whether that really applies to particularly needy local authorities. I only wish that I could share the optimism displayed by the Minister this afternoon. My suspicions were somewhat aroused when I learned that the wealthy county borough of Bournemouth was to gain some £37,000, and that Blackpool was to get £100,000.
On the figures supplied to me, the effect of this Order on my local
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authority—and I refer to it only as an instance of what is happening to all similarly-placed local authorities—is to make it worse off to the tune of about £ 110,000. That amount is made up as follows. The amount that we shall get from the general grant will be at least £50,000 less than we would have received had the present specific grant arrangements continued.
In addition, the county council will lose about £50,000 as a result of the abolition of the Exchequer equalisation grant, and of the rate deficiency grant being paid direct to the county district authorities. That is to say, the net loss to the county council—that is, the difference between what it once obtained from the Exchequer equalisation grant and the amount it had to pay per capita to the county districts—amounts to a further £50,000.
In addition, it will lose about £10,000 because of the changes in respect of Section 100 of the 1948 Act—although I concede that, in this respect, the rating authority will regain some of that loss. The only factor that could possibly make up for this reduction in the scale of assistance given by the central authority to the local authorities in these areas is a substantial increase in the amount obtained from the rate deficiency grant as compared with the amounts received by way of Exchequer equalisation grant. If my authority, the Cardiganshire County Council, is to be reimbursed for what it will lose from the effect of the General Grant Order and the loss of the Exchequer equalisation grant, the amount obtained from the rate deficiency grant will have to be at least 11 per cent. higher than that obtained from the Exchequer equalisation grant.
So far, I have not been able to obtain any information on how local authorities such as my own will fare when we get down to details in relation to the rate deficiency grant. If the Parliamentary Secretary has any information to give in that respect I would be very glad to receive it, because unless there is a substantial increase in that sphere local authorities such as my own, these sparsely populated local authorities with a low product of 1d. rate, will be placed in grave difficulties in maintaining basic local government services in their own areas.It is true that the rerating of

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industry will have the effect of emphasising the poverty in relation to rateable values of these authorities. All we can hope is that the increase will be at least something in the nature of what I have indicated.
I wish to refer to one or two other matters connected with this Order. The Minister has referred to the formula and has drawn attention to the fact that there is provision for supplementary grants in respect of the proportion of old people and in respect of low density, among other matters. In my view, the supplementation provided for by reason of those factors does not anything like make up for the additional costs incurred by authorities which have particular problems arising from the factors which it is intended to cover by those grants.
In my area, for example—and the latest figures I have are from the 1951 census—the number of people in the technical category of "old people" in proportion to the rest of the population is substantially greater than that in England and Wales as a whole. I believe the figure for England and Wales as a whole was 13 to 14 per thousand of the population whereas in my area it was 19 to 20 per thousand. By reason of these numbers and of the geographical nature of the area, the costs are substantially increased for such services as home help, home nursing and welfare services generally. That accounts for the fact that the costs of these services in the area which I represent are double those of the national average.
While we welcome the supplementary grants which are provided for in this Order, it would be idle to pretend that they really meet the additional costs which these areas have to meet. The same applies in the case of low density grants. They go some way, but only a small way, to meet our difficulties, particularly in relation to highways. I have already mentioned that the cost is three and a half times that of the national average in respect of highways, and the main difficulty in that respect arises in relation to unclassified roads.
While recognising that these provisions in relation to supplementary grants are helpful, we would be deceiving ourselves if we thought that they really helped to the extent which they should in meeting
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the difficulties of areas such as that which I have the honour to represent. I repeat the hope that the Parliamentary Secretary will have some specific news to give the House about the extent to which the new rate deficiency grant will meet the gap which has to be filled if local authorities such as my own are to receive at least the same measure of assistance from the central authority as they have done in the past.
6.5 p.m.
Mr. John M. Temple: I am very pleased to follow the hon. and learned Member for Cardigan (Mr. Bowen), but, if he will excuse me, I will not follow him in all his arguments because they were specifically applicable to West Wales and to his own constituency in particular.
I was one of the fortunate Members who had the honour to be called to speak during the Second and Third Readings of the Local Government Bill, and I also had the privilege of taking part in the Committee stage of that Bill. It must be of great interest to those hon. Members who were in that position to see today the financial provisions of that Bill being unfolded. I remember so well on the Second and Third Readings saying that I considered that the fears of educationists would prove unfounded. I believe that those fears have to a large extent proved unfounded, and I would go so far as to say that the critics of that time have been confounded.
There are two keynotes to this Order. One is stability and the other is progress. The Minister drew attention to this in his opening speech when he said that he wished to keep the dragon of inflation underfoot. That is the stability. That is what everyone throughout the length and breadth of the country has been wanting —to keep this bogey of inflation behind us. It is for that reason that local authorities will be able to budget ahead so that it will be possible to achieve stability.
The hon. Member for Fulham (Mr. M. Stewart) drew attention to the fact that there had been a rise in the cost of living over the last two years. That is perfectly true, but what he did not say was that the rise in the cost of living had largely been arrested over the last twelve months.
Mr. Edward Evans: The hon. Gentleman should not believe that.
Mr. Temple: I said "largely".
The first main provision of this Order is the facility for local authorities to budget ahead, and it is very much hoped that this will be a stabilising factor in the battle to keep the cost of living steady. The second keynote is progress, and as I read paragraph after paragraph of the White Paper the emphasis is on development—development and progress, not stagnation. We have, firstly, the development to which the hon. Member for lichen (Dr. King) referred—development in education. I believe that the critics of today will again be confounded and that development will, in fact, take place. We have foreshadowed the improvement in primary school education, the lessening of the numbers in the classes and the passing of the all-age primary school.
The hon. Member for Fulham said that the Minister of Education was acting in the capacity of second fiddle. I rather think that he is playing in the capacity of leader of the orchestra. In his White Paper, Cmnd. 604, "A New Drive", the Minister of Education certainly does not appear as playing second fiddle. I believe that the chief emphasis in this General Grant Order is on the expansion and development of education. Many other facets of educational expansion are referred to. such as the extension of teacher training colleges, and the like. I do not, however, wish to discuss all the matters to which attention is drawn in the White Paper.
Far beyond education alone, development in local government services is envisaged. There will be development in the medical services, particularly in respect of the mentally sick, who are to be boarded out under residential care. As a justice of the peace, I have had the privilege of visiting mental hospitals, and I believe that one of the most important factors in treatment is that those who are mentally sick should be brought out and put under residential care. It is far better for them to do that than spend all their time in institutions. Under residential care, the mentally sick can be in an environment which brings them closer to the realities of the life that they will have to lead once they are away from specific treatment.
The Order refers also to the care of children. The number of crossing patrols is to be increased. Crossing patrols provide a valuable source of part-time
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employment to many people on retirement pensions and the like, and I believe that they perform a very valuable service for our children. Road safety also is referred to, especially the training of child cyclists.
All these things. in my view, represent not stagnation but progress. The Order represents another step forward in our long history of social advance. Having had the privilege of serving on the Standing Committee which considered the Bill, I welcome being associated with my right hon. Friend the Minister of Housing and Local Government in this further step forward in our social progress.
6.12 p.m.
Mr. J. P. W. Mallalieu: The Minister of Housing and Local Government prefaced his remarks this afternoon by saying that local government finance does not lead to poetic fancy. I should have been inclined to agree with him until I heard his speech, which rose to lyric heights that I found exciting but rather puzzling. With my colleague, the hon. Member for Huddersfield, West (Mr. Wade), I spent some part of the weekend discussing this Order with a sub-committee of the finance committee of Huddersfield Borough Corporation. After listening to the Minister I began to wonder whether the Order he was talking about and the Order we had spent so much of the weekend studying were one and the same. The figures which we got out—admittedly they may be wrong, and I hope to goodness that they are wrong—suggest to us that the Order has dealt the Borough of Huddersfield a very serious body blow.
According to the figures we have prepared, we believe that the amount we shall receive under the total proposed grant will be less than we received in 1956–57 from the grant specifically for education alone. The total new grant will be less than the old grant solely for education. Whereas the specific grants used to cover 55·6 per cent. of our expenditure—the sort of figure which the Minister suggests will be true for the whole country—the amounts we shall receive under the new grants will cover not 55 per cent. but 46 per cent. That is a very serious blow indeed.
How typical our experience is I do not know. We have some peculiarities in Huddersfield one of which is that we have

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a rather low school population. Having that factor in mind, I was delighted that the Minister has revised his figure of 120 down to 110 in the supplementary grant. But it still seems to me that, on education alone, we shall be very hard hit in Huddersfield.
We have made some comparisons with nearby towns. We find that, although in years gone by, particularly last year, we had for education about 31 per cent. more than our neighbours in Barnsley, under this scheme we shall have something like 35 per cent. less to spend on education.
Our real complaint arises from other factors, however. We have recently committed ourselves to what is, for a borough, a very large programme of capital expenditure amounting to about £3½ million. Over £1 million of that is for the purpose of building a new technical college in our district, something that everyone in the country agrees is an important thing to do. We undertook those commitments on the understanding that the then existing system of local government finance would be maintained. We find now that it is not to be maintained.
I would put to the Minister, first, a very minor aspect of the matter. In order to build the new technical college we had to clear 118 houses from the proposed site. When we were negotiating about it, we asked whether these houses could be treated as slum-clearance properties and thus attract a subsidy in that way. We were told that they could not be, but, so I am advised, we were told that they would, on the other hand, attract education grant. Now, of course, they will not attract education grant because there will not be a specific education grant any more.
In the current year the deficit on that small item alone which we shall have to face will be about £5,300. That, however, is a mere bagatelle compared with the loan charges to which we are now committed. In 1956–57, our loan charges per thousand of population were £706. They will jump in the year 1957–58 to £1,035. In the following year they will be £1,596, and in the year after that they will be £2,092.
Everybody knows perfectly well that a Government must have the right to change their policy. I happen to think, as
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do so many hon. Members on this side of the House, that this change is very much for the worse. It will, I am afraid, mean there will be varying standards of education as between one borough and another; a child going to school in one borough may well be penalised by the fact that he happened to be born in town A and not in town B. Surely, although the Government have a perfect right to change their policy, if in making the change they cause exceptionally severe hardship to particular local authorities, as we claim they are causing to Huddersfield, they have a duty to safeguard any local authority thus affected, and not only by these transitional payments; they must safeguard such an authority against the effects of entering into commitments in perfectly good faith and then finding that the basis on which those commitments were undertaken has been completely changed.
Mr. Donald Wade(Huddersfield, West): I am in entire agreement with the hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu)—I think that we are all in agreement on this occasion—but would he point out that these loan charges will continue for many years and will, therefore, amount to a very considerable sum?
Mr. Mallalieu: I am most grateful to somebody I may on this occasion call my colleague, because this is a united front in Huddersfield. Most members of the borough council are very much opposed to my way of thinking, but they feel as strongly as I about the effects of the new proposals on our finances. As the hon. Member for Huddersfield, West has pointed out, these loan charges will continue for a great number of years.
Sometimes there is a trace of bias in the Government against county boroughs. For example, we have been pressing to get a grant towards the maintenance of classified roads. County boroughs cannot get them, but counties can. I notice that in this grant considerable changes have been made in the total amounts compared with the first White Paper. An increase has been made, but the counties seem to have got the bulk of it.
According to my calculations, under the supplementary grant, the counties have an increase of about 55 per cent. whereas the boroughs have only 24 per cent. of the total grant, the amount for counties has gone up by 38 per cent.

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whereas the amount for county boroughs has gone up by only 27·7 per cent. I do not know whether that is bias or simply that the counties have a somewhat better lobby for putting pressure on the Government than have the county boroughs. However that may be, I ask the Minister to have a look at the position of county boroughs in general, hut specifically to have a look at the position of the county borough of Huddersfield which seems to be extremely hard hit.
Mr. N. Nicolson: While the hon. Member has been talking, I have been comparing the figures for Huddersfield given in the original White Paper with those given in the Government's latest estimates. Taking school children alone, a subject upon which the hon. Member has concentrated, I notice that between the two documents the figure for Huddersfield has gone up from £136,000 to £278,000. How did the hon. Gentleman's Finance Committee come to the conclusion that Huddersfield would he worse off?
Mr. Mallalieu: The figure has gone up by reason of the reduction from 120 to 110 in the weighting figure. Therefore, we are certainly better off under the new proposals than we were under the old. This is a calculation based not merely on that one weighting figure, but on the total, and our calculation is that the net result of what is being done, so far as we can work out the calculations, represents an increase of about half a crown in the £ on the rates in Huddersfield.
Mr. Nicolson: If one compares the totals in the last columns of the two documents, one sees that, in total, Huddersfield is likely to receive £990,000 compared with £683,000. That represents an increase of over £300,000 for this one county borough. How can the hon. Member claim that Huddersfield will be worse off?
Mr. Mallalieu: These are surely comparisons between the first and second Waite Papers.
Mr. Nicolson: Yes.
Mr. Mallalieu: What we in Huddersfield are complaining about is the difference between what we used to get by way of special grant compared with what we are now to get under the general grant. That is the whole point of my protest. I am delighted that under the second
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White Paper we shall be considerably better off than under the first, but the protest that I make is that, so far as we can judge, we shall be so much worse off even under the revised White Paper than under the system of specific grant.
Mr. Wade: Would the hon. Gentleman agree that the estimated figure for grants that would have been received under the specific grant system would work out at approximately £1,028,000 as against £990,991 in the White Paper?
Mr. Mallalieu: Yes. It means a difference of about half a crown on the rates.
6.25 p.m.
Mr. Geoffrey Rippon: I first apologise for not having been present throughout the debate, but I have been here long enough to see that a very different atmosphere prevails than prevailed during our discussions on the Local Government Act. I feel that that must be very disappointing for some of the hon. Members opposite who so fiercely opposed the Bill, because they said that the general grant provisions meant that the Government were planning an assault upon the expenditure of local authorities. We can now see that that is not true. Indeed, it never was true. From the beginning, the Minister made it perfectly clear that the whole object of the Government's policy was to give greater freedom and responsibilities to local authorities. That is what they will now have. I believe that is something the vast majority of them welcome.
The hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu)—and I should for the purposes of this discussion perhaps call him the hon. Member for Huddersfield "United"—pointed out that the figures show that the percentage of local authority expenditure which will be met by grant, taking the country as a whole, will be very similar to what it was before. Of course, under a change of procedure some authorities will gain and some will lose, but I think that all of us who have been concerned with local government know the inequities and injustices caused by the operation of the old Exchequer equalisation grant. Taking the country as a whole, I believe that the position will be very much better under the new procedure.
As the hon. Member for Huddersfield, East pointed out, it is gratifying to local

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authorities that the Minister has gone so far to ensure that, quite apart from the transitional grant, the amount which authorities may lose has been reduced to the greatest possible extent. I think that local authorities are now pretty well satisfied with the results of the review of their future expenditure. The local authority associations have said specifically that they regard the Order as fair and reasonable—within the context of the Act. [HON. MEMBERS: "That is a qualification."] It is not so much of a qualification if ones takes account of what they have said by way of criticism. I think that they regard themselves as having been extremely well treated by the Minister throughout the negotiations.
It may perhaps be of interest to the House to hear what the Chairman of the General Purposes Committee of the Association of Municipal Corporations, Sir Francis Hill, had to say to a meeting of the Council of the Association on 4th December. Referring to the preliminary discussions which the Association had with the Minister, he told the Council:
"You will be very pleased to know that in the discussions, the Ministry representatives used as a basis the figures which had been supplied by the local authorities themselves. This was regarded by the Treasurers at the time, and subsequently by the Grants Sub-Committee and the General Purposes Committee, as the proper basis for the discussions. Certain adjustments were suggested by the Departments concerned and their representatives were most helpful in explaining the reasons for these and in giving the fullest possible information on all questions posed by the local authority representatives. Following these preliminary discussions, the statutory consultation under the Act took place with the Minister of Housing and Local Government and some of his colleagues on 17th November, and the General Purposes Committee on 27th November were pleased to note that the White Paper itself took account of most of the points—and there were not many—which had been put to the Minister on that occasion.
The amount of grant to be distributed for 1959–60 is £393 million and for 1960–61, £414 million. (Members may recall that the original White Paper on Finance referred to the smaller sum of £291·4 million.) The representatives of this Association, the County Councils Association and the London County Council told the Minister, at the conclusion of the discussion, that they welcomed the attitude of the Government Departments in the consultations and their use of the local authorities' own estimates, and the readiness of the Departments to disclose all relevant information for discussion across the table. We also said that in reporting to our respective bodies about these discussions on the first General Grant
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Order we would say that, within the context of the Act, the result taken as a whole is one which we regard as fair and reasonable."
It is the Order made under the Act that we are discussing this afternoon.
Mr. Charles Pannell: The hon. Member has given a long quotation about what the Chairman said. At the end, however, the Chairman said:
"within the context of the Act".
Had the hon. Member referred to the President of the Association of Municipal Corporations, my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), he would have been given a very different picture. Of course, the Ministry should be helpful "within the context of the Act," but I do not see that that long quotation proves anything at all.
Mr. Rippon: I do not know what views the President might express. He was not there to express them on that occasion. I am quoting the Chairman of the General Purposes Committee, who made a report to the Council of the Association which it accepted readily enough.
I have not disguised what the Chairman said about the result being fair and reasonable within the context of the Act. It is not necessary for me to do so, because the Association of Municipal Corporations and most of the other local authority associations warmly welcome the principle of a general grant in substitution for the old specific grants. Therefore, I do not think that the Association of Municipal Corporations of which the hon. Member for Leeds, West (Mr. C. Pannell), like myself, is a vice-president, would complain of the change of policy which is contained in the Act.
We have to bear in mind not merely that the Government have ensured that the percentage which they contribute towards local authority expenditure remains the same to all intents and purposes under the new procedure as it did under the old, but that the Government have envisaged the payment of very much greater sums of money to allow for important developments of local authority services. The services which are to be developed have already been referred to in this debate. When we look at the White Paper as a whole, it is not only a justification of the Government's financial policy. It is an extremely important social document describing the broad advance

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along the whole field of local government services that the Government propose to make.
There is one specific point with which I wish to deal which causes anxiety to same of the smaller non-county boroughs. The boroughs do not dissent in any way from the principle of the general grant. They are, however, anxious on one particular point. which my hon. Friend the Parliamentary Secretary might be able to answer when he replies. As the House will appreciate, the grant is now paid direct to the county councils and to the county boroughs, but not to the non-county boroughs. There is a fear that they will be in difficulty because of the loss of the direct contribution for town planning purposes. They will, of course, share in the general distribution by the county council. but, as we all appreciate, redevelopment is essentially a borough problem.
This point was raised on Second Reading of the Town and Country Planning Bill. Whereas the larger authorities can absorb without difficulty the additional cost of redevelopment, which is now going ahead much faster than ever before, the smaller ones may be in trouble. No specific account of this expenditure can be taken by the county councils in their distribution. They could, of course, make a direct grant. but it is accepted that even if that were possible, it would not be very satisfactory. I shall be grateful if, when he replies, my hon. Friend will indicate whether this matter is being borne in mind
As far as I am aware, the only other serious criticism directed against the Order is that the amount of money which the Government are making available does not take account of the possibility of further inflation. I do not, however, see how that could have been done. I do not see how the Minister could have gone further than the statement in paragraph 9 of the White Paper. If it transpires that there is a considerable and unforeseen increase in costs, we know that it will be covered. If it is merely a case of minor fluctuations, I have no doubt that local authorities can absorb them by way of making economies, as the White Paper suggests. That, however, is the only serious criticism which has been directed against the Order.
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That is why the atmosphere is so very different this afternoon than when our earlier discussions took place. This was another example of the Opposition, when the Government come forward with new policies, saying that they would lead to all sorts of disasters as soon as they were introduced. Every time, however, we find that those disasters do not occur and that the Opposition, which was so loud and vigorous on Second Reading, is silent when the time comes to implement the policies which the Government are pursuing for the great benefit of local government and which will ensure further great social advances.
6.37 p.m.
Mr. Edward Evans: I do not propose to make a constituency speech as such, but I wish to traverse a field in which I am intimately concerned and interested. I want to say a few words concerning grants affecting welfare services for the handicapped. The whole subject of the disabled gets little consideration in this House except at Question Time or by a point raised by a private Member.
The grants in respect of the disabled are open to objection on two main grounds: first, the method of application, and second, their total inadequacy. The services that they are designed to help are those which flow from the National Assistance Act, 1948, and are embodied in Section 29 and following Sections. The Act laid upon appropriate local authorities the duty of providing welfare services for handicapped persons. These are defined as
"persons who are substantially and permanently handicapped by illness, injury, or congenital deformity or such other disabilities as may be prescribed by the Minister."
If ever there were a section of the community which should demand, rather than request, the warm help and support of any Government, it is that unfortunate mass of our friends who are handicapped or disabled, physically and mentally.
Unfortunately, at the time of the passing of the Act these duties were not made mandatory, except as regards the blind. There was a reason for this because the blind community had derived substantial benefits from the Blind Persons Act, 1920, which has sometimes been called the charter of the blind. Nor, unfortunately, has any

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Minister seen his way to make them mandatory even today, and this has been a great disappointment to all of us who work in a voluntary capacity, and also those who are officers of voluntary associations and local authorities.
I am pleased to say that a large number of local authorities have submitted schemes voluntarily and that these have been endorsed by the Minister. So far, out of 145 local authorities 126 have promoted schemes for the welfare of what we call the general classes—that is to say, those who are cripples, spastics, epileptics and so on—and 116 have promoted schemes for the welfare of the deaf and for the hard of hearing.
These services up to now have been operated without any financial grant from the Exchequer; that is to say, they have been financed out of the rates. It is a great tribute to the public spirit of those local authorities who have implemented these schemes, despite the great cost to the ratepayers, that they have found a ready acceptance amongst the people in the areas in which they operate.
Naturally, for this reason there is a wide divergence in the scope of the work as between different authorities. Some are excellent. It would be invidious for me to name them, but it might comfort the hon. Member for Norwich, South (Mr. Rippon) to know that the London County Council and other great authorities. because they have the resources and the good will, have embarked on welfare services which are a pattern for the rest of the country and have been copied by other great civilised countries.
It is difficult to get the figures, but according to some I have obtained today, the money expended by local authorities for the blind amounted to £2,887,000 last year, and most of that is covered by grant. For all the other disabled persons, including the general classes and the deaf and the hard of hearing, the total net sum, after allowing for repayment grants from the Ministry of Labour and so on, was £270,000 according to the White Paper. This disparity hits one in the eye straight away. I hope I shall not be misunderstood. I am in agreement with the expenditure of this huge sum of money, which is all paid by grant
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apart from the vast sums spent by voluntary societies on the blind. However, it is disappointing to those of us who work in other fields to find that the amount of money spent from the rates is only just over £2¾ million.
The House will recall that in March, 1953, the Minister of Labour, jointly with the Minister of Health, appointed the Piercy Committee to survey problems relating to the rehabilitation and resettlement of handicapped persons. The Committee took a long time but sent in a most valuable report in November, 1956, and there have been only a few allusions made to it in this House. Referring to the local authority welfare services for the handicapped, the Committee stated:
"… it is clear that in the field of local authority welfare services for the disabled only the fringes"—
That is a damaging statement—
"… have been touched so far and there is no doubt that there is need for fuller and better provision and scope for considerable development."
Recommendation 12 reads as follows:
"It therefore recommends that local authorities be grant-aided for their expenditure on services provided both under Section 29 of the National Assistance Act …"
Further the Committee states:
"Any such grant should be available without distinction between the type of disabled person or of services concerned."
This view has been emphasised time and again by several bodies, particularly by many with which I am intimately connected, the Minister of Health's Advisory Committee and so on, and repeated attempts have been made in this House and elsewhere to persuade the Government to accede to this recommendation of the Piercy Committee. In spite of the failure of the Government to help financially, the welfare work has gone on and the voluntary societies, supported by charitable bequests, have continued to do a fine job. In effect, this means that we are running our welfare services for the disabled by charity in a disproportionate measure, and we are getting back to the time when we dealt with education by charitable endeavours 100 years ago.
Now we are to get grants in respect of further developments but nothing for the existing services, nothing for those people who have had the courage to develop services, the 116 who promoted schemes for the welfare of the deaf and

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the 126 who provided them for the general classes. They must continue to provide the existing services, and only when they expand those services will they get a tittle from this grant. How this money will be distributed and what will be the amount remains a mystery.
I quote paragraph 11 of the White Paper as saying:
"Expenditure on welfare services for the handicapped classes does not at present attract Exchequer assistance—"
Everyone knows that—
"… but in order to promote a fuller development of these services as envisaged by the Piercy Committee, the Government have agreed that the cost of further developing these services above the present level should rank for general grant. Accordingly, the estimated increase in expenditure above the level of 1958–59 is taken into account."
How can they possibly estimate the increased development? How do they know what local authorities' expenditure will be? How do they know whether those local authorities who have not yet submitted schemes will do so and what will be the scope of those schemes?
Mr. Rippon: Would not the hon. Gentleman agree that this position is much better than the old position where there was nothing? Is he not aware that the question of the amount of development which will take place was considered in the discussions between the local authority associations and the Minister?
Mr. Evans: I am sorry, but I cannot take the hon Gentleman's assurance on that point. I would not for a moment believe that recalcitrant authorities have submitted claims to be included in the general grant scheme. Indeed, some of them are satisfied with the lack of development and in leaving this work to the voluntary societies. It is a nice way out for some of them if they can get those services free. I do not know how anyone can calculate an expanding service. Flow can it possibly be taken account of in making such a grant? It is no use the hon. Gentleman saying that, because they have not had it before and they are going to get it in future.
Mr. Rippon: They are going to get it.
Mr. Evans: They are not going to get grants for the work they are doing already. When we see the L.C.C.
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accounts we shall find that a very wonderful service will not attract grant, although what they develop in future may do so.
Mr. Rippon: But would not the hon. Gentleman, to be fair, agree that this is a substantial improvement?
Mr. Evans: It is like saying that two clouts across the head are better than three.
I could give a list of many of the services which are inadequately performed by the majority of local authorities, not because of a lack of desire on their part but because of lack of funds and encouragement by the Government. We want more sheltered workshops, more domiciliary employment and training schemes, more special homes for the disabled, especially for the maladjusted, handicapped and those with multiple handicaps, more gadgets and appliances, more reconstruction of houses for the disabled, more ramps, railings and lighting. I could go through a whole range of the improvements which are the right of the disabled and which it is the duty of local authorities to provide, as given in Circular 16/58, which contains the pious hope that the new grant will meet our complaints. There is a whole paragraph devoted to the projects which could be the subject of effective action.
To me, this is a frivolous and mean approach to a great human problem. The Government can take no credit for their action, which, I am sure, does not represent the wishes of the community nor match the responsibilities that a Government should undertake in respect of these people.
6.52 p.m.
The Parliamentary Secretary to the Ministry of Education (Sir Edward Boyle): I thought it might be for the convenience of the House if I rose at this stage to answer some of the points raised by the hon. Members for Fulham (Mr. M. Stewart), Southampton, Itchen (Dr. King) and Cardiff, West (Mr. G. Thomas), who have spoken about the implications of this Order for the education service.
Before doing so, I should like to make a very brief comment on the speech of the hon. Member for Lowestoft (Mr. Edward Evans). No one who has held my present office—I have now held it for nearly two years—could be in any doubt

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about the time and trouble which the hon. Member devotes to working for the handicapped classes. I had the pleasure of attending a conference for the deaf last year in which he takes a special interest.
I am not, naturally, going to make any comment about the Piercy Committee. but I should like to take the opportunity of saying that one cannot help being impressed by how much is done by many local authorities for handicapped children. It is not only the large local authorities. It is extremely encouraging to see what is being done in, for example, Reading today for a certain number of deaf children.
We can take some pleasure in the thought that there is today no serious shortage of places in special schools for the deaf or blind, and we are rapidly overcoming the shortage for handicapped children. I recognise that there are still many places needed for children who are educationally subnormal, but we can all take some pleasure and pride in the progress in our special schools during recent years.
Mr. Edward Evans: I thank the hon. Gentleman for his very kind reference, but I would point out that my speech was concerned with welfare services.
Sir E. Boyle: I realise that, but the hon. Gentleman, by what he said, reminded me to make a brief comment on our special schools.
My hon. Friend the Member for Norwich, South (Mr. Rippon) was justified in drawing attention to the difference between the atmosphere of our debate this afternoon and the atmosphere of many of our debates while the Local Government Bill was going through the House and through Standing Committee. I do not want to spend a long time going over the past, but it is fair to say that during the proceedings on that Measure two charges were frequently levelled by hon. Members opposite, and frequently levelled during deputations to the Ministry of Education, both of which have been conclusively refuted by the Order.
The first was the accusation that the introduction of the general grant would mean that all local authorities which wished to expand their services would have to meet the cost of expansion as to 100 per cent. from the rates and
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would not receive assistance from the Ministry of Education. I am sure that the hon. Member of Itchen will not mind if I give this one quotation from his remarks:
"Those who wish to lead the country in sending lads to the university, or pulling down slum schools, or cutting down the size of classes, can do so only if they themselves bear 100 per cent of the cost of their educational generosity and wisdom, while the Minister of Education stands aside and does not offer a penny to help."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 284.]
I do not see how anybody could possibly read this Order and feel that the Government have been untrue to their pledge that we would maintain a fair balance between grant-borne and rate-borne expenditure, and also that the Government would pay a fair share of the amount of money needed for educational expansion.
The second charge, a rather less plausible one, was the one that one read in, for example, the pamphlet "The Threat to Education" which suggested that the amount of the general grant would be fixed by the Treasury irrespective of the needs of the social service departments. As my right hon. Friend the Minister of Housing and Local Government pointed out this afternoon, we have taken as our starting point throughout the estimates of the local authorities themselves, and I find it very difficult to see how the charges which were most frequently levied during the stages of the Measure can be regarded as plausible any longer.
The hon. Members for Fulham and Itchen referred to the possible effects of inflation on the general grant, and the hon. Member for Itchen specifically mentioned the article which appeared in "Education" recently, suggesting that the Government's proposals were not really very generous. But those figures in "Education" have to be used with a certain amount of care. For one thing, the author of the calculation deducted the money added for a possible Burnham increase in each of the next two years, but included a figure of between £17 and f18 million for each of the years 1956–57 and 1957–58 for the last Burnham increase.
Secondly, there is the point that the Government have, broadly speaking, accepted the estimates of the local authorities themselves. The estimates are

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avowedly based on the level of costs obtaining in July, 1958, and in consequence we are justified in saying from the Front Bench that the increase in estimated educational expenditure for 1960–61 over 1959–60 is wholly, and the increase for 1959–60 over 1958–59 largely, due to the real development of the service. That is to say, for the two years for which the Order provides we are budgeting for a real development in the education service. I suggest that it is misleading to compare these assumed development figures with increases in expenditure over earlier years which contained very much larger elements of cost inflation, of which the Burnham increases effective during the financial years 1956–57 and 1957–58 were the most obvious examples.
When one looks at the percentage increases for 1956–57 and 1957–58 one has to be very careful indeed not to take credit for the inflation of recent years as though this inflation represented a real development of the education service. The hon. Member for Fulham fairly quoted the increases in the price index between 1956 and 1958 and pointed out that between January, 1956, and June, 1958, there was an increase in the retail price index of 10 per cent. During this period, expenditure on education was rising by approximately 14 per cent. Therefore, the real development in education during those years in real terms was somewhere in the region of the difference between 14 and 10 per cent.; and it is the firm determination of the Government that during the years 1959–60 and 1960–61, in real terms, educational expenditure should develop at a faster rate than it was developing during the previous two years to which I have referred.
I should also like to come to the point made by the hon. Member for Fulham, which interested me, about the climate in which the estimates of the local authorities were prepared. He made a good deal of play in his speech with Circulars 331 and 334. I think he made slightly heavy weather of these circulars, because, after all, whatever may have been contained in them, and however much we all may have regretted having to postpone or hold up temporarily the programme of rural reorganisation, it has remained the Government's policy throughout this period to cut down the size of classes.
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The principal reason for the increased estimates of educational expenditure during the forthcoming years is the simple point that there will be more children than ever at school, and, in particular, there will be more children than ever in the secondary schools. The main reason for the increase, as the hon. Gentleman very well knows, is the bulge which is now coming up into the secondary schools, which means that there will be more children than ever in secondary schools. Another factor which we must always remember is that, we hope, the trend towards more children staying on at school until after 15 will continue, which will, in itself, add to the total cost. This is quite unaffected by anything that may have been contained in Circulars 331 and 334. Therefore, I think, with respect, that the hon. Gentleman made slightly heavy weather over the matter of these circulars and the climate in which the estimates were prepared.
The hon. Gentleman specifically asked what immediate steps could be taken to increase the supply of teachers. I can promise him that, so far as we are concerned, the answer is that everything possible is being done to get more teachers in advance of the expansion of output from the training colleges. As he knows. we are engaged at the moment in crowding up the existing training colleges as far as possible. We are doing our best to get more graduate teachers and more part-timers, but the results of these minor measures to increase the teaching force are allowed for in the estimates of recruitment in the coming years.
We need all these extras, and as many as we can possibly get, in order to reach a target of nearly 6,000 more teachers a year, which has been assumed for the purpose of these calculations. While I entirely realise the seriousness of the teacher position, and while teachers are still by far the scarcest educational resource, I wonder whether hon. Members realise what they are saying when they put in their propaganda that it will be Labour Party policy to get all classes down to a maximum size of 30 during the lifetime of the next Parliament. That assumes an increase in the teacher supply of 40 per cent., and it is a quite unrealistic target.
The hon. Gentleman also asked—and a good deal has been asked—about the

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effect of increased loan charges on the proposals in the Government's White Paper, and on the estimates given in the White Paper.
Mr. Mitchison: I wonder if the hon. Gentleman could deal with one point before he goes on, and if I am disturbing the order of his speech I apologise. My hon. Friend asked what was the cost of the additional 5 per cent. increase in teachers' salaries, which the Government have included in the final figure, and how, in short, he fitted that increase into the total increase of £10 million between the figure submitted by the local authorities and that finally taken by the Government?
Sir E. Boyle: I was actually going to say a general word about the programme and I will include in it the answer to the hon. and learned Gentleman's point. For the moment, I should like to answer another question which has been asked by the hon. Member. It is the question whether, in fixing the amount of the general grant for the next two years, the Government made due allowance for the cost of the new drive in secondary education. I think I might put my answer to that question into three parts.
First of all, my right hon. Friend the Minister of Housing and Local Government has already stated that the cost, in terms of loan charges, during the two years of additional capital expenditure, must be pretty insignificant in relation to a total revenue expenditure of £600 million. That is to say, we must be careful to distinguish between the capital cost of the new programme in terms of its share of the total amount of investment in the public sector, from, on the other hand, its effect on revenue expenditure by the local authorities. A capital expenditure programme of £300 million over five years is quite a sizeable proportion of the total volume of national investment in the public sector, which, as hon. Members know well, is running at the moment at about £1,500 million a year. But when one considers the effect of this on revenue expenditure, the effect is altogether different.
What I can tell hon. Members is that, supposing that local authorities as a whole were to spend an extra £10 million of capital expenditure, the effect of that on their revenue expenditure would, in fact,
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be approximately £700,000 and that is a pretty small proportion—indeed, it represents a marginal figure, when we are dealing with a total revenue expenditure on education of £600 million a year.
Mr. Mitchison: I am sorry to interrupt the hon. Gentleman again, but this is the substance of what we are discussing. The White Paper said that in fixing the amount for the first general grant period, the Government have taken account of the policies proposed in this White Paper. What was the sum of money they took into account?
Sir E. Boyle: I am trying to give as fair an answer as I can. In the first part of my answer, I have pointed out that we are here dealing with sums of money which are very marginal in relation to the total of the revenue expenditure of local authorities as a whole.
The second point is that the estimates of the local education authorities were submitted at a time when the downward trend in interest rates had already begun, and it has since gone further. Therefore, there is room within these forecasts for some expansion of capital expenditure without the local authorities exceeding their estimates of expenditure on loan charges.
The third point is that, in any case, apart from these figures for expenditure for the service as a whole, which would be taken into account in fixing the grant, the figures. as the hon. Gentleman knows from the White Paper, are £600 million for 1959–60 and £633 million for the year after. This deliberately includes a margin so far as capital expenditure is concerned, and I do not think it would have been really necessary to regard that capital expenditure as making any substantial effect on the total revenue expenditure of the local authorities during those years.
The hon. Gentleman referred in his speech, quite fairly, to the question of maintenance and upkeep of schools, once they are built. After all, the five-year programme announced in the White Paper only starts in 1960–61. Furthermore, it is not until a year after a school has been started that that school will be completed, and it is only after a school has been completed that the cost of maintenance really arises. And therefore the hon. and learned Gentleman's point must

