I beg to move,
That this House takes note of the White Papers relating to the Areas, Status, Functions and Finance of Local Authorities in England and Wales (Command Papers Nos. 9831, 161 and 209), and to Local Government Finance in Scotland (Command Paper No. 208).
This is the first day for a great many years that a Government have invited the House to discuss comprehensively, with a view to improving it and bringing it up to date, the whole structure of local government. There can be an infinite variety of opinion, because some of us are county men, some are borough men, and some are urban or rural district men.
Most people, I find, believe firmly in the virtues of the particular form of local authority with which they have been most closely associated, but one thing on which we all ought to be agreed is the desire to ensure a strong and independent local government system. Freely-elected local authorities are an essential part of British democracy and a safeguard that we should treasure against the excessive use of central power.
The basic local government structure as we have it in England and Wales today was established seventy or eighty years ago. There is widespread agreement within and without the local government world that the time is ripe for a bold and comprehensive overhaul that should cover functions and finance as well as areas. I am sure that changes in areas should not be made piecemeal but integrated in a general review. That, more than any other consideration, has obliged Ministers, from both sides of the House, in recent years to advise against individual Private Bills for county borough status.
It is over thirty years now since the last county borough was created. In that time some large towns have grown still larger and, naturally, want to look after their own affairs. Many existing county boroughs, under the pressure of expanding employment and new housing, have overspilled into adjacent areas and want to extend their boundaries. County and borough interests clash, and we must resolve them. Then there are the built-up sprawls known by the terrible name of conurbations, where separate communities have now grown together into what is often a continuous urban mass with common problems but still governed by dozens of separate authorities.
Then, when one turns from the towns to the country one often finds there, too, a pattern of local government more suitable to days gone by, with many districts so small that with their present resources they can hardly hope to grapple effectively enough with all the problems that the rest of the twentieth century will bring. Here, therefore, we have to resolve another clash.
Local government should as far as possible be truly local. Local representatives should know the people they serve and the electors should know their representatives. From this point of view the district council is almost the ideal unit, but strength and independence in a local government system are hard to reconcile with small and financially weak authorities. This is one of the most difficult questions we need to debate.
When the representatives of the local authorities were discussing many of these matters with my predecessor they made the point strongly that organisation should not be considered apart from finance, and I am sure they were right. Local authorities need more independence in the raising and in the spending of their money. Without that no reorganisation of areas and of functions will avail.
I reject the idea of sweeping all the present structure away and putting in its place something quite different which might look tidy on paper, but would lack the traditions and the local roots and the working experience whose value we all of us know. No fanatical reform but thorough overhaul is what we want, and the overhaul should have three main aims: stronger and more convenient local government units; a more rational sharing of local government functions; and a greater local responsibility for what is to be spent or saved.
Three White Papers about England and Wales have been laid before the House, and a fourth about Scotland, on which my right hon. Friend the Secretary of State for Scotland hopes to speak tomorrow. In 1954, my predecessor, now Minister of Defence, approached the local authority associations of England and Wales to try to resolve the deadlock between those who sought a wide extension of the one-tier system of all-purpose authorities—that is, the county boroughs—and those who believed in the two tiers of county councils and county districts. He brought them to a large measure of agreement, and I pay tribute to the local authority representatives for the way in which they placed the interests of local government as a whole above their own narrower interests. The agreements between them are set out in the Appendix to the first White Paper, that on areas and status, issued just a year ago. It has greatly assisted in the shaping of the Government's proposals.
To review and help to settle the major problems of local government structure, that is, the boundaries of counties and county boroughs and the patterns appropriate in the conurbations, the Government intend to appoint two commissions, one for England and one for Wales. Each of these commissions will be asked to examine the existing structure, to hear the views of all local authorities concerned, and to make recommendations to the Minister for any changes which seem to it to be required. That is the first stage. In the second stage, after the county and county borough pattern has been settled, each county council will be asked to review the areas of its boroughs and districts, and, finally, of its parishes, and to frame recommendations likewise.
I am sure that this is the only practicable procedure. There are fundamental differences between this and the machinery of the old Local Government Boundary Commission which was set up in 1945 and came to nothing. The Government are intending to deal this time with both structure and functions. These new commissions will not be in the position of being asked to deal with form divorced from purpose. Recommendations from the new commissions will come not, as with the old Boundary Commission, in the form of Orders presented direct to Parliament but as proposals made to the Minister. The Minister will reach conclusions in the light of those recommendations and the Minister will make the necessary Orders and seek Parliamentary approval for them.
There are a number of large authorities who think it is high time they became county boroughs, and some of them have very strong claims. The present position is that boroughs with a population of 75,000 and upwards can promote a Bill for this purpose. A somewhat higher figure is now suggested as the point at which the authority may seek to cut itself loose from the county and become wholly self-governing. The Government propose that a population of 100,000 should be adopted as the level at which an authority—this applies to urban districts as well as to boroughs should be presumed to be competent to discharge all the functions of a county borough.
The commissions will be instructed to deal with claims on that assumption. This does not mean that applications from boroughs or urban districts below that new level will not be considered on their merits. It means simply that at 100,000 there will be an assumption that the town is large enough. There is no disagreement among local authority associations on this proposal. I hope that it will commend itself to the House.
The commissions, looking at this, will be expected to look simultaneously at claims for extension of boundaries by authorities seeking to become county boroughs, and, indeed, to look generally at the likely growth of towns. It is an essential part of our proposals on these matters that they should be firmly settled for a good many years ahead.
I am coming to that in a later part of my speech.
In all questions of promotion to county borough status and extensions of county boroughs there is a potential conflict between the interests of the town and those of the rest of the county. The commission's duty will be to consider the consequences for the county, or, possibly, counties, and to make proposals which will take account of those. In some cases it may prove that the solution lies in adjustment of county areas concurrently with the creation or extension of county boroughs. If so, it will be open to the commission to recommend that. That is one of the advantages to be gained from a comprehensive procedure.
Can the right hon. Gentleman say how the main proposal to give county councils power to revise the boundaries of county district councils will be carried out? Will the county district councils be called into consultation before any final scheme is put up by a county?
I was trying to deal with this matter in an orderly way. I have been speaking so far of the commissions' duties. I was coming on to the next stage in a moment, but before reaching that I should like to deal with the conurbations.
I want to try to avoid calling them "conurbations," because I dislike the word so much. I shall call them "special review areas," because that is what they are. [Laughter.] I am not suggesting that that phrase will pass into common parlance, but I am using it for the purpose of my speech because I want to be as clear as I can. That is what they are for our purpose—areas which, prima facie, have common local government problems to the extent that the structure of their local government requires to be looked at as a whole—counties, county boroughs and districts together.
One important issue is where and to what extent co-ordination of services is needed over the whole area. I think it will be generally accepted as right that each of these areas should be reviewed as a whole by the commissions. The White Paper mentions six such areas which were defined by the Registrar-General for census purposes—Greater London, South-East Lancashire, the West Midlands, West Yorkshire, Merseyside and Tyneside. I will deal with Greater London in a moment. Taking the other five areas, I am certain that special reviews of this kind are needed. There may be other parts of the country which will also need review as a whole, but I think we should leave those to be discovered by the commissions themselves. If it is necessary as a result of the commissions' investigations to add to those five obvious ones, that can be done.
I want to be quite clear to the House about these special review areas.In each case I have in mind prescribing a definite area for review. We may take an area with boundaries wider than those defined by the Registrar-General, but the prescribing of an area in this way will in no sense be an instruction to the commissions that they must seek to devise a special, new structure of local government for the whole of that area. It is intended simply as a way of drawing their attention to a part of the country which they should look at as a whole and to the possibility that within that area they may find a complex of problems which needs some fairly drastic revision of the existing local government pattern and perhaps some redistribution of functions.
When the commissions have looked at a special review area and consulted all the local authorities concerned, they will then make their recommendations for the pattern of local government which they think will meet the needs. The White Paper mentions some alternative possibilities, but the commissions will be free, having examined each area, to propose whatever structure of local government seems best to them.
Incidentally—here I come to the point raised by the hon. and learned Member for Kettering (Mr. Mitchison)—to leave their freedom unfettered I propose to withdraw the stipulation in paragraph 30 of the White Paper that in one of these special review areas the figure for county borough status should be 125,000 instead of the 100,000 provided for elsewhere. I do not think it would be defensible to propose two different figures as a test of fitness for the same thing.
The real point here is that in a special review area other factors will come into play and it may be found that it is convenient to create rather larger urban units than elsewhere. The overall pattern needed in the whole area will be the decisive factor.
Greater London is a unique area——
I want to leave the commissions as unfettered as I can, but I thought I should tell the House of that change in our proposals since the White Paper was published.
Greater London is a unique area—not only because of its size, but also because it is the one part of the country where unique kinds of local government already exist. It contains two urban counties. The County of London has a form of government of its own. The County of Middlesex contains not one rural district, but it has the two-tier form of government which was designed originally for rural and semi-rural areas. Adjustments have been made to meet the special Middlesex needs, but I think no one is wholly content, though I commend the very genuine efforts which have been, and, I know, are being, made within Middlesex to reconcile opposing viewpoints.
Around and alongside these two counties are the Metropolitan areas of the Home Counties generally. Here, we find three county boroughs and many county districts of varying sizes, some of which already have a population that would entitle them to aspire to county borough status. These places have a natural affiliation with Greater London, they share various problems in common with London and with Middlesex, but for county administration they look outwards to the county towns of the Home Counties.
No representatives of London local government took part in the discussions which preceded the laying of the first two White Papers, and the general assumption was made that the reorganisation would not apply to the County of London. The 1956 White Paper assumed that the English Local Government Commission would review the whole of the Metropolitan area, excluding the County of London, just as it will review other conurbation areas, and would do the best it could to propose an appropriate structure. But the White Paper added a proviso that the commission would have to consider whether there were any matters needing to be handled jointly on behalf of Greater London as a whole.
It does not now seem to the Government that this approach could produce a satisfactory result. It would mean that the commission had, in practice, to take note of the working of local government inside the County of London as well as outside—but without any mandate to consider the effect on the structure of government within the county of any proposal it might wish to make in fulfilment of its Greater London instructions, including the proviso which I have mentioned.
Then there is another difficulty in the White Paper proposals. It was suggested that no county boroughs should be created within the County of Middlesex. This conclusion was reached because it seemed that in Middlesex there were really only two practicable alternatives—either to have no county boroughs, or to have all county boroughs and to abolish the county. Faced by those alternatives, the Government felt that they must adopt the first. But this is, naturally, not very acceptable to some of the great Middlesex boroughs, and there is no definite proof that it is, in fact, the right course to take. It may be impossible to determine what is the right structure for Middlesex, except in the context of the Greater London area.
The plain fact is that Greater London needs to be looked at as a whole, but there are here such complicated and far-reaching problems that the Government do not think it would be practicable to ask the commission to deal with Greater London as it will deal with the other five areas for special review; and it would gravely hold up all the commission's other work. What is needed is a preliminary and independent and geographically comprehensive examination of the structure of local government suited to the Metropolitan area—which may, of course, be different for different parts of it. Only when we know the answer to that question can we wisely reach conclusions on the boundaries, the status and the functions of the local authorities included within it.
The right hon. Gentleman's remarks about the Middlesex area are a matter of some importance to those of us who represent Middlesex constituencies. Do I understand him to say that the restrictions in respect of Middlesex which he proposed in the White Paper are now to be withdrawn and that Middlesex will be considered by the commission in conjunction with the whole of the Metropolitan area?
I believe that the hon. Member will find me answering all his questions as I continue with my speech.
The Prime Minister has authorised me to inform the House that Her Majesty the Queen has been pleased to approve his recommendation that a Royal Commission should be appointed. The Royal Commission's task will be to examine the present structure and working of local government in the Greater London area—that is, roughly, the Metropolitan Police District—and to make recommendations about the broad structure appropriate to the area in present conditions and about the distribution of the main local government functions, with special reference to the possible need for an overall authority for any services throughout the whole area. There will be consultation with local authorities on the precise terms of reference, and on the area to be covered.
As the Home Counties themselves are affected, can the right hon. Gentleman say whether the review of those counties will proceed independently of the Greater London review? Essex, Surrey, Kent, and so on, are obviously very much affected by this proposal. Can the right hon. Gentleman say how they will be affected by other parts of the White Paper?
The best way of proceeding will be for the House to allow us to investigate, to follow up, to have consultation, and to decide the terms of reference in consultation with the local authorities.
I mean the County of London and, broadly speaking, the Metropolitan Police District. I said that it seems to the Government, in these circumstances, to be right to have consultations with the local authorities concerned before we settle either the precise area, or the precise terms of reference for the Royal Commission.
I am sorry to interrupt the right hon. Gentleman again; he is getting enough interruptions. He referred to the Royal Commission investigating local government in Greater London, which he defined as approximately the Metropolitan Police District, which is the usual interpretation.
I agree that the Commission's terms of reference are not yet known, but in considering the structure and functioning of local government in that Greater London area, if the Royal Commission proposes changes, will it consider the effect of those changes on administrative counties on the fringe of the Greater London area, if those changes absorb parts of those counties into other areas?
The right hon. Gentleman will realise that the Greater London boundary passes through a number of administrative counties outside London and Middlesex. Will it be possible for the Royal Commission, in making its recommendations, to take into account repercussions on those counties?
I am sure that what the right hon. Gentleman has mentioned will be relevant to the work of the Royal Commission. I hope that the House will feel that the Government have done right, as this was a local government debate, to make this announcement in the course of the debate so that it could proceed in the light of the announcement—although the usual procedure is for the Prime Minister himself to announce a Royal Commission and its full terms of reference at the same time. It is solely for the convenience of the House that we are proceeding in this way.
The right hon. Gentleman is in danger of making a technical mistake. The whole area of the County of London excludes the City of London. Did he mean the administrative County of London, which includes the "ancient square mile"? I hope that he did, because I have always had visions of the City of London Corporation absorbing London County Council.
We are not proposing to set up a Royal Commission with any hidden purpose of merging County Hall in Mansion House or Guildhall. or of bringing the City of London more under the control of any other local authority than it is at the moment. I agree that it is part of the geographical area which will have to be considered.
I want to return to the ordinary counties of England and Wales after their boundaries have been reviewed by the commissions and any alterations made by Parliament. The White Paper proposes that each county council will then make a review of the county district pattern in its own county. This is not new. County councils carried out county reviews in the 1930s. The new feature is that in future non-county boroughs will be reviewed and, if necessary, may form the subject of proposals for alteration on the same basis as other county districts. I assure the House that this forms part of the agreed proposals of the local authority associations.
I know that, none the less, the councils of a small number of non-county boroughs up and down the country are very naturally concerned, but I believe that almost everyone recognises that there can be no adequate county reviews unless all districts, whether rural, urban or borough, can be reviewed alike. We cannot aspire to get effective and convenient local government units—convenient in the civic sense—if we are not free to deal as may seem best with all the districts in a county.
I intend that every effort should be made to preserve, as far as possible, the identities and dignities of any boroughs which, as a result of the new proposals, may not remain as separate districts. Where two essentially urban areas merge and one is already a borough, the new unit will normally itself be a borough, but in some cases the best course may be to merge a small borough with a rural district adjoining. Where that happens, I want to see the borough retain the distinction conferred by its charter and its name of borough, its mayor, and is corporate property.
I am considering a new style of authority. The rural districts which we know are made up of parishes. In future, they can include not only parishes, but what we might call a "rural borough", or "country borough", or some such name, with the mayoralty continued and with a continued corporate existence so that the burgesses can continue to enjoy for their own exclusive benefit the traditions and the corporate property which their predecessors have handed down to them.
These are matters upon which I shall welcome the views of the House, for it is hard to see how ancient boroughs with small populations and low rateable values can wield many powers in the modern world, yet I am very anxious that there shall be no break in their tradition of mayoralty or their historic ceremonies. I understand the apprehensions of the small borough, or for that matter, the small district, at the prospect of losing its identity. I understand their indignation at any suggestion that they are not efficient. Many quite small districts and boroughs are, within their resources, very efficient indeed, but it still may not be efficient to have such a number of authorities in close juxtaposition within an area, and one cannot turn a blind eye to the fact that resources are important.
I know that concern has been aroused by the suggestion in paragraph 50 of the first White Paper that guidance might be given to county councils, when carrying out their reviews, as to the minimum populations desirable for a county district. The view has been put to me that any such guidance will lead county councils to act in a rigid and arbitrary manner, and that they will force unnatural marriages between unsuitable areas. I do not think that this is true. County councils, when considering what is necessary to secure effective and convenient units of local government, will be required to take into account a very wide range of factors—community of interest, accessibility, distribution, of population, and so on—as set out in what has become known in local government circles as the "nine factors."
No county council would pay attention exclusively to population: certainly, no Minister would accept proposals which ignored all the other factors involved. My belief still is that some indication of the sort of size at which county councils should aim when considering these reviews of their districts will be found necessary if we are to get good reviews. The experience of the last series of county reviews, when no clear and specific guidance was given on this subject, suggests to me that something more than general exhortation is necessary. Let me say definitely that I am sure that no figure could be hard and fast, and I am sure that some small boroughs and small districts will continue.
The second White Paper, published in May, deals with distribution of local government functions between county and county district councils. The functions discussed in it are those chosen by the associations themselves as needing consideration. The associations were not in agreement on all the specific changes which should be made, so the Government invited fire from both sides by putting forward proposals of their own, in this White Paper, as a basis for discussion.
I said that local government should as far as possible be truly local. It was with that general aim that the Government approached this review. But right away I want to say, frankly, that there are limits to what is practicable in the direction of taking responsibilities from the county councils and giving them to the district councils. The problem is an obvious one; how to reconcile a shift of responsibility downwards with the present-day needs for substantial financial resources and for what I might call large catchment areas.
It is not easy to see how to effect the reconciliation without impairing the interests of the services themselves. The proposals in the White Paper represent a valuable step forward; borough and urban districts with populations of 60,000 and upwards should be able to claim the responsibility for nearly all the services listed in this White Paper. This means that the large borough or urban district can have a real say in the administration of education and local health and welfare services. These are the most important of all. They intimately affect people's daily lives, so they ought to be run as locally as possible. This is a major change and I believe that it will be greatly welcomed by the councils concerned.
I know that it has been argued that some of these services should be conferred on the large districts as of right, and not delegated from the county councils. This is one of the matters arising out of the White Paper upon which local authority associations have been having discussions with Ministers, but as far as the major services are concerned—education, health and welfare, roads and planning—we are firm in our adherence to what was said in paragraph 10 of the White Paper, that delegation in one form or another is inescapable for these services, and that the county council must remain responsible for broad policy and general finance.
