I want to associate myself with the statements which have been made by my hon. Friends on this side of the House and to express my gratification at the speed with which the Secretary of State has faced the problem which is creating difficulties as far as Scotland is concerned. In accepting the general principle of the Bill, I must point out that there are questions of detail on which we shall seek to make further improvements to the Bill, but the Secretary of State can rest assured that, as far as we are concerned, it will be in no spirit of hostility but with a desire to make the Measure even better than it is now. The Bill seeks to remove some of the anomalies which are associated with administration in Scotland at the present time. The Under-Secretary of State wondered why this question had not been made a real issue before now. The explanation is simple. In 1889 the Act which we seek to change was placed on the Statute Book. In 1900 a Bill dealing with the burghs of Scotland was also placed on the Statute Book, and both Acts of Parliament left it possible for a member of a company registered under the Companies Act to vote for contracts which might benefit himself personally, or benefit the company with which he was associated. At that time the co-operative movement was only in its infancy, and no reference was made in these Acts to the exemption of a member of a society which was registered under the Industrial and Provident Societies Act.
The co-operative movement has grown. In 1889 to 1900 there was no co-operative society dealing with a supply of pasteurised milk; pasteurisation was not then carried out to the extent it is to-day. In those early days, not a single society carried out painting contracts, but as the co-operative movement grew, it reached a position in which it was able successfully to compete with private enterprise in tendering for such contracts. The Under-Secretary of State may rest assured that there were many of us associated with administration in Scotland who knew what the law was, but our opponents did not realise what it was until we were able to enter into the field of competition in regard to painting contracts. Repeatedly, members of local authorities voted for contracts going to co-operative societies, but it was always when the co-operative societies submitted the lowest tenders. Our opponents did not act in a similar way.
I remember one case of tenders for a supply of policemen's caps. The lowest tender was that of the Scottish Co-operative Wholesale Society, which was to provide caps at 4s. 9d. each, and the second lowest tender was that of a local firm at 7s. 6d. a cap. Although the "Moderates" were returned for the purpose of effecting economies, because of their hostility to the co-operative movement they voted against the lowest tender and in favour of the second lowest tender. Fortunately, in that case, as the contract was for the police services, it had to be approved by the Scottish Office. I happened to be in contact with the Scottish Office in another direction at that time, and when the lowest tender was not accepted, I was able to pass word to the Scottish Office to watch the tender when it came up for their approval. To their credit, when that tender was sent to them by the Kirkcaldy town council, they made the necessary inquiries as to why the local authority was prepared to accept a tender at 7s. 6d. a cap when there was a tender at 4s. 9d. a cap. The local authority was compelled to accept the lowest tender, and the policemen of Kirkcaldy, at least for a short period, went about with cooperative caps on their heads.
The point I am making is that in my long association with local administration I know of no case where, when a cooperative society has tendered, there has been any vote given by a co-operative member who was a member of the local authority for other than the lowest tender; but I have given a typical illustration of those who wanted to defend private enterprise being willing to accept a higher tender rather than accept the lowest tender when it was made by a co-operative society. In the case of that contract, we voted for it. We also voted for the cooperative society's tender for the supply of pasteurised milk. There were no other firms in Kirkcaldy that could supply pasteurised milk except one or other of the two local co-operative societies. It is true that under the law it was possible to disenfranchise all of us, but our opponents did not know what the law was, and we knew that if they wanted to take action, they were, under the Corrupt and Illegal Practices Act, compelled to do so within 21 days; and that if they did not do that, we were perfectly clear. I suggest to the Under-Secretary that that is the explanation why this did not become a real issue until recently. Under the 1889 Act, there is no reference to exemptions with regard to industrial and provident societies.