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apply to the next General Grant Order rather than to the Order which we are discussing this evening.
Mr. M. Stewart: The hon. Member will remember that the White Paper on education is not concerned solely with the capital expenditure of building new schools, but also refers to raising standards of secondary modern schools, for instance. If that is to be done, it will involve expenditure on equipment, staffs, libraries and so on, which will be current expenditure. We are told that the projects mentioned in the White Paper—not only capital building projects, but all the expenditure which the White Paper will involve—have been taken into account in arriving at the figures of £600 million and £632·83 million. The simple question which we are asking is by how much would those figures have been reduced if the White Paper had not been produced.
Sir E Boyle: My answer to that is that we should not forget that the programme mentioned in the White Paper only starts in 1960–61, which is the second year of the General Grant Order which we are discussing. The point is that, taking into account the facts that the cost of additional loan charges must be very small. and that by far the biggest items of expenditure will be accounted for by the number of children at school and the additional teachers we hope to gain, the extra items to which the hon. Gentleman refers must be marginal in relation to the total of £600 million. Therefore, while the Government have certainly considered the point, those extra items could not have affected the Government's decision about this General Grant Order.
Mr. M. Stewart: Let us get it quite clear. The answer to the question is, "Nothing to speak of".
Sir E. Boyle: The answer can be more fairly stated by saying that the big items in education expenditure over the next years have been fully taken into account in the Order which we are now discussing, while the items to which the hon. Gentleman refers will affect the next General Grant Order. The Government do not believe that they can have more than a marginal effect on the present Order, since the first year of the drive is 1960–61 and the schools cannot be completed until that financial year is over.
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And, after all, it is the new school buildings themselves that are fundamental to the Government's plans.
I want now to refer to the Burnham award. The hon. Member for Fulham said that the inclusion of the 5 per cent. in the general grant will make authorities take a rather more stubborn line since they will feel that they have the money for the 5 per cent. "in the bag", whereas they will have to carry the whole of any increase over and above 5 per cent. The answer is that the authorities do not have the extra 5 per cent., except, as it were, provisionally, since my right hon. Friend has made it perfectly clear that they are on warning that if the teachers in the end get less than the additional 5 per cent., the extra amount will be taken into account when the amount of any future review is fixed.
On the other hand, the authorities know very well that the Government have undertaken to consider adjustment of the general grant in the light of any significant Burnham award. That pledge has been given again and again, so I can see no reason why the authorities should be stiffer on this occasion than they might otherwise have been.
The hon. and learned Member for Kettering (Mr. Mitchison) asked about the amount of the 5 per cent. No doubt my hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government will have further comments to make on this matter, but the position is that the amount of the 5 per cent. represents approximately £14 million, and the difference between £4 million and the £10 million is accounted for by certain marginal items.
Mr. Mitchison: I am sorry to interrupt the hon. Gentleman again. He has been most courteous in giving way. Is this the figure of ½ per cent. which was mentioned by the right hon. Gentleman? Is that the marginal calculation, and to how much does it amount?
Sir E. Boyle: Yes. My right hon. Friend was referring to the difference between £14 million and £10 million.
Mr. Mitchison: So the only thing taken into account as between the figures supplied by the local authorities and the figure taken by the Government was the 5 per cent. increase in teachers' salaries?
Sir E. Boyle: No, that raises a wider point, and the hon. and learned Gentleman must not tempt me into a sort of Committee stage debate on this matter. My hon. Friend the Parliamentary Secretary will deal with this at greater length when he replies to the debate. I have given the hon. and learned Gentleman an answer to his specific question. The answer is £14 million.
I need not detain the House very much longer. I have tried to answer the questions which the hon. Member for Fulham raised, but there is one point I want to make before concluding. The hon. Member for Fulham said that ultimate responsibility for education must rest on the Government. In that connection, he quoted Section 1 of the Education Act, 1944. There is no dispute about that on this side of the House. On the contrary, if asked to describe the responsibilities of my right hon. Friend, I think that all my hon. Friends would say that his first and prime responsibility was to see that there were sufficient funds available, a sufficient share of national resources available, for the education service. We should also agree that his second function was to lay down certain broad priorities and, by co-operation with local authorities, to see so far as he could that those priorities were observed. It is exactly in that spirit that the Government have introduced their White Paper, "Secondary Education for All: A New Drive".
But when the hon. Member says that responsibility for education rests on the Government, I find it very difficult to see how a system of percentage grants of necessity makes it easier for the Government to honour their pledge, because with a system of percentage grants there has always been a good deal of difference in standards between one authority and another.
We believe that whatever system of finance is in force, educational progress must essentially be a co-operative matter between the Government and the local authorities, backed all the time by public opinion and by a growing national realisation of how essential to the nation are improved educational standards. It is in that spirit that my right hon. Friend has introduced the Order. I believe that it will form an adequate and firm base
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for the educational expansion which we all wish to see during the years ahead.
Mr. Speaker: Mr. Blenkinsop.
Mr. James Simmons: On a point of order. May I seek your guidance, Mr. Speaker? It is now twenty minutes past seven o'clock and we are about to have another speech from the Front Bench. Does this mean that we are about to have the Closure moved, or is it to become a regular feature of our debates that we shall have three opening bats on each side to the exclusion of back benchers? Is it another privilege that if an hon. Member speaks from the Front Bench he has a priority with Privy Councillors over other speakers even if he is not a Privy Councillor? May I seek your guidance in the interests of other back benchers?
Mr. Speaker: I gathered that the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) was not attempting to close the debate but was merely making an intervention. I hope that I shall get an opportunity to see the hon. Member for Brierley Hill (Mr. Simmons) rise to catch my eye.
7.18 p.m.
Mr. A. Blenkinsop(Newcastle-upon-Tyne, East): I have no desire to keep my hon. Friend out of the debate. I hope that he and others will take part in the discussion to make their attitude clear. I intervene merely to raise certain matters affecting the health aspect of these proposals.
The hon. Member the Parliamentary Secretary to the Ministry of Education is always a vigorous speaker, but his vigour this evening did not cloak his dampening words about the educational aspect of these proposals. I am sure that all hon. Members have noted that he said that the more detailed aspects of the education proposals would be dealt with not by him but by the Parliamentary Secretary to the Ministry of Housing and Local Government. Apparently, the Ministry of Education is to that extent surrendering its responsibility for some of the education services.
I am afraid that I am in an even worse case than some of my hon. Friends. I had an apology presented to me by the Parliamentary Secretary to the Ministry of Health, who regretted that he had to get away a short time after six o'clock.

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I thought I had given him sufficient opportunity to get back again, or if not he, the Minister of Health, who does exist, I understand. One of them should be present to deal with a matter which affects the Government very considerably and affects the services for which the Minister is personally responsible. It is unsatisfactory that we should have a debate on a matter which deeply affects the health services without a representative of the Ministry of Health being here. While I appreciate that the early apology was given, it should not have covered the whole of the period of time during which I have been waiting for the hon. Gentleman to return.
Just as my hon. Friends were anxious when they raised matters affecting the education aspect of this grant, so I am anxious to raise matters affecting the Health Service. It appeared to be common ground—but now I am doubtful whether it is—that both sides of the House desired in this country a major development of our domiciliary community services, if we were to make any progress with the nation's health in the future. I thought this much was common agreement between both sides. Indeed, this has been supported by Royal Commissions and the most expert advice has been given on the same lines. We have been anxious to help in the furthering and the development of the domiciliary services, because we know how anxious all those concerned with this matter have been. For example, we want to move many of the mentally afflicted out of institutions which are not suitable back into the community for more effective or useful care which would break down the isolation from which they have suffered.
In the same way we have been anxious about the provision for the handicapped, to which my hon. Friend the Member for Lowestoft (Mr. Edward Evans) referred a little earlier. We all listen to my hon. Friend with great care, especially when he is speaking of services for the handicapped, because of his very long and detailed experience in that matter. We have all been looking forward eagerly to developments in that direction and have been particularly concerned about what might be done about provision for old people. We know that in this country we shal1 inevitably face a steady increase in the number of old people in our population, and we know that the best place for
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those old people is not the hospital, except for active treatment. They need the proper welfare and care in their own homes which can be provided, no doubt, both by local authorities and the hospital services.
Some of my hon. Friends, looking at the explanatory White Paper, must have been delighted if they took the words they read at their face value. It appeared that the Government were accepting fully this new responsibility and were proposing to move into this new, exciting development of domiciliary services. They were really going to open up new opportunities in this field. The great, resounding words on page 7 of the White Paper were referred to by the right hon. Gentleman who opened the debate as an "impressive list" of developments. One of my hon. Friends has referred in terms of some adulation to the great advance that was being projected—I see that an hon. Member nods his head—presaging a great new step forward.
In fact, when they are examined, what a dismal account this is. Far from being an impressive list, it is miserable. The first item which is covered on page 7 in this part of the "impressive list" is provision for mental illness and deficiency. One should look first at the recommendations of the Royal Commission on the Law Relating to Mental Illness and Mental Deficiency, in which are set out the Commission's own proposals. It will be clear to anyone who has taken an interest in this development that the Royal Commission was eager to see concentration for the future upon community care, because it made a series of very important recommendations in this regard.
Under these proposals of the Royal Commission it would be a requirement that local authorities should establish a wide new range of services which would need buildings, equipment and trained staff of a very considerable character. The proposals accept that if this is to be done there must inevitably be special financial provision. From time to time in this House, over a period of six or nine months, I have been asking the Minister of Health for details of the financial provisions he proposed to make for the new services. Always he has replied that the matter was under consideration and that we should hear them in due course.

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The reply is contained in effect in these provisions for the general grant. According to the White Paper there is to be increased provision of all kinds. It says that the Estimates will take into account and allow for
"an annual rate of development in the mental health field in each of the years 1959–60 and 1960–61 at roughly two and a half times the rate which has obtained in recent years."
That is a rather peculiar way of expressing the development. I have always been told that if one wants to cloak the actual amount of development one must put it in percentages. It looks much better. If development has been so minute in the past as hardly to exist, we can multiply it by two or by five and the extension will still be on a modest scale. That is what the Government have done here.
Everyone knows that the development of the mental health services of the domiciliary kind by local authorities has been minute in recent years. If we multiply it by two and a half the result is relatively nothing. The Royal Commission said it wanted to recommend that there should be up to 75 per cent. grant. It recognised that was no longer possible, because of the Government's proposals for a direct general or block grant. So it said it hoped that the Government would find means of making extra finance available to ensure that the developments took place. Taking the most generous assumptions from the answer which I had in the House this afternoon in reply to a question to the Minister, we are to have about £900,000 extra expenditure throughout the country upon domiciliary health services of all kinds in the first year. and another increase of a comparable size in the second year.
If the Minister of Health really believes that is going to make any kind of effective start in tackling this problem, he has to think again. I do not believe it will make any kind of provision for patients who, we hoped, would be brought out of mental hospitals and institutions. It will not deal either with the type of case referred to by my hon. Friends at Question-time today. They were referring to cases of people who, in effect, had been illegally detained in mental institutions but could not be discharged simply because there was no place for them to go. Those are some of the cases the Royal Commission has been making recommen-
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dations about and for whom there must be some domiciliary provision.
This kind of expenditure provided for will not meet that problem. I should have liked the Minister of Health or the Parliamentary Secretary to be present to answer these questions, because it is important that we should know the answers. One can only assume that in the consultations with local authorities the great bulk of them have said, "We are not going to do anything about it". That is the only sense one can make of this. Yet I know that some of the plans put forward by my authority in Newcastle would absorb a great part of the provision which is to be made for the whole country. This provision is simply ridiculous. It is part of the "impressive development" but so far from being impressive, it has completely prevented any hope of the recommendations of the Royal Commission being carried out.
If my assumption is correct and local authories are saying: "We are not going to do this." we can only assume that the recommendation of the Commission that it should be mandatory upon local authorities to carry out these things is to be disregarded by the Government and the provision is to be purely permissive. I should like to know whether that is so. I hope an answer will be forthcoming before the end of this debate, because I think it shocking that we should be led to imagine from the flowery language of the White Paper that we are to have a revolutionary new approach, such as was suggested by the hon. Member for the City of Chester (Mr. Temple), yet we find nothing will come out of it.
Mr. Temple: I think the hon. Member will agree that two-and-a-half-times the existing amount is a good start. Possibly it is not everything we wanted, but it is a very good start.
Mr. Blenkinsop: That is the point I have been trying to make. If nothing has been done there would be no expansion, because two-and-a-half times nothing is still nothing. In the same way, if the development is on the modest scale it has been in recent times and it is to be multiplied by ten, we still have a very modest form of development, which would not in any way meet the recommendations of the Royal Commission. On those grounds, the provisions

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in this White Paper would in no way meet the recommendations but are, in fact, a douche of cold water on those who sincerely and eagerly have been looking forward to the opportunity of developing effective community mental health services.
It will mean that the kind of experiments which some local authorities and hospital boards have been making on this kind of basis cannot go forward. As many hon. Members know, Dr. Bierer has been running satisfactory experiments in psychiatric social clubs and other work, which is exactly the kind of work the Royal Commission is recommending to be increased and developed and which might have a remarkable effect on reducing the call on hospital beds. I understand that in response to an approach for extra assistance London County Council has had to say that under the expected provision it regrets it will not be able to give that assistance. If that is so in London, how much more true it is of other parts of the country where authorities have smaller resources? It is obvious that in fact we shall get next to no development in this matter. It is a very tragic position.
Turning to the next part of the "impressive" list of developments, it is rightly said in the Report that development of the domestic help service could do a great deal to make provision for many old people and might do a great deal to avoid their having to go into hospital. As in the case of the mental domiciliary service, in this case also we are trying to save the Exchequer a great deal of money in the long run. Unlike some of the other services we have discussed, this would save hospital expenditure which would fall entirely on the Exchequer. Whatever the extent of grant aid, there is a considerable contribution from the local authority itself and there is a great attraction about that for the Treasury.
Of the domestic help service, which the Government now realise is so important, they say that this "impressive development" is to provide an increase in staff
"from just under 22,000 at 31st December, 1958, to nearly 24,500 by 31st December, 1960."
There are 140 authorities listed in the supplement to the Report which probably are ready to take advantage of this wonderful development. If my calculations are right, that means something like
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seven more home helps to each local authority each year. That is a magnificent development! But how does it stand up to any kind of estimate of the increase in the number of old people in our population, quite apart from the enormous extra load we have of old people who, unhappily, are not provided for today as we need to provide for them?
It is obvious that this provision is not at all adequate. The same can be said of the other proposals. I want, in particular, to emphasise the provision for the aged and infirm. Every hon. Member, no matter in what part of the house he sits, has from time to time brought before the House examples of the number of old people needing residential accommodation of a welfare kind. We all know from our
experience—I know from my experience, on Tyneside, and I am sure every hon. Member knows from his own experience wherever he lives—that if we had welfare accommodation available we could move a great many old people out of unsuitable institutional buildings to far more suitable accommodation. There they could take a more active part in the life of the community, which would be far better for them and for everyone else. We know that that is so.
What does this do? It is estimated that since 1948, the date of the passage of the relevant Act, just under 30,000 places ranking for contribution will have been brought into use in homes up to the end of the current financial year and that the number will be increased to 33,000 by 31st March, 1960. It is hoped in two years to raise the number of places by 3,000. That is, 21 places for each authority in two years. That is ten per year for each authority. That is the majestic advance.
What does it mean? It means that many local authorities will presumably do nothing at all and have made no proposals and that some local authorities will try to tackle the job. Will the Minister of Health be satisfied with that? With the growing problem of more and more old people in our population, and with our knowledge of the great need for accommodation of this sort in every city and town and in the rural areas, too, will the Minister regard this progress as good enough? It is obvious that the proposal which is made in the Report takes us nowhere towards providing the facilities we need.

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I could deal with other proposals, but let me mention a few things which are not even referred to in this marvellous Report. There were some Questions this afternoon about the need for chiropody services. The hon. Member for Blackley (Mr. E. Johnson) asked the Minister when we should be able to start chiropody services for old people—and answer came there none; or, at least, the answer, such as it was, said that the Government regretted that they were not able to provide any services. Nor is any provision made in this Report. Yet it is common knowledge that there must be an adequate national provision of chiropody services for old people under the National Health Service if we are to keep old people active in the community and to avoid them becoming institutionalised. I understood that that was what we all wanted to achieve, but there is no glimmer of hope from the Report.
The Gillebaud Committee made recommendations about this, but it might as well not have bothered. It recommended that this was a service which ought to be provided as soon as possible, and it also recommended that there should be grant provisions for both capital and running expenses for the residential accommodation for old people to which I have been referring. Obviously these recommendations are not to be implemented. None of this service is to be provided.
I come to the point made by my hon. Friend the Member for Lowestoft about handicapped persons. I will not take long on this subject because he has so much authority on it and has said much of what I otherwise would have said. It is true that we have the clear recommendation of the Piercy Committee that local authorities should be grant aided in their expenditure on welfare services for handicapped persons. The recommendation was that there should be specific provision for them.
My hon. Friend pointed out what we are to get from the Report, if anything. It is all mixed up in the general grant, and heaven knows whether the handicapped persons will in fact get anything. The only words of comfort we can find are that there will be some provision for any increased expenditure in this respect by local authorities but nothing for existing expenditure. As my hon. Friend
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said, it is remarkable that the authorities which have tried to move in a progressive way in this work are to have no help at all. This is an encouragement to local authorities to be dilatory and to take no action which they are not compelled to take.
This is a miserable proposals. From some of the figures given by my hon. Friend in respect of provision for the disabled other than the blind, I can only assume that the expenditure expected is about £50,000, and that must assume nothing more than an occasional pilot scheme here and there in the country.
I feel that this set of proposals is nothing more than a hoax. In the Report we read the phrases which we like to read and the apparent sign that the Government are interested in providing what we know is needed, but when we examine it with some care we find that the Government are satisfied, in effect, with the local authorities carrying on their present path without making any inroads into the problem which lies before us.
As the Minister knows very well, some of us have taken a great deal of interest in the Health Service. In many areas we have been concerned about the possibility of its development, and we have been excited by the new opportunities which appear to be before us. We are told by the Government that now, just before an election, they are willing to make extra capital and revenue expenditure available. But in effect they are not even doing that for the National Health Service. We can take the absence from the Front Bench of representatives from the Ministry only as indicative of the weak position which the Minister of Health has reached in this Government. It has the power neither to affect usefully the proposal for grant which is put before us to aid the National Health Service nor even to provide a representative of the Ministry to be here when the subject is being discussed.
7.48 p.m.
Mr. James Simmons: I originally desired to say a few words on the lines initiated by my hon. Friend the Member for Lowestoft (Mr. Edward Evans) about the position of the disabled and of handicapped persons as a result of the White Paper and the Order, and the development of the welfare services for the handicapped. It appears from the

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Report by the Minister that this development is to be fostered by a percentage increase in the block grant to local authorities.
Looking at the back of the Report, I find that welfare for the handicapped will receive less than street crossing patrols, road safety, police traffic controls and the registration of electors. That is precisely what the Government think about the handicapped and the disabled. If this purports to be a fulfilment of the promises contained in the Piercy Report, it does not measure up to the expectations which were aroused.
As my hon. Friend the Member for Newcastle - upon - Tyne, East (Mr. Blenkinsop) has pointed out, we get from the Government glowing prospectuses, but when it comes to paying out dividends we see that we have invested in a fraudulent concern.
The Piercy Report is quite explicit on the care of the handicapped and disabled. Paragraph 106 reads:
"The total amount spent by local authorities in England and Wales for the year ending 31st March, 1955, on services for the disabled other than the blind and partially sighted was only some £250,000 as compared with £2.4 millions spent in the same period on the blind and partially sighted."
It goes on to say that the local authorities:
"… now have the task of building up their services, in particular those concerned with social activities for the handicapped (e.g., the establishment of social clubs) and with providing some form of occupation for them either at the clubs or in their own homes. It is clear that only the fringes of the field have yet been touched. The Act gives local authorities very wide permissive powers to make provision for the welfare of disabled persons, and on the evidence received there is no doubt that there is a need for fuller and better provision and scope for considerable development."
Paragraph 124 of the same Report says:
"Since local authorities were first invited in 1951 to submit for approval schemes for the welfare of handicapped persons, there has been, and indeed continues to be, a general pressure for economy in their services and their expenditure. This must have retarded the development of these services. Nevertheless, the Committee believes that more would have been done by local authorities in this field if it had not been the case that most of the services which they can provide attract no grant from central funds towards the considerable cost which would be involved. It seems anomalous that. for example, an occupational therapy department in a hospital should be financed completely from Exchequer funds
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whereas an occupational service provided by a welfare authority at a recreational and occupational centre attracts no direct Exchequer grant whatever."
It is clear that the Piercy Committee believed and, in fact, recommended, that a great deal more should be done by the local authorities, with Government support, for the welfare of these people.
During the Second Reading of the Disabled Persons Bill, several of my hon. Friends and I raised the issue of a general versus a direct grant for this purpose, and my hon, Friend the Member for Stockton-on-Tees (Mr. Chetwynd) said:
"There is the question of finance. I understand that the work will be grant-aided, but is this grant to be part of the new block grant, or is it to be a grant especially for this purpose?"
It is a pity that we have not now present a representative of the Ministry of Labour and National Service. My hon. Frend went on to say:
"If it is to be part of the block grant, then, as with education, I am a bit dubious about the extent to which it may be used by an authority that. perhaps. wants to save the ratepayers money. It would be much better if this grant were specific, with a percentage relation to the work done by each authority."
I myself made some reference to the issue in that debate, which I now venture to quote. I said:
"It appears that the local authorities will be under a duty to exercise their powers under the direction of the Ministry of Labour. The financial aspect of this has been raised in debate. Will the local authorities receive direct grants, or are the handicapped to be further handicapped by being fed on the crumbs that fall from the table of the municipal block grant This is an important point which ought to be cleared up before we part with the Bill.
Once the municipal 'economaniacs' get on the warpath at local government elections and scare the daylights out of Tory councils, the social services will be sacrificed to lower the rates."
Those of us who have been in local government know quite well that the first cry of the "economaniacs" is "reduce the rates'', and the first thing they want to do is cut the social services. During that Second Reading debate there was an explicit demand for an assurance from the Government on the financial aspect. and that assurance was forthcoming. The then Parliamentary Secretary said:
"The hon. Member for Brierley Hill and the hon. Member for Stockton-on-Tees also raised the question of finance in connection with the employment services dealt with in the Bill. They wanted to know whether they would now be part of the block grant or would remain

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direct grant-aided. I can reassure them instantly; they are to remain direct grantaided."—[OFFICIAL REPORT, 31st March, 1958; Vol. 585, c. 964–9781]
Nothing could have been more specific than that. The care of the disabled was to be financed by direct grant. That was the Government's deliberate promise, made only in March last. I know that this referred to the responsibility of the Minister of Labour, but as the object of the Bill that we were then discussing was to unify the care of the handicapped under one Ministry, one would have thought that the best way of getting effective control would have been to concentrate the financial arrangements under one Ministry as well. This present meagre grant for welfare services for the handicapped is an attempt by the Government to evade their responsibilities to the handicapped.
If we are to have this as part of a block grant, certain questions arise. Paragraph 26 of the Minister's Report specifically refers to the Piercy Report, and its recommendations for considerable expansion. How much expansion are we to have? Cannot we have the exact amount that the Government intend to give? As my hon. Friends the Members for Lowestoft and for Newcastle-upon-Tyne, East have said, these services are in existence. They have been maintained by the local authorities. Progressive local authorities have been prepared to ask their ratepayers to shoulder part of the nation's responsibility for the disabled and the handicapped. They are to be penalised by this paltry grant.
The Government Report designates a percentage increase in the block grant to cover specific improvements and extensions in this welfare service, but it is important to know how this block grant will work. Will these increases be given to local authorities, irrespective of the work accomplished by them? What check is there to be on the work of local authorities? If it is to be a block grant, are the local authorities to get it, with something in respect of the welfare and care of the handicapped and disabled included in it, but no guarantee required that it will be used for the purpose for which the Government have designated it?
If they get this increase, must they improve the welfare services of the handi-
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capped by that amount, or is it just an indication that they may use it for that purpose? What check is there of the way in which this block grant will be used? We ought to have an answer to this question because it is most important. When the Bill dealing with the handicapped and the disabled was debated on Second Reading we had a promise, a definite guarantee, from the Parliamentary Secretary to the Ministry of Labour and National Service that these services would be taken care of by a direct grant. Now the Government say, "We think we had better put this in the block grant. We shall be able to hide our deficiencies a bit better if it is put in with the block grant. We shall not be called to account so easily as we should be if it were a direct grant from a Government Department."
As I understand the general problem of the care of handicapped and disabled persons, according to the Bill which was passed through the House last Session and comes into operation on 1st January next, this is the responsibility of the Ministry of Labour and National Service. The Ministry is empowered to make direct grants to local authorities for carrying out certain obligations under the Bill. We have a right to know from the Minister whether this miserable percentage of the block grant will have any effect upon the amount of the direct grant which the Ministry of Labour and National Service should be giving to local authorities in respect of these services to the handicapped and disabled.
The Ministry of Labour and National Service has a very good record in the training and rehabilitation of disabled persons. When, then, the Government decided to put the care of the handicapped and disabled under the Ministry in co-operation with the local authorities we expected a great development to take place. We expected that great schemes of rehabilitation would be launched in areas where no such schemes were already in existence. We believed that the welfare services which were inadequate in certain areas would be improved and that the money would go in the form of a direct grant from the Ministry of Labour. Now we are told by the present Government, in the Minister's Report, that these services are to be dealt with in a meagre way by a percentage of the general grant

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to local authorities. I am sure that the House will feel, as I do, that the handicapped and disabled have been betrayed by the Government who have gone back on their promise.
As my hon. Friend the Member for Lowestoft said, we get very little time in which to discuss problems of the handicapped and the disabled on the Floor of this House. People do no realise what an important problem this is. According to the Piercy Report, half of the disabled are civilians; I am speaking of those registered under the Disabled Persons (Employment) Act. Out of a total of 798,000, 362,000 are non-ex-Service men. I usually speak in this House with an ex-Service bias, but in this problem of the handicapped and disabled there is no question of differentiation. Both types are assets to the community, and they can become greater assets if they have the proper training and care. If the State is prepared to spend money on mending broken bodies and minds, those who are now on the industrial scrap heap because of their handicap and disability can become productive members of the community by being restored in body and mind.
The best way to make these people productive members of the community is by not allowing them to rot and feel uncared for. That is the great value of the welfare services which are referred to in the Minister's Report. But there is no provision to initiate services. Their initiation is left to the efforts of the local authorities, and all that the Minister's grant is concerned with is the development of services where they already exist. I suggest that throughout the country there are centres where the handicapped and disabled could be cared for, where welfare services are necessary to make these people feel that they are no longer the forgotten men and women of this country, that somebody cares for them and is concerned about their problems, wishes to lead them out of the slough of despond and despair and set their feet on the path towards recovery both of mind and body so that they may become productive members of the community.
What are the Government doing to solve this great problem when they fob it off as part of a general grant to local authorities, instead of carrying out the promise which they gave on Second
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Reading that the care of the handicapped and disabled should be the subject of a direct grant? The whole basis of the Piercy Report was to unify the care of the disabled under one Government Department. That has been done. One Government Department is now made responsible. It has power to direct the local authorities to do this, that and the other in the interests of the disabled. What is the good of them having the power to direct local authorities, unless they have the power to give them the grants sufficient to see that the services which they set up for the welfare of the disabled and handicapped are efficient and carry out the full purpose of those who initiate them?
I have spoken for longer than I intended, but I got a little wound up. I am sorry. I often get wound up on these subjects because I feel very deeply about them. During the Second Reading debate on the Disabled Persons (Employment) Bill, as it was then, we said that we felt that not sufficient had been done to implement the recommendations of the Piercy Committee. We were rebuked for saying that. We were told that all that was necessary had been done in the Bill.
The Government have gone hack on the pledge they gave then, and I urge the Minister to consult with the Minister of Labour and National Service to see whether something, can be done to increase the direct grant for the work being carried out by local authorities, under the Minister's direction, for the welfare of the disabled and the handicapped.
Mr. Mitchison: On a point of order, Mr. Deputy-Speaker. We have been discussing a very important part of the Government's statutory report which accompanies the Order, the part which deals with the affairs of the Ministry of Health. During the discussion we have had, if I may say so, three very well-informed and serious speeches from my hon. Friends. There is no representative of the Ministry of Health here. There is no one to answer a question. There is no one even to hear what is said.
In the circumstances, Mr. Deputy-Speaker, I ask your leave to move the Adjournment of the House until a representative of the Ministry of Health attends. I say at once that I have no complaint whatever to make—quite the

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opposite—of the diligence and courtesy of the right hon. Gentleman the Minister of Housing and Local Government, who has been here during the whole of these proceedings, but the Ministry of Health is not his Department.
Mr. Deputy-Speaker (Sir Gordon Touche): I am afraid that I could not accept a Motion for the Adjournment at the present time.
Mr. Blenkinsop: Further to that point of order, Mr. Deputy-Speaker. This is a matter of courtesy to the House in respect of which you ought, I submit, to do your best to protect the House. It has been known that specific points relating to the Ministry of Health were to be raised, and it was understood that a representative would be here. Presumably, the Minister of Health still lives and is breathing somewhere in London. Either he or the Parliamentary Secretary should surely find it possible to be present in order to make for a valuable discussion here in the House.
Mr. Deputy-Speaker: It is not my responsibility who represents the Government on the Front Bench.
8.12 p.m.
Mr. E. C. Redhead: It has been very interesting to observe during the debate the way in which practically every Member speaking from the Government benches has joined in a chorus of praise, drawing our attention particularly to the sheep's clothing which the Minister has adopted in presenting this Order. Indeed, one had a vary similar feeling in listening to the theme of the right hon. Gentleman's opening speech. There seems to have been more emphasis put upon trying to represent what good boys the Government were, and how badly misunderstood they had been in this connection, than upon any really honest attempt to answer the very cogent questions about the Order which have been put from this side of the House. Finally, we have had what one can only regard as the discourtesy to the House, to which attention has just been drawn, of the absence of the Minister of Health or any representative of his Department to answer the very powerful speeches which have been made about matters which are his particular concern.
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The Minister of Housing and Local Government and other Government spokesmen have made considerable play of the fact that the proposed amounts of the general grant for the first two years determination, namely, 1959–60 and 1960–61, are greater by £30 million and £51 million respectively than the aggregate of the specific grants which preceded them in the year 1958–59, and that the proportion of local authorities' estimated expenditure which will be borne by the general grant, putting it at the most favourable figure, on the Minister's own calculation, of 56·5 per cent., is even slightly more than the proportion borne by the specific grants in 1958–59.
It has been the constant theme of hon. and right Gentlemen opposite that those figures prove that the fears of those who opposed the introduction of the block grant system were entirely groundless and the alarms expressed by the Opposition were without any foundation. Far from this being any evidence of Government generosity, quite the contrary is true; to suggest otherwise is to take a wholly superficial view. Whatever comfort the Minister may derive from it, the very qualified expression of approval which he has obtained from the local authority associations is not likely to be very long-lived when the real implications of the block grant are fully appreciated by individual authorities.
At an earlier stage in the debate, it was suggested by one hon. Member that it was, perhaps, significant that representations from local authorities had found little voice in the course of the debate. I suggested to the hon. Gentleman that, as yet, the majority of local authorities had not had the opportunity of appreciating what is involved in the proposals contained in the Order. I am told that officers attending a conference of a certain group of municipal treasurers only last week found themselves completely unable to know exactly what this would mean in respect of their own local authorities.
With all sincerity, I suggest that those who are genuinely concerned about the health and future of local government should be wary when the Government appears to be coming to them with gifts in their hands. During the past few years, local authorities have experienced cuts in their programmes, restrictions in their plans, higher interest charges, with all

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that they have meant in burdens upon local authorities, and constant fluctuations of policy which have frustrated intelligent and effective planning. In these circumstances, local authorities and local rate-payers would do well to be cautious before accepting the Government's own appraisal of the value of this General Grant Order.
After all, no serious-minded person imagined for a moment that the Government would be so stupid as to present, in this first determination of the general grant, figures which would provide an immediate and abundant justification of all that has been said in opposition to the principle. I acknowledge quite readily that the window-dressing has been done with some cleverness. That it should be done at all should occasion no surprise, considering that. after all, a General Election may well be in the offing. Further, it is clear from every Ministerial statement which preceded the Local Government Act and every word which was uttered during the passage of that Measure through the House that one of the principal underlying purposes of the introduction of the block grant was the eventual reduction of the Exchequer contribution towards local authority expenditure. Nothing that has been said or has happened since avoids that conclusion about the basic purpose of this fundamental change, with all that will be entailed in additional burdens and restriction of services.
Notwithstanding the facade now presented for this Order, for quite obvious propaganda and publicity purposes, the danger still remains. Whatever may be the façade presented, whatever may be the pretence now put up to lull the unwary, when the pretence has served its purpose, after the General Election—if the electorate is foolish enough to be deluded into returning this Government again—all the machinery will be there to effect the original object of the introduction of the block grant. We shall then see the full revelation of the true nature of Tory policy in the matter, with a cat-back in the general grant and all the consequences which will flow from it.
In any case, this present representation of Government fairness to local authorities, even its generosity to them in the amounts proposed in the Order, is not necessarily what it may appear to be. The proportion which the general grant will bear to total expenditure of the local
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authorities is based upon estimated expenditure, which we are told in the Minister's Report has been arrived at, first, by an acceptance of the estimates put forward by the local authorities themselves, and. secondly, by a measure of uplift applied to those estimates by the Departments concerned in anticipation of certain developments and expansions of services which are not by any means clearly defined, as has been revealed today and which it is contemplated will be authorised and encouraged by the Government during the grant period. The whole assumption as to the adequacy of the general grant figures, their fairness or even generosity, rests on whether the estimates of expenditure are not only adequate for current needs but commensurate with the highly necessary and desirable developments and expansions of local government services, the initiative for which does not rest wholly or even primarily. with local authorities but with the Government.
In this regard, it is necessary to examine two aspects of the matter. Firstly. in what circumstances and on what basis will local authority estimates of expenditure be submitted? It has been said already, and I emphasise it, that this, after all, is the basis factor that has gone towards the determination of the general grant. Secondly, what kind of developments and expansions of those services have been provided for by Departmental adjustments of the local authority figures and to what extent has such provision been made?
With regard to local authorities' own submissions, local authorities undoubtedly will have been conditioned by the circumstances at the time the figures were prepared last summer. Surely no one who has any knowledge of local government will deny that that was a period of continuing restriction and constant exhortations of economy from every Ministry concerned with local authorities when authorities could not possibly have foreseen the easing of the restrictions which the Minister has recently announced.
In short, what local authorities would have done in framing estimates for submission was to put them forward, not on the basis of the developments and expansions of services that they regarded as desirable or even necessary, but on what they believe would be permissible and