I know that delegation does not invariably work well, though I believe that, given the right spirit on both sides, there is no reason why it should not do so. The Government intend to do everything they can to see that it does work well by ensuring that any delegation arrangements which are made are as definite and as unfettered as possible.
The view has been put to me that the figure at which there is automatic delegation should be lower than 60,000. I know that many of the middle-sized districts would have liked the figure of 50,000 or possibly less, so that they could be sure of sharing directly in education and in local health and welfare administration. I do not think that we can go below the figure of 60,000. There can be no precision in a matter of this kind, but the Government's view is that a figure lower than 60,000 could not safely be taken for general application.
But that does not mean that no authorities with a population below 60,000 will get these powers. Where special circumstances justify it the powers will be delegated to districts with a somewhat smaller population. All existing excepted districts will continue to exercise delegated education functions, whatever their populations.
I have been speaking mainly of the major services, such as education and health. Some of the other services will be exercised by a larger range of district councils—larger, certainly, than has been supposed by many people who have read the White Paper too restrictively. I want also to tell the House about some modifications of the White Paper which we have in mind. On some of the functions in question—weights and measures, for example—the Government are now disposed to suggest that responsibility should be directly conferred upon district councils with populations of 60,000 and over, instead of being delegated.
On two of the other functions—classified roads and food and drugs—we shall probably not proceed with the proposals contained in the White Paper, and will be suggesting that the present arrangements might be left substantially as they are, except that in the case of roads the field in which the claiming system would continue to operate would be reviewed.
We are not anxious for uniformity for its own sake; we are not seeking to impose delegation upon services for which it is not essential. Throughout the discussions with the local authority associations on functions we have tried to look at the needs of the individual service. The modifications that I have already indicated to the House are the result. We shall welcome further debate for, in the last resort, it is Parliament which must delicately hold the balance here between the counties and the county districts. The present distribution of functions between them is not particularly rational. I think that the changes that we have proposed are steps in the right direction.
One matter about which people have asked me is the relationship of the new towns to all this. That raises the question whether the ownership of all the land and buildings in the new towns when the development corporations disappear is really a suitable function for local government to discharge and, if so, for what sort of authorities. Several of the corporations established in England and Wales under the New Towns Act will have substantially completed their tasks in the next few years. The Government have been independently examining this matter and have reached the conclusion that it would not be the best plan to transfer wholesale to local authorities the ownership of the properties which are now in the hands of the corporations.
We propose, instead, to establish a new agency to take over the property and liabilities of the corporations in England and Wales as they are wound up. This will, of course, all require legislation. Meanwhile, the Government are examining a number of questions relating to the organisations and functions of the proposed agency. There will be consultations on these questions with local authority representatives and with other expert opinion. The local authorities of the new town areas are, and will continue to be, responsible for all normal local government services just as similar authorities are elsewhere.
The only exceptions to this have been in a few cases water supply and, I think in a majority of cases, main sewerage. Now that that phase of early development is over, the aim of the Government will be to ensure that in new town areas responsibility for those services passes to the normal local authorities as soon as suitable arrangements can be made.
If the House will bear with me, I want now to speak of local government finance. I said that local authorities need to be more independent both in the raising and spending of their money; and unless we can increase this financial independence, no reorganisation of areas and functions will be really effective. I wish we could propose a new source of revenue which would enable local authorities to finance their services with substantially less reliance on Exchequer aid. No doubt my right hon. Friend the Chancellor of the Exchequer wishes it even more than I do. But most hon. Members will not be surprised when I say that it is simply not practicable.
This subject of alternative sources of local government finance has been studied by a group formed by the Royal Institute of Public Administration, and their study was exhaustive. Their main conclusions were for a local personal income tax and for transfer to local authorities of entertainments duties and perhaps also the motor duty. A local income tax has its own technical difficulties. Even apart from those difficulties it is not a prospect to attract one. The suggestion was that it should be limited to 3d. in the£, but the House knows what can happen to an income tax once it is started.
As for switching to local authorities the product of some of the taxes now collected nationally, this could only be of real assistance to local government. I think, if local authorities were free to alter the level locally. That, again, is not a prospect which attracts one. I wonder just how many individual areas would have been unselfish enough to take Entertainments Duty off sport and the living theatre.
If it is merely a question of diverting to local authorities the product of taxes settled nationally, surely it is better to do it according to the needs of the authorities rather than according to the local yield of each tax. I think that any Government which investigates all this will be forced to accept that the main sources of finance for local authorities must remain what they are at present—that is to say, the rates, their own rents and revenues and the Exchequer grants; so it is with rates and with grants that the Government have to deal.
The main rating adjustment which we propose is the rerating of industry and freight transport by 50 per cent. Industry's share of the total rate payments rose by half as much again by reason of the 1956 revaluation. Rerating from 25 per cent. to 50 per cent, on top of that, will, therefore, have the result that as compared with the year 1955–56, industry's share will have increased about threefold. The Government have thoroughly considered this and have come to the conclusion that in the economic circumstances, and keeping in mind export costs, that is as heavy an addition to overheads as industry can safely be required to bear. It is estimated to produce, on present figures, an extra£30 million a year in rate income. It permanently and materially increases the rateable value of local authorities on which they are free to levy whatever rate they think fit.
I should mention also the proposal to bring the rate contributions of the electricity and transport industries within the rating system, as the gas industry contributions already are; and the proposal to assess separately electricity and gas showrooms which are used as shops, on the same lines as other shop premises. Local government means, or should mean, local responsibility. Subject to national standards, certainly, with central government assistance, certainly. But, ultimately, local choice to determine how best to spend one's money and local responsibility for reckoning the cost. All this is fundamental to our ideas for the future of local government. It points towards more genuine local discretion, and it is local discretion of this sort that has, in past days, been the source of some of the most worthwhile advances in local government services.
Of course, it is right that adequate central Government assistance shall continue to whatever extent it is needed, but let us be sure that this assistance is in a form which does not reduce the local authority to the status of a mere agent of the central government. The position today discloses one weakness after another. That is why local government is not what it was. Local authorities are now receiving more from the taxpayer than they get from the rates. Most of it comes not as a straight contribution to local resources as a whole, but as a regulated sharing by the Exchequer in specific local expenditure. Local government is in danger of getting assistance as a dependant gets assistance—on dictated terms.
Whereas, before the last war, 65 per cent. of all Exchequer aid to local authorities was made by specific grants for particular services, today it is not 65 per cent., but 85 per cent. Then there were 35 specific grants, now there are no fewer than 60. The worst feature from the standpoint of local autonomy is that of the money total of grants now given from the Exchequer to local authorities, two-thirds is in the form of percentage grants. The local authority spends the money knowing that whatever it spends, so much per cent. will automatically be reimbursed by the Exchequer. The Government Departments seeking to watch the taxpayer's interest inevitably have to "keep tabs" on each local authority's spending, not just when the spending is planned, but, even more, when the accounts are reckoned up.
There is very little rhyme or reason for the way grants are available for particular services today. They came into being at various times, because of particular needs, or pressures, at those times, and in relation to some only of the great range of local government services and not others. A town council may face a need for heavy expenditure on sewage or refuse disposal. It can get no direct Exchequer assistance towards it, but public opinion requires the job to be done. If it is considering expenditure, possibly of a much less essential nature, on some other service which happens, more or less by historical accident, to attract a percentage grant, Exchequer assistance will be automatically forthcoming.
Even within the field that is grant-aided, the amount of grant which can be made available in different circumstances differs markedly on no national principle. The unhappy result is that expenditure on one particular service rather than on another may be much more attractive or, at any rate, much less burdensome in its effect upon the ratepayers, not necessarily because of the merits or costs of that service, but simply because it happens to rank for a high rate of Exchequer grant, whereas the other ranks for less grant or none at all.
It is said by some critics of the White Paper that the disadvantages of the percentage grant system are exaggerated and that it has not in practice led to an excessive degree of central Government checking of local authority operations or to any risk of a reduced sense of' independence and responsibility in local authorities. The Lees Report of the Institute of Municipal Treasurers and Accountants is, I know, quoted in support of that.
Well, it would be nice to take this as a compliment to the enlightened way in which Government Departments administer a complicated system. What we really have to go by is the number, range and complexity of the accounts that have to be prepared, scrutinised and discussed. These amount to thousands and thousands a year, which hardly looks a good thing when everybody is saying that there ought to be fewer officials and not more. As for the sense of financial responsibility among local authorities, everybody will have his own opinion, but all of us who have served on local authorities know perfectly well that we cannot but look differently at a plan of which we must meet the whole cost and a plan of which we need meet only half or less and can get other people to pay the remainder, without their knowing that they are doing so.
The Government now propose that the cornerstone of the structure of Exchequer aid should, in future, be a general grant. Percentage grants will only be retained when the general grant cannot be made to fit the needs. It is a big step towards increasing the financial freedom of local authorities, and it is welcome—[Laughter]. I say that it is welcome to thoughtful people throughout local government. It conforms with the aims on this side of the House of leaving as much as possible of the detailed management of local services to the local authorities themselves.
The general grant will be based not on the amount each council spends, but upon objective factors outside the control of the individual local authority and related to the needs of the area. It will absorb and replace as many of the existing specific grants as can suitably he included. We are not trying to force anything into this new pattern that will not fit it. Housing, highways and police will not be affected. The general grant will replace those mentioned in paragraph 16 of the White Paper.
These which are replaced are running at nearly£300 million a year. Their absorption into the general grant will mean that, in future, Exchequer assistance to local authorities will consist only as to one-third of specific grants instead of about seven eighths as at present. The Opposition will find themselves on weak ground if they try to argue that a general grant will hamper the development of social services like health and education. [Laughter.] Well, let us look the kind of things which have been said.
One suggestion is that the Government mean to freeze the Exchequer grants at or around the existing level, leaving local authorities to bear the cost of existing services. Another suggestion is that even if the Government produce a fair contribution local authorities will not spend the necessary money on the necessary things unless they have the stimulus of percentage grants.
The first point simply is not true, and anyone who repeats it is uttering an untruth. Just as with the existing arrangement, so under the proposed new system, the level of grant will rise if the cost of the services has to rise. As a matter of fact, the new system will provide a much more orderly way of assessing and determining the amount of development to be planned. The general grant for the first period of two years will be determined in the autumn of 1958, in readiness for its commencement in April, 1959. It will be determined by reference to the latest information about the levels of costs and grants, to the need for development of the services concerned and to the nation's capacity to meet the cost.
In 1958, and on subsequent occasions, the fixing of the total grant in this way by Order will give rise to debate in Parliament, presumably, and will attract a good deal of public attention. It will be something on to which serious attention in the Press and among the public at large can be much more effectively focused than the separate grants which are at present provided. It will give an opportunity for the Government to show clearly, and for the public to see clearly, just what aid from the taxes is being given and will be given to the services concerned. I am certain that the procedure to which the Government are committing themselves is not what anyone would devise whose sole aim was secretly to save the taxpayer at the expense of the ratepayer.
On the second point, that local authorities will not fulfil their responsibilities unless that is the only condition on which they can get Government money, I am sorry that hon. Members opposite have so little faith in public opinion and local government. Education is being cited as in particular danger. My hon. Friend the Parliamentary Secretary to the Ministry of Education will have something to say about that point later.
I simply do not accept that councillors are so reckless towards their responsibilities, so indifferent to the next council elections, and so careless of every consideration except the rates, that unless they are compelled by Whitehall to spend money they are certain to let their children, their sick people and their old people suffer, or, at any rate, suffer by comparison with those in other areas. If that were true, we had better abolish local government and have done with it; but it is not true, and the House knows that it is not true.
These services have been developed by local authorities. Many of the most valuable new ideas have come from local authorities. Locally elected people do not, whatever hon. Gentlemen opposite may say, need to be told all the time by some Minister or other what they ought to do and how they ought to do it. They need powers, resources and freedom to exercise some initiative of their own, and these are what the Government intend to give them.
The Government are not proposing to abandon their legitimate concern with the operation of the various services. Departments will continue to exercise control at the key points, but a Minister's responsibility for general policy ought not to entail meticulous scrutiny of the detailed management of a service. It is one thing to prescribe basic standards, as Governments will continue to do wherever that is necessary; it is another thing to dictate in detail the methods by which those standards are to be achieved and maintained. That is what the Government want to get rid of; and whatever the Opposition may say I know that the local authorities want to be rid of it, too.
We shall have absorbed as many as practicable of the specific grants into the general grant and shall have abolished several others. It will be important for the future that we do not proliferate new specific grants except for good reason. When, in future, Parliament feels that extra financial provision should be made for local government, the first assumption should be that it should be added to the total of the general grant. If the addition is made because of new duties put upon local authorities and these duties are nation-wide, then the assumption will be very strong indeed that the general grant is the proper vehicle, possibly with some amending of the factors governing its distribution. Legislation would then take the form of extending the list of services for which the general grant makes financial provision, and the total of the general grant would be suitably increased.
Only if the new activity is confined to particular areas ought the case for a specific grant to be pressed. For example, that would have been the case with smoke-control areas under the Clean Air Act. Other activities may come along, perhaps arising from some important inquiry as the clean air campaign did, but even in this sort of case the time may arrive when the service becomes general and the burden on local authorities can be related to defined factors applying to them all. When that happens, the specific grant can be absorbed into the general grant.
I will not, unless the House wishes it, go deeply into the technicalities of the formula by which the general grant is proposed to be distributed amongst different local authorities. It has been much improved as a result of detailed discussions with representatives of local authorities and I am grateful for their help. The major factor in it, common to all local authorities, is population, but there are other factors, too.
The White Paper, by way of illustration, gives, in Annex C, an indication of the values that ought to be attached to these various factors to produce a particular total of general grant. Those values will need to be varied according to the total amount to be distributed. They may, therefore, be different in each grant period, but—initially, at any rate—the weight attaching to any particular factor will be broadly as indicated in the illustration given.
I want the House to realise that the weight of these factors will be reviewed for each grant period, along with the total of grant. Both will be embodied in a statutory Order. The total amount of grant will, as the White Paper points out in paragraphs 18 to 20, be fixed after taking into account the complete picture of local government needs, and views, and current spending, and the position of the economy as a whole. Those three paragraphs deserve to be carefully read, for they invalidate a great deal of the rather facile criticism by people who were hastier to put their objections on record than to study what the Government actually propose.
Over and above their share of the general grant, many authorities will also receive equalisation grants, which is rather a misleading name, with a smack of levelling down as well as levelling up; and with the agreement, I think, of the local authority associations we propose to call it henceforward rate deficiency grant. The Exchequer comes in to make good any shortfall in local rateable resources below the national average. Hon. Members may be impatient with some of this jargon. So am I, but I believe it is unavoidable on this subject.
There is more to this change than a mere change of name [HON. MEMBERS: "Hear, hear."] I thought that these particular changes were welcomed.
The complete list of them is set out in Annex D to the White Paper. I shall refer to only one of them now, one of which I thought everybody, or almost everybody, approved. Hitherto, these grants have been paid only to county councils and county borough councils. The grant to county councils has been paid not only on the county expenditure, but also on the expenditure of county districts. The county districts receive what are known as capitation payments, but these are based on unweighted population and take no account of differences in rateable resources. One of the chief defects of the existing arrangements is that they take no account of the variations in rate resources within a county, which can often be very significant. That is why we propose to revise the system so that county districts may qualify directly for rate deficiency grants on their own rate resources and their own expenditure. They will, of course, no longer receive capitation payments.
I come now to what some people tell me, strangely enough, is the least popular of the Government's proposals—the proposal to effect some reduction in the total of Exchequer grants to local authorities. I say "strangely enough" because one might imagine that any attempt to relieve the taxpayer would be universally popular. In this topsy-turvy world, apparently, that is not so.
I explained that the rerating of industry will produce about an extra£30 million of rate revenue a year, on present figures. About half of this sum will be lost to the Exchequer by reduced tax yields from industry; and I would not suppose than even hon. Members opposite would dispute that the Government should reduce the amount being distributed through grants by at least that amount—that is, by£15 million of reduced tax yield. In view of the immense burdens on the taxpayer—which have increased five or six-fold since 1939—there is a strong case for reducing the Exchequer grants by the full£30 million.
That, of course, would leave the position of ratepayers, other than industry, undisturbed, and also would leave the total revenue of local authorities unaltered. But it is recognised that there are difficulties inherent in the transition from specific grants to a general grant, and the Government have concluded that it would be right on this occasion to ensure that, as a result of all these changes, local authorities should gain£10 million a year overall. That is twice what the Exchequer—in other words, the taxpayer—will gain on balance.
The effect on individual local authorities of all these changes will be that most will gain. But some will lose. For this reason the scheme embodies special transitional arrangements. Those rating authorities who are found to lose as a result of the changes proposed will have their losses entirely made good in the first year, 1959–60, and the fund required for this purpose will be provided in appropriate proportions by the authorities that gain. In the second year, 1960–61, the losses will be made good in the same way, but as to 90 per cent. instead of 100 per cent. In the next year, 1961–62, we shall be seeing the effects of the next revaluation. No one can forecast how large those effects may be. There may then have to be special consideration of further arrangements to be made for tempering losses on grant; but the intention is that contributions towards these losses should be tapered off over a period.
In talking of gains and losses, I have not taken account of the substantial benefit which local authorities are to receive from the general grant becoming eventually payable in full within the year to which it relates; this is the point referred to in paragraph 21 of the White Paper. It does not, of course, mean extra money for local authorities; it simply means that they will not be kept waiting for their money, but they will find more in the till each year while the payments are being brought up to date. It does entail an extra charge on the Budget—estimated to be of an order of£40 million—and I have agreed with the Chancellor, therefore, that the change will be brought into effect gradually.
Finally, because I know how much importance the local authorities attach to it, I invite the attention of the House to paragraph 5 of the White Paper, where reference is made to a review of controls. The Government have readily acceded to the request of local authorities to have this review carried out. We believe that control over local government services by Whitehall should only be at key points, and that the changes we are proposing in the grant structure will provide opportunity for a genuine reduction of other controls. We propose to take this opportunity to carry out a review of all controls, whether associated with the grant system or not; and discussions with the representatives of local authorities for this purpose are to begin very shortly. I give the House an undertaking that this review will be thorough, and that we shall be prepared to abolish or relax any controls over the freedom of local authorities to act as they think best, which cannot be shown to serve a useful purpose.