A greater difficulty has arisen as a result of the Housing Act, 1935. Under the Section that we are now to repeal, which deals with voting in connection with housing, it was quite competent to vote for the fixing of rents under the 1930 Act, although one could not vote for fixing the rents under the 1919 Act if living in a 1919 Act house. That has been changed now as a result of the passing of the Housing Act, 1935. Before that Act was passed, separate accounts were kept for all the housing schemes, and there could be no beneficial interest in voting to keep the rents of 1930 houses at a certain level if a municipal tenant who was a member of the town council concerned was living in a 1919 or a 1924 house. The position has been completely changed since the passing of the 1935 Act. Many of our town councillors, irrespective of party, were living in what, in Scotland, were considered to be at least semi-decent houses. Under the 1935 Act, there was compulsory removal from overcrowded houses to the new municipal houses. Prior to 1935, there were separate housing accounts, and it was possible to vote for a reduction or an increase of rents for 1923, 1924, 1930 or 1933 houses; but under the 1935 Act there was a unification of the accounts, and consequently, a vote for an alteration in the rent of houses in any of the schemes was bound to have at least an indirect beneficial effect upon the individual who was voting. If there was a housing pool, and if there was a vote to reduce the rents of the houses in any scheme, the time might come when there would be a deficit in the pool and it might be necessary to vote general increases to balance the housing pool. That is another explanation as to why there is a crisis in local administration at the present time and it is necessary to produce legislation to deal with some of the difficulties and remove some of the anomalies.
Reference has been made to the Departmental Committee's report in connection with this Bill. It is a memorandum that was issued with the Bill, and special reference was made to it by the Undersecretary. I have sat on innumerable Departmental Committees, and, quite apart from party politics, I have done all I could to help my country in the way of advice or suggestions for legislation. I can say that I have never sat with colleagues who have done more able and enthusiastic work than those who are at present engaged on work in connection with local government consolidation. I think the preliminary Bill which they have prepared is a monument to their energy and enthusiasm.
I wish particularly to speak of the work done by the official side of that committee in preparing the draft Bill of which this is a part. I think a tribute is due to those colleagues of mine who did such work in the interests of Scottish administration, but I do not think it was fair of the Under-Secretary to tell the House that I had signed this memorandum, because I did not do so. My signature is not upon it. I do not want to go into the details, but I do wish to point out that I did not agree with all the decisions that were reached. My duty as a member of a committee is to vote for what I consider best. If defeated I have to take the next best, and if I do not enter a caveat or state either my dissent or my disapproval, yet, as a good democrat, irrespective of consequences, I accept the decision of the committee. From the beginning I argued, rightly or wrongly, that a co-operative member had no real beneficial interest in any contract between the society of which he was a member and the town council on which he is a representative. I know that the Under-Secretary will not challenge my statement but it is recorded in the minutes that I dissented from the view that a co-operator, as such, could have a beneficial interest in these contracts.
I should say that we were hurried in our decision. I make no apology about that. I have already paid a tribute to the energy and I would almost say the enthusiasm with which the Secretary of State acted once he was convinced that there was danger to local administration and that grave injustice was being done and was likely to be done to a section of our local administrators. He took what, to my mind, was the right course, and he took it speedily and remitted the whole problem to the committee dealing with the consolidation of local government law. As I say, the memorandum which deals with our work had to be drafted hurriedly on the very day when it was sent to the Under-Secretary and no Member had the opportunity—certainly I had not—of going over the proofs and correcting them. I am not complaining of that. It was all due to the energy with which the Secretary of State tackled an urgent problem. I am sure that the Under-Secretary is the last person in this House who wishes to do any injustice tome personally, and that there has been some misunderstanding which led to his statement that the memorandum was signed by me. On that account I merely mention the fact that the decision of the committee was hurried, in accordance with the request made by the Secretary of State. I hope I have made the point clear. It is in no spirit of hostility that I refer to this matter, but we have to deal with facts as they are and not with facts as we would like them to be.