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authorised within the ambit of Government policy. I find support for this view in the Ministerial circulars which were issued calling for the estimates or forecasts. The first was the preliminary Circular No. 34/58 issued by the Minister of Housing and Local Government on 29th May. It intimated that the form of the estimates would be notified to the local authorities by the various Departments concerned at a later date, but went on to give general guidance as to the basis upon which the figures were to be prepared.
My hon. Friend the Member for Fulham (Mr. M. Stewart) has already quoted from paragraph 6 of this circular. He drew attention to the significant phrase, that the authorities were required to put up their figures as the "councils sober estimate." I quote from the succeeding paragraph, paragraph 7, which also has a real bearing in determining what the atmosphere was for local authorities, and what the basic condition was upon which they should compile their figures. Paragraph 7 reads:
"Post-war experience has commonly been that approved programmes have not always been achieved because, taken in total, they have exceeded the available resources. The Departments will examine the estimates put in by local authorities critically from this point of view, and the Government will consider both whether they are, collectively, a realistic estimate of what is feasible, and also what the country can afford to aim at achieving in the relevant services during the grant period having regard to the general economic prospect and to other aspects of national policy."
In the light of what the authorities knew about the representation of the national economic position and the Government's economic policy last May and June, I suggest that that paragraph offered no encouragement to the view that a general policy of expansion was likely to be authorised or that it could properly be the basis for the computation of local authorities' figures. Furthermore, local authorities were told that their estimates would be wanted in considerable haste, which again has significance in deciding whether the ultimate figures provided did any more than reflect the needs based on the then current policies and conditioned by the atmosphere and climate of economy which was then current.
Of the more precise and detailed Departmental circulars which were subsequently issued to local authorities about
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the forecasts that were called for, I will refer to only one, namely, the Ministry of Health Circular No. 14/58 concerning local health and welfare services to which reference has already been made by several hon. Members on this side of the House. The Ministry of Health circular was issued on 19th June. It called for forecasts by not later than 15th August.
I emphasise that that gave less than two months for local authorities to prepare and submit forecasts for the next two financial years. In the case of county councils this involved the necessity of first referring to area officers for their estimates of local needs for the ensuing year and to provide time, within a strict timetable of less than two months from Ministerial circular to submission to the Ministry, for the labyrinth of submission to the county office for officerial examination and for submission to subcommittees and committees of county councils through which county councils customarily proceed in their budgetary processes.
In the case of Essex, I have ascertained that the area financial officers had exactly six days in which to prepare the relevant forecasts of health expenditure for their areas. So confusing was the immediate result, with so many discrepancies in the first figures, that the whole job had to be done all over again a few days later, again at only a few days' notice.
I have seen a copy of a letter which one such area financial officer, in forwarding the estimates for his area, submitted to the county council and from it I quote this significant passage:
"I must stress that the information submitted can only be taken as a guide since it has not been possible to give mature thought to probable future developments, having regard to the fact that this task virtually entailed the preparation of three years' annual estimates in three days."
With a timetable of that kind, how can it be seriously said that the local authorities' estimates represented any real provision for requisite development and expansion of their services?
It is important to note in this connection that the opportunity for consultation with the elected members of the authorities was only of the most minimal character, for, clearly, these were in the main officers' submissions. I remind the

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House that on policy decisions, the responsibility is that of the elected members and not of the officers who, in these circumstances, were bound to have acted with the utmost caution and framed their estimates within the known conditions and not in anticipation of any development in policy for which they themselves could not accept responsibility.
I mention that because if it was typical, as I suspect it to be, or the build-up of county forecasts from the aggregate of area and district forecasts, not only in health, but in education and other services, what reliance can possibly be placed on the adequacy of the ultimate aggregate figures and, even more so, on the provision that they may make for necessary development and expansion of the services?
It may be said—I expect it will be—that the subsequent Departmental adjustments of the local authority figures took all that into account and that additions were made to cover the foreseeable and intended development of services contemplated by the Government. That is a point worthy of examination. In this connection, it is worth while to remind ourselves of the figures which have been mentioned. We have been told that the sum total of the departmental additions to the local authority figures, according to the Minister's Report, was only £10 million for 1959–60 and £12 million for 1960–61 or approximately 1·5 per cent. of the total.
I was going to suggest in any event that that does not seem to contemplate any spectacular development of local authority services in the next two years, despite all the pressing needs. Having heard some of the explanations which have been given to us from the Government Front Bench today, however, I am even more bewildered by the long array of developments which, in the Minister's Report, has been said to be contemplated and taken into account in this determination of the general grant. We are told that there is to be an addition of £10 million over the local authorities' figures for the first year of determination.
The Parliamentary Secretary to the Ministry of Education has told us that there has been included in the grant an item for the prospective increase in teachers' salaries of 5 per cent. He told us that the figure was £14 million and
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then said that the full amount for which allowance has been made has been trimmed down a little by reason of compensating factors. He left us, however, with the impression that that £10 million which has been placed on top of the local authorities' aggregate figure is wholly due to the anticipated rise in teachers' salaries. When challenged on the point. the hon. Gentleman said that it was not.
Now, we are left in a worse state of confusion to know exactly what that £10 million represents. It cannot possibly be an adequate cover for the increase in teachers' salaries and for all the developments that are forecast in the White Paper and of which the local authorities in many instances could have had no foreknowledge and could not, therefore, have included in their figures. Therefore, when hon. Members opposite talk about this proposal by the Government representing an impressive broad advance in local government, one is tempted to say that that is just poppycock and an entire delusion and something that ought not to go out to the responsible local authorities as representing the real intentions of the Government.
I want to test the position in this regard, as other hon. Members have tried to test it in relation to the major services of education and health. I want to test it in relation to what is financially a much smaller but nevertheless important community service. I hope that the Parliamentary Secretary, when he replies, will be able to furnish an answer to this point. I refer to the question of the fire services.
On the last page of the Minister's Report on Local Government Finance, in the Appendix, the estimated expenditure for these given as £24·72 million in 1959–60 and £25·05 million in 1960–61. I cannot compare these estimates with the actual expenditure for these services in the immediately preceding years because I have failed so far to trace any figures of total expenditure under these heads from 1956–57 onwards. The Minister may be able to supply that deficiency.
In the Explanatory Notes in the Minister's Report dealing with this item, paragraph 28 states:
"Development of the Fire Services. Some increases in man-power establishments for the fire services are contemplated in the years under review. Steady progress in other parts of the service has been allowed for."

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Just what is meant by "some increases in manpower"? Frankly, it could mean little or nothing. At least until recent times there was known to be a serious deficiency in the complements of many fire services owing to the difficulties of recruitment; a shortage by reference to the actual authorised establishments at that time. In any event, therefore, progressively increased expenditure under this head was to be expected in order to repair that deficiency.
Beyond that, for the last three or four years there has been a serious question as to whether the authorised complements of the fire services were sufficient to provide an adequate fire cover. This was the subject of investigation by the Select Committee on Estimates which in its Fourth Report published in June, 1954, recommended that there should be a comprehensive review of the standards of fire cover. In consequence the review was undertaken by a joint committee of the central fire brigades advisory councils which, in turn, published its Report early in 1957.
In that report various recommendations were made for modest improvements involving increased manpower for the fire services. It is not necessary for me to go into all the technical details of those recommendations. Suffice for me to say that even though the Fire Brigades Union did not assent to these recommendations, believing that they did not go far enough to provide the kind of service which the man on the job feels to be requisite in the face of modern fire risks, they continued to press the Home Secretary on this matter.
The result was that the Home Secretary recently issued a circular to fire service authorities stating that he will be prepared to consider favourably for approval, schemes of establishment based on certain of the recommendations of the joint committee of the central fire brigades advisory councils. These recommended standards, if implemented, will involve an increase of establishments to the extent of 920 men in England and Wales and 190 in Scotland, at a total estimated increased cost of over £¾ million, and indeed it may be somewhat higher by now at current rates of remuneration.
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Therefore, what I want to know in this connection is whether this expansion. authorised now by the Home Secretary, has been allowed for in the total estimated expenditure in the next two years. and whether it has been taken into account in determining the amount of the general grant. On the face of it, it seems extremely unlikely, for in the first instance the Home Office Circular was issued only on 26th November, some days after the Order which we are discussing was laid in this House. The local authorities could have had no knowledge of it whatever and could not have taken it into account in framing their estimates under this head, and it is doubtful whether the Ministry did so either.
If it has not been taken into account, what is the result? It surely must be that local authorities can hardly be expected to agree to implement the recommendations put up by the Home Secretary in this connection, for they are not obligatory, the local authorities having been given discretion about them, until they have some assurance that they will have a measure of Exchequer assistance to provide for them. Even if it is suggested that an allowance has been made for this in the computation of the general grant, the fact that the element of the general grant attributable to this is, like so many other things, obscured in the generality of the total figure and not separately discernible, will discourage local authorities from adopting the new standards of fire cover, despite their importance, if the general grant presents them with difficulties in other directions. The whole purpose of the circular will be virtually frustrated in this connection and the fire service will be left in what is admittedly an inadequate condition.
I mention this instance to illustrate the dubiety that will arise in many other similar matters and every time a Ministry sends out a circular recommending some form of expansion or development in a local authority service.
In his Supplement to the Report the Minister sets out what the allocation of the general grant will be to the county councils and the county borough councils in the first year of determination. Ostensibly, this is done to guide local authorities in framing their budget and rate demands in the first year. It may be of some use to county councils and county

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borough councils to have this information, but I have yet to meet the municipal treasurer of a county district council who has the slightest clue what the result of all this will be or who has any confidence in advising his authority what the effect will be for guidance in framing the budget and the rate demand for the ensuing financial year.
Indeed, the so-called greater freedom and independence which is ostensibly one of the purposes and objects of this operation will be bought at the price of even greater uncertainty in local government, increasing doubt and hesitation and frustration in planning. This will mean for the progressive authority a risk, whatever it may do in its dubiety, of placing undue burdens on its ratepayers and in the case of the not-so-progressive authority the temptation to take refuge behind restriction of services rather than to be expansive in their development.
I acknowledge that the proof of the pudding will be in the eating, but, notwithstanding the apparent sweetness of the sauce with which the pudding has been embellished for this first bite, I have a most unhappy conviction that in the end it will prove to be a very unappetising meal for the ratepayers.
Notice taken that 40 Members were not present;
House counted, and, 40 Members being present—
8.45 p.m.
Mr. J. A. Sparks: I am very glad to see such a large attendance in the House at this time to hear the closing speeches in this debate.
There is one aspect of this problem to which the Minister completely failed to refer. He referred at great length to the White Paper and to the specific grants which the Government propose to make in the next two municipal years, and went on to claim for the Government a generous measure of credit in fixing the figures of the general grant. The figures may not be so bad as they could have been, but this problem must also be looked at from the point of view of the ratepayer and of the ordinary man—and woman, too—without whose rate contributions there would be no system of local government at all. The Government are merely a partner in this effort, and I think it is important that we should pay
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some regard to the effect of these proposals upon the ratepayers themselves.
The figures in the Report by the Minister of expenditure by local authorities seem to be regarded by many hon. Members opposite as being the total expenditure of the local authorities for the period of years mentioned in page 5. It is not the gross, total expenditure of the local authorities, but what is known as the relevant expenditure. In other words, certain expenditure has been extracted from the general budget of the local authorities, and only that expenditure which previously carried a Government grant is included in the expenditure which is listed. It is called the relevant expenditure, and it is based upon the specific circumstances in which grants have hitherto been paid.
That is a very important matter for us to remember, because the local authorities and the ratepayers have to bear a very considerable burden of expenditure on local services for which there is no form of grant whatever. Some of these we can call to mind, such as libraries, the maintenance of district roads, refuse collection and disposal, and certain other services carried out by local authorities for which there is no grant whatsoever. The non-grant-aided expenditure of local authorities is a considerable amount which grows from year to year and places an additional burden on ratepayers.
I referred to the figures in the Report by the Minister where there is a list of local government expenditure on grant-aided services over a number of years. It shows that for the year 1958–59 the expenditure was roughly £644 million; for next year that will rise to £707·8 million, and in 1960–61 it will be still higher, at £744·3 million. The Government pay only a part of that expenditure. The increased expenditure on what were grant-aided services will cost ratepayers an additional £28·4 million in the next year and £44·7 million more in 1960–61 compared with the current municipal year.
That additional burden will have to be borne in addition to the cost of the non-grant-aided services, a cost which regularly increases from year to year. Some idea of the increasing burden is given from a study of the rates estimated to be collected per head of the population. I will not instance too many years, but it is important to show the substantial increase which has already taken place.

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In 1950, the amount of rates collected was about £278 million, representing a rate per head of the population of £6 10s.; in 1957, the corresponding figures were £483 million and £10 18s. 6d.; for 1958, they were £528 million and £11 13s. Figures for the current year are not available, but they will show a substantial increase. The average rate poundage in 1957 was 15s. 8d., last year it was 18s., and for the current municipal year it will be very much higher.
The burden on the ratepayer can be considered in other ways. For instance, the figures of the average rates levied per head of the population for the current municipal year can be broken down into types of authorities. Those figures are most revealing. In the county boroughs the average rate levied per head of the population in the present municipal year was £11 13s. 5d. If we go back ten years to 1948–49, the amount was £6 9s. 7d. In the Metropolitan boroughs of London the average rate levied per head of population in the current municipal year is £26 10s. 8d. as against £13 18s. 11d. ten years ago. In the non-county boroughs the figure for the current year was £12 9s. 5d. as against £6 14s. 8d. ten years ago. In the urban districts it was £10 18s. 1d. as against £5 19s. 5d. ten years ago. In the rural districts it was £8 8s. 11d. compared with £8 3s. 0d. in the previous year, 1957–58. Ratepayers who live in rural areas pay a very much lower amount of rate than those who live in the Metropolitan boroughs.
The point of giving these figures is to emphasise to the House, and particularly to the right hon. Gentleman, that it is all very well for the right hon. Gentleman to crow from that box that the grant-aided payment is to be maintained at the average of 55·5 per cent., but he must not ignore the other side of the picture which is the continuous and growing burden on ordinary people who maintain and develop the services of the municipality. It must never be forgotten that this House and Her Majesty's Ministers decide from day to day matters which impose very heavy burdens upon local authorities which do not have the last word about the financial burdens or charges which are placed upon them.
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They are merely told, "This is what it is to be".
We have heard about salary scales for teachers this afternoon. They are settled by national negotiation. In many other activities of local authorities the financial aspects are decided at national level and the local authorities merely carry out national policy. Therefore, a sound case could be made for increasing the comparative proportion of 55·5 per cent. towards grant-aided expenditure by a fairly substantial amount.
We must not forget that as a result of Government policy local authorities have been deprived of at least £72 million worth of rateable value through industrial derating. The right hon. Gentleman might have given back to them something like £10 million by advancing the derating of industry from 25 per cent. to 50 per cent., but the Exchequer takes two-thirds in the process. The right hon. Gentleman crows about it as though he had done a magnificent thing for local authorities. In fact, at the moment, the local authorities have lost and still lose about £72 million of their rateable value through industrial derating.
Last year this House passed a Bill which deprived local authorities of a further £45 million of rateable value through the derating of shops and miscellaneous hereditaments. All these measures which are carried out by the Government and other national bodies from time to time tend to impose a burden on the ratepayers which ought not to be overlooked.
I emphasise that local authorities are engaged on a great job of work. I do not think we give them the full credit that we should for all they are doing. They have a wider and wider range of services entrusted to them—some of them very vital services. We must be quite sure that those services are not cramped, restrained and restricted because of shortage of money or through Government grants being inadequate. We must do all we can to encourage local authorities to develop and extend these services. Therefore, I should have liked to see the right hon. Gentleman going further than he has to lighten the growing and very heavy burden which ratepayers throughout the country are having to endure.
9.1 p.m.
Mr. G. W. Reynolds: I was intending to make quite a long speech, but in view of the shortness of the time— —
Mr. Blenkinsop: There is no restriction.
Mr. Reynolds: I thank my hon. Friend for reminding me of that. I was under the impression that we were finishing at the normal time this evening.
I agree with what a number of hon. Friends have said and about which a great deal has been made by hon. Members on the Government benches. Hon. Members opposite say that all we on this side of the House have said about the cutting of expenditure under the block grant has apparently come to naught because the Government say that more is to be given to local authorities than ever before. The Minister even went so far as to point out that the estimates of local authorities had been accepted and that, if things went well, most local authorities would get a 4d. reduction in their rates this time because of the effect of the proposals the Government have brought before us as a result of the Local Government Act.
I ask the Minister to think hack to the last time when local authority finances were adjusted. He will realise that when that job was last done, by my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), local authorities benefited to the extent of a 6d. rate. So it is not for those on the Treasury Bench to do a lot of crowing about a mere 4d. rate reduction, which, we are told, they are to make.
Many figures have been given in the Supplement to the Report showing what each local authority will receive, but that gives but a small part of the total picture of what will actually happen under the block grant. It does not help us in regard to the old Exchequer equalisation grant, which is now called a deficiency grant. On page 5 of the Report, percentages are given of what local authorities received during the last few years. What we are not told is what percentage would have been met from Government grants if the system had not been changed. We are told what it has been in the last few years, what it will be in the next year and the year after. I should think that somewhere in the archives of the Ministry—because of the
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mass of figures which has been presented to us—there would be an idea of what the percentage would have been but for the change in the financial relationship between Government and local government.
I have a suspicion that but for the change the percentage would have been going up. I do not know whether the Parliamentary Secretary has the figure and would be able to give it to us this evening, or it would be more useful if it could be given in a White Paper at some time in the future. I should like to see not only the figures which we have in the Supplement but also figures showing the differences which would have arisen in the rate deficiency grant, in order that we might look at each local authority and see which are the gainers and which are the losers and also look at the whole picture. I hope that we may have an assurance this evening from the Minister that, once the figures are available in a slightly more concrete form, we shall be able to see the whole picture in a table instead of, as at present, just part of it.
We are told that 90 per cent. of the money will be paid to the local authorities in the coming year and that the balance will be paid in the following year. We are told that in the year after that 91·25 per cent. will be paid in the year in question and the balance in the following year. This will continue and it will be eight or nine years before local authorities receive the full amount of the grant in any one year.
This surprises me, because, speaking on this subject in the Standing Committee, the Minister said:
"The purpose of the Government is that the whole of the general grant shall be paid to local authorities in the year in question so that they will not only know where they are but will have the money. On those grounds, which I consider overwhelming, I invite the Committee to approve the Clause."—[OFFICIAL REPORT, Standing Committee D, 20th February, 1958; c. 398–9.]
Apparently now it is to be eight or nine years before these grounds, which the Minister considers so important, are to take effect.
I consider that local authorities should be treated a little better than this. We know that at the moment there is between £30 and £40 million outstanding on the

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old percentage grants and that the Government will withhold £39 million from the first payment of the block grant and will pay that £39 million in the following year. At the same time, the Government are themselvees getting some extra money. They are getting £20 million—£13¼ million as a saving on the rate deficiency grant because of the increased rateable value of local authorities due to the re-rating of industry and £6¾ million which they are taking from the benefits which local authorities themselves are to get from the re-rating of industry.
If it is so important—and I believe it is important—under the new system that local authorities should have all the money during the year in question, why cannot the Minister hurry up the process by allowing local authorities to retain some of this rerating money? Instead of waiting eight or nine years before we reach the condition described as desirable by the Minister in Committee, why cannot we get there in two or three years? If it were so important to warrant the Minister calling upon the Committee to accept the Clause, it is most important that local authorities themselves should not have to wait eight or nine years before they reach that stage.
I am also surprised that in the working out of the supplementary grants the Minister has chosen to give exactly the same amount of grant to all local authorities within the Metropolitan Police District, whether they are wholly within that area or only partly within it. As I understand it, when the Bill was first published the position was a little obscure, and in Standing Committee an Amendment was moved which made it possible for the Government to pay different percentages to local authorities—one percentage to those entirely within the Metropolitan Police District and another, presumably smaller, percentage to those not entirely within the Metropolitan Police District.
This Amendment was moved in Standing Committee. The report of the discussion took less than one column of the OFFICIAL REPORT, and the Parliamentary Secretary accepted the Amendment by saying,
"I do not think that I need add to what has been said by my hon. Friend the Member
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for Crosby (Mr. Page). The Amendment seems to my right hon. Friend to provide for an eminently sensible piece of clarification, and we advise the Committee to accept it"— [OFFICIAL REPORT, Standing Committee D. 22nd April, 1958; c. 1443.]
I agree that it was a sensible piece of clarification, but it also included a provision allowing the Minister to specify two separate percentages, one for an authority wholly within the Metropolitan Police District and another for an authority not wholly within the Metropolitan Police District.
It appears to me that there is a case for having two sets of percentages, and I am surprised that only one figure has been fixed in the Order. In fixing this amount the Minister has to look at the extra cost of running services in and adjacent to the Metropolitan area. May I draw attention to the fact that one of the most important of these costs arises from the wages and salaries of the employees concerned. The additional part in the Metropolitan Police District is generally the London allowance paid on top of the standard salaries applying elsewhere in the country
For instance, the London allowance for teachers is paid for the London County Council area and the Middlesex County Council area. They are entirely within the Metropolitan area. But, when we come to Surrey we find that allowance paid in the areas of only 15 of the 33 district councils; that, in Kent, the London rate is paid in only 10 district areas out of 56; in only 12 out of 43 in Essex, and in only 7 out of 34 in Hertfordshire. Therefore, whilst these higher wages have to be paid in only comparatively small numbers of the areas, they will all get the same grant. The extra salaries to be paid to local government officers apply only to the Metropolitan Police District, so that cost covers a smaller area.
I am, therefore, surprised that in allocating the block grant between the local authorities the Government have decided to make to those authorities whose areas are only partly within the Metropolitan Police District the same payment as to those that are wholly within it, despite the fact that the Standing Committee deliberately inserted in the Bill a Clause, which was accepted by the Minister, enabling him to use two separate percentages. I can only assume that there is a reason for it, and I hope that the Parliamentary Secretary will tell us what it is.

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We have heard much today of education and of the health services, and with what has been said about them by my hon. Friends I fully agree, but there is an item of £1¾ million for electoral expenses for each of the next two years. The fact that it is the same for the two years rather disturbs me. The House will remember that in the Representation of the People Act, 1948, provision was made for the preparation of two electoral lists every year. Then, first for economy and, second—and just as important—because of a shortage of those capable of doing the work, as soon as that Act came into operation the Electoral Registers Act, 1949, was passed amending the original Act to provide for only one register to be prepared every year.
I should like to see us getting back to two registers per year as soon as possible, but from the amounts calculated for the new block grant it appears that the Government assume that, at least for the period of this Order, there will be no such attempt to make that return. Although there are comments in the Report on the improvement in the various services, there is no such comment in relation to the electoral registration service.
A necessary improvement is to return to the two registers. For one thing, there is the Government's liking for February elections. This is most unfair on those who have moved their homes in the previous fifteen months. Again, overspill housing entails people moving from their present dwellings to the very outskirts of towns, and, as they have no postal vote they have long distances to travel to the polls. I am disquieted by the fact that the Government are not making an attempt in the next two years to return to two registers a year, especially when the present unemployment position would seem to indicate a better supply of those capable of doing the work. We should get back to the provisions of the 1948 Act.
I am disappointed, too, that declining population is to be calculated over as long a period as 21 years. At a quick glance, it appears to me that the authorities that will benefit from this are mostly those that have suffered from bombing and consequent loss of population in the war. I do not criticise that, but instead of looking at the past it would
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be better if the Order provided something to help at present.
Many authorities should be encouraged to do more than they are doing to re-house overspill population and to reduce the populations in their areas. To look back on the last 21 years may do some good, but I would rather the Government looked back for only two or three years so as to give financial help to those authorities that ought to be reducing their populations at present. A term of 21 years is far too long.
I am also disturbed to note this reduction from Is. to 9d. in the rate deduction to be made once the other calculations for the new block grant have been carried out.
The hon. Member for Bournemouth. East and Christchurch (Mr. N. Nicolson) virtually thanked the Minister for having displayed no political partiality in working out the various elements in connection with the block grant. I would not have thought that political partiality would have entered into this matter. I would not have thought of it unless the hon. Member had mentioned it. He said that 14 authorities, of which his was one, had already benefited from changes which had been made between the publication of the White Paper and the making of the Order.
Then I began to get suspicious. Obviously a reduction in the rate reduction factor from 1s. to 9d. benefits the richer authorities. Obviously it benefits places like Bournemouth and Blackpool, both of which places were mentioned, and the Minister was thanked for changing his mind and reducing the amount. I should have preferred to see this particular aspect increased from 1s. upwards rather than reduced from 1s. downwards. We have to realise that it replaces in effect what was originally a 30d. rate deduction factor, which eventually became 17d. rate reduction in the old education main grant. It went down to 1s., as proposed in the White Paper. It has now gone down to 9d. It ought to have gone up to something like the 17d. which operates at the moment for education.
I know that we shall be told that the rate deficiency grant deals with variations as between one local authority area and another, but the sort of case which was put by my hon. Friend the Member

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for Huddersfield, East (Mr. J. P. W. Mallalieu) arose largely because the reduction in the education grant, which is at present 17d., is being reduced to 9d. under this new grant. I am certain that if the reduction was at 17d. we would not have had the quite justifiable complaints that we had from my hon. Friend the Member for Huddersfield, East. I am disappointed that it has been reduced to 9d.
One last factor which I would like to mention is the way in which the transitional adjustments are going to be dealt with. The new block grant is to be paid to county boroughs and county councils, but I understand from the Regulations that the transitional payments as between gainer and loser authorities will be based on the rating authority areas. I have studied the Regulations carefully and have spoken to people with more experience of them than I have, and I have been unable to find out what mechanism is to be used to make this adjustment. I hope the Parliamentary Secretary can give us some idea of this. Are the extra amounts, where they have to be paid to loser authorities, going to be paid direct by the Exchequer to the rating authorities? Are the rating authorities which are gainer authorities going to pay the money in, or is it to be dealt with by alteration in the county precept? That seems to be up in the air. I cannot find the answer anywhere and I hope the Parliamentary Secretary will be able to throw some light on the problem this evening.
A lot has been said about what might happen in the future. I am convinced that the only reason why the Government have apparently been so generous with the Regulations is that there is likely to be a General Election. We have had experience of this before and I think we shall experience it again. I shall not be happy until we get back to a more sensible relationship between local authorities and the central Government in the financing of their services.
9.18 p.m.
Mr. G. R. Mitchison: We have listened to some very informed, knowledgeable and sensible speeches from this side of the House. My hon. Friends the Members for Islington, North (Mr. Reynolds) and for Walthamstow, West (Mr. Redhead) and other hon. Friends of
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mine who spoke in connection with those aspects of the matter relating to health, said things which I hope were not only attended to by such few Tory Members as were here at the time but will also get the serious attention of the Minister afterwards, and will at least get a reply from the Parliamentary Secretary tonight.
The Government band has been somewhat out of tune. We were told early in the debate that the Minister of Education was the second fiddle, and it did not take much to discover that the right hon. Gentleman was the trumpeter, blowing his own trumpet. We lost the bassoon for some time, but now the prodigal bassoon is back. I will tell the right hon. and learned Gentleman that there is more joy over a prodigal Minister of Health who returns than any sorrow we may have felt at his absence.
There has been some discord. What we are dealing with are two rather dismal Orders, if I may say so, dismal in form at least, the product of the Local Government Act and the instrument called "Ernie", which the Government must have borrowed from the Post Office for the purpose. No doubt some part of it is serious calculation, but the more I heard of the debate, particularly from the Government side, the less certain I felt about how they arrived at some of the figures which have gone to make their total.
It is perfectly true that education takes by far the largest share of the expenditure, but I ask right hon. and hon. Gentlemen to remember that other services with which we are dealing are of vital importance to the community and have been the subject lately of great public anxiety. They involve matters which it is our particular and special duty in this House to attend to, matters like mental health and what is commonly called Part III accommodation, the care of the aged, and a number of other things to which I shall have to return a little later.
The right hon. Gentleman, a member of this Government of weathercocks, amused me by charging me with inconsistency. He did that, of course, on the principle that, if one knows that somebody is going to accuse one of inconsistency—and we can accuse him of that quite easily—one had better get in first. I looked up the remarks of mine which he thought were inconsistent. I very much dislike the

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practice of quoting one's own speeches, but what I did say on Third Reading seems to me now so apposite to what we are, discussing today that I will risk the distaste of the House by quoting it:
"The difficulty in all these cases is not only that these are essential services, but that they are expanding ones. Education has got to expand. It has expanded and has to go on expanding. As for mental health, look at the Guillebaud Report"—
I think I had the name wrong—
"and as for handicapped persons, look at the Piercy Report. Things have to be done in recognition of our duty as a community to the kids, the old people and those who are ill. We have to meet rising expenditure. This block grant is intended to limit expenditure and to see that the Treasury knows where it is in advance. That is the real object."
I stand by every word of that today, and I stand by what I said a few sentences later:
"One was the block grant, the amount of which they "—
that is, local authorities—
"did not know, do not know, and will not know until the very last moment."—[OFFICIAL REPORT, 13th May, 1958; Vol. 588, c. 333.]
The criticism about the block grant levelled at the right hon. Gentleman when what is now the Act was going through, was that he would not tell anybody what he intended to do about it. All we had was a shadowy promise from the Minister of Education, which was really of no value at all, to say that he would not cut down the expenditure on education. Since education is just about the most obvious instance of a necessarily expanding service that one can have, and since his own estimates indicated necessary expansion, it was really toying with the House to suggest that a promise not to cut it down meant anything at all. Obviously, he could not cut it down.
The difficulty about the Minister's attitude today is this. He is dealing with expanding services. Some of them, at any rate, are health services which, to quote the phrase which has been applied to the mental health services, must be reorientated—something a good deal more sweeping than mere expansion. He is so bad at political relativity. He is proceeding at a given rate and when he begins to slow down, which I think is what is happening on the figures in this case, he then says, "We are going forward". In one sense he is going forward—he has not completely stopped yet—but in another he is slipping back.
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If one looks at the figures in the White Paper Report of the Minister, one finds that that is exactly what is happening. One Government spokesman tried to wriggle out of it on grounds of rising costs, but the percentage figures are not affected by rising costs, and they show, as my hon. Friend the Member for Fulham (Mr. M. Stewart) said, a steady fall in the increases in the proportion of expenditure borne out of grants. Naturally, in the ordinary course of things, the tendency for some time past now has been for the proportion of grants to rates to rise, and one of the reasons, as my hon. Friend the Member for Fulham said, is that the rates cannot manage the requirements of some of these services. They become obvoiusly oppressive when one reaches a certain point, and the regressive element in rates, the unfairnesses between the moderately off man and the really well off man, becomes too marked to escape attention. For that reason, there has been a constant tendency for grants to increase in relation to rates.
The table in the Explanatory Memorandum sets out these percentages, and it shows that that tendency, which is a natural one, is actually being stopped. One finds from the figures that the rise in grants has been persistently getting smaller. In 1956–57 there was £42 million more in grant than the year before. The next increase was £37 million, the next £30 million and the first of the figures we are concerned with today shows another increase of £30 million. The next increase is £21 million. If one takes that as a curve, a rate of increase, it is clear that the effect of this grant is to slow down a rise, which is due partly to the nature of the demands on local authority finance and partly to the character of the services in question. The result, therefore, is that in total this is a niggardly expenditure.
That is not all. We heard the most extraordinary story about what happened as between local authority estimates and the Government's final figure. I invite the House to consider exactly what was said. First, there was circular No. 34/58 in May, at a time when the stringent economy campaign was in full swing. To quote my right hon. Friend the Member for Huyton (Mr. H. Wilson), the Govern- meant had not yet
"… turned Peter's face to the wall."— [OFFICIAL REPORT, 3rd November, 1958; Vol. 594, c. 617.]