I have spoken separately about the three aspects of local government reorganisation—areas and status, functions and finance—but they are all bound up with each other, and the proposals that the Government are making under any one head are linked with the other proposals, too. I come back to our three main aims: stronger local authorities; discharge of local government functions at the point at which it can most efficiently and conveniently be done; and an adjustment to the system for bearing the costs of local government, which will give local councils not only a more equitable share in financial assistance but also a greater degree of responsibility and—over and above the maintenance of national minimum standards—practical freedom of choice, in planning and paying for the services they want.
I ask the House to examine these proposals all together, nationally and not parochially. From my own experience I believe that if Parliament fails to seize this opportunity to recast our local government system so that it may flourish afresh, the chance may not come a second time.
If the three are bound together, will the Minister explain why the proposals in respect of local government finance and the date of their operation must be taken separately? If it is 'the Minister's case that all three are bound together, I should have thought that the operation of the financial proposals would coincide with the reorganisation.
May I begin by saying that, like the right hon. Gentleman the Minister of Housing and Local Government, I do not propose to deal with the Scottish White Paper. On the cover it bears a Latin translation of the well-known words, "Wha' daur meddle wi' me." I propose to take the hint.
As to the other three White Papers, it seems to me that they are not the kind of summer salad which I had hoped for at the end of July, but three remarkably stodgy plum puddings, rather ill-digested, a bit out of season and full of fruit of doubtful origin and uncertain effect. Moreover, when I look for the threepenny pieces which we always hope to find in a plum pudding, I find only one, whereas the cook took from me, or rather from the local authorities, some little time ago, three threepenny pieces in connection with shops and offices. He has put two in his pocket and one back in the plum pudding. I do not think that that is quite good enough.
The cook has not appeared much in these proceedings. He is the Chancellor of the Exchequer. The Minister of Housing and Local Government is bringing in the plum puddings in his capacity of head waiter for the moment and he has covered them with liquor in the usual way and set light to them. He told us, "This is the heady liquor of liberty". Believe me, it is not. It is that old concoction, taken out of a bottle, called "Tory Freedom", and those who think that it is the real stuff—and quite a lot have thought that—will suffer from drinking it.
Let me turn to these three White Papers. Giving a more sober presentation of them, I repeat that they seem to me to be a confused and somewhat dishonest statement of policy. I say dishonest because I believe that the main motive of the Government here has been to introduce a general grant for the purpose of limiting Exchequer expenditure, knowing perfectly well that the main effect of the introduction of that general grant is bound to be a reduction in education expenditure and the cramping of education initiative. After all, this general grant covers only a limited number of services and, to take the figures which the Government have given us, out of a total of£298 million no less than£260 million is in respect of education services.
I cannot resist the conclusion that a Tory Government, unwilling to do too much openly by way of curtailing education expenditure, have found this is a not inconvenient method of approaching the same object. I shall say more about that, but I do not think that I have exaggerated what the effect of this appears to be, not only to hon. Members on this side of the House but to all those concerned with the present and the future of education all over the country. The Minister out up many criticisms which he phrased himself and then, in his own phrases, proceeded to knock them down. He made little mention of the quarter from which far the most severe and far the most widespread criticism has come.
Let us see what has happened. First, we had a very considerable measure of agreement, promoted, I agree, by the right hon. Gentleman's predecessor, between the local authority associations on areas and status, subject at that stage to some reservations about functions and, in one instance, to a specific mention of finance. Since the right hon. Gentleman has taken charge of these matters there have been some notable rifts in the lute, and there is certainly not much agreement now.
It started. I think, with the substitution of what is called compulsory delegation for conferment. That upset the municipal corporations. To some extent it upset the urban districts, too. Then "functions" appeared, and on that the municipal corporations expressed profound dissatisfaction, partly for the reason which I have given and partly for another reason. I will not go through it all in detail, but the agreement on these matters has disappeared except on a few points. If the Government intended to divide and rule they have certainly had some measure of success in doing so.
What is the result? Are we to get their agreement on finance? The position seems to me to be that all the local authorities—as far as I can see—object to the rerating proposals as unfair and insufficient. They all make the proposition of a general grant dependent or satisfactory decontrol, if I may use a word which in another sense must have unfortunate connotations with the right hon. Gentleman. They do not know what decontrol they will get. They have agreed the proposals, and that is how the matter stands.
I will not go through every point. I expect to be shot at by my hon. Friends this evening for talking too much rubbish and I shall certainly be shot at if I do it for too long. If I do not cover every point, therefore, right hon. and hon. Members opposite will be thankful that, at any rate, I have not spoken for as long as I should have done had I tried to deal with every point. Speaking most seriously. I know that many hon. Members wish to speak in this debate. If I may misquote John Bright and refer to the voice of the parish pump, "I can hear it all over the land and its wings can be detected in every council chamber in the country." I am sure that we shall get quite a bit of that from all of us before we have finished, but I will try to keep away from it as much as I can.
Turning to the question of areas and status, I understand that there is to be one commission for England, one for Wales, and no more. Perhaps the right hon. Gentleman will later be able to tell us—or get someone else to tell us—whether the commissions will be so constituted that they can function in sub-commissions, because it seems to me that they have a great deal to do. At any rate, the commissions' main duties are to deal with the question of conurbations and to deal with the creation—I do not think that I am mistaken in calling it the creation—-and extension of county boroughs.
There is to be a presumed right to county borough status of any district with a population of 100,000 or more. The right hon. Gentleman is well aware, and, indeed, he has put it into the White Paper, that the creation of county boroughs on that scale by itself, coupled with the suggestion that some conurbations could be dealt with by setting up a number of county boroughs inside them, will put many of the county councils most seriously at risk.
I make this comment on that at this stage. I think that that must be looked at in the light of two functions of the county councils which they ought to have and which are vitally important. One is general town and country planning for their areas and the other is the educational programme. I do not say that this ought never to be done. I say, however, that it is a very difficult business indeed to do without upsetting those two very vital functions of the county councils.
As to the conurbations, I regret the way in which this has been left. I listened to what the right hon. Gentleman had to say. Leaving out London and Middlesex, upon which I shall have a word to say in a moment, he starts with the Registrar-General's five conurbations which, I would remind the House, contain 20 per cent. of the population. They are no small matter.
The Commission—there is really only one commission concerned with this—is to have power to add to these five and then, as regards the five, presumably, and any others suggested by the Commission, the right hon. Gentleman is to prescribe the area; but he is to do so only for the purpose of drawing the attention of the Commission to the area so that it can find the appropriate area of the administrative conurbation within it. Having done that, it is free to propose whatever pattern suits it best. I merely point this out. This leaves matters completely uncertain in respect of the boundaries and, indeed, the number of the conurbations until the Commission has finished its job. It may at any time have power to add or suggest additions, which the right hon. Gentleman may accept, to the five conurbations.
The area within each of these five or any other conurbations which have to be dealt with as such will depend on the Commission's findings, and we still do not know what power the Commission will have to reject one of the five conurbations altogether. Perhaps the most obvious case is Tyneside where, without coming to any conclusion in the matter, I would point out to the right hon. Gentleman that there is some doubt whether it ought to be a conurbation or not. The County of Northumberland, for instance, might have very strong views on the matter, because it will make a very large difference to its area and population.
I now turn to one other point of the proposals for conurbations. This will lead me to London. There is a suggestion in paragraph 42 of the White Paper about co-ordinating services. That is a vague phrase, but I think that I know what is intended. Again, on the question of planning and, even more, on the question of housing and industrial development, it seems to me that these services inevitably go beyond the conurbation itself. That is why there is overspill, and why we had the new towns.
Incidentally, I think that we ought to have some more new towns. I would suggest that if this matter were properly tackled we ought to have for services of this kind—and off hand it is only those two that occur to me specifically—some real sort of regional basis rather than a limited one to cover a conurbation or to cover counties. It seems to me that dealing with the unhousable population—unhousable for reasons of space—in some of our big towns is becoming an absolutely insuperable problem unless we are prepared to go a good deal further with it than we have been so far.
We ought not to have any limitations of services within, say, the south-east Lancashire conurbation, which will prevent Manchester going a good hit further afield than any likely limits of that actual conurbation. The right hon. Gentleman will notice that I have not accepted his form of rechristening for a moment. I am accustomed to the term "conurbation" and "special review areas" seems to be rather like the subject of military reorganisation. I think that for the moment I will keep to conurbation. I say to the right hon. Gentleman that he ought to be more definite with the House about what he proposes to do, first, on the question of conurbations and the Commission's geographical powers in relation to them, and secondly, on what he really has in mind about large area services of the type that I have mentioned.
There is one other thing. I do not like leaving these very wide questions entirely to the local government commission. I think that that is going rather too far. I merely say that at this stage. I quite agree that there ought, of course, to be local inquiries, local consultations, and so on, but if a decision is going to be reached on these matters, which. I repeat, affect one-fifth of the population of the country, I hope that we shall be allowed to express our views on it in this House before it has reached too concrete a form and before it has become something which binds the Government too definitely.
I want to say one or two words about London and Middlesex. I shall say very little, because a Royal Commission is to be appointed. Everyone recognises the particular complexity of the problem. It is an extraordinarily difficult business. I am quite certain that the Royal Commission is bound to take some little time in doing its job. That, of course, will mean that the Greater London problem will be put on the plate of the next Labour Government, like quite a number of other things, and I am sure that we shall take better care of it than the present Government would. At heart, we would not hesitate to exclude any such interesting examples of high rateable value as the City of London from the conurbation.
I was very much impressed, as I always am on matters of this sort, by what my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison)said about that. It seems to me absolutely vital that the Royal Commission, in considering London, should not be restricted geographically. What it has to consider are the problems of Greater London, and it will not find a solution for many of them inside Greater London. It will have to consider the position in relation to the neighbouring counties.
I turn to another matter, still on the areas and status part of the proposals. This is what I call the elimination of small county districts—because, as I see it, that is what the right hon. Gentleman has in mind—partly by the exercise of the existing powers of county councils, and partly by their extension to non-county boroughs—subject, I agree, to some safeguards that are stated in the White Paper.
I agree with the local authority associations in finding the suggestion of a minimum population suspect. We are told that there are nine factors. That is well and good, but why pick on one of them to make a suggestion about it which tends to give it a leading place? There it is, but I do not particularly like it and, whatever is done about it, I hope that the other factors will be carefully considered both in any instructions, circulars, or the like, and when it comes to practice.
There is something else. I mentioned just now that many county councils will really be at risk because of the formation of new county boroughs and, possibly, because of the treatment of conurbations. That being the position, those county councils will have to decide which small county districts ought to disappear and which ought to survive. I do not altogether like the idea that the county councils, which now, because of these other proposals, have a rather special interest in the matter, should be the sole arbiters.
It might have some very odd results on their own powers. It might raise the question of the county councils' survival if they decided it in one way or another. Though I hasten at once to pay my tribute to those who serve on county councils, as on other local authorities, it is a little difficult to be impartial when the future of one's own council may be involved.
That leads me to another question closely connected with it, and that is functions. The original suggestion was that there should be a distinct conferment—I use the word that is used—of certain functions on county districts. That is the form the suggestion took, at any rate, in the text of the first of these White Papers, but the county councils, as I understand, said, "We cannot have that. We must have compulsory delegation."
What is the difference? The difference, as I see it—reading the White Paper—is that that gives the county councils control of what is called broad policy. I wonder how broad policy has to be before it becomes broad policy? What does the phrase mean? It seems to me to be a rather vague one—and vague in circumstances where it would be very advisable to be more precise. The second matter over which the county councils desired to retain control was, in appropriate places, finance.
One has to remember that delegation has had a rather unfortunate history. It has too often been the case that county councils called upon to delegate, delegated the minimum. I agree with the right hon. Gentleman on one point, that, subject to efficiency, the nearer one can get to the individual citizen by the form of local authority, the better. Therefore, I start with a prejudice, if I may say so, in favour of the smaller, more accessible and, in that sense, more human local authorities.
I really wonder whether compulsory delegation means the reservation of some effective powers by the county councils which they ought really to transfer, or whether, in fact, it is simply a rather confused, compromise phrase for something that will, in the long run, amount to conferment. The right hon. Gentleman will see that, so far, though I may be critical, I am not very combative. We will come to that part later.
Next, we are asked to draw a rather sharp line for a population of 60,000 plus. This is for the purpose of compulsory delegation—or of what is called somewhere else, automatic right to delegation—from county councils to county districts. There are 1,356 county districts, and I understand that only 55 of them will benefit from that compulsory delegation; and there are five rural districts that are in a sort of intermediate position.
Therefore, although it is an important matter, the great majority of the county districts, and the great majority of the people living in the county districts will be concerned with the other, discretionary delegation that is also mentioned. I wonder whether this distinction in this form is really worth making? As I have said, it does not affect the majority of even the district councils or their inhabitants. Its effect seems to be—, and here I differ from the right hon. Gentleman—on the medium-sized county districts of between, say, about 30,000 and 60,000 population. They have to suffer for it and, on balance, have lost rather than gained by the proposals in the White Paper about functions.
I cannot help feeling that this creation of most-purpose authorities or, if it is preferred, second-grade county boroughs, or, if it is preferred, super-county districts—let hon. Members take their choice—has really been a rather half-hearted and confused idea for which the great run of county districts will have to suffer. I would ask the House to remember this, and I agree that I say it with a little constituency feeling but, I hope, not too much—I want to keep the parish pump as quiet as possible when I am talking.
I think that these units of between about 30,000 and 60,000 inhabitants really are, as a rule, rather efficient, and that, socially, they are desirable. I should be sorry if, as a result of these proposals, they should find themselves delegated one grade down in the pecking order of local authorities, and rather pruned of their previous functions or, at any rate, not receiving as much as they really might and could carry out. There are points in that connection about highways but, by and large, they are being left over, so I say no more about them at the moment.
Now we come to a very remarkable matter. There is a sport now of butchering the Lord Privy Seal's babies. It goes on continually. The "pots and pans" tax was half-killed the other day, and there is a baby buried as a result of this White Paper. Divisional executives for educational purposes disappear in one sentence—without reason given, without argument adduced. I think that that is a bit unkind. There are about 150 of these babies, and if we take the population in the administrative counties, which amounts to about 27½ million, nearly 13 million live in divisional executive areas and only about 4 million, I may add, in excepted districts.
Allowing for the delegation arrangements for the areas with populations of over 60,000, the net result will be that about 11/ million people who lived in what I might call divisional executive areas before, will see those divisional executives disappear overnight. I attach no exaggerated importance to them. I know that opinions about them differ and I know, too, that the divisional executives themselves differ. They often—in fact, usually—cover something rather more than a single local authority area. In fact, out of the 150 I mentioned, 100 actually cover a population of more than 60,000.
If we are to have the same sort of standard as we applied to the local authority unit, there seems to be a case for something being left out of that 100. If we take the view, as I do, that the 60,000 figure, if we are to take it at all, is too high and reduce it, say, to 50,000, we cover an even larger number of divisional executives on the same standard. I express no strong view about it. Indeed, I think it is a matter which affects the north of England rather more than the south, but I do know many cases where I am told that these divisional executives have done very well, and I had a most pathetic letter this morning from the Kettering Divisional Executive in which it considered its own impending extinction and was, on the whole, against it—not a surprising conclusion.
It will not have escaped the attention of the House that the Amendment that I shall move shortly relates entirely to the financial proposals in these White Papers. That is not because we have not got some objections to the other proposals, but because our objections to the financial ones are very much more marked. I do not believe that the Government or hon. Members opposite fully appreciate the financial difficulties of local authorities at present. They are faced, in the first place, with steadily mounting costs—the Government's inflationary policy, or their failure to combat inflation, whichever one likes to call it; they are steadily mounting costs which the Government cannot control.
If we take the principal service affected by this general grant proposal, more than half of the educational expenditure of local authorities is on teachers' salaries. They cannot control that. Again, if we look in the national income and expenditure figures for 1955, and look at Table 40 which gives the local authority expenditure on these various services, we find in "Goods and Services," matters that by and large are not in the local authorities' control, a steep increase so that now after eight years—the latest figure here is for 1954—they were 13 times what they were at the beginning of the eight years. Meanwhile, education, by far the largest of them, had actually become 21 times what it was at the beginning of those eight years.
If we look now at the Ministry of Education's comments on the Estimates, to be found in Cmd. 99, there is a table of what they expect to happen in the period that follows that period in this national income and expenditure book, and they compare the year 1954–55 with the estimated expenditure for 1957–58. There will be an increased expenditure on primary schools of£50 million in three years. That is an increase of about 30 per cent. Secondary schools will be up£42 million, an even greater percentage increase. The whole expenditure will actually rise from£377 million by£183 million to£560 million. That is very sharp indeed. Of course, this puts a heavy burden on the local authorities, in addition to what it puts on the Exchequer.
Let me take some other items. The removal of housing subsidies has made difficulties for local authorities who wished to carry out their full housing obligations much more serious. In the eight years that I mentioned, the increase on the rate burden on housing has been from£9 million to£23 million. They are smaller figures, but they are still significant.
There is another item which appears on the expenditure account of local authorities, but it derives from their capital expenditure and that is what they have to pay by way of interest and repayment charges on their capital borrowings. That is going up steeply now. Most of them have still got some old cheap borrowing left, but the amount is getting less and less as every year goes by and the rate of interest appears to be going up, higher and higher. In the result, in the table that I mentioned, we get a rise from£63 million to£127 million for that item alone, some of it no doubt due to additional expenditure but quite a lot of it due to far higher rates of interest. Those are very real financial difficulties, and it is not surprising in those circumstances that the increase in the rateable value on the last revaluation is gradually, if I may use the phrase, being absorbed by higher poundages. They are working slowly back to the old poundages, because they have to. It is no wonder that increased grants have been required.
What is the Government's contribution in this White Paper to all these difficulties? This is the threepenny bit that I mentioned. Either this year or last year—I forget which for the moment—the 20 per cent. concession by way of offices and shops meant a loss of about£27 million of rateable value to the local authorities. They asked for a Government contribution. They pointed out that the Treasury would get some good out of this. Nothing was done. There was no contribution and no concession.
Now we have come round to the other side, and instead of being called to suffer a loss they are to be offered a concession by the partial rerating of industry. It amounts to something not very far off the previous one. What is the result? This time the Treasury pinches two-thirds of it, and if the arguments which we have heard from the right hon. Gentleman had been applied when there was a question of the 20 per cent. loss on offices and shops, then in that case the Treasury would have made a contribution of about two-thirds. Heads I win, tails you lose—a very old-fashioned phrase, and it applies exactly to what has happened in this case.