There is an outstanding feature of Scottish administration which applies equally to English administration. It is the fact that we have had, shall I say, a purity in local administration of which we are entitled to be proud. It is the duty of the House and of those who are keenly interested in local administration, to keep it as pure as it has always been and to see that there is no possibility of corruption in dealing with local problems. The local administrator as far as his public work is concerned, must be, like Caesar's wife, above suspicion, and the purpose of the Bill is to make sure that no one enjoys any real beneficial interests as a result of any vote cast by him on a local administrative body. But as has been pointed out, in remedying one injustice we must be careful not to create another, and I am sure that if a good case can be made out in Committee for any alterations that will improve the Bill, the Secretary of State will have a receptive mind for such proposals. The Bill seeks to deal, first, with what is in Scotland a real anomaly. A member of a co-operative society with that very indefinite and infinitesimal advantage—if you are prepared to admit that there is any advantage at all, which I have contested all along—to-day not only runs the risks of being fined but, strictly speaking, under the law as it stands, is liable to the loss of his seat if any four local government electors take the case to the sheriff.
The crisis in Scotland arose in my own constituency where the co-operative society tendered for the contract for the painting of a large number of municipal houses. A member of the council raised the legal question of how this would affect members of the local co-operative society if they voted for that society's tender. I want the House to know that it was the lowest tender. There was no question of trying to get an unfair preference for the co-operative society. I think the opinion of the town clerk of Stirling was very well founded. It was a very carefully drawn document in which he proved to his own town council that if members who were also members of the co-operative society, voted for that society's tender and if any four ratepayers within the specified period took the case before the sheriff, those members were liable under the law, not merely to be fined but to lose their seats on the town council. I advised the representatives of the local authorities at that time not to take any action immediately on that decision, because I knew, although I did not tell them what legislation was proposed, that the committee was working on the problem. But the trouble spread from Stirling to Saltcoats and from Saltcoats to Hamilton. In Hamilton they were unanimously in favour of defying the existing law and voting in favour of the tender of the co-operative society which was the lowest. In the case of Saltcoats a majority decided not to accept tenders from the co-operative society until the law was changed and that attitude has been taken by several other authorities in Scotland.
The result is that local authorities are being called upon, in some instances at least, to pay more in connection with contracts for housing and even contracts for bread. When it comes to the supply of
pasteurised milk, it will be impossible for those contracts to be filled by local cooperative societies without disfranchising members of those bodies and not merely leaving them open to a penalty as in England. That is making local administration practically impossible and this Bill, at least in principle, seeks to deal with that anomaly. It seeks to bring the law, as far as I understand it, alongside the law in England. The law was changed in England in its application to co-operative societies in 1906. Then you had your Local Government Consolidation Act in 1933, and almost word for word you are going to get the assimilation of the Scottish law to that of England, but with at least one or two improvements. The difficulty that has really arisen in my mind is because of the special reference in the Memorandum:
subject to such conditions as he may think fit to impose or to give directions as to how the business is to be transacted, e.g., by the appointment of an impartial person to fix rants for housing.
Even the reference in the Memorandum is specific in its application to the rents of houses and not to the general problem of administration associated with housing itself, because I can visualise direct interests even in connection with housing administration. But there is a specific reference only to rent. I am sure I am speaking for all on this side when I say that we could not stand up to those who live in municipal houses determining then-own rents. There are difficulties there and it is a problem that we have to face. It might lend itself to all kinds of difficulties in connection with administration. If there is a real difficulty in connection with rents because of these alterations in the law the final approval of the rents to be fixed, where this difficulty arises, might be left to the Department of Health, because someone is responsible in this House for answering for them. You could not discuss the decisions of the sheriff of a county in the House in the same way in which it is possible to deal with decisions arrived at by the Department of Health. We will place no obstacles in the way of the speedy placing of this Bill on the Statute Book. In principle we accept it. There is no difference between us and the Secretary of State in the principle that we have in mind, though there may be slight differences in the method of the application of the principle. I sincerely thank him for the speedy and
courteous way in which he met that deputation of Scottish Members who are dealing with the problem. He is to be congratulated on the speedy way in which he has even got his colleagues in the Cabinet to accept this legislation. I hope he will understand that anything that savoured of an attack upon him was not in any spirit of hostility. Any criticism that there has been is merely directed towards this piece of legislation.