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The circular to local authorities reflects the position in May. My hon. Friend the Member for Walthamstow, West made this quotation from the circular:
"The Departments will examine the estimates, … and the Government will consider both whether they are, collectively, a realistic estimate of what is feasible, and also what the country can afford to aim at achieving in the relevant services during the grant period having regard to the general economic prospect and to other aspects of national policy."
It was that somewhat frightening observation which had to be coupled with a request to local authorities to make a sober estimate, and these preparations amounted to saying to local authorities, "Tell us the least amount which you can do with. Tell us your most economic estimate in the light of the national policy of the Government at the moment." The resulting figure was £697 million; I am taking the first year.
Then, what happened? The Departments went through it and by now, I suppose, the climate may have been beginning to change. At least, all that they succeeded in doing was cutting down less than one-half of 1 per cent., about £3½ million from that figure. Then, there was another £10 million or thereabouts. Those two figures taken together amount to the 5 per cent. increase which the teachers were being offered at the time.
It is perfectly clear what happened. The local authorities' estimates were taken, allowance was made for the 5 per cent. increase for the teachers and nothing else whatever of any substance was done. Therefore, all the talk in the White Paper about the health services and the rest, and all the talk in the other White Paper about the expense of secondary education, is the purest election propaganda and nothing else.
Let me remind the House again of what was said in the White Paper, Cmnd. 604, which has only just appeared. Paragraph 32 deals with cost and the capital expenditure programme and states:
"In fixing the grant for the first general grant period the Government have taken account of the policies proposed in this White Paper".
We now know, on the figures and on the persistent refusal of the Government to answer what account they had taken, that that sentence can be described in the time-honoured phrase as a terminological
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inexactitude of the most pillar-box-red colour. That is exactly what it is. I am allowed to think and say rude things about Government White Papers that I would not for one moment think or say about the author of any one of them, but to have that kind of thing coming from a responsible Government and then to get the admissions and the refusals that we had today, and the final figures that resulted from them, throws a lurid light on the real intentions of the Government.
The object of the White Paper is to explain the two Orders that we have to consider today. It is just as well that there was not another White Paper to explain this one, because it would have had some startlingly frank things to say. When we get to the lurid purple patch at the end of the White Paper about secondary education, opportunity for all and the wonderful idealism of the Government, and when we listen to some of the stuff we heard today about the wonderful generosity, wisdom and all the rest of it from the Government, it makes me wonder what on earth are the limits to the belief that the party opposite thinks it can impose on the electors shortly before a General Election. Members opposite have it well and firmly fixed in their heads that the public will swallow anything and this White paper is the result of that sort of belief.
I turn now to another matter, to what I might without unfriendliness call the prodigal bassoon. The Health Services, of course, do not amount to nearly so much, but do hon. and right hon. Members appreciate the effect of what I have been saying about these figures? This is what it comes to. The local authorities were asked to make estimates. They were asked, as appears in the instructions, to follow their old and tried procedure of making estimates in the usual way through the usual committees and, finally, reviewing them in the finance committee. They had to consider a number of things that were tolerably clear. They were, no doubt, expanding, but a good chief education officer could give a measure of the extent of the expansion in education.
When we come to the health services we are dealing with an entirely different matter. We are dealing with things which have to be "reorientated "—I quote the word again. We are dealing with

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responsibilities as regards mental health which are now being put on local authorities for the first time. We are dealing, too, in the matter of the handicapped with an extremely difficult problem on which there has been a full Report and, I am sure, full consideration by the Government.
These are not town hall matters, these are matters of national policy. How can we expect a county council like Essex, to which my hon. Friend referred, in six days or thereabouts to consider the whole matter, to formulate its future policy on mental health and handicapped persons? And is it the county council's business to do so? It most certainly is not its business to do it. It is the business of the central Government, and the central Government left themselves no elbow room. These £10 million and £3½ million were fully accounted for by the teachers' salaries and, so far as I can see, there appears to have been no provision by the central Government for any definite sum for any of these health services. It may be that the bassoon was away and we did not hear the right note played, but we could not get it out of anybody. After all, the right hon. Gentleman the Minister of Housing and Local Government is the responsible Minister in these matters, and he must not be so occupied in blowing his own trumpet that he does not keep the rest of his band in order.
There it is. It is a really scandalous performance to let a responsible county council have six days, ten days or even a fortnight at any rate, a lamentably short time—in which to consider what is being asked of it on the first occasion of a general grant and then to come up with all this stuff about the health services, saying how wonderfully the Government are doing. When we come to analyse the facts, my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop) pointed out the full story—ten old men and seven domestic helps as an average of the Government's contribution in this matter.
One can have fun with it and laugh at it but what are being laughed at are the old, the sick and the handicapped folk, and it is thoroughly in line with the usual habits of the Tory Party that they should bring out a grossly deceptive White Paper like this one, pretending that they have
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paid some attention to these things, and when we get down to the facts we find that they have paid no attention whatever, monetary or otherwise, but have just written it up out of their fertile imaginations. They really are a wonderful political party. The more I see of them, the more I marvel at them. Well, that is what one has to say about the health services. Now let us turn to another aspect of the matter.
I wonder if hon. and right hon. Gentlemen opposite realise that they are not merely laying down this figure for today but for two years to come, with the variation allowed for in the recommendations and in the Order. Only on one point can they change their minds and increase it, and that is the cost of goods, services and remuneration. Even then, suppose there is more inflation. Is anybody bold enough to say today that there will not be any inflation in the next two years? Is anybody bold enough to venture his opinion on that point at the risk of the old people, the sick people and the children, with whom the substance of this Order is dealing?
If there is inflation let us look at what will happen. It is left to the Minister of Housing and Local Government to decide whether or not the local authorities can carry the burden, and the right hon. Gentleman is the person who is responsible for the remarkable sentence that I shall never forget in the first local govern-White Paper about local authorities and money, namely:
"The present system of percentage grants acts as an indiscriminating incentive to further expenditure."
Anybody who can be responsible for a sentence like that about local authorities ought never to be allowed to judge on his own, or with his colleagues, on whether the local authorities can or cannot carry extra expenditure in connection with vital services such as education and the health services about which we are talking.
Short of that, look at the position. We can take the education services, but let us take the health services first. We are venturing on new ground, ground which has been charted for us by Royal Commissions, but we have had no practical experience of the enormous change envisaged in the rÔle of the local authorities in relation to mental health services. We have had no experience of the effect

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of stimulating them on the lines suggested by the Piercy Report. We are venturing on new ground, and we are doing it —this is mentioned in all the Reports— because the public conscience at large has lately become more alive to these matters and we hon. Members are here to reflect it as best we can.
It is right that it should be done, and no one disputes that, but to say that everything is ascertainable in advance is a very bold statement. One of the troubles about the Order and the block grant system is that one ties oneself up for a period ahead when, as in this instance, one is dealing with things which one cannot measure, because one does not know how they will turn out and what will happen.
It is the same with education. Even with this Government we had a White Paper on technical education and now we have a White Paper on secondary education. The Government change their mind often enough. Look what they have done about financial policy. Do they never change their mind about education? I do not know. If they have covered the whole field already, are they fully satisfied that no further major developments are possible in education which will affect local authorities during the next two years? Yet, the Government are committing themselves to a fixed figure and taking town hall estimates, pruning them a bit and adding something for the teachers' 5 per cent. That is how they have arrived at it, as far as I can see. If they have arrived at it in any other way it will take a good deal of explaining how they manage to make the two things coincide so remarkably.
This kind of thing that happens just before a General Election. The right hon. Gentleman comes along and says how well he has treated the local authorities, blows his trumpet as hard as he can and get much of the Tory Press to say how wonderful and how generous the Government are and that things are not as bad as the Opposition have painted them. That is not the point. The point is that this is a very dangerous experiment. The Government have taken a very narrow margin and forget that what they are dealing with is expanding and new services. This is a most risky experi-
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ment, and I regard it as very distinctly on the stingy side.
On the other hand, what are we to do about it? This is a matter which it is possible for the Opposition to criticise but almost impossible for it to replace; for they have not the machinery to deal with figures of this sort. I think it very doubtful indeed whether there is any real increase having regard to the demand. The Opposition have been thinking about this and we have come to the conclusion that the right thing to do is to let the Order pass at the moment with our comment that we are not a bit satisfied with it, that there are things in it with which we are grossly dissatisfied and that we regard some of the White Paper as nothing but propaganda of the cheapest sort; and then see how it works out.
After all, after two years there may be a different Government. There may not even be the same system of grants. The Labour Party is pledged to review all the financial relations between the central Government and local authorities, and when we do it I hope we shall do it in a better spirit than that which animated the authors of these Reports and these Orders.
9.45 p.m.
The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. J. R. Bevins): The House has had a rather longer debate than was generally expected, and certainly more questions have been asked than I had anticipated. I hope quite shortly to answer most of the questions that have been put to my right hon. Friend, and if there are any of a particularly detailed character that I do not deal with in the course of what I have to say, I will take the opportunity of getting into touch with these hon. Members who have put these minor points.
The hon. Member for Fulham (Mr. M. Stewart), who opened the debate, and the hon. and learned Member for Kettering (Mr. Mitchison), both made a most valiant attempt to make bricks without straw, and I must say that I thought their intellectual equipment was far superior to their material and their arguments. First of all, may I say that neither my right hon. Friend nor any of my hon. Friends on this side of the House retract a single word of what we have ever said about

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our support and backing for the principle of the general grant. Having said that, I realise, of course, that the Opposition throughout this matter have always distrusted our motives. The OFFICIAL REPORT of the various stages of the Local Government Bill is very freely littered with the most extravagant phophecies and forebodings of what was going to happen.
For example, the hon. Member for Birmingham, All Saints (Mr. D. Howell) made a speech on Second Reading of the Local Government Bill on 9th December, 1957, in which he said that:
"… the proposals in the Bill are a complete fraud and confidence trick that the Government are now perpetrating upon the country, the bill for which will be paid by the ratepayers for years to come."—[OFFICIAL REPORT, 9th December, 1957 Vol. 579, c. 934.]
The hon. Member for Fulham today went out of his way to use words suggesting that none of us would ever have doubted that my right hon. Friend would make a bold show by cutting down the general grant before a General Election. It is all very well to say that tonight, but that qualification to the attack on the general grant was never made on Second Reading, in Committee or on Third Reading by a single hon. Member on the other side of the House.
The hon. and learned Member for Kettering was, I thought, rather unusually sensitive when he was replying to some of the comments of my right hon. Friend. I thought my right hon. Friend was extremely gentlemanly, as indeed he always is, with the hon. and learned Gentleman, because he at least selected the most innocuous of the hon. and learned Gentleman's comments on the general grant. Therefore, perhaps I may be allowed to refresh the memory of the hon. and learned Gentleman on one or two other things which he said about the Government and the general grant. On 10th December, 1957, in the Second Reading debate, the hon. and learned Gentleman said:
"The Treasury is to be indemnified this time and the local authorities can go hang for all it cares."
We will come to that in a moment. A little later on, he said:
"The Bill, and the way it has been treated, verges on the fraudulent. … If the Minister can talk about immoral arguments, I can tell him that his Bill is really fraudulent. The
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Government have been altogether too smart with the local authorities."—[OFFICIAL REPORT, 10th December, 1957; Vol. 579, c. 1187–8.]
Hon. Members: Hear, hear.
Mr. Bevins: It is all very well for hon. Gentlemen to echo, and presumably endorse, this rather foolish and rather extravagant statement, but, if that is really what they feel, how is it that all the old fury has gone out of their bellies in this debate? Why is it that there is no suggestion of dividing the House on the first General Grant Order ever put forward?
In our earlier debate, a great deal was said about the views of the education world, and I well remember many quotations which were used in the House coming from the Chairman of the Association of Educational Committees, Dr. Alexander. That gentleman was very forthright, and I am putting it mildly, in some of his criticisms of my right hon. Friend, but what does Dr. Alexander say in the current issue of the journal Education?
"When the proposals for these changes were first made there was a good deal of evidence that one of the outcomes would be a transfer of part of the burden so far as education was concerned from the taxes to the rates. But these proposals show that on the basis of estimates, the level of grant hitherto obtaining has been maintained."
He went on to say:
"Perhaps the campaign in which the A.E.C. took an active part has not been without effect."
Be that as it may, the fact of the matter is that all the steam and heat has gone out of that gentleman's criticisms. It was chiefly because of the hostility of Her Majesty's Opposition to the principle of the general grant, which had nothing to do with functions or with the Local Government Commission or with boundaries, that the House divided on Second Reading. It was chiefly because of that that we had six Divisions in Standing Committee against the principle of the general grant, and that was why the Opposition divided the House on Third Reading.
I now come to the more specific points mentioned by the hon. Member for Fulham and the hon. and learned Member for Kettering. What my right hon. Friend made perfectly clear was that in the present financial year—and no amount of argument can blur this picture—grants will be paid and are being paid by the Exchequer to local authorities

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throughout England and Wales to the tune of £363 million. Nothing can alter the fact that under the proposed arrangements which would operate during the first year, the next financial year the total amount of grants will be £393 million. I say nothing about rerating or any of the minor issues. I confine myself to those two simple figures, which show an increase in Exchequer aid to local authorities of £30 million. I do not begin to understand what is fraudulent in an exercise which produces that result, nor do I see where there is any lack of good faith.
Mr. Blenkinsop: Presumably the hon. Member will deal with what I said about the Health Service and so on. For example, will he say whether the Government are making a mandatory provision for local authorities to undertake mental health services of a domiciliary character? If such services are to be provided, can they be provided under the provisions of the White Paper?
Mr. Bevins: I will deal with that when I deal with the Health Service provisions.
It was argued by several hon. Gentleman opposite, chiefly by Front Bench speakers, that there had been some jiggery-pokery, some strange machinations, which enabled the Government to progress from the figure of £697 million —the aggregate of the local authorities' estimates—to the agreed figure for relevant expenditure of £707¾ million. It was assumed that because the difference between those two figures amounted to only £10 million, it was difficult to see where the Burnham award came in and also difficult to see where various charges in connection with various kinds of capital expenditure came into the picture.
Before discussing the details of those figures, I want briefly to comment on the play made by the hon. Member for Fulham on the wording of the circular wherein my right hon. Friend invited local authorities to put forward their sober estimates of expenditure. I see nothing wrong with that. Every hon. Member with experience of local government knows that estimates of expenditure, especially in their preliminary stages, are very often lacking in sobriety. Local councils, whatever their political complexion, often have to trim their original
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estimates of expenditure. It is true that my right hon. Friend went to the local authorities and asked them for these estimates. What would have been said in this debate if he had not taken that step? Had my right hon. Friend not gone to the local authorities for that information he would have been accused of far worse things that he has been in this debate.
The hon. Member for Fulham said that it was perfectly clear that the Government had allowed for the Burnham award only; this brings me to the explanation of the figures. Local authority estimates aggregated £697 million. The final agreed figure for local government relevant expenditure was £707¾ million. So we start with the local authority figure of £697 million, and from that we take certain reductions which were agreed with the local authority associations. They total £5½ million. That leaves a balance of £691½ million. To that my right hon. Friend added the 5 per cent. Burnham award, which gave £14 million. He then added a further figure for certain small pay increases and other developments in the services of £2¼ million, which gave us the final figure of £707¾ million. That is the perfectly fair explanation.
The hon. Member for Fulham referred to the fact that my right hon. Friend had used a phrase in connection with reductions from the local authority estimates of not much more than ½ per cent. I concede that £5½ million is rather more than ½ per cent. It is accounted for by the agreement with the local authorities that £1 million of these estimates referred to contributions in connection with child care which should not have been within their original figure.
Mr. Mitchison: I am very much obliged to the Parliamentary Secretary. I only get up to rescue Dr. Alexander. In Education of 5th December, 1957, he said:
"… when it comes to the provision of money in the form of grants for the development of the service the process is one of deceleration."
That is exactly what I said here.
Mr. Bevins: He may have said that in that context, but that is not what he said in the context to which I was referring before.

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I would make one further point. It has been suggested by several hon. Gentlemen opposite that no provision has been made for the expansion in education, particularly in secondary education, during the period of the two-year general grant, that is to say, the first two years of its operation. The Parliamentary Secretary to the Ministry of Education very rightly pointed out earlier that most of these developments will, in fact, commence during the second year of the two-year period of the general grant.
The principal impact of these developments will, in the financial sense, be that the local authorities will have to pay loan charges during the second year of the general grant. The House would be very unwise to exaggerate the impact of those loan charges. I have had them worked out by my advisers, and this shows that for each additional £1 million of capital expenditure in the second year of this period the loan charges will increase by only £35,000. The grant on that figure would be only one four-hundredth part of 1 per cent.—·0025 per cont.—of the general grant for those years. The forecasts of expenditure the Government have used in fixing the amount of general grant cover the probable increases in capital expenditure.
A great deal has been said on the question of inflation and rising prices. The hon. Member for Fulham said that during the two and a half years ended June, 1958, the Index of Retail Prices had risen by 10 per cent., and proceeded to give us a homily on the case for inflation by means of expansion, in accordance with the Socialist doctrine. I agree that the total of relevant expenditure makes no provision for possible further increases in the price level. That is true, but if it seems to my right hon. Friend that during this grant period there is any unforeseen rise in the level of prices and that it is so large that it ought not to fall on local authorities, of course he has power under the Local Government Act to amend the Order.
We hope that that will not be necessary; indeed, we do not think it will be necessary, because for the first time since the end of the war we have got inflation under control. [HON. MEMBERS: "Oh."] Hon. Members opposite really must not take offence if they are sometimes reminded that in the twelve months which
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preceded the 1951 election, when we were sitting on the opposite side of the House, the Index of Retail Prices rose by 10 per cent. In the last twelve months that figure has been less than 2 per cent., and certainly there is no intention on the part of the Government of stoking up the fires of inflation again. I should be foolish to deny that at some time in the future inflation may rear its head again. That depends very largely on the result of the next General Election. The Labour Party's latest 6d. "glossy" reads to me like a batch of prescriptions for inflation with the lid off, but I do not think hon. Members opposite should worry too much about that because it will never happen.
Before I turn to the health criticisms made by the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop), I should like to refer to some of the speeches made from this side of the House. My right hon. Friend is indebted to the appreciative speeches made by my hon. Friends the Members for the City of Chester (Mr. Temple), Rye (Mr. Godman Irvine), and Norwich, South (Mr. Rippon). [HON. MEMBERS: "Bournemouth, East and Christchurch?"] I am coming to the speech of my hon. Friend the Member for Bournemouth, East and Christchurch (Mr. N. Nicolson). He put two questions. First he asked what the figures for individual local authorities in the settlement really meant, that is to say, whether they were liable to change or not under the transitional arrangements. The short answer is that if a local authority happens to be a loser, as my hon. Friend's constituency is, the figures in the Supplement would be increased because the local authority would be entitled to contributions from the Government under the transitional arrangements.
His second question related to the connection, if any, between the estimates of relevant expenditure by local authorities and the grants which are actually paid. He was perfectly right in understanding that there is no necessary, automatic connection. The estimates of relevant expenditure are simply what they are represented to be, whereas on the other hand, the distribution of general grant is based on the formula which is largely founded on need, although to some small extent it has regard to the resources of the local authority. I know my hon.

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Friend is glad that the rate product deduction factor has been reduced from 12d. to 9d.
The hon. and learned Member for Cardigan (Mr. Bowen) dealt with the County of Cardigan, but I am afraid that there is not a great deal I can say to him except that I commiserate with him and his constituents. As I know the House realises, it is impossible when one is trying to work out a formula to avoid the fact that some local authorities will gain and some will lose. I think that probably the great majority of the rest of the Welsh counties are beneficiaries by these arrangements. Cardigan undoubtedly is not, although we tried, not only in the case of Cardigan but in the case of other Welsh counties, to make their plight a little easier by changing the low density factor. It has helped, and I think that Cardigan will also be assisted by the transitional arrangements.
The hon. Member for Huddersfield, East (Mr. J. P. W. Mallalieu)—who is not in his place although his colleague of a different political colour, the hon. Member for Huddersfield, West (Mr. Wade) is—referred to the difficulties there. I have not been able to secure exact figures in the time available to me, but I think that the hon. Member's figures were somewhat exaggerated. If he will be so good as to leave it with me, I will certainly examine the case of Huddersfield and get in touch with him.
My hon. Friend the Member for Norwich, South asked about the cost of redevelopment in non-county boroughs. The position there is that those non-county boroughs which are least able to bear this expenditure by reason of small resources will be helped through the agency of the rate deficiency grants. For the rest, of course, the county councils have power to make contributions where they think fit.
The hon. Member for Islington, North (Mr. Reynolds) who, if I may say so without being patronising, made a delightfully well-informed speech which I am sure the whole House enjoyed, asked me a number of questions, to one or two of which I will refer. He asked about the payment of general grant within the period of the 12 months to which the general grant refers. Our intention is that in the first year we shall pay
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90 per cent. of the full amount, and the balance will be paid in the succeeding year. The figure is to be only 90 per cent., because, frankly, there are such large arrears of education and other grants to be paid that I doubt very much whether it would be practicable to go at a more rapid rate.
As for the mechanics of the transitional arrangements, there will be no calculations between local authorities or anything of that kind. All the calculations will be made in the Ministry of Housing and Local Government and when the net amounts have been calculated, those sums will be paid to the receiving authorities. I think that the hon. Member will find that most of the arrangements are provided for in Section 15 of the Act.
The hon. Member for Brierley Hill (Mr. Simmons)—and I apologise to both him and his hon. Friend the Member for Newcastle-upon-Tyne, East for missing their speeches—suggested that the Government were going back on a pledge given by my hon. Friend the then Parliamentary Secretary to the Ministry of Labour and National Service that there would be specific grants from the Ministry to local authorities. The answer is that by virtue of the Disabled Persons (Employment) Act, 1958, which comes into operation at the beginning of next year, the specific grants which up to now have been paid in respect of sheltered employment services by the Ministry of Labour will continue to be paid by that Ministry. They have in no sense been superseded by the general grant. I hope that that will satisfy him.
The hon. Member for Newcastle-upon-Tyne, East and several of his hon. Friends had a good deal to say about mental illness and the services for the handicapped. My right hon. and learned Friend the Minister of Health would like an opportunity to study in detail all that has been said on these very important matters, and I have no doubt that in due course, if he thinks it necessary, he will communicate his views to those hon. Members who have evinced such an interest in these subjects. Meanwhile, perhaps I might be allowed, with the consent of my right hon. Friend, to say one or two things that I hope may be of some help.

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First of all, I refer to the deliberations of the Piercy Committee. That Committee considered that while the welfare services for the blind were very comprehensive, there was still need for a great deal of improvement in the services of all other classes of handicapped people, and that the absence of Exchequer grant was slowing down the development of those services.
As the House knows, the Committee recommended that local authorities should be grant aided by the Exchequer in their expenditure on services provided under Section 29 of the National Assistance Act. The Report [Cmd. 9883] went on to say that:
"Any such grant should be available without distinction between the type of disabled person or of service concerned, but the rate of grant would need to be calculated having regard to the extent to which services have already been provided in some fields."
The advent of the general grant ruled out any possibility of introducing a specific grant for those services. It will be recalled that when the Bill was in Committee, my hon. Friend the Parliamentary Secretary made a statement which made it quite clear that the Government intended to exclude expenditure on account of which grant has not been paid before the year 1959–60. He added that up to the level, I think, of 1958–59—the current financial year—expenditure will not rank for consideration in the general grant. but that any excess will.
The case for taking into consideration expenditure over and above the 1958–59 level is the accepted need to promote development in the service. Financial assistance towards current expenditure would not contribute to this object. It may help a little if I give one or two figures relating to this service. The estimates that we received from the local authorities showed that the present level of spending is at a rate of about £2·34 million a year, and that they expected to increase their expenditure by £027 million in 1959–60, and by £0·44 million in 1960–61. These expenditure figures have been taken into consideration in the general grant calculations in the same way as have the expenditure figures for the local health services.
So, in effect—and this is the effect— the general grant contains a 50 per cent. allowance towards the cost of a future development—
Mr. Blenkinsop: I am grateful to the hon. Gentleman for what he has said, but I should be glad if we could hear the Minister of Health himself saying something at the proper time. In this particular instance, does it not mean, in effect, that the few local authorities that have developed considerable services are being put in a disadvantageous position as against those authorities newly coming into this sphere?
Mr. Bevins: What the hon. Gentleman says is perfectly true in the case of the local authority that has done this work in the past. In respect of that past expenditure, it does not derive any benefit from this arrangement.
Mr. Blenkinsop: Perhaps I can make the point quite clear. I am not referring to expenditure that has gone, but to the continuation of the existing level of expenditure, which, as I understand it, will also not be counted.
Mr. Bevins: I am perfectly seized of the hon. Gentleman's point. I was about to add only that this expenditure, at this moment, is not of an enormously important order. After all, the local authorities are doing far better under these revised financial arrangements than they have been doing in recent years.
I come to the question, with which I should like to deal briefly, of mental deficiency grants. The Government do not think that it would be appropriate, when most of the major specific grants are being taken into the general grant, to introduce a new specific grant in the mental health services either for revenue account or for capital expenditure. Spending by local authorities on the mental health services we estimate at just over £4 million in the current financial year. In the next financial year we expect it to rise by about 22 per cent. to a total figure of £5 million, and the year after that we expect it to go up to almost £6 million. We shall, therefore, have had an increase in expenditure of 44 per cent. within two years.
My right hon. Friend not only accepted the local authorities' estimates in toto and made no deduction of any kind under this heading, but even increased the total estimate where it was represented that some authorities had omitted to make any provision for development on the

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lines suggested by the Royal Commission. The estimates take into consideration in the fixing of the general grant totals providing for development in each of the years 1959–60 and 1960–61 at roughly two-and-a-half times the previous year's level.
Mr. Blenkinsop: I apologise for interrupting—I know it is most unsatisfactory—but it is due entirely to the fact that we did not have a representative of the Ministry present while these matters were being raised. I should like to know whether or not every local authority is being required to make these provisions. As far as we can see, they are not being required to do so. We should like to know. Cannot the Minister himself answer?
Mr. Bevins: I understand that what the hon. Gentleman has suggested would require an amendment to present statute law. I think he will agree that that is the case, and I rather think that there is such a thing as the rule of anticipation.
The general conclusion to be drawn from all this is that while the full extension of the local authority community services which the Royal Commission recommended, and which is accepted as being desirable, must inevitably take a matter of years to complete, there is no reason to believe that the financial arrangements that are proposed will constitute a serious obstacle to progress. Indeed, there is every reason to feel confident in the willingness of the local authorities generally to shoulder these responsibilities. I think I have dealt with the majority of the questions and arguments that have been raised—
Mr. Blenkinsop Mr. Blenkinsop rose—
Mr. Bevins: I really think that I have given way enough. I have sought to deal with most of the questions and arguments which have been advanced from both sides of the House during this debate. I entirely agree with my hon. Friend the Member for Norwich, South in his references to the disabilities of the Opposition.
It seems to me more and more as time goes on that the trouble with Her Majesty's Opposition—and it is one of the defects of all radical idealistic parties —is that they think they possess a monopoly of good faith. To them the very
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word "Tory" seems to represent the quintessence of political evil and everything that my right hon. Friend attempts to do is supposed to be influenced by the blackest of motives. The Opposition prophesied that wholesale disaster would flow from the Rent Act, and they were wrong. Indeed, at this time last year, hardly a day passed without some sort of demonstration or tirade against either the Rent Act or my right hon. Friend.
The Opposition were really enjoying themselves at that time, but they are not so vocal about it now. There are no demands for debates, no Bills under the Ten Minutes Rule, not even the odd Parliamentary Question to my right hon. Friend. Tonight, once again, the Opposition have been proved to be wrong and have been confounded.
Mr. Blenkinsop: I should like to ask now the questions which the hon. Gentleman has not answered. Indeed, I should be even more grateful if the right hon. and learned Gentleman, who is sitting on the Front Bench now, would answer them himself. First, I understand from the Parliamentary Secretary that, in his understanding—
Mr. Deputy-Speaker (Sir Gordon Touche): Order. I think that the hon. Gentleman has already made one speech.
Mr. Blenkinsop: As the Parliamentary Secretary had resumed his seat, Mr. Deputy-Speaker, I was merely asking a question, and I understand that that is in order. I wish to ask him whether it is true that the proposals with regard to mental health, in the view of the right hon. and learned Gentleman the Minister of Health, will do no more than make some obstacle, but not a serious obstacle, to the development of the mental health services. Secondly, I wish to put again the question I asked with regard to the domestic help service—[HON. MEMBERS: "Speech."]—and inquire whether what is proposed amounts to an addition of no more than seven extra domestic helps to each authority per year. So far as local authority domiciliary services are concerned—this is the last point I want to make—these are the questions I put—
Mr. Douglas Glover: On a point of order, Mr. Deputy-Speaker. Is it in order, because an hon. Member makes such an incompetent speech in the

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first instance, for him to be allowed to rehash the whole thing in the form of questions?
Mr. Deputy-Speaker: I hope that the lion. Member for Newcastle-upon-Tyne, Fast will conclude his questions very shortly.
Mr. Blenkinsop: It is the third question which I asked earlier, to which I had no answer, and the Minister actually responsible was not present. May I ask whether the provisions here for residential accommodation for the aged and infirm represent a smaller provision per year, about half of what, in fact, was provided last year? May I have an answer to that?
Mr. Bevins: The answer to the hon. Gentleman's second question about domestic helps is that my right hon. Friend was given estimates by the local authorities of what they required for the following year, and those estimates were accepted without any qualification at all.
Mr. Blenkinsop: Seven per authority. What about residential accommodation for the old folk?
Mr. Bevins: I am simply saying that these were the estimates of the local authorities. As regards the provision for mental health, it is, I think, perfectly clear from paragraph 21 of the Paper what we have done. We say there that
"Similar substantial further development of the local health authority services is provided for, especially in the field of mental health."
Mr. Blenkinsop: That is not an answer to my question.
Mr. Deputy-Speaker: Order. I am afraid that the hon. Gentleman cannot ask any more questions.
Question put and agreed to.
Resolved,
That the General Grant Order, 1958, dated 20th November, 1958, a copy of which was laid before this House on 25th November, be approved.
Grants and Rates (Transitional Adjustments) Regulations, 1958, [copy laid before the House 25th November]
approved.—[Mr. H. Brooke.]

LACE INDUSTRY (SCIENTIFIC RESEARCH LEVY)
Lace Industry (Scientific Research Levy) Order, 1958, [draft laid before the House 20th November] approved.—[Mr. J. Rodgers.]

IMPORT DUTIES (GENERAL)
10.25 p.m.
The Minister of State, Board of Trade (Mr. J. K. Vaughan-Morgan): I beg to move,
That the Import Duties (General) (No. 2) Order, 1958 (S.I., 1958, No. 1941), dated 21st November, 1958, a copy of which was laid before this House on 25th November, be approved.
This Order makes amendments to the Import Duties (General) Order, 1958, which was approved on 8th July. That Order introduced the new Brussels Nomenclature tariff which will come into force on 1st January, 1959. An advance edition of the new tariff was published in July to give importers and traders an opportunity to study it. The wisdom of publishing the tariff six months before it became effective has been amply proved. The present Order is, in effect, a mopping up Order.
I said on 8th July, in column 348, that there were a number of cases involving the details of the new tariff which had still to be examined or on which we had not yet reached agreement with the interested parties. I said that we should, if necessary, introduce an amending Order before the new tariff becomes effective in January. This is the Order.
Before I explain the new Order, I should warn the House that there are one or two changes which are still being discussed with industry, and when traders start to operate the new tariff there might be others. Any such changes will be dealt with in later Orders. I had hoped that this would be a final mopping up Order, but there may be possibly one more.
If I may, I will now explain the details of the Order. There are a number of amendments and corrections to be made which are set out in the Schedule to the Order. The need for these changes may be summarised as follows. First, since June the House has approved a number

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of changes in duty under the old tariff, and Part I of the Schedule makes the consequential amendments to the new tariff to carry over those changes in duty from one to the other. Secondly, we have to correct certain deviations from existing rates of duty which have been drawn to our attention since the advance edition was published. Thirdly, a number of items were still being discussed with industry in June and we now have to give effect to the agreements which have been reached. Fourthly, we have to correct a number of verbal and typographical errors.
The Schedule therefore is divided into two parts. Part I is the tidying up measure following from the changes approved since June in the old tariff. Part II deals with all the other Amendments and corrections to which I have referred. The House will agree that it is not a very long list when compared with the 3,000 or more headings contained in the new tariff.
The Schedule to the Order contains one innovation, in that in the third column of the Schedule there is shown against each tariff heading a short summary of its effect. I must warn the House though that these summaries are explanatory only, and, as is pointed out in Article I of the Order, they are
"without prejudice to the operation of the amendments."
The summaries explain the effect of the amendments as compared with the new Brussels tariff approved in July. The House may be interested to know that about 6,000 copies of the advanced edition were sold and, of course, copies have been sent to all official representatives of the overseas countries concerned.
As I explained at the time, that edition was a trial run only, and the value of this experiment has been fully proved in the event. A further operative edition will be published on 15th December containing the amendments which are embodied in this Order, and we hope that traders and importers in their own interests will get copies of this as soon as possible so that they may be able to use it from 1st January when the new tariff enters into effect.
10.29 p.m.
Mr. Douglas Jay: So that the House is clear what it is doing in this Order, I should like to ask the Minister a few questions. As I understand it, the changes in the Order all come into effect on 1st January and not before 1st January, whether they appear in Part I or Part II. First, I want to be clear that that is correct. Secondly, and what is perhaps most important, am I right in supposing that all the changes which are to come into effect later are not matters of policy and that they do not in themselves imply any change in import or economic policy, but purely follow from the changes in nomenclature and the administrative tidying up operation which we have discussed before?
Thirdly, so that we may be clear how the Order works in practice, I should like to ask the Minister of State about one item which appears on page 4 of the Order under the tariff heading 29.35. In the third column there is mentioned a substance of which I had not heard, haemin. There we read that this chemical, I think it is, is to be chargeable at 331/3 per cent. instead of at 10 per cent. On the assumption that we are making no policy changes in tariff tonight, I should like to know just what is meant when we read that this particular substance, which appears to be a chemical material, is to be chargeable at 331/3 instead of at 10 per cent., which, on the face of it, is a fairly substantial increase.
Mr. Vaughan-Morgan: In reply to the last point raised by the right hon. Member for Battersea, North (Mr. Jay), I hope he will forgive me if I say that I would like to look into it. There is, however, no real change in duty. I admit that the example raised by the right hon. Member is an odd one. Had he given me a moment's notice beforehand, I might have been able to give him the details. There are some even odder examples had the right hon. Gentleman pursued his researches further, but there are no effective changes.
In reply to the right hon. Gentleman's earlier remarks, I should repeat that Part II of the Schedule does the tidying-up and Part I covers the changes that the House has already passed as between June and now. That is all.
Mr. Jay: So that by what we are doing tonight we are not making any further policy change?
Mr. Vaughan-Morgan: We are not making any further change at all by this Order,
Question put and agreed to.
Resolved:
That the Import Duties (General) (No. 2) Order, 1958 (S.I., 1958, No. 1941), dated 21st November. 1958. a copy of which was laid before this House on 25th November, be approved.

HOUSE OF COMMONS MEMBERS' FUND
10.32 p.m.
Mr. S. P. Viant: I beg to move,
That one tenth of the sums deducted or set aside in the current year from the salaries of Members of Parliament under section one of the House of Commons Members' Fund Act, 1939, and one tenth of the contribution determined by the Treasury for the current year under section one of the House of Commons Members' Fund Act, 1957, be appropriated for the purposes of section four of the House of Commons Members' Fund Act, 1948.
This is non-controversial. It is a matter of administration, and I hope that the House will give its assent.
Mr. Donald Wade: I beg to second the Motion.
Question put and agreed to.

ORDERS OF THE DAY

  FAMILY ALLOWANCES AND NATIONAL INSURANCE [MONEY]
  Resolution reported,
  That, for the purposes of any Act of the present Session to amend the law with respect to the determination of questions requiring decision for the purposes of the Family Allowances Act, 1945, or the National Insurance Acts, 1946, and for connected purposes, it is expedient to authorise any increase in the sums payable out of moneys provided by Parliament or out of the Consolidated Fund in respect of payments under—

  (a) section forty-four or forty-five of the National Insurance Act, 1946; or

  (b) section fifty-three or fifty-four of the National Insurance (Industrial Injuries) Act, 1946; or

  (c) Part I of the Administration of Justice (Pensions) Act, 1950;

  being an increase attributable to provisions of the Act of the present Session which either—

  (i) relate to the manner of determining questions requiring decision for the purposes of the Family Allowances Act, 1945, or similar questions requiring decision for the purposes of the National Insurance Acts, 1946, and matters connected therewith; or

  (ii) make further provision for questions requiring decision for the purposes of the National Insurance (Industrial Injuries) Act, 1946, to be brought on an appeal or reference before the Industrial Injuries Commissioner or a person or tribunal exercising his jurisdiction.

  Resolution agreed to.

ST. HELENA
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Hughes-Young.]
10.33 p.m.
Mr. Cledwyn Hughes: Tonight I wish to speak about what is, paradoxically, both the best-known and the least-known of British Colonial Territories, the island of St. Helena. In the popular mind, this island is assocated with the name of a great figure in history. It deserves to be better known for its beauty and the charm of its inhabitants, who are remarkable for their loyalty to this country.
St. Helena is a remote island of about 47 square miles, 1,000 miles south of the Equator, in the South Atlantic Ocean. It is also the oldest British Colony and it has a population of 4,600 people. I give these facts advisedly, because I have encountered some ignorance about St. Helena. When he learnt that I was going there last summer, one usually well-informed friend of mine said how pleasant it would be for me to spend a few weeks in the Mediterranean. Another friend of mine, who is also generally well instructed in these matters, asked me what I was going to do in a French colony.
Tonight, however, I am concerned primarily with the ignorance that prevails regarding the conditions of the loyal people of St. Helena, who are going through a critical time of privation and hardship.
Before I come to the main causes of grievance and complaint, I want to say this about the island's economic position. It is not a self-supporting community, and so far as can be seen it will not be self-supporting in the foreseeable future. The financial assistance which we give the inhabitants of the island is, firstly, by way of an annual grant in aid and, secondly, by way of a grant under the Colonial Development and Welfare Act. The grant in aid amounts to about £80,000 a year, and during the current period the island has been allocated £160,000 under the Colonial Development and Welfare Act. That is for the period 1955–60.
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I hope to prove to the House this evening that both these grants are wholly inadequate and should be increased forthwith. I cannot hope to do justice to all the island's problems in the time at my disposal, and I propose, therefore, to deal briefly with its main industries, its social services and its constitutional position.
Flax growing and agriculture are two main industries of the island and both are at present in a serious condition. The hemp produced there is not of the best quality, and both its price and the demand for it have fallen progressively since 1951. The price of hemp was at its peak in May, 1951, when it sold at £180 a ton. In June of this year the price had fallen to as low as £55 a ton.
Four out of the five flax mills on the island are closed, which means that about 230 men and women have been thrown out of work. There are no alternative sources of employment on the island, and these people cannot, therefore, be absorbed in any other sort of work. In addition to that, the work is arduous and ill-paid. The basic wage is £1 13s. 0d. a week. I should like it borne in mind by the House that the cost of living on the island is relatively high. This is what the Social Welfare Officer for St. Helena has to say in his report for 1957. In paragraph 62 of the report he says:
"I have found a strong feeling of resentment tempered only by the fear of unemployment among flax workers who regard their basic wage of £1 13s. 6d. a week as totally inadequate."
The Minister will probably know that the future of the flax industry in St. Helena is obscure. One of the obvious tragedies of the island at present is that its staple industry should be in this condition. I have suggested to the Colonial Secretary one way in which the industry might be assisted and bolstered at this time, and I hope that he will investigate the suggestion as a matter of urgency.
I must mention that the Government of St. Helena have on their Statute Book a minimum wage ordinance. They have had it on the Statute Book for many years, but I was amazed to find that it had never been implemented. One must bear in mind that fortunes have been made out of the island's flax industry in the past, but wages have been kept as low as possible.