There is another matter. Do hon. Members opposite really expect us on this side of the House to say "Thank you" in a loud voice when the Government accept the principle of the re-rating of industry and freight transport hereditaments, and then say that, unfortunately, such is the economic condition of the country—I think that is what it amounted to—they can only give us one-third of what they ought to? I simply do not accept the proposition that industry cannot stand this. If we work out these charges and apply them to industry—they do not amount to a row of beans in most cases, and there is no doubt whatever—I will not repeat what has been said time and time again from this side of the House—that the reason why the Government will not face up to rerating industry is that they have too many friends in industry to do it and it is the local authorities who are being made to suffer for this incredible partiality; and, as regards the Treasury's two-thirds of the proceeds, this quite incredible stinginess comes at a time when they are desparately facing such serious difficulties. We will argue the whole hog when we come to legislation, for legislation will be required. I apologise for taking so long, even though I have not yet reached the right hon. Gentleman's time limit.
I will turn from that matter to the object of this financial exercise. I looked at the White Paper very carefully, and in paragraph 3 I find this:
The present system of percentage grants acts as an indiscriminating incentive to further expenditure"—
Does anybody say "Hear, hear"? Not a soul.
and also carries with it an aggravating amount of central checking.
Two points are made there. So it is proposed by the substitution of the general grants "to increase the independence of local authorities in the raising and the spending of their money". That is the Government's offer.
Let us start with the percentage grants. This is exactly the point that the Geddes Committee made in 1921. It regarded the percentage grant system as a money spending device, and it said so, but it found no evidence of extravagance. That was extraordinary, but it was the case. Nor did the Ray Committee in 1932, because what it said was:
It is not suggested that local authorities enter upon reckless expenditure merely because a large percentage will be borne by the Exchequer.
We find that in paragraph 11 of the Committee's Report, Cmd. 4200.
Nor did the Edwards Committee quite recently, in 1953. What that Committee was considering was the Exchequer grants; that is, a high percentage grant, and this is what was suggested to it, almost the same words as I have just quoted from the White Paper:
It has been suggested that the payment of Exchequer grants on a higher percentage and without central control over the expenditure on which the grant is calculated offers a powerful incentive to extravagance.
The Government's phrase is:
an indiscriminating incentive to further expenditure
and that it gives insufficient safeguards. Later, the Committee said:
We have received no direct evidence to support the suggestion that equalisation grants have so far led to extravazance.
It then went into the most elaborate inquiries and summarised, among other things, the report of a working party which it had set up for the purpose, and said:
The evidence presented to the Committee gives no support to the suggestion that Exchequer grants have resulted in extravagance.
I hope that we shall hear a little bit less about the suggestion that local authorities, in doing their job, are doing it extravagantly.
Let us take the next point. What about the "aggravating detail"? Why connect it at all with the form of the control and the form of the grant? All of us know that we can have the most aggravating detail, necessary or not, without any financial control at all, and, equally, we can relax it without touching on financial questions. There is one perfectly obvious example. The Ministry of Transport makes the most detailed regulations about driving on the roads, covering all kinds of things, such as the size, the shape and almost the colour of the vehicles on the roads, the kind of notices to be put up, every single thing—detailed control, perhaps necessary, but very detailed. If we want to relax controls, we can do it quite easily, and, as I see it, it has nothing whatever to do with the form of the grant.
Let us take another case, that of the Ministry of Education, which, after all, is the one we are talking about here. Let us look at the capital expenditure control. That is not to be covered by this. I have had a look at it, and I find that it is prescribed that there should be a numbered peg in the racks for each pupil's hat and coat, and that between the stands carrying these pegs in the cloakroom there should be not less than five feet. The regulations also prescribe the temperatures of various rooms, the lighting, the candle power, and all the rest of it. All this is entirely unconnected with the grants that we are talking about today—the revenue expenditure on education. These are capital projects, and they will not come into this picture.
At the end of the day, what does the district auditor have to say? Surely he can be relied upon to say, first, that there is no illicit expenditure, and, secondly, that there is no extravagant expenditure. I have not the least doubt that if we wanted a very loose control we could have it, whatever the form of the grant. If we wanted a particularly tight control, equally we could have it, whatever the form of the grant.
I would refer now to what the right hon. Gentleman mentioned, no doubt with some apprehension, and that is the Report, which is mentioned in the White Paper, of a Committee set up by the Institute of Municipal Treasurers and Accountants. It consisted of Dr. Lees, who has been writing to the newspapers about this lately, the borough treasurers of three towns, a county treasurer and a deputy city treasurer. Surely, on this question of aggravating control, their views are at least worth having, and this is what they say in page 166.
They ask whether there is substantial scope for reducing the number of inquiries made at the grant claim stage in respect of percentage grants, for it is here and only here that complaints about detailed central control, said to be associated with the percentage grants, are relevant:
We find that there is not. The evidence is that complaints of excessive detailed control cannot be substantiated. We approached a group of six county boroughs, varying in their populations from 80,000 to 800,000, and asked them to enumerate the number of inquiries at the grants claim stage, and we find that the evidence was that 47 inquiries were made and that five of them were considered reasonable by the boroughs concerned.
Apparently, the object of this extensive change in the grants is to eliminate a number of inquiries—in these cases, amounting to five in all. It is quite ridiculous. The Committee referred to other inquiries, and then added a sentence which I adopt completely:
It is to be hoped that future assertions of this kind will be supported by evidence. In the past, this has not been thought necessary.
Nor, apparently, did the right hon. Gentleman think it necessary. He just said so, and that was that.
Now, what about the independence of the local authorities? It is a very strange argument, as I understand it. These percentage grants allowed the local authorities to have too much control of expenditure. That we have heard time and time again. Therefore, the argument is that we must remove the percentage grants, and by so doing we shall increase the independence of local authorities. This is the most extraordinary proposition.
I come back now to say a word or two about the old block grants. In 1928, when the Local Government Act of the following year was being introduced in this House, the late Mr. Neville Chamberlain, then Minister of Health, put exactly the same position before the local authorities.
We can then simply hand over the grant to each local authority, and as long as they maintain a reasonable minimum "—
note the word "minimum"—
standard of service we can withdraw all those irritating examinations of small details and give them the opportunity of that independence and initiative which I think they value above all things."—[OFFICIAL REPORT, 26th November, 1928; Vol. 223, c. 105.]
Then he said that it would be exceedingly popular among local authorities on that account. It really does not happen, and bears remarkably little relation to the true position.
Later in the same debate—I will not take up time quoting it again—Mr. Arthur Greenwood, replying for this side of the House, said something which is profoundly true. He reminded the House that a block grant has only one object, and that is to save money for the Exchequer. If it does not save money for the Exchequer, it fails in its object. That is exactly the position in this case.
What is to happen? The local authorities are told to accept it because it will mean more decontrol. They are not told what the decontrol will be. They are not even told that there is to be any decontrol; they are simply told that there will be a review. When it is to come into effect is even more uncertain. Then they are told that this is an important step towards it. Really, all that has nothing whatever to do with the true position.
On the issue of independence I accept two more sentences out of this Report by Dr. Lees and his colleagues. First:
A percentage grant enables and encourages the more progressive authorities to improve standards of service "—
I adopt that—
without undue impositions on local rates.
It provides scope for different methods of tackling problems.
Again, I agree. Those, and other advantages, are perfectly obvious.
What is to happen if this block grant goes through? The battle will be transferred from a battle between the right hon. Gentleman and the Treasury, or a battle between his Ministry and the local authorities, to a battle conducted on the floor of the council chamber itself, where the chairman of the finance committee—chairmen of finance committees usually welcome this sort of thing—will find a great accession of power. Those who are interested in education, in the fire service, in the health service, or in child care, will have to battle for what they can get out of the general grant. I believe that to be fundamentally wrong.
It is not democracy. I will give the hon. Gentleman an example, and then let him tell us if this sort of thing is democracy.
Recently, we had a debate on mental health. It was proposed that mental health should be transferred to the local authorities for a good many purposes. It was fully realised that such a change would involve considerable expenditure by local authorities, and the Lord Privy Seal, without committing himself, quite definitely expressed the view that, in general, that would be right. Mental health is, apparently, one of the subjects which will be covered by this general grant. At any rate, I have seen nothing to the contrary. Child care certainly will be. Indeed, those are the two next subjects down the list of importance in these various specific grants.
What a strange place the Home Office is. It hands over to the mercies of the Exchequer, by this general grant, mental health and child care, both of which are its responsibilities. What is reserved? What stays out of the general grant? The police. Why? Is it that the functioning of the police is so vital and obviously important that the Home Office must not run the risk of having police expenditure cut down and finding the police force at the mercy of the chairman of the finance committee of some local authority, and subject to the aberrations of Tory democracy, of which we have just heard expression? Is that the reason why the police forces are left out? Or what is the reason? Is child care or health including mental health any less important?
Above all, what is to happen to education? What will be the position of progressive authorities, which, as everyone knows, have done so much better in some areas than other less progressive authorities have done? Are they to be prevented from going beyond the absolute minimum of whatever it is that the Ministry chooses to prescribe as the least that any decent local authority might do? Let us remember that, in this competition, between one service and another on the floor of the council chamber, there will be one competitor in many councils, perhaps the most powerful of all, namely, the man who wants to take the general grant and, come what may, reduce the rates even if the children suffer for it. That will be a possibility under this arrangement.
I can but say that, on several scores, it seems that these financial proposals are absolutely indefensible. They conceal one real object, to limit expenditure on some necessary services, particularly education, and to put the blame for it on to the local authorities, doing it in such a way that most of the trouble will come after the next General Election, the result of which—I was going to say the certain result, but the gods might be angry at that—the probable result of which every hon. Member knows perfectly well. [HON. MEMBERS "Hear, hear."] Hon. Gentlemen opposite can have that one; they have precious little to console themselves with.
Let us for a moment consider the timing. Those who lose for the moment will be indemnified fully at first, and then it is to wear off gradually; it will begin to stop in about three years' time. Then there is the famous£40 million, the money which, in the eyes of the local authorities, already belongs to them and which, since their accounts are kept in a form different from the national accounts actually appears in their accounts. That will be handed over to them in bits and pieces, just as a softener for a bit. Then the full weight of what is proposed will fall. It will fall on the social services. The local authorities, or the Labour Government, will have to carry the blame for all that of which the House is asked to take note today.
In these circumstances, having regard to the financial difficulties of local authorities—I have mentioned them—to the fact that this White Paper does nothing at all substantial to help them, to the fact that the rerating proposals are absolutely unsatisfactory and quite insufficient, and to the further fact that the effect of this general grant is bound to be a restriction on expenditure on necessary social services, especially health and education, we certainly cannot accept it.
We remember that Troy was taken with a wooden horse. This is the wooden horse, and here is the right hon. Gentleman sitting on it, waving a few Rent Act forms as the banner of Tory freedom. It will be pushed into the citadel of local government. When the door is open, what will come out?—the Treasury servants intent on economy at all costs, and the Tory Party which does not believe in social services, which wants to cut them but not to take the blame and obloquy of doing so in public.
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
cannot accept the statement of policy contained in the White Papers. Command Papers No. 9831. No. 161, and No. 209. relating to Local Government in England and Wales and the White Paper, Command Paper No. 208, relating to Local Government in Scotland, which fails to meet the increasing financial difficulties of local authorities, does not fully rerate industry or give local authorities the full benefit of partial rerating and which, by the substitution of a general grant for existing grants, hampers the development of essential social services, particularly those of education and health".
I would ask for the indulgence of the House as this is the first occasion that I have had the privilege of addressing it. Not long ago when I was at school I learnt a song which went as follows:
Draw it shorter and prose it less.
Speeches are things we chiefly bless
When once we've got them over.
I feel that that perhaps applies to maiden speeches.
I gather that it is traditional that I must not be controversial, and I will endeavour to follow that tradition, but I cannot resist the temptation to answer the hon. and learned Member for Kettering (Mr. Mitchison), who likened my right hon. Friend to a gentleman operating a wooden horse. He suggested that the Minister would be sitting on the wooden horse. That would be a very fair and open thing to do. If my right hon. Friend were really doing what the hon. and learned Gentleman suggested, he would be concealed inside his wooden horse.
The subject of the debate is very close to what I was greatly concerned with before I reached the House, and that is local government in the great City of Bristol, which I am very proud to be able to represent. I suppose that in the terminology of the Minister I am a "borough man".
I wish to make my very brief remarks on the broad lines of local government finance and its implications.
We have in Bristol a new council house, the finest in the Kingdom, which cost Ell million and took 20 years in the building. It should be the centre of interest in the city, but I am afraid it is not, and it is even held in ridicule by some people. I believe the reason for that is that we have seen through the years a gradual usurpation of functions from our local authority by officialdom in Whitehall. Such is the state of affairs in Bristol that the city council has this very day issued a newspaper of its own which attempts to create more interest in municipal affairs, because the city council is disturbed that only 38 per cent. of the electors voted at the last election. If a city council thinks it necessary to do that, how very necessary indeed it is that reform in local government should create more interest in local affairs.
I believe that finance is the key to the whole problem. The present system of percentage grants tends to make for irresponsibility in local finance. I should not think there is a single hon. Member who has served in a local authority who has not heard at some time a member of a committee or council say, "What does it matter how much we spend? Three quarters of it"—or whatever the case may be—" is paid by the Government." If we are honest with ourselves we must admit that that has happened, and it is happening now. That must stop; and I feel that the proposed system of a general grant, fixed but not immovably fixed, will solve the problem.
There has been a mass of objections to the proposals in the three White Papers. That is not very surprising in view of the tremendously complicated subject involved. Reform is, we all agree, long overdue. While on the subject of reform, I should like to say, as I represent a great industrial city, that I am sure industrialists will welcome the sensible and moderate reforms in industrial rating which are here proposed and that they would not welcome those proposals which have been suggested by hon. Members opposite.
There has been a somewhat heavy attack on the White Paper by educationists, and I should like to say something in the light of my experience as a school master, as a member of a local educational authority, and at present as the governor of several schools. It has been suggested that block grants are designed primarily as an economy measure. It has been said that that is a bad thing—that is one of the great objections—and that education will suffer. I do not believe that will be so.
Successive Ministers of Education have said that there are to be no cuts in education, and I believe them—I am sure the whole House believes them—but that does not preclude reorganisation of our existing resources, and I feel certain that there is room for economy in some of the activities now going on in education. Capital expenditure could in some cases be reduced. Indeed, the slight contraction in building costs has already in my division resulted in a saving of as much as 10 per cent. in large contracts—£20,000 in£200,000 in one example. We could save more if we cut out all unnecessary frills. If we saved on capital expenditure we should save on loan charges, and annual expenditure would be reduced also, and better planning could easily reduce the amount of maintenance required in our school buildings. We all know that the thing that really matters in education is the quality of our teachers. I feel that State education could learn something there from independent schools, which concentrate on the essentials.
I hope that my enthusiasm for this subject has not caused me to trespass too far on the path of controversy and to be deserted by the good will of the House. I feel very deeply on this subject because I have just had intimate experience of local government. It is the most satisfying work imaginable to see one's plans actually taking shape in front of one as one watches, whereas Members of Parliament very often have to wait a long time to see their legislation bear fruit.
With local government now in danger of losing its identity, I believe that the proposals in the White Paper will do much to give it renewed strength and the independence which it needs to meet the challenge of today.
It is always a pleasure to be able to congratulate an hon. Member upon his maiden speech. It is an even greater pleasure in such circumstances as this when the hon. Member for Bristol, West (Mr. Robert Cooke)may also he competing as the youngest or one of the youngest Members of the House as well as one of our more recent additions to the House.
We can certainly compliment him upon the obvious sincerity of his speech and upon his very able delivery and ease of manner, which I am sure most of us will envy very greatly. Thinking back even a modest number of years to my own maiden speech, I am sure that it was not delivered with anything like the fluency or facility of the hon. Member's speech. Therefore, it is no mere use of words to say that we shall be very glad to hear him later on in our debates when any bar about controversy can be fully withdrawn. However, the hon. Gentleman did not interpret it too religiously so as to make his speech utterly dull and uninteresting, nor would we have wished him to do so.
We have started a very important debate on local government and its reorganisation and I suppose that it is natural to concentrate on the financial proposals which are put forward in one of the White Papers; but, of course, it is wrong to examine the proposals one by one. We must take the financial proposals together with those for changes in the area, status and purpose of local government.
I am sorry that the opportunity for local government reorganisation seems to have been taken in such a tepid manner, because these proposals for alterations in areas and functions cannot be regarded as anything more than a holding operation. Far from the Minister justifying his claims that this is a major change in the areas and functions of local authorities, the changes are nothing more than running repairs, no doubt very necessary, but still requiring major changes to be made later.
If the House is to do justice to the problem of local government, we shall have to return to the issue with more major proposals before long. I do not say that as a challenge or as an attack upon the right hon. Gentleman, because it is clear that this is an issue which has been dodged by nearly everyone for a long time. It is merely that now we have these proposals we are disturbed that they should go such a short way. I doubt whether the Minister will get an easier passage for them merely because of their relatively modest effect upon the existing structure. He might well have anticipated better support for the proposals had he been able to offer some major principle upon which we could grip.
When listening to the right hon. Gentleman, I found it very hard to believe that we were discussing one of the most vital aspects of life in this country. I found it hard to believe that we were discussing the future of the education and health of all of our children—and of ourselves, for that matter. I found it hard to believe that the debate was related to the purposes of local government. I felt that it was a dry and rather bloodless exercise by the right hon. Gentleman, inevitably provoking just as much vigour and criticism as if we had had a much more controversial and much wider proposal before us.
For example, there has been much discussion about the general scope of local government activities as against central Government activities. There has been much discussion about the Health Service and about how far local government could take back some of the duties handed over to bodies appointed by the Minister under the National Health Service Act, 1946. Even if that were not being considered, there has been much discussion about how to get more effective forms of co-operation in the Health Service which would result in even higher standards of service to the general mass of the people—whether by a single form of administration covering the three existing arms of the service, or at least by some better form of co-ordination of those three arms.
There is nothing in the proposals about the functions and areas of local government which will make a ha'p'orth of difference to that kind of practical problem, or to the future development of the Health Service. I use that example, because I know rather more about the Health Service than about some of those services more affected by the proposals. There is nothing in the proposals which offers any hope for future development, even on the purely administrative side.
The position is worse when we examine the financial aspect of the proposals. Certainly at this early stage of our discussions it would be a mistake to consider narrowly the detailed administrative proposals without paying at least some regard to some wider considerations and to the possibilities, which, unfortunately, have not been seized, of securing a better form of administration and organisation which might encourage much wider responsibilities for local government, and possibly much better services.