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I found that the workers in the industry—I spoke to many of them when I was there—have been afraid to complain about their conditions of work and wages because of the fear of victimisation and unemployment. The basic wage paid by the Government of St. Helena to their own workers is only £2 5s. a week. Such a wage does not enable people to attain anything approaching a decent standard of living in this British Colony.
As I have said, the cost of living in the island is high. If we take 1939 as representing 100, the St. Helena cost of living index gives the figure for 1950 as 190 and for 1957 as 224, which shows that there has been a great rise in the cost of living there. Prices are comparable with United Kingdom prices. I would ask the House to mark that the requirements of the people of St. Helena are similar to our requirements. Here we have a British people—their only language is English—who have an attitude to life similar in general to ours. and their demands are similar to our demands.
How can Her Majesty's Government or the St. Helena Government justify this gross neglect of their own employees? In simple terms it means that the ordinary people of St. Helena—by that I mean about 95 per cent. of the population—do not know what it is from one year's end to another to eat meat, butter, eggs and cheese or to have milk. None of the basic requirements of life is available to them, and that is a shame and disgrace. Why are these facts not given in the official Report published by the Colonial Office about this island so that the House and the people of this country may know the true position there?
There is another fundamental weakness for which the Colonial Office must take some responsibility. That is that the existing resources of the island are not being used to the fullest extent. When I was in St. Helena there was an acute shortage of meat and green vegetables. The people are poor, and two-thirds of the island is barren waste-land. Surely, therefore, the maximum use should be made of all the available land for the production of food.
But the land is not being used to anything like its full capacity. There seemed
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to me to be a lack of imagination and drive in the Government's agricultural policy. There is also a shortage of vegetable and other seeds and of suitable machinery for the cultivation of the land. Smallholders are not encouraged on the island, and there is almost a complete lack of adequate public relations between the Government's agricultural department and the rural community. It is within my experience that this caused real resentment among the islanders. It seems to me that what is needed is a planned land settlement scheme under sympathetic Government supervision and guidance. There are plenty of young men on the island who would go on the land if they were given the opportunity and the encouragement.
Another way in which the island could be helped is by fishing. There is plenty of fishing around the island. Fish has a high nutritional quality, and organised fishing could bring cheap food to the islanders. Here again there is a lack of organisation and Government initiative. I suggest that the Government of St. Helena might assist the fishermen who are available there, and have boats, to fish on an organised basis and perhaps form a fishermen's co-operative so that the islanders, who at present exist on a diet of bread, margarine and tea without milk, might have an adequate supply of fish throughout the week, which would certainly improve their standard of living.
If those who are working are poor, what of those who are unemployed, ill or too old to work? What provision is there for them in this British Colony'? Here we come to the saddest and darkest chapter of all. There is no unemployment benefit, no sickness benefit and no pension of any kind for them. 'There is a Poor Relief Board, but I do not envy it its task, because it works on a shoestring. It has about £21 a week at its disposal to distribute among all the old, sick and unemployed. When I was there in July it was dividing £21 between the 88 most deserving cases, and 81 people were getting 5s. per week or less. I came across many old people who were living on 5s. a week. There are many more who live on the kindness of relatives and neighbours little better off than themselves.
I was permitted to attend a meeting of the Poor Relief Board at St. Helena and

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I heard details of the cases put before the Board. I felt thoroughly ashamed and sick that this state of affairs could exist in a British Colony. Let me read an extract from the report of the Board in July:
"It is not in the nature of the people of St. Helena to complain of their lot, but during the past year the reports of the social welfare officer have caused the Board grave disquiet. He has drawn attention to the pitiful circumstances of those whose only source of income is in many cases the outdoor relief received from the Board. Members of the Board have been distressed to learn at first hand of the miserable existence, it could be called no more, of those living on outdoor relief who, but for the generosity of neighbours often little better off than themselves, would hardly exist at all."
I have asked the Colonial Secretary to make more money available to the Board and I now make that plea most earnestly again. I cannot say any more about it. I have seen it, and it is beyond words.
I would like to have spoken of other things, of the lack of education because there are no trained teachers; of the inadequate medical services, and the gross shortage of drugs and of the appalling housing conditions. Those are matters on which the House will hear more when opportunity arises.
Lastly, there is the archaic constitution which leaves all power in the hands of the Governor, so that these intelligent and literate people are neither allowed nor encouraged to participate in their own affairs. Those who are members of the Executive and the Advisory Council do not represent the people, nor do they have their confidence. Must there be riots and bloodshed before men are given their elementary rights?
I hope that the Colonial Secretary will authorise elections for the Advisory Council at once as a first step towards a much overdue reform. Had I not been there, I would not have believed that such a state of affairs was possible in a British Colony in 1958. This is a case of "out of sight, out of mind".
The people of St. Helena are courteous, law-abiding and intelligent. They have faith in this country and in this House. They have been callously neglected up to now. They are cheerful in adversity and I formed a great affection for them. So it is that they are on my conscience and from now on, until their position and their
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conditions are improved, they will be on the conscience of the House.
10.47 p.m.
The Under-Secretary of State for the Colonies (Mr. Julian Amery): The affairs of St. Helena are all too seldom discussed in the House and we are very grateful to the hon. Member for Anglesey (Mr. C. Hughes) for the interest he has taken in the island. My right hon. Friend has read his report personally and has asked me to say how much he appreciates the trouble the hon. Member took both in going to St. Helena and in informing himself and others about its problems. Representing an island as he does, the islanders of St. Helena are fortunate in having found in him a spokesman in the House. We cannot endorse all the conclusion in his report, or indeed in his speech tonight, and I am sure that the hon. Member would scarcely expect that. However, it is a stimulating and valuable document and a number of its recommendations may well bear fruit.
St. Helena, as the hon. Member explained, is one of our oldest Colonies. It is important in studying its economic difficulties today to get its economic problems into perspective. The island played a great part in days gone by in the development of our commercial empire in the East. It served in those days as a main victualling station for ships sailing round the Cape on the India and China trade. This gave it, by the standard of the day, considerable prosperity. Then came the steamship and the opening of the Suez Canal. Ships called less frequently, their requirements were fewer, and the whole foundation of the old St. Helena economy crumbled away.
Since the turn of the last century our problem has been how to put the economy of the island and of its nearly 5,000 people on to a new foundation. As the hon. Member said, St. Helena has few resources for which there is any world demand. One crop alone, phormium tenax, a flax indigenous to New Zealand, has proved itself as a serious export. But the world market for this and similar fibres is, and has for some time been, seriously depressed. The industry which until recently employed 200 people is at present employing only 120.
The hon. Member spoke of the fear of unemployment and of the grievance felt by some working in the flax industry at the level of their wages. I understand

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that; but there is always a danger that any further depression in prices or any rise in production costs would lead to the flax mills closing down completely. This would cause very serious hardship to the island, and more especially to the employees and their families in the industry.
Mr. George Thomas: The Government ought to subsidise it.
Mr. Amery: I am coming to that point. We are at present considering subsidising the industry. I am not in a position to say what the outcome will be, but this is something to which thought is being given.
Apart from the export of flax there may also be some prospects of small exports of coffee. The quality of St. Helena coffee has proved to be extremely good, but in the foreseeable future the main way of improving living standards will not lie so much in the export trade as in increased food production.
Here we are up against considerable difficulties. For many years the island was seriously over-grazed. The depradations, particularly of the goat, have made barren large tracts of what was formerly fertile land. To bring this land back into cultivation the Government of St. Helena have had to impose restrictions on grazing. This policy is proving successful; but in the short term it has meant that meat and dairy produce have been correspondingly curtailed.
One of the main flax producers has intimated that he intends to dispose of a sizeable farm. The St. Helena Government are considering buying the land in question, and, if they do so, the farm will be run by the Government with the specific object of producing more meat for local consumption.
Work is also going on in one of the valleys—I do not know if the hon. Member saw it when he was there—to construct a dam to bring more land under cultivation. The land would be well suited to the growing of vegetables which were once a staple industry and which are now in short supply.
Another possible source of increased food production is fish. The waters around the island are not well stocked but they could yield a bigger catch than they do now. The Colonial Development and Welfare Corporation did provide outboard motors to stimulate the
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fishing industry and more particularly to encourage fishing on the leeward shore, I believe; but the local fishermen preferred their traditional methods, and the outboard motors have remained unused.
The distribution of fish also presents a good deal of difficulty. The island's roads are good, but transport is rather short and the local fishermen have shown little initiative in disposing of their catch outside Jamestown. However there is, I believe, a cold-store in Jamestown, and the Governor is considering whether more could be done to ensure the wider distribution of fish in the island. The hon. Member's suggestion of co-operative development will be given careful consideration, and it may be that in connection with the cold-store something could be done on those lines.
In all these matters—flax production, food production and fishing—Her Majesty's Government can help and have helped with money. Since the war Colonial Development and Welfare allocations have totalled nearly £500,000. Every year an annual grant is also made to balance the island's budget and maintain an adequate administration. But money alone and advisory staff alone are not enough. The people of St. Helena must also play their part—as I am sure that increasingly they willin adapting themselves to the new measures and methods which are most likely to ensure improvement in their living standards whether in fishing, agriculture or flax production.
I should like to say a word or two on two other aspects of the economy which deserve special mention, namely shipping and emigration. Shipping and the tourism which goes with it make a substantial contribution to the island's income. The Union Castle Line calls regularly at St. Helena and its ships receive a subsidy made up of contributions from the Post Office here, from Cable and Wirelessmainly in connection with Ascension Island, but St. Helena benefits—and from St. Helena itself. It is estimated that the shipping calls and tourism which comes from them—visitors going to Longwood and so on—provide about £20,000 a year to the island. It may be that the restoration of Longwood and things of that sort will encourage rather more tourism in future,

175
or at any rate more heavy expenditure from those who call at the island.
Mr. C. Hughes: The hon. Gentleman is aware that the Union Castle Line is now calling less frequently, with a corresponding fall in income to the island.
Mr. Amery: I understand it is calling once a month.
Mr. C. Hughes: Not passenger vessels.
Mr. Amery: I stand open to correction. As the hon. Member knows, I am rather new to the Department and, if the facts are wrong, he will excuse me on those grounds.
There is already a certain amount of emigration from St. Helena to this country. It is mostly of young women who come to this country for domestic service. In collaboration with the Ministry of Labour, arrangements have also been made to place some St. Helenian men as hotel staff in this country. These arrangements include assisted passages from St. Helena. Altogether some eighty St. Helenians a year have been coming to the United Kingdom over the last few years. Their remittances to the island and to their families probably total something over £20,000 a year. That is a substantial help, not so much in reducing the population on the island, but in the young people who have been coming here and sending remittances to their families.
I come now to the remarks of the hon. Member on social welfare. Here I should like to express my strong sympathy with what he said, but I am sure he will also understand that the conditions he described prevail in a great many parts of the world at present. The Colony's Budget, I fear, could not stand the strain of a Welfare State organised on modern lines. That is not to say, however, that some provision for the aged or needy is not made. There is unemployment relief in the form of useful work on schemes of importance to the island's development. There is a modest provision for the elderly and disabled, and in next year's budget that provision will be increased.
The hon. Member himself paid tribute in his report to the new and, I understand, rather pleasant home for old people provided out of Colonial Develop-
176
ment and Welfare funds. A private fund has also been started, I understand under the auspices of one of the flax producers, to provide old age pensions.
The basic social problem of the island, as I see it, is lack of purchasing power in the hands of the islanders. It would be attractive to think that this could be cured simply by raising wages. To do so, however, might well lead to the closing of the flax mills and to a general inflation of prices. That would bear particularly hard on the aged and disabled.
In the circumstances, it seems to us that the best way forward may lie in the direction of food subsidies. As the hon. Member knows, bread is already subsidised. We are now considering whether it would be practicable to subsidise certain meats and cheeses as a temporary measure. Such a scheme would have to be safeguarded against abuse, and it presents a number of difficulties which I do not want to go into this evening. It might, however, if it proves practicable, tide the islanders over the interval until more meat is produced locally and until the fishing industry has been reorganised.
I now come to what the hon. Member said about political representation, although it was not perhaps as serious a charge as I understood he was to make. It has to be remembered that we are dealing with a very small population—some 5,000 in all, including children. Everyone in the island knows almost everyone else and consultation is not a very difficult matter.
In 1956 the previous Governor, Sir James Harford, introduced a change in the constitutional system by bringing into his Advisory Council representatives of the country districts and of other island interests. The hon. Member described the system. At present there are nine members of the Advisory Council, which gives it a majority of non-official members.
I am bound to say that our investigations do not confirm the hon. Member's view that there is any widespread demand for constitutional reform. The best advice that I have received suggests that it is very difficult, and understandably so, to persuade people to serve on local bodies or indeed on the Advisory Council. I do not say this as a criticism of the

177
inhabitants of St Helena. We are, after all, speaking of a very small community where the first concern of the great majority is to earn their daily bread. There is not much margin for voluntary public service or much money to remunerate it.
We are very conscious in the Colonial Office of our responsibilities towards St. Helena and its people. I hope, indeed, that I have said enough to show the interest which we take in the island and its problems. If I have not succeeded in this, I ask the hon. Member to attribute it to the short time I have been in the Department, which has not enabled me to master all the facts, but to some extent the facts speak for themselves. There is the dark side of the picture, which the hon. Member explained in his speech and in his report. Many problems still need solution. There is the fact of what we have done. We have invested £500,000 of Colonial Development and Welfare funds in St. Helena and we are
178
spending about £130,000 a year both on the administration and on development. This is no small sum per head of the population—about £26 per year per head.
There is no room for complacency in saying this. Our task is to find further ways and means of constructive development both to help the islanders and to see that they can help themselves. I can assure the House that we shall not neglect this task and that the hon. Member's report and his speech will contribute towards enlightening opinion here and elsewhere of the importance of the problems of St. Helena.
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at three minutes past Eleven o'clock.

MINISTRY OF HEALTH
  Persomnia
  Persomnia
  Invalid Carriages
  Invalid Carriages
  Stress (Treatment and Research)
  Stress (Treatment and Research)
HOSPITALS
  Leucotomy Operations
  Leucotomy Operations
  Hospital Building, Wales
  Hospital Building, Wales
  MRS. DORAN (MURDER)
  MRS. DORAN (MURDER)
  CHINA (SCIENTIFIC DEVELOPMENTS)
  CHINA (SCIENTIFIC DEVELOPMENTS)
  REFUGEES, HONG KONG (TRANSPORT)
  REFUGEES, HONG KONG (TRANSPORT)
  SUEZ OPERATIONS
  SUEZ OPERATIONS
  CYPRUS (UNITED NATIONS RESOLUTION)
  CYPRUS (UNITED NATIONS RESOLUTION)
  EAST GERMANY (MEMORANDUM)
  EAST GERMANY (MEMORANDUM)
  FRONTIER FORMALITIES (SPECIAL COMMITTEE)
  FRONTIER FORMALITIES (SPECIAL COMMITTEE)
AGRICULTURE, FISHERIES AND FOOD
  Agriculture (Improvement of Roads) Act
  Agriculture (Improvement of Roads) Act
  Bacon and Cheese (Prices)
  Bacon and Cheese (Prices)
  Potatoes (Prices)
  Potatoes (Prices)
  Cornwall (Marginal Production Schemes)
  Cornwall (Marginal Production Schemes)
PENSIONS AND NATIONAL INSURANCE
  Pensions
  Pensions
  Disabled Persons (Employment)
  Disabled Persons (Employment)
  National Assistance
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  Old-Age Pensioners (Earnings Rule)
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MINISTRY OF SUPPLY
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SCIENTIFIC AND INDUSTRIAL RESEARCH
  British Embassies (Scientific Attachés)
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SCOTLAND
  Agriculture (Improvement of Roads) Act
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  Road Programme
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ROYAL AIR FORCE
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TRADE AND COMMERCE
  Nitrogenous Fertilisers
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ROYAL NAVY
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NATIONAL FINANCE
  Companies, Lanarkshire (Financial Assistance)
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  Surtax
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LOCAL GOVERNMENT
  Agricultural Land (Circular)
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MINISTRY OF POWER
  Smokeless Fuels
  Smokeless Fuels
BRITISH ARMY
  Pay and Pensions
  Pay and Pensions
  Iron and Steel Board (Employees)
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HOME DEPARTMENT
  Indictable Offences (Probation)
  Indictable Offences (Probation)

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

EXPORTS OF BOOKS
2.35 p.m.
LORD STONHAM: My Lrds, 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 their attention has been drawn to the reference in the report of the British Council to the great disparity between British exports of books and those of Russia and U.S.A. and to the fact that Russia is spending on English language publications sent outside Russia twenty times as much as our English language exports, and what action they contemplate to remedy this situation.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF LANSDOWNE): My Lords, the attention of Her Majesty's Government has been drawn to that section of the British Council's report which deals with the export of books. Her Majesty's Government are fully aware of the need to increase these exports and are giving consideration to the measures which are needed to promote this. It is hoped to make a further statement in the New Year.
LORD STONHAM: My Lords, while thanking the noble Marquess for that encouraging Answer, can I ask him, in having regard to the considerations which are being given to this matter, whether he is aware that the Russians are selling Tolstoy to paint a false picture of modern Russia and Dickens to paint a false picture of modern Britain, and that the effect is greatest in those countries where sterling difficulties preclude the ordinary commercial sale of books? Would it be possible to follow the American method of getting over these sterling difficulties and so make cheap books and periodicals available to the poor but progressive youngsters who may one day be running their countries, and thus give them a true picture of the strength, variety and freedom of modern Britain?
THE MARQUESS OF LANSDOWNE: My Lords, I thank the noble Lord for this valuable suggestion and can assure him that all the points he has raised are being given most careful consideration.
VISCOUNT ELIBANK: My Lords, if it is proposed to devote more money to the British Council for this purpose, may I ask the noble Marquess whether he will bear in mind the needs of the Arts Council which were adumbrated in this House last week?
THE MARQUESS OF LANSDOWNE: My Lords, I am afraid I must call the attention of the noble Viscount to the fact that the Question does not apply to the Arts Council.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I have taken note of that fact and therefore did not

3
put such a question. That does not mean that we shall not return to that subject again. I feel that my noble friend has done a service by raising this point. I am concerned about the general lack of scope for the British Council in such matters, because they are still so restricted in funds in relation to the work that remains to be done at the present time if we are to regain something of the initiative that we, in our national position, ought to hold in countries which are now the centres of activity diplomatically.
THE MARQUESS OF LANSDOWNE: My Lords, I thank the noble Viscount the Leader of the Opposition for his intervention. I can assure him that what he has said will certainly be taken to heart by Her Majesty's Government.
LORD STONHAM: My Lords, with regard to the reference to the British Council, will the noble Marquess bear in mind the fact that the Council are doing their gallant best with an annual expenditure of some £160,000 on periodicals, which, spread over sixty-five countries, means only £50 per week per country and is barely enough for serious students. And will he have regard to places like Kuwait, where almost every teacher is an Egyptian, purveying history according to Nasser? Cannot we act in the same way as Russia is acting in believing that trade and influence follow the printed word, so that people shall know us as we are instead of as we are painted by our enemies?
THE MARQUESS OF LANSDOWNE: My Lords, I did my best to answer these questions in my original reply, and at this moment I cannot go further than assure the noble Lord that it is our hope that in the New Year we shall be able to make a further statement which will be satisfactory to the noble Lord.

SOCIETY IN SCOTLAND FOR PROPAGATING CHRISTIAN KNOWLEDGE ORDER CON FIRMATION BILL
Brought from the Commons; read 1ª, and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2ª and reported from the Committee.

PROVINCIAL POLICE FORCES
2.42 p.m.
EARL WINTERTON EARL WINTERTON rose to call attention to the need for the appointment of a Committee to inquire whether the statutory control of certain local authorities over provincial police forces is being properly exercised, whether the powers of the Home Office Inspector of Constabulary need to be strengthened, and whether, in the interests of efficiency, it is desirable to amalgamate some of the smaller police forces with other larger forces; and to move for Papers. The noble Earl said: my Lords, I am setting myself a formidable task in compressing within the period that is properly considered suitable for a Motion of this kind all the difficult and intricate questions which are comprised in the subject matter of my Motion. I may not succeed in my task; I may succeed merely in boring your Lordships or confusing the issue, in which case I ask in advance to be excused. I should like to say what I do not propose to do: I do not wish to embarrass Her Majesty's Government, who are in a position of some difficulty with regard to the provincial police forces because of the system of control. I do not want to attack the most valuable system, which has now been in existence for more than 100 years, of police autonomy in the provinces. I want to make no strictures upon the provincial police forces as a whole. What I do want to do is to call attention to what I believe to be certain weaknesses in what I might call the fabric or structure of provincial police administration, and I think I have abundant reason for doing so.
There have been one or two disquieting events in the provincial police forces in recent years; and there have also been other questions, one of which was referred to by the noble Viscount the Leader of the Opposition in his speech on the Address. There has been singularly little discussion on these matters in the public Press, but there has been in a Sunday newspaper a valuable series of articles on the subject by a very competent journalist, Mr. Philpotts. I owe to him, and also to certain Members of another place and to others with whom I have been in touch, some of the information I propose to give to your Lordships. It is also, I think, advisable and reasonable that your Lordships'

5
House should discuss this matter because, as former Members of another place in your Lordships' House will know, it is almost impossible under the rules of another place to have a discussion of the character for which this Motion provides.
My equipment for my task is not great. I was a magistrate in my younger days, and for a short time in the 'thirties I served at the Home Office as an assistant Minister, though, since I was mainly concerned with prison administration in preparation for the Criminal Justice Bill, did not have much to do with police administration. Nevertheless, I had a very interesting and valuable experience when I was a Regional Commissioner during the General Strike—I apologise for having to refer to unhappy events of far-off days, but it is necessary for the purpose of my argument. These Commissioners were entrusted with wide powers to ensure that the food supply of the country was safeguarded and that national services were carried on so far as possible. I had a very competent police adviser on my staff then—I will not mention his name, because it might embarrass him; I believe he is still alive, though he retired long ago. He told me, "You will find, Commissioner, when you go about the four counties which are within your district, that there is a very wide variation between the efficiency of the various police forces. Some of the smaller ones are not, in my opinion, efficient, and will probably not be able to cope with this very difficult and unique situation; some of the larger ones are as good as the Metropolitan Police."
He also told me: "You will also find other things. You will find that there is not the amount of liaison and of cooperation between some of these forces, especially between some of the smaller forces and the bigger ones, that is desirable. You will find that some of my brother chief constables will not much like seeing me going around with you, because I was originally a police constable promoted from the ranks to be chief constable, and most of the chief constables in the areas are ex-Army or ex-Naval officers." And he further added—and I hope that noble Lords opposite will not regard this as a reflection on their Party, for I am quoting what he said: "You will find in one or two police districts, where there is a strong
6
Labour majority exercising influence over the watch committee, that they will be very hesitant to take the action that may be required to secure food supplies and to ensure that those who are carrying on the essential services of the country are properly protected." I found all those things to be true; and in one district, which I will not mention, I had considerable difficulty because, in my opinion, the police were not carrying out their duties with sufficient ardour, and there was there a strong Labour majority.
I should say that I have reason to fear, from the investigations which have been made, both by the journalist to whom I have referred, and by others, including honourable Members in another place, that those disadvantages to which I have referred, or some of them, are still extant. Let me refer first to the question of the big and small police districts—or, rather, to put it more accurately, the multiplicity of police areas. The criminal to-day is more mobile than he has ever been. What might he called the first-grade criminal, the really dangerous man who robs banks and gets off, unfortunately, only too often, with anything from £5,000 to £50,000, is usually exceedingly mobile. He either steals a car or has a car of his own, and his confederates have other cars which are at his disposal, so that he can flit from one police district to another. Noble Lords may say: "Does that really matter very much?" It matters, I think, in this way: that there is inevitably a delay if you get, as you sometimes do—for example, in Lancashire—three or four borough police forces whose areas are contiguous. There must, clearly, be a delay when the chief constable of one district has to communicate with the adjoining district to say that a dangerous criminal has just crossed their border in a car.
But that is not the end of the story. Investigations show that some of these smaller police forces are not fully equipped with the various modern inventions—such as radio cars, walkie-talkie apparatus, and other things—which are needed to catch, or to try to catch, the criminal. I should like to give one or two examples of what I mean. I am told that there is in Lancashire, in the county police force, one of the most efficient police forces not only in this country but in the world. I am told that

7
in morale, in the prestige which it enjoys, and in the efficiency of its methods, it is equal to the Metropolitan Police. But there are in the same county a large number of small borough police forces which are not, of course, always up to the same standard. I imagine that it is true to say that the county police force is to some extent hampered in its work by the existence of these forces.
There are a great many anomalies brought about by the "set-up" (if I may use a vulgar term) of these county police forces. Take the case of the county in which I live, West Sussex. We have a large, growing population. We have along the sea coast, in my old constituency, Worthing, Shoreham, Lancing and Sompting—one continuous urban area, with a population of between 70,000 and 80,000 people. We have the New Town of Crawley, with some 45,000 to 55,000 people, and we have a very large agricultural area. We have one police force. I am perhaps biased by local patriotism, but I think it is a very efficient one. But if you go from Shoreham to Brighton, what do you find? The distance from Shoreham to the outskirts of Brighton is five miles, and in travelling that distance you pass through four police districts. In Shoreham you are in West Sussex. When you cross the boundary at Portslade, you are within the East Sussex Constabulary area. Then you come to Hove, where you are within the area of the Hove Constabulary, which is the force under the Watch Committee at Hove. Then, when you come to Brighton, you are under the Brighton police authority. In addition, there are a large number of other police forces in East Sussex. There seems to me to be an anomaly there. I would venture to urge the Government—although it is probably not necessary to do so, because they are working along those lines: and I hope and think that here no Party issue arises—to continue with their policy of persuasion, which it largely is (although I believe that they have, in the last resort, the use of compulsory powers) to see that there is an amalgamation of those forces which are too small to be efficient.
Now I come to the next matter, which is a delicate one and one on which the noble Lords opposite will probably not agree: that is, the relationship between chief constables and the authorities under
8
whom they serve—the standing joint committees and watch committees. Frankly, I do not think that all is well there. There are two schools of opinion among investigators into the matter. One school of opinion says that the chief constable has too much power. No one—not even the Home Office—can order him to prosecute a person if he does not want to do so, or, on the other hand, can prevent him from making use of some old and possibly obsolete Act of Parliament to carry out a prosecution. The other school of opinion says that the boot is on the other foot and that watch committees have too much power: that some of them, at any rate, have a semblance of political views on the duties of the police, and, therefore, should not be allowed to be the authority (which I believe they are) for sanctioning promotions, because political patronage might creep in. This school of opinion goes on to say that if a chief constable does not work with a watch committee or standing joint committee the committee can make it difficult for him by refusing him money for necessary equipment, for new police stations, for new housing for police officers, and especially for equipment which he needs to catch the modern criminal.
My Lords, let me attempt to put for ward such evidence as there is—and it is not very conclusive—on these points. There was, I think, a very disturbing contrast last year between the attitude of certain provincial police forces and the attitude of the Metropolitan Police in respect of strikes. Your Lordships will recollect that last year there was a provincial bus strike which coincided with a strike at a certain London market. We read in the Press that during the provincial bus strike there were some very serious incidents. In one place a bus driver was struck on the chest with a crowbar, and in another the windows of a bus were broken. Women and children were in that bus, and the children, it was said, were taken screaming in terror from it. There were numerous incidents where damage was done to buses, and again and again there were reports that certain men who wished to carry on with their work (I suppose they might be described as "strike-breakers") were being prevented from doing so by howling mobs, who shouted and yelled at them and prevented them from getting into their places of work. I do not know whether the Press

9
reports were accurate, although I presume they were. If so, then the police were not carrying out properly their duty of seeing that the law in regard to picketing as it is laid down was obeyed—that there must be only peaceful picketing. It cannot be peaceful picketing for a howling mob to use force and physical action to prevent people from getting into the place where they work.
Let me contrast that with what happened in London. In London, the particular market to which I have referred was kept open. The strikers endeavoured to prevent certain lorries from entering it, and the police prevented the strikers from doing so. They did not act with any degree of unnecessary force, and there was no complaint that they were in any way brutal. They arrested a few people for obstructing the police, or for assaulting them, and those people, very properly, were fined. In fact, the police carried out their duties. Noble Lords opposite will be quite entitled to say, "The noble Earl has no right to ascribe political pressure upon the provincial police force because of what he states happened in this provincial bus strike." That may be so. I do not know whether it is or not, and I merely call attention to tile matter because I think it should be called attention to.
Another point where no question of political pressure could. I think, come in, is what appears to me to be the striking contrast between what happened in Nottingham and what happened in Notting Hill during the so-called racial riots. In Nottingham, on the first day of the riot a number of people were grievously injured—I think seven or eight were taken to hospital. The police did not arrive until after this had occurred, which was not their fault because the whole thing arose suddenly. In consequence, no arrests were made. But according to the Press reports, for something like eighty minutes after the first incident when these persons were injured there was fighting in the street between coloured and white people, although the police were present in force. As your Lordships will remember the next day there was a recurrence of the rioting. Then some arrests were made.
The Chief Constable, in a statement which he issued, said that the police did not have to use their batons. He seemed to think that that was, if I may use a
10
vulgarism, a "bull" point for the police, but I am not sure that it was. Some of your Lordships who belong to my generation will remember the religious riots that used to take place in the old days in Liverpool and Glasgow. When the Liverpool and Glasgow police were confronted with riots such as those with which the Nottingham police were confronted, they never hesitated to make a baton charge. Even if a few people did get broken, heads, it was better than that others should be seriously injured or the public peace endangered. Now let us contrast that with what happened in Notting Hill, where there was just as serious a riot but one which, I suggest, was dealt with far more efficiently by the Metropolitan Police than the other by the Nottingham Police. A number of people were arrested and the troubles came to an end. There may be an answer to this. I have brought it up, and no doubt publicity will be given to this debate; and the Chief Constable of Nottingham may have a perfectly satisfactory answer. I am talking only about what appears on the face of it.
I should mention (although it is a comparatively small matter, I think it has some bearing on the attitude of the police towards violence) something which occurred at Woking in the spring of this year. We were told in the Press of some fifty young soldiers who were apparently engaged in looking after the targets at Bisley and who, in the evening of a spring day held up a train, did considerable damage to the carriages, frightened a lot of passengers and caused a delay in the service—in fact, they disrupted the service. There was a strange statement in the Press to the effect that the Woking Police felt themselves unable to cope with the situation. That seems to me extraordinary. There is a large constabulary force in Surrey, and surely the Woking Police could have telephoned for reinforcements and either arrested these young soldiers or told them to behave themselves. Instead of that, according to Press reports they telephoned to Aldershot for the Military Police. The Military Police arrived and got hold of these fifty young soldiers. We were not told what happened to them—whether they were court martialled or whether they were brought up before their commanding officers.
I suggest that two serious issues, on what might seem to be a comparatively unimportant incident, arise there. In the

11
first place, the Armed Forces of this country have not got any special privilege which prevents them from being dealt with by the civilian police. In fact, it is one of the bulwarks of our liberty that people in uniform have to obey the ordinary law like the rest of us. It was surely the duty of the civilian police to deal with this situation. The second point is that if these men did this damage and were presumably guilty of disorderly conduct, they should have been dealt with in an ordinary court, and not by the military authorities. I mention those things because I think they are relevant.
I come now to a much more difficult and delicate matter but one which I think needs ventilation. There have been at least two very disturbing incidents in the provincial police in the last year. The fact that they have occurred is no reflection on the provincial police force as a whole, and it is only fair to them to say that there have been in the past somewhat similar instances, though not of quite so grave a nature, in the Metropolitan Police. The first of these incidents occurred at Brighton. No doubt the noble Lord who is to reply will hesitate to confirm or otherwise what I am saying, but I was told quite properly—not through official, but through other channels—that the serious corruption in the Brighton police came to light only because the members of the C.I.D. investigated another case, that of Dr. Adams, and came across certain facts, or apparent facts, which made them suspicious of some of the senior members of the Brighton police force.
Now it would be a gross abuse of your Lordships' privilege if I were to suggest—which I do not for a moment—that the Chief Constable was guilty of the offences of which he was found not guilty. I am sure that the decision of the Court was right. But what was obvious was that he had not done his duty as Chief Constable. He should have known what was going on. There was also evidence to show that he was the friend and associate of crooks and criminals, and his answer that he had to do that for the purpose of finding out what they were doing seems insufficient. But here is the serious thing: this conduct had been going on for a long time. I should be the last person to want to attack the Brighton Corporation or its Watch Committee. I have a great
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liking for Brighton. I have been a friend to many of the former councillors, and it happens that two of the former Mayors of Brighton were comrades of mine in the Yeomanry. I have no reason to suppose that there was anything wrong with the Watch Committee except that they appeared to be wholly ignorant of what was going on under their noses.
One of the most astonishing things about this case was what happened at the disreputable night club which, your Lordships will remember, was known as the "Bucket of Blood." According to the evidence, which was not denied, there were nightly scenes of a most disgusting character at this place. People were carried out dead drunk and others were hit over the head and had to receive medical attention. I understand that this particular club is in a fairly prominent place in Brighton. There must have been dozens of people passing who heard what was going on. The police on patrol duty must have known, and yet apparently not a word of it reached the Watch Committee. I hope and believe that there is no real resemblance between the situation, but when I considered the matter I could not help remembering what some of my American friends have said to me. For example, when I was in America about six years ago on a lecture tour I would be told, "You will be very shocked. When you come to such and such a town on the surface everything is all right, but I am sorry to tell you there is an enormous amount of police corruption, and fellowship between the police and the gangsters." I would ask my friend why he did not do something about it, and the answer I usually received was something like this: "It really does not nay a respectable citizen in my occupation and position to interfere in these matters. It is dangerous. If you do you will either he framed by the 'cops' or 'thugged' by the gangsters. It is mach better to leave it alone." I do not know whether there is any real resemblance, but it is a serious matter that the behaviour at this club and this corruption should have gone on for several years.
There was another disturbing thing about the evidence at the trial. One man who gave evidence said (though he was a former criminal and may not have been speaking the truth) that one of the police officers, a man who I think is now in

13
prison, had told him that he would put it all right by having a word with the clerk to the magistrates before his case came up. I do not know the clerk to the magistrates, and I have no reason to suppose that he is other than a respectable man; but after this evidence I was astonished that he did not immediately issue a statement to the effect that the evidence was not true and that he never discussed with the magistrates in advance what sentence should be given to a man about to be brought before them. I think that your Lordships, irrespective of Party, will be in agreement that nothing could be more improper than for the clerk to the magistrates to discuss in advance with the magistrates what sentence is going to be given.
I should have mentioned one other case which I thought disturbing—that is, the case of the former chief constable of Worcestershire, who is now in prison for having stolen money from a police fund. In his evidence, he said that he had really carried on the system which his predecessor, who was retired, had carried on in his day. The predecessor issued what was to me an extraordinary statement. He began by denying that he had done anything wrong, then went on to say that when he retired he had repaid to the police fund a sum of £500-odd, which was what he owed to it. What he meant by that obscure statement, I do not know.
I hope that there will be no more cases like those I have mentioned. Of one thing I am convinced—and here I hope that there will be no Party differences of opinion. Without in any way interfering with the autonomy of police authorities, there should be a strengthening of the constabulary inspectorate system. I understand that at the present time there are only a few inspectors, and that they are not provided with staff. If they had a trained staff of a few former C.I.D. men, Scotland Yard-trained detectives, they could, where they had reason to suppose that there was maladministration or corruption, of the type that occurred in Brighton, make their own individual inquiries, in the same way as Scotland Yard did in the case of Brighton. Your Lordships will remember that at the beginning of the investigations the Brighton police authorities and watch committee knew nothing about the presence of the members of the C.I.D. who
14
were investigating the case. Therefore, I would submit that it is worth considering a strengthening of the inspectorate on the lines I have suggested.
My last point is this. I would call attention to a strange situation, one for which it is difficult to find a remedy. A friend of mine, an honourable Member of another place, happens to have a constituency which is partly in the Metropolitan Police Area and partly in that of a provincial (I use the generic term) police authority. If any of his constituents in the Metropolitan Police Area has any grievance against the police, or any police constable has any grievance against his superior, my friend has a perfect right to approach the Home Secretary, as noble Lords who like myself sat in another place will know. If not satisfied, he has a right to put down a Question in another place and raise the matter on the Adjournment, if he is fortunate in getting a place for an Adjournment Motion. But in the case of a constituent who lives in the provincial police area, none of these courses is open to him.
Under the Rules of another place, with which, of course, I must riot quarrel—no doubt they are right—a Member cannot ask a Question about the actions of a provincial police authority or about any grievance which any citizen or constable in that area may have. It is out of order. Not long ago my friend attempted to raise a certain matter, and the Home Secretary said that he had no responsibility for provincial police forces. No doubt that is true, in a sense, but he has some indirect responsibilty, because, as I have pointed out, he can bring pressure to bear on provincial police forces to amalgamate; he can refuse to allow the appointment of a chief constable, and he has his inspectorate system. If a person in a provincial police area feels aggrieved by any actions of the police, he can communicate with his representative on his local council, the county council or the borough council, but almost invariably he will be met with the reply that the matter has been referred to the chairman of the watch committee and the chief constable and that they find there is nothing in the complaint. That is all an aggrieved person can do. There is no publicity as there is when a grievance against the Metropolitan Police is brought up in Parliament.
This is the puzzle: How, whilst retaining the proper authority and automony of provincial police authorities, whether standing joint committee or watch committee, can the public be given more rights than they have at the moment to query the action of these authorities. An ingenious plan, which I put forward to your Lordships but do not necessarily commend, of how to get over this difficulty has been suggested to me by a person who has given great attention to this subject. He proposes that there should be an area council, to be called the Police Authority Council, or whatever one likes to call it, composed of representatives of the standing joint committees and watch committees in the particular area—it might be that of a county or two counties. In addition, there would be independent members, preferably Queen's Counsel. That body would be empowered to hear the following complaints: a complaint by a chief constable against the watch committee that his duties had been improperly interfered with by that committee; a complaint by a watch committee against the chief constable that he had failed to carry out his duties properly, though he had kept within the law, and that he was non-co-operative; a complaint by a member of the public alleging some fault of omission or commission by the police force in the district in which he lived; and lastly, a complaint by a police constable that he had not been properly treated.
I ought to have said earlier in my speech that in some of the smaller police forces there is evidence of serious feeling of dissatisfaction at the system of promotion. It will be appreciated by your Lordships that in a small police force the chances of becoming a sergeant, and a fortiori a superintendent, are very thin; and it is alleged that promotion invariably goes by seniority. The decision of this proposed new body, which I have put forward because it was suggested to me for consideration, would be final, subject only to this: that the aggrieved party to any dispute—that is to say, the person or body against whom the decision of the authority went—would have the right to appeal to the Home Secretary, whose decision would be binding. Then, and only then, would it be possible to challenge the matter either in your Lordships' House or in another place,
16
because the Home Secretary would have been brought directly into the matter. So the plan would not mean (and this, I think, is its merit) that there would be undue interference with the autonomy of local authorities, yet it would give to aggrieved persons the opportunity which they do not possess to-day.
My Lords, I want to end on this note. There has been, I hope, nothing in my speech to give the impression that the provincial police forces are not, as a whole, sound. We still have, as I am sure all your Lordships will agree, the fairest and most honest police force in the world—and, I think, a most efficient one. But to repeat what I said at the beginning of my speech, I believe that the fabric of its administration needs to be repaired and brought up to date. We pride ourselves in this country, I think rightly, despite what some of our enemies say, in being modern and up to date; we deny that, because we have got such a long history, we are necessarily wedded to things of the past. And that is true, of course. But in a country like ours there is a danger that a particular institution which has rightly earned the praise of its fellow-countrymen and countrywomen, as the British police force has done, may be regarded as sacrosanct, so that there should be no change in its formation or in the way it is controlled. That, I think, would be a bad thing for the police, and it is for that reason that I have brought forward my Motion. I hope that it is not improper for me to say that I greatly appreciate the excellent attendance which we have in your Lordships' House and the manner in which your Lordships have listened to my points of view. I have tried to avoid being unduly controversial. I beg to move for Papers.
3.26 p.m.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am sure the whole House must feel grateful to the noble Earl, Lord Winterton, for having put this Motion on the Paper. I would say this to him, as a very old friend and one who was far senior to me in the other place, where he became the Father of the House. He has quite stolen a march on me, probably unwittingly, in that, although I raised the matter on the gracious Speech, he has managed to get in first with his Motion. I would also say

17
that I have rarely heard him to better advantage, from the point of view of reciting, extempore, in a great deal of detail, but without being too long, what was in his mind, and covering such a wide field on matters which are delicate and, whatever he may say, and whatever his endeavour has been not to be controversial, which must in themselves remain controversial.
I would start off by saying a word or two about almost the last sentences of his speech. I looked round at the Liberal Benches and wondered whether we should have the advantage to-day of the attendance of that great veteran and very well-informed Member of your Lordships' House on all matters connected with the Home Office, the noble Viscount, Lord Samuel, because one remembers that in 1937, in dealing with the subject of the police, he said:
"The police are one of our British institutions in which as a nation we take most pride, and on the whole"—
and I think this puts the noble Viscount in line with the noble Earl, Lord Winterton—
"we can claim that our police force yields to none and is, we believe, superior to all in efficiency and in what is the first condition of efficiency, honesty."
I think that is a great claim and, on the whole, it is exemplified day to day by almost the complete forces in the country. There are certain exceptions which break out, but one of the great tributes to British justice is that, sooner or later, if there is anything going wrong, somehow or other, British justice gets hold of it; and if it comes up against somebody who is in authority in these matters, the courts of our land are as severe as is required by the circumstances in their dealing with the matter. On the other hand, there is no doubt that the events of the last few years, not at all unconnected with a point to which the noble Earl. Lord Winterton, referred, the increasing mobility of the criminal and the improvement of his various accoutrements, spreading the range of them, at any rate, have made it much more difficult, under the organisation of the police forces as they exist to-day, for the police to get on the track of the criminal quickly enough—in all cases, that is: they are quick enough in some cases—to be effective.
I have been interested in the police force since I was a boy in a working-class
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home, because an uncle of mine was at that time a deputy chief constable of Bristol. That is a long time ago. I had another uncle who was much less exalted—he was an ordinary constable in the Bristol police force. I have a nephew who is at present an ordinary member of the criminal investigation department of a provincial force. I have always been intensely interested in their work, and I do not suppose that in all my travelling round the world—I have been round the world at least twice, and have visited a great many countries—I have ever experienced such courtesy and helpfulness from police forces as one experiences in one's own country.
Nevertheless all through my life I have from time to time seen a recognition of the need for change. Anybody from the West Country, for example, will remember that although there were at one time separate police forces, chief constables and watch committees in boroughs with a lower population than 10,000, they have long since been absorbed in their county forces. Certainly that was the case in the counties of Somerset and of Devonshire, and I believe that efficiency has greatly improved through adopting one or two of the points that were so notably made by the noble Earl. I should say that what he has said to-day with regard to a far better integration of the modern equipment of police forces, the modern training of police forces resulting in quickness of action after the criminal, really supports to the hilt the general case he makes for an inquiry to be held.
I have not been able to consult every member of my Party, but I am quite sure that, on the basis of getting a clarification of the position and having a general inquiry into the needs of the moment, in our country, the whole of the Opposition would be greatly in favour if the Government would agree to set up an inquiry into the best steps to be taken to improve the general administration and the general efficiency of the police; and, if necessary, arising front those two things, to secure proper integration of the varied police forces in the country. In view of the nature of the noble Earl's statements about cases which have given rise to great interest in the country, such as those of Brighton and Worcester—although these two cases are not alone—I do not propose to say anything further about them. We know that they have been recorded in the

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Press, and of course a great deal of the information that the noble Lord has proffered to the House this afternoon has had to be absorbed by him in his thinking either from what he has read in the Press, which is never really full, or by word of mouth, which varies—sometimes it is reliable, and at other times it may not be quite so reliable. All he has been able to do is to make his own judgment on what was available to him.
If one were to expect the Government to act merely upon that kind of thing it would be unreasonable. I think it absolutely essential to remember that the real point of the noble Earl's Motion is that there is an urgent case for an inquiry to be made. He was most courteous to the Opposition with regard to some of his controversial points—for example, with regard to what could happen in a general strike in the case of a particular local authority having a Labour majority; or what could happen to food supplies and the like. I would only say that I should think that to-day the police have no less loyal support in their general task of keeping the peace and securing justice through the country, which has now such a large number of local authorities with Labour majorities, than they have ever had at any time in their history. Nor if I delved into history, would it be difficult to find cases of corruption, even in the higher ranges of the constabulary, in cases where there was no Labour majority. I have not learned that there was a Labour majority, for example, in the Councils of either Worcester or of Brighton.
The noble Lord has been perfectly fair in his use of instances from which to quote. I would say, however, as a member of the Government all the way through the war, from 1940 onwards, that I do not think I came across a single case—there may have been some; I would not say there were not—where effective action had to be taken with regard to favouritism by this, that or the other political member of any Party in a local authority, with regard to food supplies and the like. I do not remember any; therefore, I put that point on one side altogether. But on the noble Earl's point with regard to the possible influence of watch committee members in general—if you take them in general and not from a Party point of view—in appointments,
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in promotions and matters of that kind I agree that there might well be examples that could be dug out by a real inquiry which would lead the Government perhaps to consider that some change might be required in the system.
I gather that in many places, although the watch committee have, of course, full right to appoint constables of any kind, and, I think, are subject to correction by Home Office representation or by the noble and learned Viscount on the Woolsack only in the case of the appointment of a chief constable, nevertheless the promotions, apart from the promotion at the very top, are usually made by the chief constable. I am told that it is often felt that these promotions are not sufficiently vetted by the local police authority. It seems to me that we might find, in order to prevent any particular favouritism by any individual political pressure, that we need some method of ensuring that the watch committee or standing joint committee members all have full information about all possible candidates for promotion, and on what grounds they are supposed to have been promoted. I think that the case on that point would again lead me to support the idea of a general inquiry.
But the other point that again and again comes before me from conversations that I have had in the matter is that there is perhaps even more need for an inquiry, so that one would know how best to act whatever Government was in power, into what is the general function of each member of the watch committee, or of the standing joint committee. What can they do as individuals while working as a team in their meetings and in arriving at their decisions, to prevent the outstanding cases here and there where matters go wrong? That seems to be the feeling among members of watch committees and standing joint committees. They feel that they have practically no power to bring any pressure to bear at the right time and in the right place. One can so easily get into dangerous legal positions by expressing in some cases even a suspicion.
I very much doubt whether I could give general approval to the noble Earl's suggestion of some kind of Appeal Board arrangement, with an area council, Queen's counsel and all that set-up, to inquire into almost any matter. I could

21
not do so without a great deal more consideration, and certainly I should not like to consider it in detail unless there had been an inquiry of the kind which is being sought by the noble Earl in the Motion before your Lordships' House. But some of the cases which have been brought to the notice of the public were of such character that if a member of a watch committee or standing joint committee had any real inkling of the position and there was no opportunity for him to act locally, he should surely, especially as a magistrate, have the right to communicate with the Government. I should have thought that something of that kind could be done.
At any rate, the general position seems to be, as I dared to say in speaking to your Lordships on the Address in reply to the gracious Speech, that the functions of the members of these bodies are placed at too low a level, and that these people ought to have greater individual responsibility in their conception of the local or national administration of justice. The other point is how far it is desirable that members of these bodies should be wholly or only partially members of the magistrates' bench. The watch committee of a borough or city would in some cases, I dare say, strongly object to the idea that every member of a watch committee must be a magistrate. I cannot quite recollect whether, in my experience, all the members of our standing joint committee in Somerset a long time ago were magistrates, but certainly some of them were exceedingly experienced and, although they were not practising lawyers, were quite capable of taking the chair very effectively at, say, quarter sessions.
It seems to me that if there is not a prima facie case for having more magistrates upon these bodies there at least ought to be some way in which we can get better co-operation between the considered views of magistrates' councils, advisory committees, or whatever they may be called, and those who actually deal with the administration of the police forces in the county and borough areas. I should very much like that to come before whatever form of inquiry Her Majesty's Government may see fit to set up—and which I hope they will see fit to set up.
I could say a great deal more, but I do not think it is really necessary to deal with any other point except the question
22
of inspection and whether, in some cases, the powers of a chief constable need to be increased, as I had rather gathered was the view of the noble Earl. In many places that would certainly be a very controversial subject. I should certainly have thought that in view of the fact that the State makes, I believe, a 50 per cent. grant towards the maintenance of every local police force, there ought to be a system of check and inspection which surely could not be confined to one of the members of the Home Office Inspectorate of Constabulary. I believe that comprises one woman and three or four men, and they have a great many police forces with which to deal. One can easily imagine that the inspection may consist of nice talk, plus perhaps a parade of such constables as may be available to be paraded on the day in question, so that what takes place is pretty cursory, having little to do with a check on the system of administration that is operating and what preventives are included in that administration against anything going wrong with the police forces themselves. From that point of view, whilst I cannot say that I would accept what the noble Earl has said about the increased powers of the constabulary or the inspectorate, I believe that by what he has had to say about it he has made out a very strong case again in favour of an inquiry. I hope, therefore, that in the rest of the debate, as it goes forward, some of the points with which I have not dealt as widely as the noble Earl but which have been put very fully before your Lordships will have further light thrown upon them. If it were possible I should like to have a unanimous vote of your Lordships' House in favour of the general principle in the Motion, that there should be an inquiry into the whole business.
3.47 p.m.
LORD MILNER OF LEEDS: My Lords, I regret that owing to the late arrival of my train I was able to hear only a portion of the noble Earl's speech. I hope he will not think it impertinent of me, as an old friend, if I say how pleased I was, as I am sure were many other of his friends, to know that, notwithstanding his indisposition from time to time and the difficulties under which he has suffered in that direction, he has still preserved in very large degree his old form

23
and many of those characteristics which for so long earned him the respect and indeed the affection of Members of another place.
The matters raised by the noble Earl are important and very much in the public mind at the present time, and I am sure that your Lordships' House is grateful to the noble Earl for raising them. I have had some experience in these matters, though it was some time ago on a local authority and, of course, also in my professional capacity, and I venture to submit to your Lordships a few observations on the noble Earl's Motion. The first question raised by the Motion is as to the effectiveness of the statutory control which standing joint committees or watch committees, as the case may be, exercise over a police force. It was said by one of Her Majesty's Inspectors in evidence before the Select Committee on Estimates of another place a little time ago, that he had found that watch committees (and he probably included standing joint committees) were doing their job extremely well; and I have no doubt that in the great majority of cases that is true.
However, I also have the feeling which I believe most of your Lordships must have and which has been reinforced by what has been said by the noble Earl and by my noble Leader, Lord Alexander of Hillsborough, that there are cases where the police authority is a mere "rubber stamp", approving the action or recommendation of the chief constable as a matter of course and without very much inquiry—perhaps without any in some cases—into the details of what is being done or recommended. If that was not the case—I do not want to go into details—it is difficult to see how some of the recent happenings to which the noble Lord has referred could have taken place.
I think one should be clear that the local police authorities have no control over the actual enforcement of the law. I need not tell your Lordships that that is a long-standing constitutional principle in order to ensure the independence of the police and the absence of all pressure from any quarter. The chief constable being the authority in regard to the enforcement of the law, the standing joint committee or the watch committee, as the case may be. have no power in those
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matters. That is obviously a very important principle and a safeguard against the creation of a Police State; and it should, of course, be retained in full force.
Watch committees are, however, responsible under police regulations and the Police Act for the establishment and organisation of the police and for promotions and appointments. They have power to suspend or dismiss any constable or to dismiss or suspend a chief constable with, in the latter case, the approval of the Home Office. They must, therefore, be presumed to have full powers of inquiry. I venture to doubt whether all watch committees, or police authorities, as I shall call them, fully appreciate or exercise those powers. There is a good deal of complacency and conservatism (in the non-political sense) among some of them, which the inquiry which has been suggested would probably disclose. The ideal is, I would submit, partnership among the police authority, the standing joint committee or watch committee, and the executive official, the chief constable. Perhaps a suitable analogy is that of a board of directors and the managing director, where the managing director makes proposals or recommendations which are gone into in detail by the board of directors and are approved or disapproved, as the case may be. If I may refer to it, in my own city of Leeds there is such a relationship, and I know that there the watch committee take a very close and personal interest in all those organisational details.
I was a little surprised to hear my noble friend Lord Alexander of Hillsborough imply—he is very probably right—that some watch committees appear to think they have no power to go into those details. Undoubtedly they have the power and should exercise that power to go, item by item, through recommendations as to appointments, promotions and so on, to find the reasons for them and to ensure that there is no favouritism and that merit counts. If that is not being done, that is one of the matters which, again, an inquiry would disclose and. one hopes, put right in the future.
One essential in a well-conducted police force is a frequent review of all the details of area or territorial organisation. In these days in particular, populations and their distribution change in some cases

25
almost year by year. Slum clearance results, of course, in the movement of large sections of the population from one part of a city to another; boundaries of cities and councils alter; and frequently questions of right distribution or better distribution or more efficient distribution of the police force arise. All those require constant review, and I very much doubt whether they are constantly reviewed to the extent that is necessary in some police forces. I would remind your Lordships that the cost of a constable nowadays is over £1,000 a year, if one takes into account his pension rights and so forth—a very expensive item. It is possible, as I know from my own experience, that even where areas or cities have increased in size, as in Leeds, a mere increase in the police force is not necessarily the right solution. Undoubtedly a great deal of economy can be exercised by the employment in appropriate cases, for non-police duties or duties which are not strictly those of policemen, of civilian clerical staff, who, of course, would not cost the authority or the taxpayer or the ratepayer, as the case may be, the amount required for police constables. No doubt all nose propositions are common form in many places, but bow far are they carried out in all?
This brings me to the second point raised by the noble Earl's Motion; that is, the position of Her Majesty's inspectors. There were, I believe, four and there are now five of those inspectors to cover the whole country. They are under a statutory obligation to make at least one visit a year to every police force. Although it is true that they make, I believe, other occasional visits, their main visit as inspectors is made at a pre-indicated time and date of which ample notice is given. I need not tell your Lordships, most of whom at one time or another have served in the Armed Forces, what happens when one has an indication that an inspecting officer is coming round a week next Thursday, or whatever the day may be, at twelve noon. There is a great deal of furbishing up and spit and polish "and that sort of thing; and that must take place in those circumstances in our police forces. That seems to me quite wrong arid quite inadequate. One day's inspection is not sufficient in which to make the detailed inspection and inquiry that should really he necessary. Had there
26
been a more thoroughgoing system of inspection, some of those recent happenings to which the noble Earl has referred would possibly not have taken place. I am not suggesting that inspectors should go in for snooping or anything of that sort, but they should go in for a more detailed and thoroughgoing inquiry than they do at present; and that, I think cannot be disputed. I suggest that, whilst no doubt there are ample powers set out in the regulations and the number of inspectors is insufficient, the visits should on occasion be without notice and should be of a more detailed and thoroughgoing character.
In this matter of inspectors another question arises, and to this I should like to have an answer from the noble Lord, Lord Chesham. I understand that Her Majesty's Inspectors of the Constabulary make a report to the Home Office, but no copy of that report is sent either to the standing joint committee or the watch committee or to the chief constable. If that is the case—and I am sure that the noble Lord will correct me if I am wrong—surely those reports are quite useless. Surely the contents should be known to the local police authority and to the chief constable. If that is not the case, I shall be glad to know why that is not done. I may say that there is a tendency, it is thought in some quarters, for the Home Office to assume too much authority, and I submit that nothing should be done to diminish the sense of responsibility of the local authority in matters of the administration of the police force. For that reason, if for no other, the local authorities should be given full information as to the findings of Her Majesty's inspectors.
Then on the third question raised by the noble Earl as to amalgamation, I would point out that the Select Committee on Estimates had that matter also before them and they came to the conclusion that there were small police forces which might well be joined up together or be joined up to a larger force. That was a view which was presumably expressed by the Select Committee on Estimates on financial grounds in the main. I am not aware that any evidence was adduced to support the contention that efficiency has any relation to size. I have, however, no doubt that there is scope for inquiry on the point, as in

27
these days much must depend on technical equipment and it is presumably not possible for the smaller forces to have all the technical equipment which is required.
Finally, on the subject of an inquiry, I may say that there is a strong body of opinion, amongst whom the Association of Municipal Corporations is included, that there is nothing wrong with the individual police officer or man or with the powers which the local authorities have. There is, however, strong doubt whether those powers are sufficiently and efficiently exercised in all cases. There is certainly room for improvement in the matter of inspection and, I think, for a general "shake-up" in some cases of the administration of police authorities. For these reasons I am of the opinion that an appropriate inquiry would be valuable, and I hope that the Government will see fit to set up such an inquiry.
4.0 p.m.
LORD BURDEN: My Lords, notwithstanding the most interesting speech of the noble Earl, to which my noble Leader, Lord Alexander of Hillsborough, has paid tribute, I venture to think that the terms of the Motion which the noble Earl has moved—and that is what we have to consider—challenge the principles which have governed the organisation of the police since Sir Robert Peel's Act of 1829—that is, for nearly 130 years. These principles are simple, they have stood the test of time, and they have given this country and Scotland a police force unique in character. The first principle is that, with the exception of the Metropolitan Police in London, the police are not servants of the Crown; that is to say, of the Government of the day. In point of fact, if an official of the Government attempted to do something illegal he would be restrained by the police. Secondly, a policeman must not exceed his lawful authority, such as to search a house without a warrant. Thirdly, the police forces are administered not from Whitehall but by their respective local authorities. The police force in many cities and boroughs are highly esteemed. For example, I happen to know from my own experience that the city police in Sheffield are a matter of civic pride.
This organisation of the police forces in this country received a striking com-
28
mendation in the Desborough Report of 1919. It said:
"The adoption of direct central control of the police would be foreign to the constitutional principle to which we have referred in para. 6, by which the preservation of law and order in this country is primarily the function of the proper local authorities. It would alter the whole basis of the police system, and in particular would prejudice the intimate relations between the police and the localities where they serve which many experienced witnesses have regarded as one of the most desirable characteristics of the present system, and to which they attribute in great measure the happy relations which have existed between the police and the general public in this country."
I am, of course, aware that a number of tiny police forces were amalgamated by the Police Act, 1946. I seem to recollect that I was chairman of the Standing Committee which dealt with that Bill in another place. If I charge my memory, I believe I am right in saying that there were some seven police forces with an establishment of twenty-five and under (and three of them were county constabularies), and one, I think, had a force of ten. No one can contend, I think, that a police force of fewer than fifty could hope to give all the services necessary to-day.
EARL WINTERTON: My Lords, I wonder whether the noble Lord would allow me to interrupt for a moment. He made a reference to me in which he said that I have challenged the principle of the original Police Act. I have been waiting to hear in what respect I challenge it. I made it clear again and again that I did not attack local police autonomy: I merely wish to make it more effective. Perhaps he would be good enough to tell your Lordships in what respect I have challenged that principle.
LORD BURDEN: I readily accept that the noble Earl has made no attack at all on the principle of the original Police Act. In fact, I referred to his speech as a most interesting one—but I have gone back to the terms of his Motion. That is what I am considering now, and not the most interesting speech of the noble Earl.
But even that Act of 1946 prescribed a limit to the size of a police force which could be merged, and also provided other adequate safeguards (and this is the point I really wish to make to the noble

29
Earl) against the development of a regional or national police force. I believe there are some 132 separate police forces in England and Wales and forty-five in Scotland, varying in size from the Metropolitan Police, with an establishment of about 20,000, to forces of about seventy. I say immediately that I agree with the noble Earl that there is no magic in the figure of fifty as against seventy, or anything of that kind, and I would not quarrel with what my noble Leader has said as to an inquiry; but it is the terms of the Motion which I feel are somewhat dangerous.
These police forces fall within three categories: the city and borough police, the county constabularies, and the Metropolitan Police. Here we come to a point which was made by the noble Earl. The supervision of these forces other than the Metropolitan Police is exercised by four senior, experienced police officers and one woman inspector who of course deals mainly with the women. The duty of these officers is to see that the local forces are properly run, and any serious irregularity would be reported to Whitehall. But their advice and their wide experience is of great assistance to, and is readily welcomed by, the local officers. As this number of inspectors divides into about 200, it means that, if necessary, they could spend a week with each force, leaving on one side time for holidays. Whether that is sufficient or not is a matter for debate.
Then I come to another important factor. The Home Secretary makes regulations to cover government, material aid, pay, allowances, pensions, clothing, expenses and conditions of service of all police forces. As has already been pointed out, the approval of the Home Secretary is required for appointment to the post of chief constable, and it may be recalled that in 1947 the Home Secretary refused to approve the appointment of a chief constable by an important county borough—I believe a borough with a Labour majority. Ultimately the council had to give way when the Home Secretary threatened to withhold the police grant. I am not sure—I cannot tax my memory on this point—whether it would be possible for him to withhold the police grant under the block grant system. That would require looking into, but I dare say that there would be other
30
ways and means of dealing with the situation financially.
As noble Lords are aware, cities and boroughs administer the police forces through their watch committees, and counties act through their standing joint committees, on which the justices of the peace are represented. The police authorities of both counties and boroughs are organised, the county authorities by the police committee of the County Councils Association and the watch committees by the Association of Municipal Corporations. Here may I suggest to the noble Earl that these committees, meeting regularly to deal with day-to-clay problems of the police forces, and having at their command the service of the most experienced people in the police forces in the country, have always available a wide knowledge and experience, whenever the Home Office wishes to consult them. That is why I feel that the terms of the noble Earl's Motion today are too wide, though I am sure that a proposal to have an inquiry after prior consultation with the bodies I have mentioned would receive the support of both sides of your Lordships' House.
I have just one further word, and I venture to quote from a book entitled Crime and the Police, which was published a few years ago, with a Foreword by Mr. R. M. Howe, C.V.O., M.C., Assistant Commissioner, New Scotland Yard. This is what the book says.
"If the powers of local authorities were slowly whittled away, if, for apparently excellent administrative reasons, a large number of police forces were merged together under single control, if the police were gradually to become servants of the Government rather than protectors of their fellow citizens, if the police became a 'national' rather than a 'local' institution, then it would indeed be possible for Britain to be turned into a Police State.
The traditions of the British police forces are exceptionally strong and almost every policeman in the country is aware and proud of his civilian status. If there is any danger, it is not from the police but from politicians who, either from ignorance or from malice aforethought, might one day try to tidy up the apparent muddle of the many forces and the many organisations."
It is because the terms of the Motion, notwithstanding what the noble Earl said in his admirable speech, seem to point us to that perilous path, that I hope the Motion will not commend itself to your Lordships.
4.16 p.m.
LORD PAKENHAM: My Lords, in the absence of the noble Viscount, my revered Leader, I feel to some extent inhibited, as I should like to get a ruling about the Party line, following the closing remarks of my very dear friend Lord Burden. If your Lordships will allow me to say so, pending any reconsideration of policy on this side I would follow the general line adopted by my revered leader, and I hope that I shall not be out of order in so doing. My noble Leader made a strong submission that an inquiry of the kind suggested by the noble Earl, Lord Winterton, was highly desirable and should be embarked upon without further delay; and that is my own attitude to the matter.
I should like to pay my tribute to the noble Earl and to all those who have supported him. After listening to the noble Earl, I feel that it may be we should all benefit by being compelled to speak without notes. I am not sure what the result would be like. We have not all the noble Earl's excellent gift of thinking on his feet, though, of course, my noble friend Lord Stansgate does it, and no doubt we could all learn in time. But I think that we should all wish to congratulate the noble Earl on a remarkable Parliamentary performance. I agree with him that attendance to-day has been satisfactory, considering that it is a Monday. The number of speakers has been rather small, and drawn mainly from one side of the House. I do not know whether one should read anything into that—maybe the subject was too difficult for noble Lords opposite. I do not altogether blame them, because discussing the police is rather like walking in a dark room with bare feet with pieces of glass scattered about the floor. It is hardly possible to lay down a general proposition about how the police are organised without making a slip, and still harder to recommend, here and now, a desirable change.
If I am supporting an inquiry, it is because I think that the whole position should be immensely clarified. I am bound to say, with great respect, that I disagree with my old friend Lord Burden, because I think the argument that it is a sign of malice or ignorance to try to clear up the apparent muddle is one that would be more often found in the police officer than in a statesman; and perhaps it is not a surprising one to come from
32
a most able detective. This is a difficult subject. So far as one can judge, we have the finest police force in the world; but as I have said, it is not easy to judge. Once I said the same thing about our Civil Service, and the noble Viscount, Lord Samuel, asked how I knew; and, of course, it is impossible to prove such a statement. But I think that we all realise that we have a force, by and large, to be proud of.
In the most recent book on the subject that has come my way, by Mr. Charles Reith, we find this considered estimate:
"the truth is that in our desire and efforts to avoid having a national police force under central administrative, and possibly individual ministerial, control. we have allowed police organisation and administration to degenerate into a confusion of muddled authority which is creating dangers for us no less menacing than any that in the course of a century we have been at pains to avoid."
The police themselves apparently, to judge from what the noble Lord, Lord Burden, said, recognise that there is a state of apparent muddle. The only question is whether it is apparent or actual; and there are some in this House, at any rate, who feel that that question should be cleared up by an inquiry.
I do not think that anyone has come to the House to-day to recommend the abolition of what I might call the whole provincial system—to recommend, in fact, a nationalised police force. But I do not think the fact that we are going to stick to the main lines of the system should prohibit us from saying whether or not that system is perfect. In addition to the ordinary problem of central versus local control, that desire to draw as much of local interest as one can into the matter, and at the same time to secure central co-ordination (and that side of it has been well stressed in earlier speeches), one has another difficult problem. One does not want to give any one Minister the right to call himself Minister of Police, for fear that the police would become militarised, and at the same time one is nervous of allowing any body of local politicians to interfere with a function that in some cases has a strongly legal character. The result of that in my opinion is that the chief constable is, in effect, responsible to nobody. At any rate, his allegiance is far less clear than that of any other important official in our constitutional system.

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Take the position of the chief constable. The noble Lord, Lord Burden, said that police officers are not servants of the Crown. Yet in fact it is a rather doubtful point whether the chief constable (and I am speaking of the chief constable in the provinces) would or would not be rightly called a servant of the Crown; and if so, in what sense? If one looks at the evidence given to the Select Committee, which the noble Lord, Lord Milner of Leeds, mentioned earlier, in his most effective speech, one finds that those who gave evidence on behalf of the Association of Municipal Corporations were disturbed about the difficulty of saying whether the chief constable was or was not a servant of the Crown.
Alderman Hoye, who gave evidence on behalf of the Association said:
"I am one of those people who say that the chief constable is as much the servant of the local authority as he is the servant of the Crown."
He was trying to stake a claim for a local authority having at least a half-share in the police constable, while leaving the other half to the Crown. Another gentleman who gave evidence on behalf of the Association of Municipal Corporations had this story to tell. He said:
"Some time ago I had experience of a then chief constable who, on the strength of his view of the Fisher v. Oldham judgment declined to attend meetings of chief officers"—
that meant meetings of other local government officers—
"which were held regularly in an attempt to bring about co-ordination, on the ground that he was not a chief officer of the corporation but an officer of the Crown."
This chief constable took the view that he was an officer of the Crown. The gentleman who was giving evidence was asked by the Select Committee:
"Did he get away with that?",
and the answer was:
"Yes, he just did not come."—
that is to say, he did not go to these meetings.
At the risk of being autobiographical, I cannot help recalling that over twenty years ago I was involved in a fracas in a certain town which shall be nameless, and following on it complaints were made against the police. I discussed the matter with the chief constable who was a friend of mine, and I remember his telling me that he regarded himself as a servant of the Crown. I was sure of that, but my
34
recollection is fortified by the evidence given before the Select Committee when a chief constable is quoted as having said he was a servant of the Crown. That being so, one or two of us went to see the then Home Secretary, Sir John Simon (as he then was). We had a most agreeable interview, but we got no change out of him. The ball was passed back to the watch committee and we got no change out of them. I am not saying whether we were right or wrong, but I formed a strong opinion then that a chief constable had a privileged position in the British Constitution and I do not think that has altered in the years. I feel that one of the most important things to be cleared up by an inquiry is how a chief constable stands at the present time. But that purely constitutional issue is perhaps academic and less important in one sense, and what we really want is to bring him under the right sort of control. I hope that this inquiry would make recommendations to the Government and that a much more satisfactory position would ensue.
I would make one other point before drawing to a close. Whatever the difficulties, ambiguities and uncertainties of the general constitutional position touching the police, I think we must all feel that the position of the inspectorate should be greatly strengthened without delay. The noble Earl, Lord Winterton, explained that and was followed by the noble Lord, Lord Milner of Leeds. Like the noble Lord, Lord Milner of Leeds, I have been studying the evidence given before the Select Committee, and the facts are, as has been explained to the House, that there are four inspectors who have to cover the country, and one woman assistant inspector. They are assisted by two staff officers. It is their duty to report to the Home Secretary on the efficiency of the various police forces with the exception of the Metropolitan Police. On the face of it, that task is fantastic. I think we must all feel that the position has been allowed to continue too long.
The Select Committee it seems to me, were rather dominated by a desire for economy and perhaps did not take the widest possible view of this matter. But even this economy-minded Committee recommended that a Chief Inspector of Constabulary be appointed. The Government, in their observations on the Report

35
of the Select Committee, published on July 30 of this year, made this comment:
"The Secretary of State has considered this recommendation, and while he has not felt able to propose the appointment of a Chief Inspector of Constabulary he is considering other measures for strengthening the Inspectorate."
I hope that the noble Lord, Lord Chesham, will be able to tell us that other measures will now be put into force. I hope, too, that they will be large measures, because to trifle with the subject at this stage would, I think (though it would not be the fault of the noble Lord, Lord Chesham), earn the censure of all who have listened to or taken part in this debate. I support my noble Leader when he says that the noble Earl, Lord Winterton, made out a powerful and, indeed, an overwhelming case for an inquiry, and I hope that the Government, through the noble Lord, Lord Chesham, who I am glad is going to reply—he is always very courteous—will tell us that they will increase the Inspectorate forthwith and that they are ready to accept this inquiry.
4.29 p.m.
LORD CHESHAM: My Lords, by a happy coincidence I am able to start with a somewhat similar approach to the noble Earl who so ably opened this debate to-day, in the course of which he told us that he was a justice of the peace in the 'twenties until he had to retire and was for a short time assistant Minister at the Home Office. I, too, was a J.P. until I had to retire, and if I am not exactly a Minister at the Home Office, at least I am engaged in acquiring some experience of that position. If, by purely fortuitous date of birth, my experience as a justice of the peace is a little more recent than that of the noble Earl, that leaves him, I think, in the advantageous position that he has had the opportunity to learn wisdom, while I can only hope that perhaps it may come to me quite soon. His Motion has enabled us to have a most interesting debate. It has been welcomed by more than one of your Lordships, and I should like to add my voice to theirs. It is welcome because we have had a chance of discussing some of these important problems of police administration. They do not lack importance because they are not always easily understood by those with experience in public affairs. It is all the more useful that we should have a
36
debate in order to make these matters clearer to the public and perhaps, if I may venture to say so, even to some of your Lordships.
The noble Earl raised a goodly number of questions in his speech, and some in considerable detail. I feel he would not expect me to follow him at this stage or, indeed, perhaps at any other, into all the details of all the points which he raised, because he raised a number of general matters which were of great public interest upon which I should like to concentrate and deal with as best I can. They alone will perhaps take more than enough of the time of the House. Before I begin I should like to make a brief and passing reference to two points of detail which the noble Earl made. They refer to the incident at Woking station. I mention this in passing only because I know that he would be the last person who would wish to give any misleading impression to your Lordships, and I feel it justifiable to say this. In regard to that particular incident of the soldiers in the train at Woking, the military police were not sent for by the civilian police because they could not cope; they were summoned by the railway authorities at the same time as they summoned the civil police. The train was held up principally while they turned all the offenders out on to the platform and got rid of them.
With regard to Nottingham, the suggestion that it was eighty minutes before the police took any action does not seem to me to be completely right to reflect credit where credit is due, because the information I have is that within about an hour from the first intimation to the police that trouble had broken out they had dealt with the whole situation and had dispersed speedily and effectively the large crowd which by then had collected. I make those two points in order to avoid any undue misunderstanding, and the noble Earl will forgive me for being detailed.
The noble Earl's first point, and that of other noble Lords, concerned the disparity between the sizes of different police areas and police forces. The noble Earl gave us some interesting recollections of the time when he himself was exercising special powers at a time of crisis. I think I ought to say that there have been a number of changes since those days. The biggest was that made by the Police Act, 1946, under which all non-county