One wants to envisage having large individual authorities truly viable financially. For many of the services of which I am thinking, that must mean authorities covering fairly wide areas, areas which might almost be regarded as regions, areas more comparable to those built-up areas which the Minister found so difficult to name in any way satisfactory to the House. We must have authorities large enough to be financially viable, taking in at the same time, if at all practicable or possible, rural as well as urban areas.
We want to find a means to put an end to the continuous struggle between town and country areas and authorities. I cannot see much hope in these proposals for securing an end to that struggle. I see an annual struggle instead of one more infrequent. I had hoped that the opportunity would be taken of suggesting an area of government large enough to embrace some of the functions which have been hived off to other statutory bodies. That means an administrative structure of a fairly wide and all-embracing kind.
On the other hand, I agree that we need a means of enabling people locally to take a part in local government activity of all kinds—and I do not mean merely by being elected to the town council. At the other end of the scale is needed a form of organisation which is so intimate that all can play some part. That is something more intimate and local than anything proposed in the White Paper. I found nothing in the White Paper to suggest that it should be one of our objects to find that form of intimate local government in which people could participate and help to provide some of the services. I hope that as time goes on it may be possible in housing for people to help to look after an area in which they live. It is certainly possible and in an unorganised way has already taken place in welfare matters.
We must keep the two ends of the scale in mind—the large authority able to finance and help provide services and covering an area wide enough possibly to take over some existing bodies, and, at the other end of the scale, an organisation small enough and intimate enough for people living on a housing estate, or in a small area of a town, or in a village, to do something themselves and actively to play a part. Only in that way are we likely to make local government the lively and vigorous thing that we want to see. One of my criticisms of the proposals put forward by the Minister is that they seem to pay no regard either to the top or to the bottom level, and therefore seem to me merely to be trying to keep the existing machine running along for a few more years before a further definite change is proposed.
I want to examine a little more closely the proposals as they affect the health services. My hon. and learned Friend rightly pointed out that we had a debate only a short time ago relating to the Royal Commission's Report on the Law relating to Mental Health and Mental Deficiency—a very important Report, as recognised by everyone. Speeches were made by hon. Members on both sides of the House urging the importance of the take-over by local authorities of very large sections of community care for mental health purposes. Very strong representations were made, including the point, which was vigorously pressed, that this would be bound to involve considerable expenditure by local authorities and that the Government must face this fact and make some special provision for it.
If the Government face this need after the pledges given both by the Ministry and the Lord Privy Seal we are going to start straight away with a specific grant for mental health, because of the responsibilities that I hope we all agree will be placed upon local authorities with regard to residential accommodation, for example, in connection with some of those cases which are at present housed in mental hospitals and with regard to the great extension of our clinic and other services for the mentally ill. This will undoubtedly require special central Government provision. What is the overwhelming case for central Government provision of this kind? It is that anything done by local authorities will enable hospitals in the National Health Service to operate much more efficiently.
Last Friday in Newcastle I attended a conference with the head of an important local hospital, together with the representatives of the local authority, including the medical officer of health. They were discussing the kind of practical problems which will arise, how to help the hospital to do its job more efficiently by taking from it some of the cases that are undoubtedly more of a welfare nature. In order to do that the local authority will have to spend a great deal more money both upon the visiting services which they provide and also upon accommodation. This is quite inevitable, but, by doing so, they will enable the hospital to treat much more adequately the cases which require treatment and which, at the moment, are not getting as much treatment and care as they could have.
I thought that this was something which was accepted by hon. Members on both sides of the House, and it is so important that I hope the Minister will make it clear at some point in the debate that it is not intended that this mental health expenditure is being absorbed in the general grant procedure but that there is agreement that in legislation which will have to come at a later date specific provision will be made with regard to central Government assistance to enable local authorities to tackle this job. It would be quite fantastic if, in this case, local authorities were to be left to fight out, within their own ranks, the question whether or not this expenditure should be met by them. This is surely a national matter, because it is part of a national service. What local authorities do in this regard will undoubtedly relieve the national Exchequer in other ways, by relieving the main hospital services. This is a very strong case, and I very much hope that before the end of the debate a statement can be made about it.
I am very disturbed too about the detail of the proposals, as outlined, affecting these health services. As far as I can understand it, the position is that the duties and responsibilities of local authorities with regard to clinics and social workers—no doubt including psychiatric social workers, health visitors and other local authority workers—will in future be delegated to boroughs and urban district councils with populations of over 60,000. On the other hand, the question of residential accommodation for the care of these same cases will be left as a responsibility of county borough councils and county councils as at present. What will happen about the welfare provisions laid down in the 1948 Act we do not know. The local government journal seems to be doubtful whether they are also being absorbed into the general grant procedure.
I do not see any hope here of any clearer form of organisation; I see no hope here of trying to bring together the different responsible bodies; I see no unity; I see a break-up even greater than there has been already. I am not arguing whether or not it is right that the smaller authorities should have a chance of running their own show in some of these schemes, but what I very much object to is that this is being done at the very time when the financial proposals being put forward are such as to make it almost impossible to hope that these bodies will be able to carry out these services.
I am sure that my hon. Friends and others will be saying about education what I am saying with regard to health matters, namely, that for the kind of service that we want to provide for the people these proposals simply do not stand up. It will not be possible effectively to organise the kind of service that we want either for mental health—an obvious example, which has recently been debated—or the equally vital and serious problem of the care of old people. There again we are in fact breaking up what ought to be a national service. It is because it is to all intents and purposes a national service that the main financial provision should be upon a national basis, and local authorities in this as in other fields should be encouraged to do more, because by so doing they would be helping to meet a problem which would otherwise have to be faced by the Central Government in its hospitals or other welfare institutions.
Therefore, looking at the matter from the point of view of someone who has been especially interested in the health administration of this country, I regard these proposals as in detail utterly ineffective to do the work that we want them to do. They illustrate again what I might almost call my despair in reading these White Papers. I find no inkling of attention to what must be our major concern, namely, the quality and standard of services to be provided. That is surely our first criterion, and it is our desire, following upon that, to ensure the widest possible participation of people in local administration and local work.
Looking through both White Papers, I can find no inkling of imagination or any conception of development of these services for the future; nor can I conclude that, in practice, even the work that we are committed to in health can be organised within the framework provided by the right hon. Gentleman. Therefore, I find myself criticising these proposals on wider grounds than those advanced by my hon. and learned Friend. Not only do I bitterly resent the financial proposals put forward, but I find in them a complete lack of imagination for the development of those wide and vital services affecting every one of us. It is on those grounds that I hope many hon. Members will speak during this debate.
With my hon. Friend the Member for Bristol, West (Mr. Robert Cooke), I seek the indulgence of the House this evening on the occasion of my maiden speech. It should by tradition have a local emphasis and in this connection I have a certain advantage in that I have lived all my life close to the division I now represent in this House. That this is not an essential qualification for good representation was fully proved by my predecessor who bore an illustrious Parliamentary name and gave long and distinguished service in this House.
The conurbation to which the hon. and learned Member for Kettering (Mr. Mitchison)especially referred, which has as its centre the great port of Newcastle, is prosperous today. Our yards are busy, our order books are full and employment stands at a very high level. It has not always been so, and I feel that we may well pause in this debate on local government—on that most important aspect of local government which is finance—to recall just why it was that the nation' industrial land and buildings were relieved of rates to the extent of 75 per cent. by the Local Government Act, 1929. That Measure—introduced at a time when we had one million unemployed persons who represented an annual cost to the Exchequer of£22 million—was designed to assist industry to become competitive and to encourage a higher level of employment.
I suggest that this rating relief, concentrated as it was automatically in areas where unemployment was heaviest, contributed considerably to the well-equipped Tyneside which we know today. It should be emphasised that in the recent rating revaluation industry sustained by far the greatest increase, in that its burden, as was pointed out by my right hon. Friend, was considerably increased, and the raising of the level to 50 per cent. will mean that before very long industry will be paying just about three times as much in rates as it has been paying. I would at all times advocate the return of the rating system as the basis of local government finance. This 25 per cent. increase will provide an estimated£30 million in rate revenue. Local authority independence in the collection of revenue will be considerably enhanced and the taxpayer, whose share of local government costs has risen out of all proportion, will gain in that there will be a compensatory reduction in grants.
I am sure that industry will recognise that its present prosperity justifies some increase, and will welcome the strenthening of local association. Although rates are allowable against taxes the increased cost to industry will be considerable, and I hope that Tyneside and other such industrial areas, in these prosperous, but nevertheless highly competitive times, will not be prevented from playing their full part in the strengthening of the economy by an undue share of local administration costs.
I welcome the suggestion embodied in the White Paper that authorities should in appropriate cases extend their arrange- ments for the paying of rates by instalments. I believe it most desirable that ratepayers should be fully conversant with the financial policy of their local authorities. In recent years it has not only been a regrettable but, I believe, also a highly dangerous aspect of our democratic system that apathy at times of local elections has so often reigned almost supreme. The result has been low percentage polls. More publicity on the costs of administration may do much to remedy this, but much more effective will be the further localising of authority in general and of spending in particular. The relative merits of the percentage and the general grants will be fully considered in this debate, as they should be, but on this occasion I must, of course, be uncontroversial, difficult as that is. However, I trust I am in order in expressing the hope that hon. Members in all parts of the House will recognise one great virtue of the general grant proposal, which is that it will most certainly bring councillor and ratepayer closer together.
Authorities are, not unnaturally, concerned about the future adequacy of the grants, and I am sure they will be encouraged by the assurance that latest cost of services will be considered, together with the need for future development. I welcome the proposal that rate deficiency grants will be assessed on the basis of rate product rather than on rateable value. I advance also a plea that in future discussions, on the basis of the distribution of highway grants, consideration should be given to the inclusion of the county boroughs. I cannot see any good reason for their continued exclusion especially if we are to have a general grant.
The announcement recently that we are to have established in our City of Newcastle the Rutherford College of Technology was warmly welcomed there, and we are proud to know that, as a great industrial centre, we shall be in the forefront of the national drive for greater technological skill. Here I believe our policy must essentially be a national one and I am sure that the ratepayers of Newcastle will welcome the proposal that expenditure for advanced education, although included in the general grant, will, quite rightly, be shared by authorities with few or no technological responsibilities. I believe that the importance and urgency of local government reorganisation cannot be overemphasised. After all, there has been no major change in the structure of our local administration since 1894. Changes in some directions are urgently needed, and cities such as mine, with little or no available building and which have been obliged to acquire land from adjoining counties, will welcome the proposed intention to allow the creation of new county boroughs and the expansion of existing ones. The special problems created by conurbations have exercised the minds of councils within these areas for a considerable time, and I believe it is highly important that the proposed examination of conurbations should be carried out by a body independent in every sense of the word.
Finally, I make a plea for the fullest possible consideration, during the very necessary reorganisation of our local government system, of local tradition and pride. In our deliberations on the future status of councils, large or small, we should invariably bear in mind that, throughout the length and breadth of this land, there are men and women who, motivated by a sense of service, and by an affection for their cities, towns or villages, give constant service without which our democratic system could not possibly survive.
It is a great pleasure to me to offer to the hon. Member for Newcastle-upon-Tyne. North (Mr. R. W. Elliott)the traditional congratulations of the House of Commons, and I do so very sincerely. It is a great trial for anyone to make a maiden speech in this House, however much public speaking he may have done on other occasions.
I congratulate the hon. Member upon coming through so competently. It was fortunate that he could choose a subject on which he could draw from his past experience and knowledge in his own constituency and city. We hope that we shall hear from him very often on future occasions. He realised that he should not be controversial and he just skirted the edge of controversy. I thought that on one occasion he was exploding the Government's case for the general grant. I will leave it at that. I am sure that the hon. Member will feel much happier than he did at having overcome the greatest obstacle in the Parliamentary career.
We are having a two-day debate. The Minister will sit here and listen to various Members of Parliament. I wonder how much effect we shall have upon him. My complaint about the Minister is not that he does not listen to good advice—he listens most carefully—but that he never takes good advice. However much I may disagree with certain points in the White Paper, I do at any rate congratulate the Government upon having at last produced something, even though the period of gestation has been rather long. I think I am correct in saying that it was in the King's Speech, in 1951, that the reform of local government was promised.
Now that it has been produced and the suggestions have come forward, there is a good deal in it with which we disagree, but the Minister will expect a wide variety of views. Everyone knows that it is very difficult to get agreement on this subject, even among local authorities. It is equally difficult to get agreement among individuals. Each of us has his ideas, and no one will get a scheme which he considers ideal. We shall have to accept a compromise.
Whatever the final solution, there are two criteria which are fundamental. One is administrative efficiency, which means that the authority must be able to carry out efficiently the task or job given to it. We ought to state that the area of administration need not be larger than is necessary to secure this requirement. I do not want to be accused of a parish pump outlook this evening, but I would remind the House that some of the smaller local authorities have been doing an exceptionally good job, but will come out of this reorganisation very badly.
The second criterion is the retention of local interest and initiative in local government. The word "local" is of prime importance. My own personal views on reorganisation seem to be ruled out by the White Paper, which says, in paragraph 12, in page 5:
that is, the previous Minister—
made it clear that he did not consider that the existing system of local administration had broken down, and that he would not be prepared to contemplate eliminating either the
two-tier system in the counties or the one-tier system in the big town.
In other words, the previous Minister was not prepared to have a comprehensive review of local government nor, I take it, is the present Minister. I believe that the best solution is the two-tier system in the whole country, whereby county boroughs would play their part in the solution of problems over a wider area, but a two-tier system with a difference. I would make the county borough authorities the more important units, entirely responsible for the administration of all services, and would give to the upper tier only general policy and the wider aspect of planning, and possibly of rate equalisation. I would also get rid of expensive county council elections by allowing those authorities to nominate their upper-tier representatives. But this is a controversial point, and I shall not develop it now.
My scheme would suit Middlesex admirably. There must be strong influences at work for the preservation of Middlesex, but now a Royal Commission is to be appointed. It must be very frustrating for the authorities in Middlesex to find that, although they have all the requirements for county borough status, their claims are not to be considered just because they happen to be in the County of Middlesex.
How sincere are the Government about the creation of new county boroughs? While they put forward that they are prepared to make these new county boroughs, the matter is so hedged about with conditions that it would be easy to formulate a very strong argument against the creation of any. I am sorry that the Minister has now gone out; he must know that what is bedevilling local government and causing such frustration is delegation. It is small wonder that the authorities dream of county borough status, and that many of them are looking round to consider whether they can combine with their neighbours to secure the required population.
I know that there are many in my own constituency who are anxious to combine with neighbouring authorities in order to achieve county borough status and to control their own affairs. With a White Paper such as we have now, every authority that can possibly secure county borough status will wish to do so. I wonder how sincere the Minister is about this question of creating new county boroughs.
Delegation, even compulsory, is not a satisfactory solution, and wherever possible the powers should be conferred. In any case, where delegation is necessary it should be according to a national scheme and not be left to the whim of an individual county council. There has been such wide variety in the system of delegation that it is entirely wrong. In any case, where delegation is necessary, the Government ought to step in and decide upon a system of delegation that is to be applied universally.
I will make the same point about delegation if I have the chance. Do I not understand that the present proposals for delegation include the possibility of reviewing individual arrangements made by the Minister? To that extent they are an improvement upon our experience in the past.
Yes, but it is still to be delegation and we wonder how far the Minister will be influenced by the fact that we are changing from conferring to compulsory delegation.
I wonder when the Government think that the reorganisation that is envisaged will take place. So far as I can see, the only provisions in the White Paper which can take place during the lifetime of the present Government are those on finance. Aft the earliest, the Local Government Bill cannot be passed before early in 1958. Then, two local government commissions have to be appointed, one for England and one for Wales. What is their job to be? In page 7 of the White Paper it is said:
Entirely new procedure is required. This must provide means for studying problems comprehensively and far assessing the wider repercussions of proposed changes upon other authorities affected. It must enable local circumstances to be investigated and local opinion to be consulted. It must provide independent and informed guidance, while leaving to the Government and Parliament responsibility for ultimate decisions.
In other words, the commission for England has to review the whole structure, including county boundaries, consider application for county borough status and the extension of boundaries of existing county boroughs and to review
the county districts within the conurbations.
I am taking it for granted that every hon. Member is aware that London is excepted from this particular question.
I would add that the commission should review all county districts. I do not think that that should be left to the county councils, but it should be done by the commission. Perhaps I had better make clear that this is not a constituency point, because my area falls within a conurbation and the review, in that case, would be done by the commission; but I consider that in other areas the commission should be the body to review county districts.
Leaving aside the additional task I would place on the commissions, when does the Minister think they can complete the tasks he has given them? Would he agree that 1960 would be a reasonable date by which we could expect their first recommendations? If the Government wanted to complete reorganisation within the lifetime of this Parliament they should have acted much more speedily. In order that all that is contained in these proposals should be carried out the White Papers should have been produced at a much earlier date in the history of Parliament.
I wish to say a word on the conurbations. I agree that the recommendations have to come from the commissions, but have the Government any view on the conurbations? Do they favour the creation of new county boroughs within the conurbations? Paragraph 41 suggests that as a solution, but paragraph 30 contradicts it. Paragraph 30 says:
In a conurbation, a multiplicity of autonomous local authorities is clearly undesirable.
Paragraph 41 suggests that it is one of the solutions. I agree that in paragraph 30 there is an attempt to make a case for the number to be 125,000. I am very interested to note that the Minister has now had second thoughts and altered that number to 100,000. That made me wonder whether he thought ten conurbations of 100,000 would be a multiplicity and. therefore, objectionable, but eight conurbations of 125,000 would be all right
I take it that the purpose of the White Paper dealing with functions is to bring about amalgamation without compulsion, a sort of gentle blackmail. It seems to suggest, "If you want any powers, form units of 60,000." I find paragraph 6 unexceptional. It says:
In general, the Government are anxious that larger responsibilities should be entrusted to the district councils. These councils are necessarily in closer touch with the people they serve than county councils can be, a factor of particular importance in the case of those services which intimately affect peoples daily lives—for example, the welfare, health and education services.
That paragraph can only refer to district councils of 60,000. The others will be left chiefly with the dustbins. Paragraph 21 states quite baldly:
In the education service it is proposed that the divisional executives should be abolished.
There is no explanation. We do not know why that is proposed, but it is just baldly stated. I know there are many different views about this and I must state that I am expressing a purely personal view. I believe the divisional executives have done a good job, particularly in those counties where the local education authority has wanted them to function adequately. I think that they deserve some explanation of the proposal. Many of them cover areas of 100,000 population. It seems rather strange if we are to take powers away from areas of 100,000 people and give them to areas of 60,000. In any case, they have a right to be told how they have fallen down on their job and why remote control will be more effective.
I turn to the White Paper on Local Government Finance. Before dealing with the most controversial point about the block grant, I wish to make several other observations. It seems a little naïve on the part of the Minister to refer to the valuable research work and investigations carried out by a study group of the Royal Institute of Public Administration, which he mentioned this afternoon, and the research study of the Institute of Municipal Treasurers and Accountants, as if the work of those bodies had a profound effect on the Minister in preparing his statement when, as a matter of fact, he has entirely ignored every single one of their recommendations. The Minister suggested no new source of revenue, but said that improvement must come from improvement of the system of local taxation, whatever that may mean.
The Minister suggested that they have to rely on improvement of the system of local taxation. I do not know exactly what he meant by that. Even with the partial rerating the Minister refuses the full benefit to local authorities. I find that a particularly mean act. I was rather worried about what he had to say this afternoon. I do not know whether other hon. Members understood the Minister as I did, but it seemed to me that he was making a threat that when the transitional period was over the Government would take not two-thirds of the benefit of rerating, but the whole of it. If I am correct, I hope that the Minister, or the Parliamentary Secretary, will make the position quite clear. It sounded very ominous to me.
Turning to the rating of electricity properties, while I am grateful for what has been said, I still do not feel that the Minister has been just to those local authorities with power stations in their areas. Half the rateable value of electricity properties goes to the Generating Board, and half of that half is apportioned to rating authorities in which generating stations are situated. They are deprived of other rateable value in the area which is covered by the generating station and they have to put up with the grit and the dust, and I think they might well have been granted the whole of the Generating Board's half, shared among them.
In respect of gas undertakings, justice is again denied to those authorities whose undertakings are used for storage purposes. I have fought this battle so often that I now despair of securing any clement of justice for these authorities, and I shall say nothing more about it tonight.
I should like to conclude with a few remarks about the block grant. In my view it would have been far more honest if the Government had said, "We intend to cut down Government expenditure and to limit our grants to local authorities." ft would have been far more honest to do that instead of to pretend that the aim is to give more freedom.
Which controls are to be abolished? I know that there is to be a discussion about this, but which are to be abolished? In every local authority Bill in the past few years the Minister has been building up and consolidating his empire. I have before me the first Report of the Local Government Manpower Committee, Cmd. 7870. Let me read what the Report says about the control which the Minister of Education must exercise:
While the Minister has a general oversight of the field of education, it is recognised that he has six primary duties which determine the points at which it is necessary for him to exercise control:
Which of these controls will the Minister abandon? Not a single one of them. As a matter of fact, he has already made his decision quite clear; he will not give up any of these controls. Why I am particularly stressing the controls in respect of education is that about 80 to
85 per cent. of the general grant will be concerned with education. This is what the Minister said:
But on one thing I will not compromise. Administration is for the local authority. Minimum standards are a question for me, and I will never surrender the duties of promoting education and of controlling and directing educational policy put upon me by Parliament. It must be my duty while making every allowance for variety of pattern to minimise so far as I can differences in standards of performance, differences that is in the quality of educational opportunity between locality and locality.
It is obvious that the Minister of Education does not intend to give up any of the controls.
The controversy about the block grant and the percentage grant is not new. It has been going on all this century, but in the past the block grant has been advocated as an economy measure and there has been no pretence of trying to hide it as giving greater freedom to the local authorities. On previous occasions it has been honestly put forward as an economy measure. The minority Report of the Royal Commission on Local Taxation, in 1901, recommended it; the Geddes Committee, 1922, the May Committee. 1931, and the Ray Committee, 1932, all recommended the block grant system, but they were all concerned with economy and not with the development of local government services. They did not pretend that they were giving greater freedom to the local authorities.
The Geddes Report gave rise to a committee with a very curious history. Acting upon its recommendations, the Chancellor of the Exchequer set up another Committee in May, 1922, with Lord Meston as Chairman. In March, 1923, the Committee, arrived at certain conclusions and the Chairman undertook to draw up a draft report. For three years the Committee awaited the production of the draft report. Many Questions were asked in Parliament, but still the report did not materialise. In February, 1926, the Chairman's draft report was circulated to the Committee, but the Committee was never called together to consider it, the report was never published and for a long time it remained an unexplained mystery. It was a mystery until Schulz, in his book. "The Development of the Grant System," put forward the following explanation:
…the bulk of the evidence submitted to the Committee during its short working life bore
against the policy which the Government and the Chancellor of the Exchequer, Churchill, with the backing of the Treasury, had determined to pursue, namely, the introduction of a block grant designed to limit the commitments of the Treasury over a period of years.
All the evidence of today is also against the Minister's proposals, but the Government are going ahead with them.
It is no wonder that the Government did not make use of the study of the Institute of Municipal Treasurers and Accountants, for the Institute made some comments about the block grant. I conclude with two quotations, commencing on page 281, from the book, "Local Expenditure and Exchequer Grants":
The two outstanding features in over a century of development in the English grant system are the persistence of the percentage grants and, latterly, the increasing attention paid to the equalisation of the resources and needs of local government areas. The first feature can be explained by the solid practical advantages of the percentage grant: its simplicity and intelligibility of form and intention; its efficiency in stimulating and encouraging the development of local services; its equity in taking automatic account of rising costs and in cutting cost differences between local areas—these and other positive advantages are sufficient of themselves to account for the fact that the percentage grant has not only survived the various attempts to abolish it or reduce its influence but is now more firmly established than ever as the principal financial link between central and local government.
This is a report by people who spend their whole life in local government, but when they wrote it they did not know this Government. They wrote:
We have spent very little time on the claims of a general grant to absorb specific grants. General grants are also irrelevant to problems of inauguration and innovation and if in more settled cost conditions it has as yet proved impossible to devise an equitable unit grant for a specific service, it is a fortiori likely to prove imposssible to devise an equitable general grant to replace specific grants. If equity is to be an important consideration, the general grant cannot be regarded as a serious competitor to the percentage grant.
I leave those words with the Minister—"if equity is to be an important consideration". It is for the Minister to decide
Sir Ian Orr-Ewing (Weston-superMare):
I do not intend to follow completely the hon. Member for Stalybridge and Hyde (Mr. Blackburn), for I could not help feeling that the whole of his most interesting speech—I certainly do not mean to belittle it in any way—was based on the very curious assumption, that all this should have been done a long time ago. I wonder why it was not done.
The point that I made was that if the Government had wanted to carry out their proposals they should have introduced them earlier, because it will be impossible, during the natural lifetime of this Parliament, to carry out all that is contained in these proposals. I agree about the past, that several Governments have failed to do anything.
Sir I. Orr-Ewing:
I am glad that the hon. Gentleman has cleared up that point. I would, however, point out that it would have been very rash on the part of anyone to have hurriedly introduced proposals without the fullest possible discussion with all types of local authorities. The hon. Gentleman knows as well as I do that it is not always very easy to get all types of local authorities to agree about any one point.
Sir I. Orr-Ewing:
One has to start somewhere. That is the theme that I want to put to the House.
This may not be the perfect solution. I do not myself say that it is the perfect solution, but I believe that it is a start along the path which will lead to a solution of many of the problems of local government today. I do not know whether most hon. Members will agree, but I have felt very depressed indeed, over the last quarter of a century, in seeing what has happened in local government. It is not only a question of power without responsibility, of duties without the cash to carry it out, of carrying out the orders of Whitehall. It goes a great deal deeper than that.
I think that there has been in the minds of many of those engaged in local government—and this applies in the great cities just as much as in the smaller urban districts—a fear that, eventually, they would be absorbed into the central Government. I could quote cases by way of example, as no doubt could hon. Members opposite, where far more time is taken up in quarrelling on matters of party politics than in getting on with the job of local government.
This is very largely because many of those who take part in local government have this fear in their minds and are beginning to think that they are part of the political system and not part of the system by which they are elected democratically to carry out the wishes of the people and to serve them as well as they can in the administration of their local affairs and finances. It is for that reason that I welcome any sort of attempt that is being made now to clear up the position.
I should like to begin, in the short time that I propose to speak, by dealing with the question of structure. I, personally, have the honour of being President of the Rural District Councils' Association. It has been debating this matter at some length, though I do not pretend for one moment to speak on it as its delegate. There have been many discussions in which this question of the magical 60,000 has been raised. This 60,000 does not apply only to rural districts. Unfortunately, it applies to county boroughs and non-county boroughs. I cannot see why this insistence on the figure of 60,000 should be perpetrated and perpetuated in all documents that have been published on this issue.
I beg my right hon. Friend to reconsider the matter not merely from the point of view of what is in the White Papers, and of what is written and said, but from the point of view of encouraging people to believe that they can get a certain amount of responsibility without fear of those forces in the decision which the hon. Member for Stalybridge and Hyde mentioned just now, seeking only that get-together to reach this magic figure. Surely the point is not just a detailed number of people. Already, we have been told by the Minister that that is not the only consideration. We know that, of course, although the insistence on this figure is very marked. Surely the point is: can we or can we not enable a local authority which has less than a certain number of people to carry out local government in an efficient manner?
I really must say that it is a very great pity that this figure has been used. Equally. I think it a very great pity that more consideration has not been given to the powers that can be either conferred upon or delegated to those authorities below that figure. It should not be some- thing like an iron table. I would much sooner see it like a sheet of ice that can be broken through. Thereby, I believe, the local inhabitants could create great benefit——
Sir I. Orr-Ewing:
No, they would not drown. It would inspire them to greater service of the people.
Then we come to the question of delegation and conferment. I agree very largely with what has just been said. Wherever it is possible, I should like to see powers conferred direct. I believe that delegated powers lead only to a lot of unnecessary work. If it is true, for instance, that the block grant is to save a great deal of detailed control as between Whitehall and local government, surely it must be equally true when we deal with the question of delegated or conferred powers. It is not a direct analogy, but that is true. I should like an assurance—indeed, I should like more than an assurance from the Minister. I should like to see drafted into whatever Measure is eventually produced before this House that conferment should be the aim wherever possible, and that this barrier of numbers really will not stand in the way to the degree it does at present.
I have gone into this matter in a certain amount of detail. In the case of a non-county borough the powers that can be easily conferred, and that can be easily absorbed within the machinery of local government without any embarrassment to their officials or anything else, can be roughly summarised as these: local health and welfare services; classified roads, town and country planning, consideration of planning problems and town map preparation; shops, theatres and cinemas, and food and drugs.
At present, none of the powers to deal with those things can be conferred. That seems to be quite ridiculous. If the machinery is there, if the personnel is there, if the knowledge is there, and if the local population is there—though not up to the magic limit of 60,000—why not confer those things directly, instead of merely considering their delegation?
The hon. and learned Gentleman the Member for Kettering (Mr. Mitchison)talked about rural districts and their powers. He suggested that because certain rural districts above a magic limit were to get certain other powers all the other rural districts would think that they themselves had been very badly treated and were thought to be rather second-rate people. I do not think that he need worry about that. I do not think that I am misinterpreting what he said, but he need not worry a lot——
Sir I. Orr-Ewing:
I am very glad that the hon. and learned Gentleman had no such intention, and I am quite sure that if I misunderstood him it was owing to my inability to understand what was said.
I must say that these proposals are most disappointing so far as they affect the non-county boroughs. There is no use concealing the fact that there is a great deal of disappointment, and I have great sympathy with their view. On this main question of finance and the block grant, as against the specific grants and the rerating of industry, all hon. Members who have spoken from the benches opposite have not taken this rerating of industry picture far enough back into history.
It is not quite fair to consider what is being taken back by the Exchequer and what is being allowed, without considering the picture right back to 1929. If a question of rating and derating is a serious matter now, surely that must be considered against the background of the initiation of the system of derating in 1929. Surely no other approach to the matter can be found. I do not think anybody can take exception to what I have to say.
I do not know what the hon. Gentleman meant by his last phrase. Perhaps he would make clear what he meant when he referred to the necessity to consider derating against the conditions of 1929. Will he not make it clear to the House that in those days there was chronic unemployment, whereas now we have a period of full employment and, consequently, the rerating of industry is receiving increasing acceptance from the other side of the House?
Sir I. Orr-Ewing:
I am sure that the hon. Gentleman did not mean to misunderstand me. What I was talking about was the question of the grants which were given in relation to the loss of revenue by local authorities when industry was derated in 1929. Now it is being partially rerated and, obviously, there must be an adjustment. I do not believe that it would be either fair or wise at this moment to impose a full rate on industry. It would come as too much of a shock in relation to costs of production and everything else at a time when we are fighting very hard indeed not only to retain some of our export markets, but to get others, and when we are doing everything we possibly can to limit the rise in the cost of living. I do not think it is possible to ignore those points when we are considering the question of complete rerating.
Coming to the question of the block grant and the percentage grant, I cannot understand the complete lack of confidence which is expressed by those who say that the block grant must be misused by local government. I have never heard such a thing.
Sir I. Orr-Ewing:
I must remind hon. Members, some of whom may not have been present at the time, of the most bitter, brutal, fierce and spirited attack by the hon. and learned Member for Kettering on the whole system of local government democracy. The whole theme of his speech was that we cannot trust these people.
Sir I. Orr-Ewing:
His pets were held up in front of us and we were assured that they would be knocked down, whether it was health, education or the social services. We were told that some councillor would say, "Not a penny more on the rates" and another councillor would say, "We must have sewerage instead of education." That was the whole theme of his speech. To me, it was terrifying. If that really typified the view of hon. Members opposite, local government is indeed coming to an end if ever they get back into power. It would be steamrollered out of existence.
Sir I. Orr-Ewing:
No doubt the hon. and learned Gentleman will read through his words very carefully tomorrow in the OFFICIAL REPORT. I do not think that I have misinterpreted the real meaning of what he said. If any other meaning can be read into the words he used, I should be very pleased to hear it.
I have considerably more confidence in the common sense of those who are elected to local government than has the hon. and learned Gentleman, but I have this, too. I do not wish to be rude to the local authorities, education authorities, or anybody else, but I know, and everybody else knows, whatever treasurers or investigating accountants or anybody else may say, that at different stages of the initiation of schemes the amount of time and money that is wasted as between the local authority and Whitehall is enormous. That is one of the reasons why I like conferred powers as against delegated powers, because delegated powers keep the strings in the hands of the central Government. Directly conferred powers should be given to those who deserve it and who have proved their worth.
I believe that the block grant system, which leaves the detailed administration and planning, the actual detailed work carried out on the spot and as near to the electors as possible, is a much more healthy system than the ordinary percentage grant. To remove the controls—and I admit that we do not know exactly what controls can be removed, though we have been assured that a working party is getting on with it—from the district to the county and to put or keep them in the hands of Whitehall would be a very risky step if we are to do anything to encourage democracy in local government. The nearer we can get to the people, the more human we can make local government, the more possible it will be for the individual to go round to the council offices and shoot his head off if he wants to.
Nothing is worse than the feeling which is spread only too easily by county councillors who say, "We cannot help spending all this money; we have been told to do it by Whitehall."
Sir I. Orr-Ewing:
It is no good hon. Gentlemen opposite trying to laugh it off; they know that it is only too true. That has been used over and over again as an excuse for what might well be unnecessary expenditure, and that is the sort of thing that is doing a great deal of harm to local government. I want to take every possible, practical and sensible step which will maintain the standard, at the same time putting responsibility as near to the door of the house in which the local elector lives as we possibly can.
There is one point which has been completely overlooked by all hon. Members who have spoken from the other side of the House so far. They have always forgotten to say that the public and the ratepayers are both protected by the undertaking that has been given that the standards will be maintained. They omit that, and then, of course, one can imagine all the evil things which the hon. and learned Gentleman said about the misuse of power by local government.
I cannot say of 'these proposals that they will encourage all forms of local government, or that they are a remedy for all the difficulties and problems, but at least they are a start. I only hope that whatever is being said in this debate from both sides of the House will enable these proposals to be improved, and that, when they have been improved, we can then press on to do something to help local government.
I fear that I may be trying the patient.: of the House considerably in being the third maiden speaker tonight to ask for its indulgence. This is an important debate, on which many hon. Members on both sides wish to take part, but, nevertheless, I ask for the indulgence of the House for a few minutes. I certainly feel myself in need of it.
Before I come to the matter under discussion, I hope that the House will forgive me for offering a personal word. I should like to say how conscious I am that my election to the House was made possible as a result of the loss to the House of a man very greatly respected on both sides, a man whose outspoken ways did not always command agreement from all hon. Members but who always, for his courage and candour. commanded respect. His friends on both sides, I am sure, would like to know that I have found much evidence in my constituency of the high regard in which people held him there.
When the right hon. Gentleman the Minister of Housing and Local Government opened the debate, he said that he supposed that all hon. Members taking part would have a particular angle; they would be county council people, county borough people, and so on. I plead guilty to being a county borough man with a Greater London complex. The White Paper points out that, in all the great variety of authorities in Greater London, there are three county boroughs. I have the honour to represent one half of one of these county boroughs in this House, the County Borough of East Ham. It happens that I have had experience also as a borough councillor for six years on the council of one of the other county boroughs in the Greater London area, the County Borough of Croydon. I shall use the "parish pump" a little. I know that that approach has been deplored in this debate, but I hope that what I have to say here will have a wider application.
First, as to the way in which the financial proposals seem likely to affect the Borough of East Ham, I must report to the House that they have been received by the Council and by the Council's officials with a great deal of concern. If I appear critical, I hope that I shall not be thought to offend against tradition in making a maiden speech by being too controversial. I do not intend it in a party sense, at least, because the other council to which I referred, that of the County Borough of Croydon, which has a political control different from that of East Ham, passed a resolution the other evening which was very critical of these proposals, for much the same reasons.
The East Ham Borough Council is concerned, first of all, as most authorities are, at the uncertainty of the future. Those of us who have taken part in local authority work know that, under the system of specific grants, authorities are able to plan ahead, make an estimate of costs, and know what proportion of those costs will come to them from Government grants. The position now is that councils do not know how much they will get. Although there will be announcements from year to year, they do not know what they will get in two or three years' time; they have only the hypothetical figures in the White Paper. Nor do they know how the grants in future will be adjusted to inflationary pressure. I realise that the Minister dealt at some length with that and said that it was explained in the White Paper that the Government would take account of inflationary tendencies. But how quickly? Things will be very different from what they were under the system of specific grants when authorities received a proportion of what they were spending.
An even more serious cause for concern, perhaps, in my constituency arises from what is said in the White Paper about there being some gaining authorities and some losing authorities. All the evidence seems to indicate that East Ham will be a losing authority when these new grants come into effect. In the financial year 1956–57, the value to the County Borough of East Ham of the specific grants, which will be superseded, was about£900,000. From the figures given in the Annex to the White Paper, we see that, if these moneys had been applied in the same year to the County Borough of East Ham, it would have received only£776,400. From the rerating of industry, the Borough would have received about£58,000. I will not trouble the House with the details, but there is left a gap of about£65,600, which is over a 1s. rate.