37
borough police forces were abolished. There is therefore no police force maintained in these days by an authority which has not at least the status of a county borough. This means that the very small police forces no longer exist. Before any noble Lord informs me that that is not true because Cambridge is not a county borough, I would say that I knew that, and there are special reasons why it has its own force.
In this connection, the noble Earl and other noble Lords mentioned the powers which my right honourable friend has in respect of amalgamation, deriving from the Act of 1946. I ought perhaps to say a word to make it clear that these powers are strictly limited by the Act. The point is that the compulsory power can be used only where one of the counties or county boroughs concerned has a population of less than 100,000. But my right honourable friend—and it would be true to say successive occupants of the office of Home Secretary—have never taken the view that there should be amalgamation for the sake of amalgamation. Local authorities are naturally jealous of their independence, and the view has been taken, I think rightly, that their police forces should not be amalgamated against their wishes unless there is a clear case for doing so on the grounds of public interest. That is not an empty statement, and I think it is important briefly to indicate that those powers are used in the circumstances I mentioned. There has recently been the case of the amalgamation of the Carmarthenshire and Cardiganshire forces. They were combined by order of my right honourable friend, although that was the first use of his powers for several years. Since 1946, however, there have been ten amalgamations of forces, of which four were compulsory.
The noble Earl was good enough to give me notice in advance of the majority of the points he was going to make in great detail, so that not only am I extremely grateful to him but I should like to acid my voice in wonder at his expertise in being able to give them to us so splendidly. He enabled me thereby to make some inquiries on the particular point I am coming to, and to obtain some expert advice about it. He cited Lancashire as an example—if I have got it right—of an area in which he thought police amalgamations would increase
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efficiency. It has been said before this afternoon that it is not reasonable to assume that because a force is small it is automatically less efficient than a larger one. There are cases where it may eventually turn out that art amalgamation would increase efficiency, but I should like to say, with some emphasis, that my right honourable friend has no reason to believe that amalgamations are required in Lancashire at the present time because of any inefficiency.
In that county there are one county police force and sixteen city and borough forces. Those borough police forces are of good quality, and they are attracting a very good standard of policeman. It may be true, in a sense, to say that opportunities for promotion in smaller services are less than they are in a large one; but there is also the point that, the number of senior posts being smaller, so is the number of candidates. However, there is the rather important fact that to-day as good men are coming into the borough forces as go into the county forces. Her Majesty's Inspector of Constabulary takes the view that in the matter of efficiency the borough forces in Lancashire have nothing to suffer by comparison with the county force, and that the police in Lancashire, taken as a whole, are quite properly efficient.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, could I be clear about the case of Lancashire? Is each one of the boroughs affected now a county borough, with its own police force, or are there any boroughs left which are not county boroughs in Lancashire which are still in possession of a police force?
LORD CHESHAM: My understanding of the matter is that the answer to that is that there are none.
If I may now turn to the question of co-ordination, or suspected lack of it, I should like to dispel any doubts here. Perhaps the first aspect which would occur to anyone is the question of the detection side of it, or rather the detective work. It might indeed seem to anyone not familiar with the great developments of recent years in the aids to detective work, that a large number of separate police forces in one area would work against good detective work. But that is not so. To start with, all detectives

39
nowadays are trained on standard training courses at one of a number of training schools in different parts of the country, and throughout the country they use a standardised form of records. Naturally, co-operation is not confined only to detective work. There is, for instance, machinery which provides for regular consultations between chief constables. They have district conferences, which were established many years ago, at which they discuss matters of common concern and arrangements are made for co-ordinated action. Each district conference sends a representative to a central conference, which considers matters requiring action at the national level. There are also in the various districts conferences of specialist officers, such as the detectives and traffic officers and so on.
The noble Earl and the noble Viscount, Lord Alexander of Hillsborough, expressed themselves as being unhappy about the increased mobility of the criminal. Surely that must be more than matched by the increased mobility of the police, and the vastly improved communications, both by direct line and by radio. Practically every force in the country now has all-round cover of its area by radio, and it is a widespread practice that each area maintains a link, either by direct line or by radio, or both, with its neighbours; so that there is really little, if any, hold-up between areas in co-operating together. There is another point which I thought might have been touched upon, and it is one worth mentioning—namely, that the forensic science laboratories, the cost of which is shared between all police forces and the Exchequer, make available to every force, without any individual charge in any case, the whole resources of science, so that in this respect a small force is just as well placed as a large one.
EARL WINTERTON: My Lords, may I ask my noble friend one question on this subject of mobility? If a serious crime occurs in one police district and the gangsters get away in a stolen car, or some other fast car, and go into a contiguous police district, have the police in the first district the right to pursue them into the adjoining police district?
LORD CHESHAM: My Lords, they have the right to pursue them from John o'Groats to Land's End and arrest them.
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But the point I should like to make, arising out of the noble Earl's question, is that, with the communications I have mentioned, it is much more likely that the fleeing gangster in his fast car will be picked up by one of the cars of the adjoining district than caught by the one from which he is fleeing. What has shown the most marked improvement is the technique of co-operation between the forces. The standard which has now been reached enabled Her Majesty's Inspector (I think I am right in saying that he was speaking particularly of Lancashire at the time, and after all, he is well qualified to speak about it) to tell us that boundaries count for nothing in the pursuit and detection of the criminal.
My Lords, I think this would be a good moment to talk about inspectors, because not only are they referred to in the Motion but they have been referred to by almost every noble Lord who has spoken. In referring to them, the noble Earl, I think, used the words, "mild and slender inspection"; and the noble Viscount, Viscount Alexander of Hillsborough, used the word "cursory." I do not believe that those would be the words used by chief constables of forces being inspected. I think they would take a different view; and, knowing just a little about it, I should myself. These inspections are of a searching character, and the reports made to my right honourable friend are most detailed. They show that it is unlikely that deficiencies in a police force would escape the vigilance of Her Majesty's inspectors.
LORD PAKENHAM: My Lords, may I intervene. I am sorry to do so, but this is such an important point that it surely seems difficult to let it go by, if it is to go by, with an ipse dixit, even from the Minister. One of the inspectors, giving evidence before the Select Committee, said that the inspection lasts, perhaps, a day, or two or three days. That is what he actually said, although the noble Lord, Lord Milner of Leeds, said that they had possibly one inspection a year. He went on to explain that in Cheshire, for example, not more than one-third of the division is visited in any one year. So, to take Cheshire as an example, that means that the division is visited once every three years. and the visit may occupy one, two or three days. That is the actual position as revealed

41
by the inspector to the Select Committee. I think it should be on record for the benefit of the House.
LORD CHESHAM: My Lords, perhaps I may say to the noble Lord, with great friendliness, that if I may continue just a little longer with what I was going to say (to say nothing of the sentence upon which I was interrupted at the time) my remarks will perhaps be a little more to his taste. I do not know whether I can add anything of value as to the amount of time that the inspectors spend on this work. May I put it this way? They start their inspection by obtaining from the chief constable concerned a vast mass of material, covering details of every sort. They then go carefully through it, and pick from it any and every point they wish to touch upon at their inspection. They then go right through that part of the force concerned with a fine tooth-comb. If that is not a reasonable method of inspection, I do not know what could be. I do not think it is a question of measuring in terms of hours and days how long an inspector takes: the important part is whether his inspection is thorough or not, and I am saying to your Lordships that it is. I do not know whether the noble Lord is more satisfied now or whether he is not?
LORD PAKENHAM: My Lords, the answer is, No. I was not going to interrupt the noble Lord again, but since he has asked me the question, my answer is, No; I am not in any way more satisfied.
LORD MILNER OF LEEDS: Neither am I.
LORD CHESHAM: We shall remain at variance on this matter, and I do not see that there is much more that I can do about it.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: Come! Be persuaded.
LORD CHESHAM: Frankly, no.
LORD MILNER OF LEEDS: Do the inspectors visit the local police station?
LORD CHESHAM: The inspectors come on formal inspections, and they also come at fairly frequent intervals, sometimes with notice and sometimes without. That is a point I was coming on to in a moment, but in view of what the noble Lord has said I may as well make it now.
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The noble Lord, Lord Milner of Leeds, raised a question on the reports made by inspectors which go to my right honourable friend the Home Secretary, and wanted to know whether they should have wider circulation. It must be remembered, however, that the primary function of the inspectors is to advise my right honourable friend whether the forces are efficiently maintained, so that they can qualify for the Exchequer grant in aid of the police authority's expenditure. I should like to add here that, although only my right honourable friend gets the report, the inspectors do call the attention of a chief constable or police authority to any point arising from their report about which they feel the chief constable or the police authority should know.
LORD MILNER OF LEEDS: My Lords, can the noble Lord say whether that is done in writing or in the course of the inspection?
LORD CHESHAM: My Lords, I cannot answer the noble Lord's question off-hand, but I will find out and let him know.
The noble Lord, Lord Burden, asked what would happen under the block grant. The position is that the police will continue with their own grant. Her Majesty's inspectors spend a great deal of their time with the forces in their areas and with the chief constables, and offer them advice on improvements, where such advice is needed. They enjoy a position with the forces whereby that advice is readily sought and accepted. I am afraid, therefore, that to give effect to the suggestion of the noble Earl that the inspectors should be provided with a small force of secret detectives—which in itself I find a rather unattractive kind of suggestion—would destroy in almost every respect the usefulness they have, for if they had such a force they would not enjoy the confidence and reliance which is placed on them at present. I can only ask the noble Lord: Quis custodiet ipsos custodes? which always has been a difficult question to answer. I feel that where we are so bound up with honour and honesty, as with the police, I can only answer by saying
"Big fleas have little fleas
Upon their backs to bite 'em.
And little fleas have lesser fleas,
And so ad infinitum."

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Those being the only two pieces of Latin I know, I thought that I should take the chance of working them in. In any case it is not the function of Her Majesty's inspectors to act as detectives. Although the noble Earl used a word which I should hesitate to use—"snoopers"—it is not their function. Their position is rather different, as I hope I have shown.
EARL WINTERTON: My Lords, may I ask the noble Lord a question on that? Was it, or was it not their function to have discovered (which they did not do) that for several years gross corruption had been going on in the Brighton police force?
LORD CHESHAM: My Lords, the proper answer to that is: No, it was not. But I should like to explain that a little. Their function is to see whether the force is an efficient one—
EARL WINTERTON: It could not be efficient if it was corrupt.
LORD CHESHAM: My Lords, bribery and all forms of corruption of that kind are, by their very nature, secret, and usually come to the attention of those whose duty it is to enfoce the law only when somebody who has had something to do with it feels that it is in his interest to bring it to light. I admit that there is nothing peculiar to Brighton about that, but I believe it is unreasonable to suggest that Her Majestys' inspector should have unearthed the particular corruption that was going on in Brighton, because, as I have said, it was not one of his responsibilities to do so.
I feel that what we want to learn from Brighton is that there is effective machinery for dealing with this kind of evil when the police are the evildoers, and that that machinery will be and can be properly used. I do not think your Lordships would want me to go into the history of the whole of the Brighton case now, but when suspicion was first aroused it was, in fact, to Her Majesty's inspector that an approach was made. The Director of Public Prosecutions was called in, and the result, as we know, led to the Old Bailey. This refers to a point made by the noble Viscount, Lord Alexander of Hillsborough, that no citizen need fear that the authorities will be reluctant to act where there is ground for doing so; but we must also remem-
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ber that it is his duty to help by bringing suspicious facts to the notice of somebody.
While we are talking of Brighton, I may say that that applies, incidentally, to what was said by the noble Earl about the "Bucket of Blood." I find it very strange and difficult to understand why, if things such as he described went on, as appears to be the fact, local people took no action, and how the watch committee remained in ignorance; because I should have thought that, even if the chief constable was taking no action, local people would have stirred up a clamour that he should do so.
VISCOUNT ALEXANDER OF HILLS-BOROUGH: My Lords, that was one of the things which was worrying me when I was speaking. The question is: How does an individual begin to bring this to light? Does he have to run the risk of an action under the law of libel every time he has something brought to his particular notice, perhaps by somebody else, in order to get it properly investigated? That is a very difficult position. If we take the case quoted by my noble friend Lord Pakenham, we seem to be in danger of having another form of eternal triangle as between the person asking for an inquiry, the chief constable and the Watch Committee combined, and the Home Office saying that "everything in the garden is all right" and that there is nothing more to be done about it.
Are there any means by which people who give information which they believe to be true can communicate it in such a way that it will be properly investigated through the proper channels? Where do we want the local individuals to send information—direct to the Home Office? And will it then receive only the same treatment as before, and the same prescription—a reference to the chief constable who says, "Everything in the garden is lovely"? Is there not something to be done about it? I understood that, on the Report of the Select Committee, it was said that the Secretary of State had considered the recommendation and that, while he did not feel able to appoint such a Committee as was suggested, he was considering other measures for strengthening the Inspectorate. Could we perhaps hear how that might affect the situation?
LORD CHESHAM: My Lords, I was about to come on to that point. However, the noble Viscount has raised the question of what should the citizen do—which seems to me the most important part of what he has said. It cannot be right for the citizen to do nothing. He has a perfect right to go to the chief constable and say, "This is scandalous." He has a perfect right to go to the watch committee and say, "Things are not right in this town." Surely no self-respecting watch committee is going to have citizens coming and making allegations of most scandalous and obnoxious behaviour in their town without doing something about it. If watch committees are really convinced that Something is going wrong in a sphere over which they have no control—that is, enforcement of the law—they can always call the attention of Her Majesty's inspector to it. His job is to find out things which affect the efficiency of a force.
I was about to say that one cannot expect Her Majesty's inspector to know of all these kinds of occurrences that are going on in every spot in his whole area. He needs to know them, I quite agree, but he cannot be expected to know them all himself unless they come to his attention by one means or another. Certainly if any major complaint of failure of law enforcement which went to the root of the efficiency of one of the forces he was supposed to inspect came to his notice he would naturally take it into account. But he really cannot be expected to set himself up as a sort of private-detective force. There are reasons against that which I have already mentioned, and I think it would be impossible. These must remain primarily matters of local knowledge which should have local attention.
On the subject of inspectors, it has been said that they were an inadequate number; but one has recently been added to that number, making five for England and Wales. There is another one in Scotland. As the noble Lord, Lord Burden, said, there is a woman assistant inspector to cover the women police of the whole country. My right honourable friend is satisfied that this number (that is, with the addition of the one extra inspector recently appointed) enables them to perform properly their duties of examining
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and reporting to him on the efficiency of the police forces.
I should like now to go on to another matter which has been mentioned by the noble Earl and other noble Lords, and that is the relationship between police authorities and the chief constable. As your Lordships know, in the boroughs the watch committee is the police authority; in the counties it is the standing joint committee. And, just for the sake of clarity on a point mentioned earlier, I might add that the standing joint committees are appointed half by the county council and the other half by quarter sessions, while watch committees normally contain a number of magistrates. The noble Earl was quite right in saying that in the boroughs the legal responsibility for making promotions and for discipline rests with the watch committee. In counties it is the chief constable who has the authority for both promotion and discipline. I am going to spend, if I may, just a minute dealing with watch committees, because the noble Viscount, Lord Alexander of Hillsborough, went into this matter in some detail, and I believe that it is a quite important one.
I should have expected that a responsible watch committee would be guided by their chief constable in the selection of men for promotion. He is, after all, in much closer contact with the daily work of the members of his force, and he must be expected to have a better knowledge than the watch committee of their suitability for promotion. A watch committee who take it on themselves to interview men for promotion from among a number of candidates must not be surprised if they create the impression that irrelevant, and even improper, considerations might enter into the matter and if the efficiency of their force is called into question. I should like to quote some words—and I think they are appropriate to what the noble Lord. Lord Milner of Leeds, said about watch committees—which one of Her Majesty's inspectors used when addressing representatives of police authorities on this subject. I think that they express very well what I am trying to say. He said:
"If you have a good chief constable, trust his judgment and advice. I am not suggesting that you should what is called 'rubber stamp' his recommendations, but bear in mind he is answerable to you for the standards of his

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officers and his sole object must be to get the best men available under him in the various ranks."
It is necessary at the same time to say something else—and I would ask the noble Earl, Lord Winterton, to remember this fact in advancing his interesting suggestion of a local police council. What I wish to emphasise (it has been said, but I say it again) is that no police authority or anyone else has any authority to interfere in relation to the enforcement of the law by the police. Naturally, there is normally good co-operation between the police authority and their chief constable, but the full responsibility for enforcement is a matter which is reserved entirely to the chief officer of police. In the exercise of this responsibility he is answerable to the law alone, and not to any public authority. That is the position both in the counties and in the boroughs. I think it is generally recognised to be such to-day, whatever may have happened in the past. And, my Lords, I can say, too, that if any improper attempt were made, no matter by whom, to influence a chief constable in the enforcement of the law he would find he would have solid support in resisting that influence.
VISCOUNT ALEXANDER OF HILLSBOROUGH: My Lords, I am not questioning that side of the matter at all, though I am very glad to have that statement from the noble Lord. What I do question is this: it is assumed always that a chief constable must have full control of promotion, because otherwise there might be local influence brought to bear; whereas, as a matter of fact, if there were sufficient information supplied by the chief constable, not only on service but on all other reasons for promotion, very often the members of a watch committee would be able to prevent someone from being appointed by a chief constable for his own particular purpose, as seems to have been the case in one or two examples that have had to be brought before the courts.
LORD CHESHAM: My Lords, I should have thought that an arrangement like that between the chief constable and the authority would have been the normal arrangement.
LORD MILNER OF LEEDS: My Lords, is it not in fact laid down in the precept and in Police Regulations that
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appointments and promotions are the specific function of watch committees and standing joint committees, and are not a matter for chief constables alone?
LORD CHESHAM: My Lords, I have already said that. In the case of watch committees, they are the authority for discipline and promotion. It is different in county forces, where the chief constable alone is responsible. But I should have thought that, in the case of watch committees, chief constables would normally be the best people to advise the committees, who actually make the promotions, on whom to promote, because they are in the best position to know their men. I should have thought that the normal procedure would be a good working arrangement between the two.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Why does the same principle not operate in the case of standing joint committees?
LORD CHESHAM: Because standing joint committees are not the authority on matters concerning discipline or promotion.
VISCOUNT ALEXANDER OF HILLSBOROUGH: I do not see how we are going to get the right people to serve on these bodies if they have not at least equality in power when exercising what is the same proper function. The watch committees have this power, but apparently a standing joint committee is put into an inferior position in that matter. Why?
LORD CHESHAM: My Lords, I think the answer to that question is one that I should not take up now. I have got a lot to say, if I may, and I should like to get on with it.
VISCOUNT ALEXANDER OF HILLSBOROUGH: Let us have the inquiry.
LORD CHESHAM: Before we come to that, I have one or two more points which I feel I must touch on, in view of what has been said. One concerns the power of chief constables, although this perhaps applies more particularly in the case of county chief constables than in the case of borough force chief constables. At least, I think that that is what noble Lords had in mind when mentioning it. That power has perhaps been represented as something rather undesirable, but we

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must remember that the police is a disciplined service and that the officers in command of the police must be able to exercise their powers of command. There are safeguards provided by the law, and there is elaborate provision in regulations made by the Home Secretary for the exercise of disciplinary authority and for the conduct of disciplinary proceedings. Those provisions include the fact—which may or may not be generally known—that every policeman has a right of appeal to the Home Secretary against all but minor disciplinary awards.
The noble Earl brought out in his speech, very properly, I thought, the fact that there are two sorts of complaint about the powers of chief constables. He said that on the one hand it is said that they have too much power and on the other that they have not enough—and I think this conflict of view itself would suggest my answer. I think it is important, my Lords, in a matter so vital to our liberties as the maintenance of an efficient and incorrupt police service, that too much power should not rest in the hands of any one person or authority. The noble Lord, Lord Pakenham, made this paint; and I believe it is most important to keep it this way. In fact, the police administration is a system of balance in which the chief constable, the police authority, and the Home Secretary, all have their part to play, each one limited by the rights and duties of the others. To sum up this aspect, I believe that, considering the difficulties of the problems which have to be tackled, this system works well, and we should be very reluctant to put anything in its place unless there was some great deterioriation in it.
My Lords, I must turn for a moment to the fact, mentioned more than once, that the Home Secretary can be questioned in another place about the Metropolitan Police when he cannot be so questioned about the provincial forces. It seems the opinion that there is something anomalous about that. I do not think I can quite accept the picture of the state of affairs in the provinces which the noble Earl painted for us. Members of local police authorities are surely people with a real regard for proper administration, and I do not see why it should be assumed that they are not just as ready to consider representations from their constituents about matters of police
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administration as they are about any other matter, or that they are less willing to put right things which need to be amended.
EARL WINTERTON: I am sorry to interrupt the noble Lord again, and I apologise for doing so; but that really was not my point. I was not suggesting that there should be applied to the provinces the system as regards Questions in Parliament which applies to the Metropolitan Police. My point is this: the ultimate sanction in regard to the Home Secretary and the Commissioner of Police is that there is a public discussion in Parliament, and of course in the Press. Could the noble Lord quote me any case where a man has made a complaint about the behaviour of the local police force, of the chief constable, or of the watch committee, where there has been any public discussion at all?
LORD BURDEN: Following that, might I ask the noble Earl this question? Is his remedy to bring the whole of the police force under the control of the Home Secretary?
EARL WINTERTON: No. I said it was not. The noble Lord did not listen to what I said.
LORD CHESHAM: My Lords, I think I am quite aware of what was the point made by the noble Earl originally, and if he will bear with me for a moment or two I shall come on to answer it. Certainly, things being what they are—as I am explaining, and as I intend to finish explaining—I cannot quote the noble Earl any such instance as that for which he asks; but may I ask him to bear with me a moment or two more?
EARL WINTERTON: Of course.
LORD CHESHAM: The other thing I was going to say was that chief constables also, I should have thought, are naturally very concerned over any complaint about bad police work, and surely they must be as anxious as anyone that anything complained of should be investigated and put right. I do not really understand why it is assumed that the only useful way of raising questions relating to police administration is to ask Questions in Parliament. I do not really think that that is quite what the noble Earl had in mind. He wanted the ultimate appeal, so to speak. But I have every reason to

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believe that ii Members of Parliament—or anyone else who was dissatisfied—were to approach their local police authority or their chief constable with the grievances of themselves or of their constituents, they would receive attention and action. In fact, I know that they regularly do so.
I should not have thought that this ability to raise Questions in Parliament was so very necessary, because surely public authorities and chief constables are as amenable to public opinion as anyone else. And I have never noticed any reluctance on the part of citizens of this country to ventilate their grievances about anything, either in the Press or elsewhere. I do not think it is taking a very wide view to think that, in order to achieve success in this field, they must be able to discuss these local matters in Parliament. We have the fact that outside London the police forces of this country are locally controlled. There is very strong support in another place for the view that they should continue to be locally controlled, even if that means that honourable Members cannot ask Questions about their administration. My right honourable friend does not direct the workings of local police forces, and it would be—and is—unreasonable and unconstitutional to expect him, in the circumstances, to answer Questions in Parliament about such details.
The noble Earl suggested that the position was very different in London because the Home Secretary can be questioned in Parliament about the Metropolitan Police, since he is the police authority. I fancy that the noble Earl over-exaggerates the importance of this fact. My right honourable friend and his predecessors in office have always made it clear that they would not interfere with the Commissioner of Police in the enforcement of the law, or in the details of administration, and my right honourable friend has no intention of departing from that attitude.
Before I finish on that point, may I emphasise again that in the enforcement of the law the police must remain independent of public authorities, whether local or national. Any and every police officer is subject to the law in all that he does. If he over-steps his legal powers and duties, he is liable to an action brought against him by aggrieved citizens.
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If he is thought not to be doing his duty, the police have no monopoly of powers of prosecution, and a citizen can himself, prosecute, if he thinks he has grounds to do so. Similarly, a police officer has his own remedy at law, if he feels that he is aggrieved. In the case of what is thought to be oppressive action by the police, the arbiter is not the Home Secretary but the courts of law. And my right honourable friend will continue to do his best to protect the police from any pressure which would interfere with the impartial administration of the law, no matter from where it may come.
I have endeavoured to cover the main general points which have been raised in the debate, and I come now to the Motion itself, which calls attention to the need for the appointment of a Committee to inquire into the matters we have been discussing. Some noble Lords argued that there should be an inquiry, others thought not. For my part, I hope that what I have said to your Lordships will persuade you that our system of police administration works pretty well and that the appointment of a Committee is not a matter that ought to be pressed.
In opening the debate, the noble Earl, Lord Winterton, referred to instances in which the conduct of the police is said to be at fault. Naturally, the affairs of Brighton and Worcester must cause considerable disquiet, but they cause equal disquiet in the police service itself. I should be the last person to minimise them. I agree that even a few cases in which police officers succumb to the many temptations which beset them give a serious shock to the confidence of the public. The noble Earl gave us instances of what was said to be bad conduct, but I could go on for days giving instances of good conduct. We must not forget the great majority of our police who, in town or in country, are serving their fellow citizens well and who make their service, as my right honourable friend described it recently, the "envy of the world."
When the country is faced with a serious increase in crime, no one can afford to be complacent. The noble Earl has given us a chance to take stock and to consider whether the system which has gradually been built up over the years is one which is best calculated to serve our interests. Despite criticism which has been directed against particular episodes—and I do not want to be taken as

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implying that I accept that criticism—I believe that we have a police system which serves us well. I hope that what I have said will make it clear that the police service has been developing all the time within its traditional framework to meet the challenge of modern times. My right honourable friend, on whom the ministerial responsibility falls, is closely in touch with these developments through his advisers and Her Majesty's inspectors, and he and his Department will continue to discharge their duties in the most active way to see that we have an efficient police service.
5.25 p.m.
EARL WINTERTON: My Lords, I always think that it is not fair to your Lordships that those exercising the privilege of the mover of a Motion of replying should speak for more than a few moments. In asking leave to withdraw the Motion, I want only to put the matter in a truncated form. In the first place, I am deeply grateful to noble Lords on both sides of the House for the very friendly—I think, far too friendly—things they have said about my speech and about me. I want to apologise to the noble Lord, Lord Chesham, if I interrupted him rather often. I ask leave to withdraw my Motion rather reluctantly.
NOBLE LORDS: Hear, hear!
EARL WINTERTON: I told the noble Lord privately that I was not going to press this matter to a Division, but I do not regard the Answer that he has given, through no fault of his own but through the fault of the Government, as wholly satisfactory, and I want to put in tabloid form why I do not think so.
From my point of view, he dealt satisfactorily with the question of the large number of local police authorities. He reassured me on that and made it clear that the mobility of the criminal is now matched by the mobility of the local police forces. He certainly did not convince me on the inspectorate, and I am in complete doubt about what the inspectors are for. He said that they were there to see that the police were efficient. But they did not see that the Brighton police were efficient. Surely it is not efficient to be corrupt. I do not understand what they are there for, if they do not find out what is going on in the police force. That is why I suggest that they should be strengthened.
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There is an obvious and great anomaly, which in itself would almost justify an inquiry, in the fact brought out by the noble Viscount the Leader of the Opposition, of the complete difference of functions between the standing joint committees and the watch committees. Why? Surely there should be an inquiry into that matter.
Then there is the position of chief constables. Here again the position is obscure. Some chief constables regard themselves as servants of the Crown: others say that the Crown has nothing to do with them; that they are sui generis servants of the public or of themselves. The noble Lord said that chief constables will always answer a complaint by Members of another place. I know a Member who, having attempted to get some redress for a constituent from the Home Secretary, and having been told that it had nothing to do with the Home Secretary and was a matter for the chief constable, wrote to the chief constable and received a pompous reply saying that he was not responsible to the Home Secretary and therefore a fortiori not responsible to a Member of Parliament. This is the sort of thing that goes on.
Despite the efforts of his colleagues and mine, the noble Lord, Lord Burden, seems to have a completely wrong idea about the point which his colleagues and I were making. We are not advocating taking away the right of local authorities to control the police. We merely want to make that control more efficient and more democratic. I repeat that, whereas in the case of the Metropolitan police it is possible to get a discussion in Parliament, there is no means of getting a discussion of any grievances that citizens of provincial police areas may have against their police authority or chief constable. I did not say that there should be a like discussion in Parliament—the noble Lord, Lord Pakenham, is right here, and I entirely agree with him. What I did say was that there should be some method by which grievances could be publicly discussed. The practice might grow up, for instance, of local authorities discussing in open council grievances of this kind. As it is, there is no means whatever of getting any public discussion. The chief constable is in an astonishing position: it is practically impossible to challenge his actions.

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My last point is this. The noble Lord, Lord Chesham, said that it would be quite wrong to give anyone power to compel a chief constable to carry out the enforcement of the law, and that he was responsible to the law. But in fact he is not responsible to the law. If he chooses not to prosecute a certain type of case, the law courts are not going to do anything about it unless, as the noble Lord admitted, a citizen brings an action. The chief constable is not, in fact, responsible to anyone, but can do what he pleases: he is sui generis. I do not think that is a satisfactory position. What I am really seeking—and I am entirely at one with noble Lords opposite—is a more democratic system of control than exists at the present time. I am bound to say that it is with some reluctance that I ask your Lordships' permission to withdraw the Motion.
VISCOUNT ALEXANDER OF HILLSBOROUGH: You ought to divide on it.
Motion for Papers, by leave, withdrawn.

BEARER SHARES IN INDUSTRY
5.32 p.m.
LORD GRENFELL LORD GRENFELL rose to ask Her Majesty's Government as to their policy on bearer shares in industry; and to move for Papers. The noble Lord said: My Lords, I should first like to thank your Lordships, as the noble Earl, Lord Winterton, did, for being in your places to-night; and I should like to do so especially because, although I have spoken in your Lordships' House several times in the last years, this is the first time that I have had the privilege of initiating a debate. I want to draw attention this evening to a subject which is vital not merely for the future prosperity of the nation but, to my mind, for the maintenance of our existing standard of living. There is no doubt whatever that we are at the beginning of a new industrial revolution in which the impact of the increasing spread of automation and the startling development of nuclear power for industrial purposes are bound to be dominating factors. We are again engaged in a hectic race for the international trading markets of the world, and it is obvious that unless we make full use of the new industrial techniques which are bound up with automation and
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with atomic power, far from being able to enhance our position as a major commercial nation, we shall not be able to maintain the level which has to-day been achieved; nor shall we be able to contribute our appropriate share to the improvement of the underdeveloped areas in the world, upon which the real struggle between East and West ultimately depends.
I believe that we shall be able to find the managers, scientists, technicians and skilled workers, all of whom must play an essential part in our industrial progress. I am not so sure, however, that we shall be able to make the best use of our capital resources. It is these which we must regard as the lubricating force which will allow our national industrial machine to function with the required smoothness and efficiency. It is to these that we must look to provide the tools by which our managers, our scientists, our technicians and our skilled workmen will keep us in the van of the trading nations of the world.
I have said that I doubt whether we are going to make the best use of our capital. Let me explain to your Lordships what I mean. It appears to me that far too much of the capital attracted to British industry to-day is institutional, and because of its very character it is unsuitable for the risk-taking which must be a major part of any future development of British industry. It appears to me to be essential that, while nothing should be done to disturb the present institutional investment in industry, every effort should be made to attract to industry as great a part as possible of the individual savings of our community. Believe me, my Lords, industry will need all the capital it can possibly attract in the foreseeable future. That, from the point of view of the economics of the nation, is why we should commend any attempt to attract the savings of the ordinary man and woman of Britain to industrial investment, and we should do all in our power, for this reason alone, to encourage any carefully considered plan—and this plan has been carefully considered over two years—to bring this about.
But there is more to it than that. The problem of the wide dispersion of industrial investment throughout the whole of our community is not merely a problem of economics; it is also a social problem.