Here I illustrate what I meant when I said that I hope the House will forgive me for my parish pump method of speaking. I consider it is a serious matter for the whole country if authorities which have a poor rateable value, as East Ham has, are to be losing authorities under the scheme. In East Ham the product of a Id. rate is less than£6,000, and at the moment the rate is 22s. 6d. in the£. Consequently, these proposals are very serious. We realise that there are some other imponderable factors. We do not expect to get much value locally from the new system of rating nationalised industries, and we do not anticipate that the new rate deficiency grant will do anything to make up the gap compared with the old equalisation grant.
As in the case of other authorities, our education costs will be going up in the near future. The bulge in the school population is passing from the primary schools to the secondary schools with a greater cost per child. The very fact that the basis of the new grant takes no account of the current level of spending or the prospective level of spending on srevices such as education means that an authority in the position of East Ham will get a smaller share in future of the Government's money than it has done in the past. I hope all these matters will be taken into account by the Government before legislation is drafted.
I wish to say a few words on the question of area status. Here I shall leave the parish pump behind. Perhaps that is just as well, because I think that when we address our minds to the question of local government reform we are all liable to have split minds. We tend to be in favour of reform in general but not of reform in particular when it affects our own area, particularly if we think it will have an adverse effect.
Surely there is an overwhelming case for a large measure of reform in local government. I can only express the hope that the measure suggested by the Government of using the new local government commissions will prove adequate to the task. I have some doubts about it, but I hope they will act with speed and will not be afraid to make drastic proposals.
The present framework was laid down, as we are reminded in the White Paper, in the Local Government Acts of 1888 and 1894. In those days local government was very different from what it is now. There was practically no provision for public education and practically nothing in the way of public housing, and the highways did not carry a single motor car. The picture was entirely different. The population changes which have taken place since then have been enormous. In those days the people had not heard of "conurbation" or "special review area". We have since then had an enormous social revolution without the pattern of local government keeping pace. There was only one major safety valve, and that was the promotion to county borough status of towns which were growing, but that safety valve has been stooped for over thirty years.
I hope I do not appear to be too partisan if I say that the Government seem to be rather slow in bringing forward any major proposals for reform In case I am accused of being partisan I had better say that successive Governments have failed in that respect. My hon. Friend the Member for Stalybridge and Hyde (Mr. Blackburn)referred to the fact that it was likely to take a long time before the local government commissions were able to bring forward their proposals and the proposals were acted upon.
I would ask whether the Government would consider either the setting up of more commissions or adopting some system by which the commissions can devolve their authority on sub-commissions so that the work may be put forward more quickly. I had intended to refer to the impossible task of bringing the Greater London problem into the work of the commission for England, but that has now been covered by the proposal for the setting up of a Royal Commission. One can only hope that this Royal Commission will work more quickly than most Royal Commissions and that its proposals will be implemented with speed.
We have to make up our minds to the fact that we do not want to change for the sake of change, but we want to make certain that our local government system keeps pace with a changing society. A system laid down in the latter part of the nineteenth century cannot of itself cope with the problems of the second half of the twentieth century. I hope that in this matter the Government and the House will not be afraid, where necessary, to tread upon local vested interests—quite honourable ones—which want to cling to the forms to which they have been accustomed, and that we shall have the resolution to carry forward a genuine reform of local government.
Those of us who believe in it, as I hope we all do, must realise that unless the form of local government is adequate to those tasks it is bound to lose further powers in the future and will not flourish as we want it to flourish.
I shall be speaking on behalf of all hon. Members when I congratulate the hon. Member for East Ham, North (Mr. Prentice)on the outstanding maiden speech which we have just heard. We now know that there was no need for him to ask the indulgence of the House. He spoke as one who has studied the way we do things here and as one who is a very worthy successor to a Member who always stimulated and interested us, the late Mr. Percy Daines, whom we have missed so much since earlier this year. I shall also be speaking on behalf of the House when I congratulate the hon. Member not only on his mastery of his subject and the fluency of speech, but on the nice way in which he salted his speech with criticism which was not controversial.
I had a good deal of sympathy with the hon. Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop)when he remarked on the quietness of the debate. I came here wondering whether we should debate the form of local government in the spirit of G. K. Chesterton when he wrote, "The Napoleon of Notting Hill". It is perhaps a pity that we have remained so free of outbursts of enthusiasm for local government and that we have confined ourselves to its niceties.
In that we have made the best comment of all on the fundamental soundness of the Government's approach to the problem of reform, and shown that the former Minister of Housing and Local Government was right when he decided that local government had not broken down, but needed only change and reform, something of the nature of the Local Government Act, 1929, which was a major step forward in conformity with conditions as then seen. So, nearly thirty years later, we have to change again, but in that change we are confirming the fundamental soundness of the arrangements under which we have worked much of our lives.
I want to discuss the problem of change and reform as it affects the smallest unit of local government to which no one has yet referred, perhaps because there is not a great deal which one can say about it. I refer, of course, to the parish council which in so many rural parts is an important unit of local government which allows those living in each parish to express their views on what they think ought to be happening in an area which they know very well.
I should perhaps declare an interest in this matter, in that I am one of the national vice-presidents of the Association. Seven and a half million people live in rural parishes and there are 7,500 parish councils out of a total of just over 10,000 parishes, and they spend£1¼million every year—small in comparison with the expenditure of larger authorities, but still a large sum of money.
My first point concerns boundaries. I think that all who have read paragraph 56 of the first White Paper will have felt that the proposals for reviewing the boundaries of parish councils are inadequate. I hope that by the time the Bill is drafted those proposals will be drawn from the vagueness in which they are at present into something a good deal more precise.
Talking about parishes leads me on to the country districts about which I should like to echo a remark which several hon. Members have made, especially my hon. Friend the Member for Weston-super-Mare (Sir I. Orr-Ewing), to the effect that the figure of population of 60,000 mentioned in paragraph 13 of the second White Paper should not be interpreted too rigidly, and that when the counties consider the county districts it should be indicated to them that there are several other factors which should be taken into account. The sense of community in an area is an important factor and, from a practical point of view, in order that we can have units in county districts which are viable for the functions which they may be called upon to perform under delegation, the rateable value might also be taken into account.
I now turn to the problem of delegation. I have the honour to represent a constituency in a county whose county council exercise the powers of delegation to the largest possible extent and so gives a great deal of satisfaction to the county districts. I am not sure what has been the reason for the Lancashire County Council's wise delegation. It may be because its population has been fairly stationary in comparison with those of the southern counties. Whatever the reason may be, powers of delegation have been widely used and this has been an important contributory factor towards the continuing great interest in local government which manifests itself in every sort of election in Lancashire.
I think that one of my hon. Friends mentioned that in Bristol only 38 per cent. of the population polled in the council elections. In a hotly contested year in Lancashire the figure runs at well over 60 per cent. for county council elections and for local councils the percentages are higher still. I believe one reason is that local authorities have many powers delegated to them.
Whilst touching upon this problem of delegation I want to ask the Minister if he will expand upon the reasons for the abolition of divisional education executives. In Lancashire—and I expect that other councils will adopt the same procedure—even when these executives have been abolished the arrangements to be made in future will be upon an area basis; in fact, they are likely to cover the same areas as are covered by divisional executives at present. We found them a sensible arrangement for promoting the interest of people in the area in educational activities. Admittedly we have experienced pre-dating the 1944 Act, but they have worked so well that I think we shall probably continue with them after they have been officially abolished.
We know that divisional executives have been dismissed in a phrase in one of the White Papers. Now the hon. Gentleman is speaking of arrangements in Lancashire prior to the 1944 Act. Is he so much in the confidence of the Government, or has he the gift of prophecy, or does he possess inside information, which enables him to state that when divisional executives are abolished the Lancashire County Council will set up some area authorities? It is under no obligation to do so.
I agree with the hon. Gentleman that there is no obligation. I was merely hazarding a guess that the Lancashire authority will return to a system which worked well before 1944, has worked well since and may be continued after the present executives have officially been abolished. I suggest that other counties might well regard the matter in the same way, and I ask the Minister to enlarge on the reasons for the abolition of these executives.
Parish councils have small incomes, but they are as much if not more concerned than anyone else because they are at the bottom of the financial queue. When rates get high, there is a kind of psychological resistance which prevents parish councils from imposing the rates which they might otherwise impose because they get complaints from the ratepayers more quickly than any other authority. Consequently, if they cannot put up the rates they are unable to exercise their existing powers.
Thinking over the speech of the hon. and learned Member for Kettering (Mr. Mitchison)I came to the conclusion that he proved his point almost too handsomely. If the Government proposals produce a certain carefulness in the spending of money I think they will have justified the policy they propose to follow. As I understood the arguments of the hon. and learned Gentleman it was that about which he was worried; that they would be too careful; that what he considered desirable projects, and what others might say were more experimental, would be looked at more closely than at present. If that be true, certainly regarding the matter from the point of view of parish councils, and also I think from a general point of view, any procedure which results in making those engaged in local government look more carefully at what they spend must result in a gain. The new procedure will give power to county halls with less checking from London, despite the figures which I know will be produced to remove the impression that there is a lot of checking in London.
Leaving the details of these proposals to be considered and discussed much more fully when we get to the Bill, I say that the three White Papers make a sensible step in the reform of local government, and bring up to date a system which has worked well for more than half a century, enabling it to meet the demands of our country today.
I do not know whether I ought to declare an interest, since I am vice-president of the Urban District Councils Association, on the next rung up the ladder to the hon. Member for Clitheroe (Mr. Fort). From the arguments which he has adduced, I am inclined to think that he should be on this side of the House. I cannot see how he can logically defend the proposals put forward by his right hon. Friend.
I commend the civil servants who have been responsible for briefing the Minister and I commend the Minister for putting over in a remarkable manner such a bad case. His predecessor said that his predecessor on 8th May, 1946, had promised a thorough investigation of local government. Apparently, that has been carried out. I have looked through the White Papers and I submit that these proposals are almost the most pernicious proposals that have been laid before this House since the 1929 Derating Act. [Laughter.]
Government supporters may laugh, but I have heard only two of them who claimed to have served upon a local authority. One of those stated that when the central Government granted 85 per cent. of the expenses of a local authority, the councillors said, "It doesn't matter. The Ministry will pay." I give the lie to that. I have had more years in local government than the hon. Member has had months. I am sorry that the hon. Member for Weston-super-Mare (Sir I. Orr-Ewing)is not in his place. He is president of the Rural District Councils Association. The figure of 60,000 population that he gave I agree is rather on the large side and I am hoping that the Minister will reconsider it.
I am not with the hon. Member for Weston-super-Mare when he says that we are making a party issue of the reform in local government. Nothing is further from the truth. I first got on to a hospital committee more than thirty years ago, before some hon. Members who have been talking about party issues in local government were born. Party issues were at work then. Landlords and vested interests had always had a monopoly, but when the Socialist Party came along they found there was opposition, and so local government became a party issue. Anyhow, this was an irrelevancy and ought not to be tolerated.
I appreciate that reorganisation in local government is over-due and that many parishes, rural and urban districts, and even some boroughs, are incapable of maintaining their social services either from the aspect of rateable value or from the administrative aspect. Therefore this question should be examined carefully. Non-county boroughs with a population of 4,000 cannot maintain their services. Something must be done. The Minister and the Department have a difficult proposition, and the snag comes when we come to the question of delegation of powers.
Although many mistakes have been made, taking it by and large, local government representatives throughout the country have done a tremendous job for many years. They have been very public-spirited men and women. Often they have carried out their duties not only at personal sacrifice morally and physically, but at financial expense. To my mind these White Papers will kill the very spirit that is most essential.
It has been remarked by hon. Members opposite that the block grant will not make any difference. I contend that no argument has yet been used by them to show that it is other than a question of collusion—I put it no higher—between the Treasury and the Minister of Housing and Local Government with a view to curtailing expenditure. The hon. Member for Weston-Super-Mare said that we on these benches do not appreciate the difficulties of industry. If he had been a member of my authority when the Derating Act came into operation he would have found that in an industrial area the mines, railways and farms were all relieved and the burden fell on cottage property when there was unemployment and 75 per cent. of the people were working three days a week. He would then have realised the difficulties created by that Act.
Now it is said that we have to be tolerant to those people or we shall put them out of the market. Nothing of the kind. The hon. Member knows full well that if they pay their rates and taxes that payment will come out of other costs and will go in that expenditure rather than in Income Tax or through other channels. Why should they not meet their obligations? All industries have been cashing in and doing exceedingly well since 1939 and now there is to be another imposition put on the ordinary householder while the industrialists will benefit.
It was asked what different would the block grant make to the educational system? I should imagine that any hon. Member who has been in local government any length of time knows full well that since 1914 85 per cent. of the approved expenditure of Government grants was approved by the Treasury. Who is to say that the Treasury has not been a keen watchdog of local government spending? Apart from Treasury officials, what about Government auditors? Are they not responsible persons who have always brought us to book if we have made any expenditure over and above what we should have made? I think it is grossly unfair. The Government are using a lot of irrelevancies.
I turn to Cmd. 9831. The Minister has told us that he wants to maintain local autonomy and freedom and to encourage local government representation, and in paragraph 15, dealing with the status and functions of authorities, the Government state:
The test of any system of local government in this country should be whether it provides a stable structure, capable of discharging efficiently the functions entrusted to it, while at the same time maintaining its local democratic character.
I put it to right hon. and hon. Members opposite that in carrying out its functions a local authority has to be guided at all times by the Ministries. Is not that the case with the county council in the first place? Is it not the case that the Government Departments have been the watchdogs in all matters and have granted permission for limited expenditure? Why attempt to be mealy-mouthed about this when we know full well that this expenditure has been controlled?
The Government intend to cut down expenditure and also to check the progressiveness of some Socialist monopolised authorities. [HON. MEMBERS: "Oh."] I said "Socialist monopolised authorities" advisedly, for there are also Tory monopolised authorities. It would be interesting to have an analysis of which has been the more progressive and an investigation of their social services. I speak with pride, although regret, of the fact that in my authority we had to suffer severely in 1929 when the burden was placed on cottage property. Hon. Members will know that that was also the case in other rural areas.
It is ridiculous for the Government to use the phrase about maintaining "its local democratic character" when the White Paper proposes that 55 non-county boroughs and urban districts with populations of 60,000 should have delegated powers. We cannot retain local control in those conditions.
Hon. Members have referred to the divisional education executives. I do not want to elaborate the point, but before I came to the House I spent over twenty years on a divisional executive. One divisional executive in my area covers a population of 96,000. Is it to be nonexistent or to be left in the hands of Whitehall or of the County Hall at Wakefield? Will that be to the benefit of local government, of progress and of the wellbeing of the headmasters, headmistresses, staff and scholars? I hope that the Minister will have second thoughts about this, which is a very serious matter, and I urge him to give it further consideration.
Turning to the Appendix, I suggest to the Minister that the delegated powers in respect of local health and welfare services should be brought down to units of 20,000 and even below and that we should consider not only the population but the services provided and the progressiveness of the authority as well as the future developments likely to take place. I agree that many of these services could be merged, and I hope that when the Commission is appointed it will get on with the job not only as speedily as possible but in an impartial way and will not be dictated to either from Whitehall or from the county council. This will mean the survival of the fittest. It will be a battle between county boroughs and county councils. Indeed, that has been the position for a long time. When I spoke on a Private Bill in the House in 1947, I urged the Minister—a Minister of my own party—not to accept the Bill but to appoint a body to tackle the job completely instead of patching here and there. I urged him to get on with the job of reorganising local government. There is no doubt that county boroughs and new towns have to expand. The question is where they are to expand.
We also have the question of rivalries between the towns and the county councils. I hope that the Commission will get on with its job expeditiously and with consideration for the authorities concerned. I also suggest that the right to apply for delegation should be extended to Part III services of the National Assistance Act. It can be a very useful part of the social service. Anyone who has had experience of looking after the aged, sick and suffering will know full well that their problems can be more speedily dealt with by local men and women. The same comment applies to classified roads.
The provision of libraries is another important function in the service of local government which should also be left with the local authorities. As to control over food and drugs, the right hon. Gentleman said that he would waive that to a large degree. In dealing with the prohibition of the sale of T.B. milk, are we to wait until a county M.O.H. deals with this problem rather than allow the local medical officer, sanitary inspector or housing inspector to deal with it? Will not that be a problem? I am afraid that it will
Finally, while I agree that we need some reorganisation, I maintain that many of the proposals in the White Papers go from the sublime to the ridiculous. The Government are not giving the councils enough money to meet the costs. Industries will still be privileged at the expense of the ordinary ratepayers. Why should they be? That has gone on far too long. While I readily agree that there is need for reorganisation it should be looked at very seriously. It is desirable that it should take place in many instances but I think that in these proposals we are going too far.
My right hon Friend, in opening his comprehensive review of the White Papers, said that our views would be largely covered by the authorities with which we were most connected. I reside in a rural district council area. I represent an urban district council and a non-county borough. I have been a member of a county borough council and I am a county councillor. I believe that my constituency will come into a special review area. Therefore, I think that I am entitled to say that I find some little difficulty in reconciling the conflicting interests about areas, status and finances of local authorities.
I want tonight to concentrate my remarks upon the decision to reduce the derating of industry to 50 per cent. That decision is one of considerable concern in my constituency where there is such a heavy concentration of industry. Industry now bears 17·9 per cent. of the rate burden in Stretford and 27 per cent. in Urmston as against 6·27 per cent. for the whole country. After derating is reduced to 50 per cent., it will bear 30 per cent. of the rate burden in Stretford, and 42 per cent. in Urmston as against an average of 12½per cent. for the rest of the country.
I want just to examine the reasons for increasing the rate burden on industry. I have tried to follow what has been said both in the White Papers and by the Minister, and I think that there are two reasons. One is that there has been a failure to devise a new source of local revenue, and the other is that the Government feel that industry can bear an additional share of the cost of local government. The first is a confession of failure, and the second it to turn away from the principles upon which derating was based. Even if we allow that industry can pay more, I believe that we should not extract the money by taxing the tools of production but by taking it from the profits of industry.
My right hon. Friend the Member for Woodford (Sir W. Churchill), in his Budget speech of 1928. clearly stated the principles upon which derating was based. He said:
Our system of local rating, dating from the 16th century, is wholly inapplicable to modern industrial production. The practice of levying local taxes on the tools and plants of production is, in its nature and essence, economically unsound and even vicious. The rates enter directly into the cost of production and affect our competing power at home and abroad.