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There is something hopelessly wrong in a system which, while being theoretically just, produces a practical barrier against the equal use of money by different sections of our society. It is true that in theory industrial investment is free to all who have the money and the inclination, but, in practice, that is not the truth. To by far the greater part of our nation industrial investment is a mysterious jungle which only the boldest of spirits dares to penetrate; and even to those who dare, if they are normally employed in industry their chances, because of their hours of work, of making contact either with a stockbroker or a banker are very limited. That is why we in this House should welcome in no uncertain terms the bold and imaginative plan produced in recent days by some enlightened industrialists through which that social barrier to which I have referred will once and for all be torn down.
The essence of this plan produced by Aims of Industry is to make a special kind of bearer share available to the ordinary industrial worker of the country. He will be able to buy or sell his share for cash in a shop set up specifically for the purpose in his own factory and in that shop in his own factory he will be able to buy shares of this kind not merely in his own firm but also in many other firms. In this way, the vast majority of workers in this country will be able to enjoy not merely the rights but also the responsibilities of ownership. This splendid conception has received general and spontaneous approval. Naturally, the bearer shares would be of companies whose shares are quoted on the Stock Exchange and who are willing to enter into the scheme.
I hold here a pamphlet which explains in detail, by question and answer, how the scheme would work, but I should like to give your Lordships the main details quite shortly. A company deciding to take advantage of this scheme would notify the Treasury, who would, after due consideration, give permission for a quota of its ordinary shares to be converted into bearer form. The company would then set up within its factory a private company called a shop company, which would always be prepared to buy from and sell to the employees its own shares and also the shares of other companies who had entered the scheme.
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All shares would be sold and redeemed at the middle price reigning on that day and dividends would be dealt with by coupon and exchanges over the counter for cash.
Some may say that in advancing this scheme we are opening wide the door to the working man to dissipate his savings in a gamble on stocks and shares. Let us not be deluded over this matter. There are many ways in which any citizen can gamble—I need mention only football pools, horse racing, dog racing and—dare I suggest?—premium bonds. But there is at the moment little chance that the working man will invest his money with the company in which he is employed, or other companies in which he may be interested, and hence become a part owner in the great industrial expansion which is heralded by the new atomic age. I appeal to the Government to give this matter favourable consideration, and I look to industry not only to consider this scheme but to enter into it with enthusiasm. This is a child newly born of free enterprise and of common sense. I trust and believe that this child will flourish and bring our nation even closer together in our determination to meet the great challenge of the future. I beg to move for Papers.
5.40 p.m.
LORD PETHICK-LAWRENCE: My Lords, I have listened with great interest to the speech of the noble Lord. Of course, I had some knowledge of the scheme before he spoke, but I am bound to say that I am not very clear precisely how it is going to work and I should not like to commit myself for or against it until I know a little more about it. To my way of thinking, there are a good many dangers in the scheme which the noble Lord has propounded, and I feel that they ought to be taken into full consideration. In the first place I would ask: has this scheme any great advantage? There are unit trusts of all kinds in the country, and I should have thought that a person who had only a small amount to invest would be much safer investing it in a unit trust than in the kind of bearer bonds to which the noble Lord has referred.
Do I understand that these bonds will not be registered in any way whatever—that there will not be any name attached to them? I understand that they will be transferable from hand to hand. It seems

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to me quite possible that there might be a trade in these bonds which it would be extremely difficult to control. The noble Lord seems to assume that the person who buys a bond for the first time is going to keep it until he dies. But he may want a little money and sell it to somebody else. You will have a miscellaneous market in these bits of paper which I should have thought was a very risky proceeding.
In the second place, I can understand a workman's having the opportunity of buying shares in the company in which he works. He knows something about it, and probably he knows whether it is a good deal or not. But if these companies are going to be set up to sell shares of other companies who like to subscribe, what is there to prevent a lot of bogus companies of a most undesirable kind from getting a place in a shop where these things are going to be sold and palming off on to working people a lot of unsatisfactory pieces of paper which will be practically worthless? I am speaking only from what I understand. It may be that all these point have been taken into account. If they have, I think we ought to be told what safeguards there are going to be to prevent the working man from being cheated, as I think he is liable to be unless we take great care in this matter.
I look at it from the point of view of the Government. I think it will add great difficulties to those of the Government in securing the proper running of taxation. One of our great safeguards at the present time is that investments are properly registered and the Government have some control over them. But if a miscellaneous number of people all over the country are going to have bits of paper which presumably are going to enable them to obtain small dividends, I should have thought the Government would lose control over the income of the people of the country to a degree which might, if it were extensive, seriously affect the revenue.
Finally with regard to that point, it seems to me that the Government will have little control over the export of these articles to overseas, which again may be a dangerous thing and prevent the Government from controlling the reserves. Until all those points are carefully considered and provided for, I consider that this is a most adventurous and dangerous
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proposal to adopt. The noble Lord did not explain how these people were going to get their dividends. As I understand it there is no register.
LORD GRENFELL: My Lords, may I interrupt the noble Lord? I did say that they would get their dividends by coupon over the counter.
LORD PETHICK-LAWRENCE: I remember the case of some bearer bonds that my guardian had. There was a big sheet, and one cut off little coupons on each quarter day. Is that what the noble Lord is proposing? That is a very complicated thing. It is all right when you have a great number, but if you are going to have just a few, as the noble Lord contemplates, it seems to me a most difficult procedure. You have to cut off these little coupons and take them along to the bank. If you have a bank account you can hand them over the counter in your own bank, who will go to the bank of issue and cash them. But I do not think it is going to be a great advantage for a working man to have a bit of paper. Suppose he buys £10 worth, and suppose the dividend is 5 per cent. so that he gets 2½ per cent, half yearly. He will have to get this little bit of paper, take it to his bank and cash it, and it will bring him in about 10s. or something of that kind. I cannot think that that is a great advantage to the working man. If he is going to invest £50 or £100, then there is no reason why he should not use the more authorised and better organised means of investing his money.
I think we want to know a great deal more about this scheme before accepting it. Nothing the noble Lord has said to-day has suggested to me that these grave difficulties have been thought out and provided against, and until that is so my instinct is entirely to reject. I hope the Government will show that if they are at all inclined to consider the matter, they will not do so until much greater safeguards are brought forward.
5.47 p.m.
LORD AMWELL: My Lords, I think the answer to some of the questions raised by the noble Lord, Lord Pethick-Lawrence, can be found in the pamphlet referred to by the noble Lord, Lord Grenfell, but I agree with the noble Lord, Lord Pethick-Lawrence, on his question as to the exchange of bearer

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shares between people outside as an ordinary personal transaction. I think it would be wise if the noble Lord, Lord Grenfell, could put the House right on that point. Do I understand rightly that the shares could not be exchanged except by being realised at the shop?
LORD GRENFELL: My Lords, I am delighted that the noble Lord has put that question to me. That is in fact completely true. When I said a special kind of bearer shares, I meant that these will be bought and sold in the factory in the shop, and they have to be returned to the shop for cashing in. They are not "bits of paper" as the noble Lord has said; they are actual shares in that company, and although they are bearer shares they are still ordinary shares and have voting power. They have to be redeemed in the shop in the factory.
LORD PETHICK-LAWRENCE: In what sense are they bearer shares? They seem to be bearer shares and not bearer shares.
LORD GRENFELL: They are a special kind of bearer share, the object of the scheme being to allow the working man to have an interest in his own factory or his own business. There will be a great deal more information coming out about this proposal soon, but I can assure your Lordships that there is nothing bogus about it whatsoever.
LORD AMWELL: My Lords, what I feel about the question is that it is one which ought to be considered carefully, and that is what the noble Lord, Lord Pethick-Lawrence, has said. I do not turn it down so definitely as he did. I do not want to turn it down at all. I want to know more about it, and I think the public would want to know more about it.
There are one or two points to which I should like to refer. It is recalled in Punch that when Max Beerbohm first heard Henry Wallace's phrase:
"This is the century of the common man"
he remarked:
"Let us therefore be thankful that it is only a century."
My comment is that when the same truth dawned upon Lord Monckton and his committee of clearing house bankers, the answer was, "Let us make him a customer of the bank." Opening a bank
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account by the common man would be an idea if the facilities were equal to the bearer share scheme, and it would, of course, be a thoroughly sound investment practice among the current ideas of—shall we say?—low finance as distinguished from high finance, and calculated to turn unthrifty proletarians into thrifty bourgeoisie. And there is a suggestion about amending the Truck Acts so as to make it possible for wages to be paid by cheque. Proposals of that kind all have the same trend as this one—namely, the accepted desirability of getting capital, not of an institutional character but from the reserves among the vast population of the country which sometimes are encouraged to be used wastefully upon such things as pools, dog racing and I do not know what.
That is all very well, but the basis is one of wage-earner investment. It cannot be much. It may be true that we have some people who can put down more than ten pounds and open a bank account. Of course there are some such people, but they do not represent the majority of the workers of this country. A lot of nonsense is talked about the prosperity of the country in that respect. It is rather an artificial, inflationary prosperity, and it does not apply to all, especially when we consider that much of it is not a basis of prosperity at all but is in the form of fancy wages, awards, bonuses, and so on. In the majority of cases the basic wage of the worker in this country would not allow for the opening of a bank account.
Nevertheless, on the question of wage-earner investment in industry in the form of bearer shares, it is important to realise that the proposal is that it shall not be confined to the company by whom the purchaser is employed. There must be a pretty good reason for that. It will include any other company willing to participate in the scheme. I understand that it is desired to preserve the identity of the investment; that is held to be important. That is why any form of unit trust is ruled out. Shares over the counter will not he confined to those of the firms employing the purchaser, and can range over all participating units. That is the important aspect of this proposal.
In the ordinary way, as the Labour Party pamphlet Industry and Society

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points out, for all its great attractions to wealthy people or to the more wealthy people, the scheme has possible drawbacks for the worker. Shares in any one firm are subject to short-time fluctuations in value. To a man of wealth, who is able to spread his investments over a number of different firms and who may have other assets, such risks are of small consequence. To the worker with few other resources and having the need to sell shares, sometimes at short notice, fluctuations and risk of loss are crucial. This scheme facilitates some spread of small investments for even the humblest individual, and so far does not insist on putting all the eggs into one basket; so this disadvantage may, to some substantial extent, be overcome.
The key advantage of bearer shares, it is alleged, is, first, the ease with which they can be bought and sold, and secondly, freedom from stamp duty on transfer. I see that the Government is making some move in that direction at present. I think it would be useful if we knew from the Government something more about that. Then this is important: that holders have exactly the same rights, with the Board of Trade agreeing (so the promotors point out), including voting rights, as other shareholders, whether shareholders of the sponsoring company or other companies on the list, according to the designation of the shares bought. Thus, the interests of the share-bearers are not limited to the fortunes of the firms that employ these persons. A varied appeal might be desired.
The introduction of bearer shares does not, I understand—I am really putting this in question form—involve the creation of new share capital, but only the conversion or exchange of existing registered shares into bearer form. That is unlike the principle employed in schemes of profit-sharing—namely, the tie-up is not employer-employee. As I have said and as Lord Grenfell has pointed out, there is no compulsion in this matter; the transaction is worker and industry at large. Whether workers should have a financial concern in industry is a large question. How far it will go, and what will be the economic effects, I must leave the experts to decide. This is obviously not a "get-rich-quick" device to benefit workers—you must
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leave that kind of lure to the pools. Nor is it one for stopping strikes. Presuming it is a success, one imagines it should imply an added sense of responsibility so far as it goes.
To sum up, I think it is important that the public should understand that it is really another form of saving rather than an idea to turn workers into capitalists, rentiers, parasites or whatever you may like to call them. It is more like a simplified widening of ordinary shareholding. In that sense I do not see any particular reason for opposing it from the point of view of this side. I notice that it has had an extremely good reception from the Press—a very generous reception, the motives for which I do not altogether understand because I am not an expert upon the subject—but with one notable exception; that is, the Daily Herald. That paper says:
"Our captains of industry have had a smashing idea. The 'Let's all be owners' scheme is beguiling and extremely ingenious. I can tell them that this wonderful idea is dead before it starts."
I do not understand why there should be that emphasis and enthusiasm in the opposition to the bearer share scheme. It is in the category of the hearty proletarian criticism that we should expect from the Daily Herald, but I cannot see what it is that the captains of industry who are running the Daily Herald can fear from their fellow captains of industry.
I am afraid that some sections of Labour suffer frequently from a Freudian complex. Here is a scheme to give every worker "roped in" or "inveigled", whichever way one puts it—because it is voluntary in any case—the right to stand up at any company meeting and to criticise directors until further orders, and to have full voting powers and participation in the management. On that account the Communist Party might think it is a godsend as of value for propaganda purposes. But conspiracy must be scented by the Daily Herald. I have discussed this matter with quite a number of people and I know that there is that old feeling that existed against profit-sharing, the feeling that it is a trick on the part of the capitalist class to fix the chains of slavery still more upon the working class. Conspiracy! Like the implied conspiracy of the Tories and big industrialists to fall down on their job in order to "dish" Labour, of which we

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hear—the wicked against the pure, the goats divided from the sheep.
I do not think that this is a matter which should or need be made a Party matter, certainly not in an ideological way at all. It is really nothing more than a new method of saving with the idea of directing working-class saving into the industrial market. That is practically what it is, and I do not, for the life of me, see any disadvantages in it from the point of view of any fundamental economic principles that I possess. But the Freudian censor is always at hand, although the subconscious urge must be disguised before entering the upper world of consciousness.
Labour, or some sections of it, is sometimes the victim of suppressed class war. It will not accept openly the principle of class war which, of course, is the basis of Communism; but there is just that subconscious, suppressed idea—and we know what suppression does to mind and character. "Shareholdings are dirty things; it is the way workers are robbed; therefore let shareholding be restricted to the robbers." I know that the classic objection to the capitalist system is that of sharing as a matter of fundamental principle, but it is a common objection of mine, not only to the capitalist system but to the whole of modern civilisation; because I do not believe in the trend towards the mechanisation of the human soul or the mechanisation of the economy of any nation, or of the world. But I am not going to discuss that.
This scheme is not going to upset or support the capitalist system. In class-war terminology, the interests of the workers are opposite to the interests of the capitalists; but that, of course, wants interpretation. It is no part of Labour's official policy, as I should like to point out to noble Lords on the Labour Benches who are taking part in this debate, to refuse co-operation, to oppose negotiation or to decline to admit that capitalism must be allowed to work. The real point of criticism—and there may be many radical points of criticism—should be not ideological but practical. But why so readily assume a trick?
Organised labour in one way or another is up to its neck in capital investment. Though I do not want to offend anyone by what I say, I would point out
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that the Co-operative Wholesale Society has quite a portfolio of industrial securities and sinks a vast amount of money in such firms as Tate and Lyle. And Tate and Lyle's workers are not to be allowed to invest for themselves because it might undermine the trade union movement! That is the type of idea that I have met in connection with even this practical little policy of investment for the workers. The Miners' Pension Fund at the end of 1957 had £33 million, of which nearly £26½ million was invested in industrial equities, from banks to tobacco. Why should that investment idea be confined just to organisations and trade unions? Why should it not be extended to the individual worker? There is no sense or logic in regarding this as a trick and advising the workers, as the Daily Herald practically does, to "Get behind me, Satan" for individual investment, and to talk, as it does in a whole pamphlet among the new political pamphlets which were passed at the last Labour Party Conference, of the necessity to find ways and means of directing investment into industry. It is not as if investment, as such, was officially condemned. On the contrary all Parties agree that a higher rate of investment is desirable, just as all accept commercial competition as a guiding principle.
The capitalist machine, in the ironical description of George Schwartz, is a lovely one needing only proper care and maintenance. We must get rid of the old firm and put some new directors there. That is really what it amounts to. The oil of capital investment is more and more essential for Labour; expansion means more and better commercialism—nothing else. Measures to increase our competitive position against the rest of the world are essentially capitalistic and not socialistic at all. I will give your Lordships one or two quotations from the policy of the Labour Party, accepted unanimously at the Party Conference:
"We must plan to achieve higher investment on a basis of full employment, stable prices and a strong balance of payments…first and foremost."
And, most emphatically,
"we must turn our attention to a higher level of investment as central to our hopes of achieving expansion…incentives to industrial investment would have to be used much more vigorously."
Why all the objection? I am not saying that it has been expressed in this

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debate so far, but there is a feeling, as I know—and I have quoted the Daily Herald to that particular effect—that we live in a capitalist world. That is the line I take in this whole matter; and while we do so, it is absurd not to allow the capitalist system to work efficiently. It is accepted, whether we like it or not, that only a successful, high-powered capitalistically-financed industrialism—more successful, of course, than the Tories would contemplate—can sustain a Welfare State and guarantee adequate wages. There is no Socialism in any of that. I am not arguing against it. I am not saying that it is wrong. While we have a capitalist system we should be sensible about it and not just throw sabots or monkey-wrenches into the machinery. Therefore I do not see why we should not, with unbiased minds, consider this proposal of Aims of Industry.
Our system rests on private investment. What is the logic in taking a "holy of holiest" position? I say that it is rubbish to talk about undermining trade unionism and the power of the workers by suborning them, as it were, with this invitation to purchase, with their savings, industrial shares. The question is not an abstract one of whether profit-making by shareholding is moral or immoral: I have my own views about that, but they are views which I should have to discuss at another time. What I criticise is this running with the hare and hunting with the hounds. I cannot see any good reason to oppose the line that the noble Lord, Lord Grenfell, has taken. I am not supporting it, because I cannot profess to be any expert upon the financial and economic expediencies involved, but I say that it is worth careful and non-Party examination.
6.11 p.m.
LORD HAWKE: My Lords, if one is living in a capitalist world, as we in the free world are, we must all agree that it is desirable that everybody should know as much as possible about the details of how it works, because enlightened capitalism has nothing to hide. On the other hand, it is a target for all sorts of misrepresentations and untruths; and though it tries to combat these, it does not succeed very often simply because of the apathy of the people it wants to get at: the people who work in industry. Undoubtedly, if there were investment by
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the workers there would be bound to be more interest in it, and from that point of view investment would, I believe, be desirable. It is absolutely essential, however, that the investment should be suitable and proper for the state of life and finance of the people who are concerned. Some people, of course, might say that they cannot understand this sort of thing; but I think that that is absolute nonsense. The British workman who can work out his most complicated mathematics for football pools is perfectly capable of understanding any form of company finance if he really sets his mind to it and wants to do so.
The question is: what is proper investment? The discussion to-night has revolved around the question of equity shares, ordinary shares; and as the noble Lord, Lord Amwell, has said, most workers' pension funds already have large quantities of these. But the question is the proportion. I am speaking from memory now, but I believe that we of the Church Commissioners hold roughly one-third of our money in fixed-interest securities, one-third in property and one-third in industrial equity shares; and it is on that money that seven-eighths of the stipends of the clergy in the country depend. So one can assume that that proportion is a fair balance between risk and safety. But for the small man I would suggest—and in making this suggestion I have the support of a prominent financial writer—that the first priority is property and fixed interests and the last priority is equities; in other words, his national savings, his house and, after that, equities.
Of course, in this scheme of Aims of Industry no mention has been made of shares or debentures other than ordinary shares. I see no reason why anybody should not own a preference share in industry, or a debenture. I think it would be most unwise to confine such investment to the place of work of the investor, because he stands to be "shot at" both ways if something happens to his particular industry. I do not particularly like the idea of bearer shares. The noble Lord, Lord Pethick-Lawrence, has detailed all sorts of complicated things that might happen to them. I know that there is nothing to prevent their being sold over the counter of any "pub." in the country, and one knows that a man's judgment when he has had one or

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two drinks is not quite so good as when he has not; and I can see the possibility of sonic of these bearer shares being sold at unduly low prices to some sharper citizens.
Another objection to bearer shares is the lack of facilities for their safe custody. The substantial citizen can go to a hank and have his things held by the bank, but the working man's cottage or his house is very prone to burglary, and he has no safe place for these things at all. I have no doubt that some arrangement could be made for these so-called "shops" to hold these securities in safe custody for the buyers, in which case my objection to bearer shares would largely vanish. I do not believe there is anything in the fear of the noble Lord, Lord Pethick-Lawrence, that sonic completely bogus company could enter the ring. I do not think it could happen; the others would not have it in.
The only point I can see in favour of the bearer share is that it dodges the stamp duty of 2 per cent. But the company has to pay 6 per cent. to the Exchequer out of its own pocket to convert its registered stock into bearers, so the Exchequer get a substantial sum in any event. I should have thought that some arrangement could be made whereby ordinary registered stock of this special type, perhaps by payment of a once-and-for-all 6 per cent., could afterwards be dealt in free of stamp duty in these particular "shops", in consideration of the fact that payment had been made equivalent to what would take place at the moment.
Another point one must impress on the citizens who are going to buy these things is that shares go down. Those who do not own shares have a habit of assuming that they always go up; but we all know, to our cost, that they have long periods when they go steadily downwards. It is only too easy to buy them when they are expensive and to see them go steadily down; and if one needs the money suddenly, one has to realise them when they are down and so make a loss. So there must be no undue advertising or that sort of thing. Every man must be fully aware that he is definitely taking a risk.
All the same, I think that this would be tapping a new source of savings. There are many households in this country—I repeat "households"—where a
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very large income is coming in every week, and, because there are very small commitments, it goes mostly on consumer goods of one sort or another—some of which, I suggest, are not necessary. I have heard of a working-class household being persuaded to buy a cocktail cabinet when they have never drunk a cocktail, and that sort of thing. Therefore, if these monies could be drawn into some form of savings it would be a good thing from the national point of view. At the same time it would ensure for these people some security from inflation for at any rate a portion of their savings. If, as I suggest, they had one-third so secured, one-third of their savings would have security against inflation.
Another effect—though it would not occur in the very near future: it would take many years to work out—is that over the course of time a considerable voting power of workers would be built up in the shares of some of these companies, and that voting power could have a decisive influence if used at annual general meetings, and so on. In that event, of course, we should see workers coming a great deal nearer to guiding their own industries than they ever have done through the nationalisation of industry. To sum up, my Lords, I believe that it is a good idea to look into this proposal. I think there are certain defects which could be ironed out, with the help of the Treasury and of the Inland Revenue, and if such a scheme was a success it could be very useful to the country.
6.22 p.m.
LORD CONESFORD: My Lords, if the sole subject of our discussion to-night were the desirability of there being more saving and of the workers putting some of that saving into industry, I think there would be (as indeed there is) a very wide measure of agreement in this House; and I think we are all grateful to my noble friend Lord Grenfell for giving the Government an opportunity of stating their views on this matter. What we are invited to consider, however, is not so much whether men should be encouraged to put their savings into industry but whether the investment should take this new form of bearer shares. Like the noble Lord. Lord Pethick-Lawrence, I desire more information on many of these points, but let me say at Once that I am very much impressed by the fact that Lord Grenfell

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and Aims of Industry have come to the conclusion that this would be a very useful step to take. That, by itself, would incline me to the view that there is prima facie something in it. Further, I was very glad indeed that Lord Amwell made it clear that there was no need, for any Party political reason, for anybody to take an a priori objection to the scheme.
I hope that my noble friend, when he comes to reply for the Government, will remind some of us who may have a little forgotten it what is the present law on the subject. The noble Lord, Lord Pethick-Lawrence, spoke once or twice of bearer bonds; but, of course, the position of bearer bonds is quite different. I think I am right in saying that if we own, or any of us owns, a bearer bond, we are not allowed to keep it ourselves: we must hand it over to our banker or to some other authorised depository. I am quoting from memory, and I may have the actual phrase slightly wrong, but I think that that is the position. That is under the Exchange Control Act. Now, these bearer shares, I understand, are not in that position at all. The owner can hold them himself and can keep them wherever he wishes.
I think that my noble friend Lord Grenfell made one slip, in answering a noble Lord on the other side, when he said that value could be received for one of these bearer shares only from the shop company, as I think it is called. I think that is not so. I think that my noble friend Lord Hawke is right in saying that these shares could quite lawfully be handed over, under any bargain which the owner chooses to make, to anybody outside. It is perfectly true, no doubt, that the obligation of the shop company to give value for it depends entirely on its being presented to them, but I hope that my noble friend, when he comes to reply, will tell me whether I am right in those assumptions. I share many of the views expressed in the last speech by my noble friend Lord Hawke. Though it is entirely legal and possible for these new shares to be held by the man himself or kept in his home, I should have thought it was extraordinarily desirable that he should do nothing of the kind. He should hand them over to the shop company or to some suitable depository.
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That leaves me with two further questions that I should like to put. If it is desirable, for the sake of ease of transfer and ease of holding a small share in a company, that there should be a special form of bearer shares, should they be confined entirely to these shops? Should they not be made more widely available? I do not know. No doubt it may be a good start to do what was advocated by my noble friend Lord Grenfell.
I should like one further matter to be considered. If this scheme is adopted and becomes general, and it becomes possible for the worker in a factory to buy fairly easily shares in his own industry and in various other businesses, would it not be a good idea that he should also be able to buy from the shop company another form of investment? Many noble Lords have spoken about the desirability of spreading risk. Now, I quite see, and sympathise with, the view of the Aims of Industry that such things as the unit trust should not he the sole method of investment in industry by the worker. The worker may well wish to share in the fortunes of a particular business which he himself has chosen. I entirely agree with those noble Lords who have already spoken that it is absurd to adopt this patronising attitude to the ordinary workman, who is able to do what I think a great many of us could not do—namely, understand the conditions of football pools, and the rest of it. The idea that he cannot pick and choose where he wishes to put his money is, I think, insulting to him.
I entirely agree with many of the remarks made from the other side by the noble Lord, Lord Amwell. I think a worker may well wish to put his money into the shares of a particular business—and that is, of course, the object that my noble friend has in mind. But may he not also wish to put some of his money into something that spreads the risk? I have in mind the ordinary stock or shares of investment trusts. I am not now speaking of unit trusts, but of investment trusts. Let me say at once that I have no knowledge at all whether any of these excellent English or Scottish investment trusts would be willing to convert any part of their capital into bearer shares of the kind now suggested, but if they were. I should like my noble friend and others to consider whether, among the bearer shares dealt with, the shop companies could

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not perhaps deal also with some bearer shares in investment trusts. Their investments are so well spread that the risk of the owner would be spread over a great many of the greatest industries in the country and, indeed, in the world.
Like the noble Lord, Lord Pethick-Lawrence, I have sought for further information, but I am convinced that the Government, who desire that there should be more ownership by the ordinary man, will not give a discouraging reply to this debate. I have no doubt that there are various dangers against which the Government must guard, but I think that the noble Lord, Lord Pethick-Lawrence, was wrong in thinking that there was any risk to taxation revenue, because obligation to deduct income tax would exist exactly as if the shares were registered. I think that that particular fear is not a real one. I apologise for the disjointed nature of the questions I have put. So far as this scheme is one for encouraging ordinary workers to save and invest in British industry, I think it is to be encouraged. So far as there may be dangers, I think that they have probably been foreseen and guarded against by those who devised the scheme. But, if they have not, and the Government have any suggestions, I am sure that the Aims of Industry will give them consideration.
LORD RITCHIE OF DUNDEE: My Lords, I wonder if I may intervene to make one point which I do not think was made clear by the noble Lord, Lord Grenfell. If the scheme comes into being, the shares purchased will be shares of companies which are quoted on the Stock Exchange, but I do not think that the noble Lord made it clear that the bearer shares themselves will not be quoted on the Stock Exchange, nor will dealings in them be permitted in any circumstances.
6.32 p.m.
LORD BLACKFORD: My Lords, may I be allowed to say a word or two on this subject before the Minister replies? Opinion is by no means unanimous on the point. The staff association of one of the industries with which I am connected recently approached the managing director and said that the staff would like to invest in the shares of the company but did not know how to set about it, and could he advise them. That shows that in that industry there was a feeling towards taking an equity interest in the
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fortunes of the concern. On the other hand, the staff association of another industry with which I am connected, where there was a staff sharing scheme of many years' duration, came to the general manager and asked that the sharing scheme should be terminated and an appropriate addition should be made to their salaries instead. This shows that staffs are not unanimous on this subject.
I think that the natural saving of a working man is, in the first place, towards the purchase of his home, and, after that or along with it, the purchase of his furniture, then the amenities of a home, like refrigerators and washing machines, and, after those, the luxuries of the home. He is rather inclined to save for these things before turning his mind to stocks and shares, of which he knows nothing at all. He may be clever about football pools and such like calculations, but his mind has been devoted to those from the earliest time. He has not given the same consideration to stocks and shares and has been taught by his political environment to regard them with definite suspicion. Therefore I am doubtful about the wisdom of executives of companies in encouraging the workers to invest in their concerns. I should not think of encouraging the workers in any concern with which I am connected to invest in that concern.
I agree very much with my noble friend Lord Hawke when he said that those who know nothing about stocks and shares are apt to think that they always go up. A great many industries have adverse experiences. Some of our greatest industries have been obliged, or are now obliged, to make some decrease in their dividends, and their shares do not stand at as high a price as they did. Of course, capitalist industry, competitive industry, is always liable to slumps and recessions. So it is not impossible that a working man, if he has been encouraged to invest in a concern in the confident belief that its fortunes will always go up, would suffer a very definite shock if they went down, and might feel a great deal of resentment. Therefore, I am doubtful about the idea of forming a shop company which embodies the idea of encouraging the workers to buy shares. Presumably, the shop company would have some sort of manager who would want his company to be successful and would propagand in favour of his company and

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so forth. That all involves the idea of encouraging the workers.
Even in this debate I have heard phrases like, "We can tap a new source of saving." That sort of phrase denotes the idea of trying to get the workers into this scheme. I am against that. If workers were to come up of their own free will and join any scheme, I would say, "I am pleased to show you how you can do it and I will facilitate your action, if you do it by such and such a means, which can be discussed later; but I do not encourage you to do it. You do it entirely of your own free will, and, if you make a mistake, do not blame me. You will have only yourselves to blame. If, with your eyes open, you wish to invest in my industry in which you are employed, I shall be pleased to help you, but do not say I encouraged you to do it."
6.38 p.m.
THE MINISTER WITHOUT PORTFOLIO (THE EARL OF DUNDEE): My Lords, I have listened with the greatest possible interest to all that has been said by your Lordships in discussing the merits and possible dangers or drawbacks of the scheme which has been explained by the noble Lord, Lord Grenfell, to help small investors to acquire industrial equities by means of issuing bearer shares disposed of through the agency of shop companies. I hope that your Lordships will not think that I am uninterested in the argument if I do not enter into the argument itself but confine myself rather strictly to the primary interest of the Government in this matter, which is that any scheme of this kind should, in general, be in conformity with the Companies Acts, and, in particular, not facilitate the illegal export of capital contrary to the Exchange Control Act.
As your Lordships are aware, there was never any restriction on the issue of bearer shares until 1940. Bearer shares may sometimes be convenient and useful, and sometimes not. But there is not the slightest reason why everybody should not have perfect freedom to issue bearer shares if he wants to do so, except for the special reasons for which bearer shares were prohibited in 1940, and which we all hope may, in the long run, be only temporary. It was during the war, because of our exchange difficulties and war-time needs, that we had to prohibit
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the export of capital; and since bearer bonds and bearer securities are a particularly easy means of enabling money to be illegally exported, their issue was prohibited under the Emergency Powers Act in 1940. After the war, unfortunately, although it was in time of peace, our exchange difficulties continued, and therefore it was necessary to pass the Exchange Control Act, 1947. Under Section 10 of that Act the issue of bearer bonds is prohibited except with Treasury consent; and under succeeding sections—I think Sections 15 and 16, about which my noble friend Lord Conesford asked—if and when the Treasury do consent to the issue of bearer shares, these have to be placed with what is called an "authorised depository", which might be a hank or a finance company or a solicitor, who would be responsible for seeing that the bearer bonds were not illegally exported.
We all hope that exchange difficulties will not last for ever and that these laws which we have passed to safeguard our position will not be necessary for all time. They are necessary now. But we want to relax them as much as possible, consistently with our present necessity of preserving the exchange control which we now have. The Chancellor of the Exchequer was asked in another place on November 13 whether he could relax the present exchange control rules (which the Treasury have power to do under the Act of 1947) in the case of schemes such as have been described by the noble Lord, Lord Grenfell, and he replied [OFFICIAL REPORT, Commons, Vol. 595 (No. 13), col. 62]:
"I think that it would he reasonable to allow a company to convert its registered shares into bearer form if it could show good reason for this, if the hearer share warrants would be of small denomination, and provided that the arrangements would be such as to ensure that capital could not be exported from this country without Treasury consent."
The Treasury have felt it right to impose a double safeguard in allowing the issue of these bearer shares. First they say that they should be of small denominations; and the maximum denomination which will be allowed is £5. So that if they were illegally exported it would still not be possible for a man to take out of the country a very large sum of money on a very small piece of paper. But the other safeguard is a more important one. It is that these bearer shares should be

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marked so that they will not be what is called "good delivery"—that is, not acceptable as good tender—on any stock exchange. That makes it unnecessary for the requirement that they shall be placed with an "authorised depository"; and that is what I think my noble friend Lord Conesford wanted to know. It means that it will not be worth while anybody exporting them illegally, because if they are not legal tender on any stock exchange the man who did so would probably not succeed in getting any money from them when he got abroad.
I do not think that necessarily means that they could not be privately bought and sold outside the shop company, which was another question asked by my noble friend Lord Conesford. I think that perhaps what my noble friend Lord Grenfell meant when he said that they could be dealt with only inside the shop company was that that would be the normal and usual method of doing it. I think that in fact they could be dealt with outside the shop company privately and that there is no legal reason against that. But they could not be quoted and sold to any person on the Stock Exchange; nor could they be profitably exported abroad. It is not really the concern of the Government whether they are sold privately outside the shop company or whether they are only sold within the shop company. The only concern of the Government is to protect our exchange control position: subject to that, we want to allow as much freedom as possible.
The noble Lord, Lord Pethick-Lawrence, raised the question of possible avoidance of income tax on the dividends from these bearer shares. Under Section 234 of the Income Tax Act, 1952, the Special Commissioners of Income Tax have power to require any person or any company through whom bearer shares have been issued to give him a return of all the persons to whom dividends have been paid on the coupons of these bearer shares. That is, I think, a reasonable safeguard against evasion of tax, which in this case of course would be due from people whose identity was not immediately known to the Revenue.
The noble Lord also suggested that these shop companies might be used for fraudulent purposes in order to rob the investors. I suppose that any company of any kind which was run by wicked people might be used for a fraudulent
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purpose, and the safeguard against that, apart from the Common Law, is the Companies Acts and the Prevention of Fraud Act. It seems to me that if the Government were to prohibit people from issuing bearer shares and forming a shop company merely because of the fear that the company might turn out to be fraudulent, it would be rather like prohibiting an ordinary householder from keeping a poker in the fireplace of his living room for fear that he might use it to beat his wife. People sometimes do use pokers to beat their wives, but that is not the proper use of pokers; and fraud is not the proper use of companies.
LORD PETHICK-LAWRENCE: May I put this point to the noble Earl? This particular industrial company opens its room for the sale of all these things and puts in the shop window, as I understand it, all sorts of other shares of all sorts of other companies. To some extent, my point has been met by my being told that they must be quoted on the Stock Exchange. But, even so, a great many securities are quoted on the Stock Exchange in which probably other noble Lords as well as myself would not care to invest. A company—I should not say "bogus" company: that probably overstates the position, but a company whose shares are not very good and are likely to go down, such as the noble Lord, Lord Hawke referred to—comes along to this company which has the shop and says, "Would you mind putting some of my shares on the market for your investors in bearer bonds?" So this company sells a number of these and, as most people expect, they go down a great deal. I think you want some protection against that kind of thing. The only point I rose to ask was: Does the noble Earl think that the Treasury, in sanctioning these shops, as I understand is the intention, will insist upon certain safeguards to prevent the shops from being used improperly for the sale of miscellaneous shares, and ensure that they make no guarantee that the shares are going up and do not give a guarantee that they will not go down.
THE EARL OF DUNDEE: My Lords, I am sure the Treasury will insist that it should comply with the Companies Act, and that it should not act as a bucket shop. I do not think the Treasury or anybody else can prevent people from

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making unwise investments. As the noble Lord, Lord Hawke, and the noble Lord, Lord Blackford, rightly pointed out, some investments sometimes and, indeed, fairly often, go down. Of course, that does not always apply exclusively to equity shares. People who put their money in the Post Office Savings Bank may find that after ten years inflation has halved the value of their money, and people who invested it in Doctor Dalton's Loan find, to their dismay, that they have lost one-third of their nominal capital, and a much larger proportion now, if you allow for inflation.
The Government do not propose to advise people to invest in this particular way, but I think we must, in this modern age, regard the small investor not as a child who has to be looked after and led by the hand, but as a responsible person who is as good a judge as anybody else of the way in which he wishes to invest his own money. Not only the Government but, I am sure, noble Lords in all parts of the House, are strongly in favour of a better distribution of property and a far greater amount of small ownership, and we are also in favour of doing anything we can to increase industrial investment. The Government cannot commit themselves at present to the proposition that this scheme which has been described by the noble Lord, Lord Grenfell, is the best way of doing that. But so long as it does not facilitate—and we think we have taken reasonable precautions against it— the illegal export of money, and so long as it does not defeat our present exchange control system, we see no reason to place any unnecessary obstructions in its way, nor do we see any reason to do other than wish it every success.
6.53 p.m.
LORD GRENFELL: My Lords, I shall say only a few words. First of all, I should like to thank the noble Earl, Lord Dundee, for putting me right on the question of the shop company obligations. What my noble friend Lord Conesford said is absolutely correct. As these shares are not going to be quoted on the Stock Exchange or dealt with on the Stock Exchange, the normal place to which they will find their way back will be the shop
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company, because that will be the easiest place to redeem them.
LORD PETHICK-LAWRENCE: Do I understand that the workman, or the person who has bought one of these shares, can sell it to his lodger or anybody upstairs, and that he can sell it to anybody else? That is what I understood was possible with a bearer bond. I had understood from the noble Lord that that was not possible with these bearer shares, but it seems to me that he has now gone back entirely upon that statement.
LORD GRENFELL: The noble Lord is quite correct, and I apologise to the House for a slip of the tongue. He can sell it to anybody, but as it is not quoted on the Stock Exchange the normal place for it to come back to would be the shop company.
There is nothing much more to say, except that I think we must not delude ourselves that the working man is a person who is completely incapable of looking after himself. That has been hinted at in some places. I am quite sure that the shop company would arrange to retain the custody of the shares if so wished. With regard to the risk of the shares going down, we must also remember that dogs and horses lose races, and it is just a question of whether you would rather have the money going into industry or into football pools or dog racing. Personally, I should like to see the money going into the industries. I am most grateful to noble Lords who have spoken in this debate, and I am most grateful to the Government and the noble Earl, Lord Dundee, for his reply. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

ADOPTION BILL [H.L.]
Read 3!(according to Order), and passed, and sent to the Commons.

NATIONAL DEBT BILL [H.L.]
Read 3! (according to Order), and passed, and sent to the Commons.
House adjourned at four minutes before seven o'clock.