He therefore went on to announce the 75 per cent. derating which is now in force.
A young Conservative Member hailed that proposal as the most important, the most comprehensive, the most daring and the most progressive to be put forward by a Conservative Government in office. He said that no other Budgets could rank with it in its importance, and its effect upon the system of local government and the whole industrial system. That Conservative Member was the then hon. and gallant Member for Stockton-on-Tees. Yet, when competitive power in industry today is as important as it was then, he now, as my right hon. Friend the Member for Bromley (Mr. H. Macmillan), instead of decreasing the rate burden upon industry doubles it at a cost to industry of£15 million by reducing the derating, or of£20 million if we compare it with the position in 1955–56. If a patient who, through constant blood donations is suffering from pernicious anæmia, is saved by reducing those blood donations, it seems to me to be folly, once he is cured, to compel him to double those blood donations.
There is another aspect of this problem to which I want to call attention. Industry has to bear a large part of the rates, but has no voice in their expenditure. My right hon. Friend the Member for Woodford, in that same speech, when making his derating proposals explained why industry was only derated by 75 per cent. He said:
The remaining quarter is left, not in derogation of the principle which we affirm that the tools and plants of production ought not to be subject to taxation, but only the profits arising from their use—the remaining quarter is in recognition of the importance of preserving some connection between local industry and local fortunes, in order that the local authority and local manufacturers may have some interest in common and take an interest in each other's welfare."—[OFFICIAL REPORT, 24th April, 1928; Vol. 216, c. 844–865.]
That was a laudable aim, but it is not one which has worked out in practice. How often do we see an industrialist play his part on a local authority? To begin with, it is not easy for him to get there. It is the votes of the ratepayers who own dwelling-houses who elect councillors. They have a tendency to vote for the councillor who will look after their personal interests rather than the interests of voteless and voiceless industry.
I remember very well the 1935 Election when in Sunderland we lost control of the council to the Socialists, and won the General Election which followed the next week. A lady came into my committee rooms, whom we knew had voted Socialist the previous week. We asked why she had come to us when she had voted Socialist the previous week. She said, "The Socialists know how to spend the money, so I voted Socialist last week. 'the Conservatives know better than anybody how to get it, and I am going to vote for them tomorrow."
That, I think, is what happens. I do not think the industrialist has much chance of getting representation upon the local councils. Taken over the country as a whole, if we maintain the principle that we have no taxation without representation, then industry should have 12½per cent. representation upon local authorities. But in my own constituency the position is much worse, as I have already pointed out. In Stretford, industry will bear 30 per cent. of the rates and in Urmston it will hear 42 per cent., yet it will have no means of making its voice felt.
It therefore seems to me that if we are to continue with this proposal to rerate industry, there are some grounds why industry should be given some special franchise and so have direct representation upon the councils. I know it would be very difficult to frame such a scheme, but I feel that if industry is to bear this large proportion of the rates it should have some voice in expenditure. I therefore hope that my right hon. Friend will devise a way in which industry may have a direct voice in local government.
The Minister has already had many indications that his proposals find little acceptance, and I trust that as a result of today's debate they will be recast in several important respects.
Other hon. Members have dealt with the variations in the structure of local government machinery, but as there is little material alteration suggested in the county boroughs—I am thinking not of the counties, but of the county boroughs—I shall not pursue that aspect, although I am very glad that in his opening speech the Minister clarified the point to which the County Councils' Association has drawn his attention, namely, the figure of 100,000 as a minimum for county conurbations.
Incidentally, the right hon. Gentleman referred to the fact that there are two commissions, one for England and one for Wales, but I wonder whether he would say whether he is accepting the recommendation that one of the members of the Welsh commission will be able to speak Welsh. That is very important in several respects and I shall be obliged if he will let me know that at some time or other.
If the block grant is not intended to be an economy axe, what other purpose can it serve? The supposed intention is to increase the independence of local authorities. That, if I may say so, is an ultra-modern version of, "'Will you come into my parlour?' said the spider to the fly", because the right hon. Gentleman knows that the Government will always have the whip hand. In fact, they have threatened us by implication at least in paragraph 2 of Annex D to the White Paper that they will reduce the rate deficiency grant if they think expenditure is excessive, which means that on all occasions the Government will be judge and jury.
The plain truth is that owing to the failure of the Government's economic policy, we are rapidly drifting to another "Geddes Axe" or May Committee, with their consequential inequalities and injustices. I should like to endorse the appeal which has been made by my hon. Friend the Member for Newcastle-upon-Tyne, East (Mr. Blenkinsop)in respect of mental hospitals. The Minister has had a wide experience of local government and has given attention to the Report on mental health. He knows the tragic circumstances of thousands of hospital patients and the desperate need for accommodation and more modern equipment. I therefore sincerely hope that he will yield to the plea made by my hon. Friend, because the urgency of that problem cannot be over-emphasised.
It is surely common ground that the educational services are likely to suffer most under the block grant system. They can escape only if given sole priority and if every other serviec is neglected, but that, of course, would be an impossible position for any local authority to adopt. Therefore, local education authorities are bound to experience major difficulties. They would not be free agents, because the Minister has made his position perfectly clear. Indeed, the present Minister of Education seems to be in a very militant mood. If I may quote something he has said:
Ever since I have joined the Ministry, I have been conscious of a whispering campaign that we were spending too much on education. Well, I am not going to be airy about it. I propose to say in quite categorical terms that this assertion represents approximately the opposite of the truth. But in this general issue of extravagance, I am spoiling for a fight, and I intend to win it.
In another speech, the noble Lord said:
But on one thing I will not compromise. Administration is for the local authority. Minimum standards are a question for me, and I will never surrender the duties of promoting education and of controlling and directing educational policy put upon me by Parliament. It must be my duty while making every allowance for variety of pattern to minimise, so far as I can, differences in standards of performance, differences, that is, in the quality of educational opportunity betwen locality and locality.
May I ask the hon. Gentleman from what document he is quoting? I should like to have that excellent anthology of extracts from my noble Friend's speeches for wider distribution.
If not, I forgive him. I am quoting from a questionnaire, containing questions very difficult to answer, issued by the National Union of Teachers. I have had these questions put to me, and I cannot answer them. I think that the appropriate person to answer is either the right hon. Gentleman or the Parliamentary Secretary to the Ministry of Education. The Parliamentary Secretary will not doubt the authenticity of the quotations I have made. In fact, there are a number of very salient points that will have to be dealt with later.
No matter where the speech was made, the substance of it is equally relevant today as it was then, and in fact it is a contradiction of the position put by the right hon. Gentleman the Minister of Housing and Local Government. The point I am making is that the local authorities will have no more authority on expenditure under the block grant. The Minister can dictate and the local authorities will have to obey, and, presumably, will have to find very much more money than hitherto. I have the honour to be one of the representatives of a blitzed area. We are striving in every possible way to overtake the repairs and works of modernisation made necessary by enemy action, in addition to extending our schools programme. We have done much work by direct labour, but there are occasions when expenditure exceeds estimates, entirely as a result of circumstances beyond the control of the local authority. In such circumstances, the Minister has refused to allow the excess to rank for grant. The Parliamentary Secretary to the Ministry of Education may recall a particular case. He wrote to me in very genial terms about it, but I think that he was a little conscience stricken, because, when I saw him afterwards in one corridoir, he preferred to go to another. I think that he felt that he would like to have written to me in different terms.
When the local authority carries out a contract by direct labour for educational services and exceeds the estimates, the Minister will not allow the excess to rank for grant. If, perchance, as has happened on more than one occasion, the work is carried out well within the estimates and the authority effects an economy, the Minister declines to give the authority the necessary credit. He has it both ways in every respect.
There are certain questions, as I said earlier, which have been put by the National Union of Teachers to me and to other hon. Members. I pass them on, in the hope that we shall have satisfactory replies from the Government. First,
What will be the total of the general grant for the first period? Nobody knows.
Will future grants be depressed to such a level as to throw an impossible burden on local authorities? Nobody knows.
What will be the exact effect on rates in any area? Nobody knows.
How much are prices to rise before an interim review takes place? Nobody knows.
Is the Government contemplating the further re-rating of industry?
It all comes to this, that there will be a haggle between the local authority and the Treasury, and those of us who have had experience of that kind of thing realise how much delay and frustration will take place. It is the uncertainty and ambiguity of the whole thing which distresses hon. Members. We trust that, as a result of the debate today and tomorrow and of further consideration, new proposals will be put forward for the reorganisation of local government which will give a far greater measure of satisfaction to all concerned not only in local authority work generally but with education in particular.
I hope that the hon. Member for Swansea, West (Mr. P. Morris)will forgive me if I do not follow him closely. I wish to use the few minutes remaining to me to make one or two brief points about the White Paper on Functions.
We have had reference today to what I think The Times called the dogfight which is alleged to exist between counties and county districts on this question of powers. I would say on that to my right hon. Friend the Minister of Housing and Local Government, that the principal representations which I have had from the main local authority in my area come from one who is not only chairman of the finance committee of that authority, a non-county borough, but who, in addition, has been intimately connected with the finances of the West Riding County Council over a number of years. I stress that, because I should not like it to be thought that the views I am about to put forward are designed to advance one sectional interest at the expense of another.
In the first place, we are very concerned that the Minister should have plumped for delegation rather than outright conferment of powers. I understood that, at one time, it had been fairly well agreed between the local authority associations that conferment should be the rule.
My right hon. Friend will be well aware of the objections to delegation which are entertained by the county districts. They have been enlarged upon sufficiently today. I would only say that the system of delegation is admitted to be expensive. In the West Riding County Council area alone delegation for the function of planning costs about£97,000 a year, and planning is only one of the functions involved. Those who have experience of this system feel that if the Minister adopted the system of conferment he would make it possible for better value for money to be obtained. I hope that my right hon. Friend will be able to give an assurance that, in the further talks which I understand he is to have with the local authority associations, he will reopen the question of conferment versus delegation.
The next point that I wish to put to my right hon. Friend, which has also been aired during the debate, concerns the test figure of 60,000 in respect of the level of population which he is advancing as one criterion for whether or not certain powers should be conferred. The White Paper proposes 60,000 as the test of whether powers should be delegated or conferred—whichever it is to be—as of right. That is, surely, the point. The White Paper admits that population is not to be the only criterion. It would be obviously absurd if it were, and if the Minister insisted on a bare figure of population and ignored considerations of rateable value, administrative record, and so on.
The point is that, as these proposals stand, without a population of 60,000, a county borough, as in the case of my own, has to go more or less cap in hand to the county council and ask for the powers. I urge upon the Minister, as others have done this afternoon, that he should consider reducing the qualifying figure to at any rate 50,000. My right hon. Friend may reply that if he did that local authorities with populations of 40,000 to 50,000 might well ask him for a similar concession. I can only reply to that objection that the figure of 50,000 has been unanimously agreed by the A.M.C. Their members are agreed that this is a suitable figure. They have not so far presented any objection to the decision of the A.M.C. to advocate that figure.
Can my hon. Friend advance any real argument why the case for a non-county borough with a population of 50,000, which is efficient, should be any stronger than that of a non-county borough of 30,000 or 31,000, which is equally efficient?
Obviously, there must be a test figure. That was the difficulty in which my right hon. Friend found himself.
I am supporting the figure of 50,000 because it is one which has commended itself to the Association of Municipal Corporations, on which my authority is represented. I realise that in the White Paper my right hon. Friend has been in some difficulty in respect of the question of functions. He has had to put up, as it were, a blueprint for discussion, and in so doing he has been forced to work within a more or less rigid framework of uniformity.
I hope that the eventual solution which may be arrived at in these cases will be more ad hoc and pay more regard to particular cases and to local conditions. If this is so, and if this is what is in my right hon. Friend's mind, I hope he will be able to say so at the end of this debate and reassure those whose apprehensions have been aroused by some of these proposals as they stand.
We are now coming towards the end of the first day of this important debate on the future of local government. As one would expect, most of the speeches today have revolved around the experiences of the Members concerned. Naturally, we all speak from our experience in local government, or experience of the local authorities associated with our constituencies.
We have had three excellent maiden speeches, two from the other side of the House, from the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott)and from the hon. Member for Bristol, West (Mr. Robert Cooke)and, on this side of the House, from my hon. Friend the Member for East Ham, North (Mr. Prentice). If I may particularise, his contribution was excellent and I join with other hon. Members in hoping that we shall often hear him and the other hon. Members in our debates.
The Minister said that the present system of local government had been in force for about seventy years. During that time there have, of course, been modifications and adaptations from time to time. The general structure as we know it today has, as the White Paper says, borne the stress of time and the development in the local government services extremely well. War-time was one of the heaviest periods for local government and local government services stood that strain exceedingly well. Equally, no one will deny that there are features of our present system, both in structure and finance, which are unsatisfactory and which should be changed.
The question, therefore, is: what are the defects in our present system of local government and do the proposals in the three White Papers contribute towards solving the problems of local government? Quite bluntly, I say that they do not. They make hardly any contribution. The Minister said that this was a bold overhaul of the machine of local government. Lord help us when he is timid if this is bold! This is a mouse, not an elephant. The Minister has tried to offend no one and the trouble is that he has pleased no one. One starts to tackle the problem in altogether the wrong spirit if, with all the prejudices which are hound to be involved, one approaches it on that basis, seeking the complete agreement of all the local authority associations.
Let us examine the two White Papers dealing with area and status and with functions. They merely tinker with the problem. First, the Minister fixes certain population figures, 60,000 and 100,000, an then says that, although he has fixed those figures, if there is an authority with a population a little less and another authority with a population less still, then they are not precluded from being given delegation or other powers. He says that 100,000 is the population for county boroughs, but that, although he has fixed that figure, if there are others with populations below 100,000 he is prepared to consider them; and that all he means is that if there is an authority with a population of 100,000 then it is almost a foregone conclusion that it will get county borough status.
One of my hon. Friends said, "Is it a foregone conclusion?" I query it on the same basis. Again, the Minister said practically nothing upon the point mentioned in the White Paper, namely, that the creation of county boroughs undermines the whole structure of county government and the two-tier system in many areas.
I now turn to the White Paper on finance. Instead of attempting to meet the point about which I thought everybody was agreed—until I heard the Minister today—namely, that local authorities are carrying a very heavy burden of financial responsibility without adequate financial assistance, the right hon. Gentleman says that any future development in the services included within the general grant will have to be carried out of the general rate. So, instead of relieving local authorities of a financial burden, the Minister is adding to it in future.
The Government have been a nightmare to local authorities, In the early post-war days local authorities were a little disturbed at some of the restrictions placed upon them by a Labour Government, but they are now looking forward to the day when a Labour Government returns to power, because the greatest period of stability and progress which local government has had in this country was in the period from 1945 to 1951. Since the Government came to power financial burdens have been added to local authorities almost daily. Between 1951 and today interest rates have changed sixteen or seventeen times.
If a local authority is properly to plan its programme it must have some idea of what a scheme will cost it when it is completed. During the lifetime of this Tory Government, if a local authority has considered a scheme, by the time it has received its officers' reports the interest rates have risen and the cost has gone up; by the time it has gone to tender conditions have changed again; by the time the work has started they have changed again, and by the time the authority has finished the scheme they have changed again.
Not one local authority has been able to go ahead on any project with any degree of certainty—and they will be more uncertain still as a result of these White Papers. Having placed all this added financial burden upon local authorities by way of increased interest charges, the Government are making no contribution towards helping them to bear those added burdens.
Let us look at the functions of local government. It has only two functions. First, it has to provide the services which are essential to the community, where private enterprise fails to provide them, or cannot provide them at a profit. Its second function is to protect the consumer of a service against fraud or exploitation where private enterprise does provide that service. The services which are essential to a community and which private enterprise cannot provide at a profit include housing, education, parks and open spaces, sporting facilities, water and sanitation, police and fire protection. They are essential services to the public which other people cannot provide at a profit. If they could, local government would not be allowed to tackle them.
Turning to the second function, the protection of the consumer against frauds, I would point out that we did not have weights and measures inspectors because shopkeepers were giving overweight. We did not need food and drug inspectors because shopkeepers were selling pure food. Equally, we did not need building and sanitary inspectors because the building contractors and private owners were doing the right thing by the community. So they are the functions of local government.
We have today a further example from the Minister of the concept of local government. The right hon. Gentleman mentioned new towns. My hon. and learned Friend the Member for Kettering (Mr. Mitchison)also proposed to refer to them and to the statement of the Minister, but he felt that his speech was becoming too long so he cut out that reference. Today, we have had mention of new towns provided by national finance. There is profit in land ownership and property ownership, in the development of estates and in the industrial and commercial development of housing. Of course, this Tory Government proposes to hand that over to some other authority. The local authority cannot have anything out of which it is likely to make a profit.
In some of the new towns water and sanitation have been provided by the development corporation, but that will not be handed over to private enterprise. That will be handed back to the local authority as services which are unprofitable. Services which are profitable will be handed to the right hon. Gentleman's friends in private enterprise. In the days of the Labour Government, they talked about "jobs for the boys." I do not wonder—they coined the phrase. At some other time I hope there will be an oppor tunity to debate the future of the new towns. Hon. Members on this side of the House do not propose to allow these national assets, which were built up by national finance, to be lost.
I am proud of the Labour Government of 1945 to 1951 which made it possible for new conceptions of living conditions to be provided in the form of 14 new towns. That was done amid the difficult period of the post-war reconstruction. We say that those assets were provided by the people for the people, and they should be maintained for the people. The profits which have accrued have resulted from people going to the new towns. It is because people have gone to the new towns that profit has been created. It was not created by private enterprise and it should go back to the people who have helped to build those towns.
Although hon. Gentlemen opposite may say that those profits have gone back to the people who helped to build the towns, if in fact new towns are sold off while the development is still taking place, the future development will be enjoyed by private enterprise. I could give examples from new towns where land was bought originally for£40 or£50 an acre and today it is being sold for£20,000 and£25,000 an acre. The change in land values is due to the fact that when it was sold for£40 an acre there was no one living there, and now there are between 20,000 and 25,000 people living there. The people being there has created the value.
The ordinary citizen looks to local government for the services which I mentioned earlier. He wants a home and schools so that his youngsters may be educated. He looks for parks and open spaces for the children to play in. He looks for opportunities for physical recreation, for swimming pools and facilities for other sports. He requires adequate police and fire protection and all the other things. I wish to make this point, which may be considered controversial, but I am not altogether unknown as a person who is controversial.
From the way some people talk and have spoken even in this debate, including the Minister, one would think that the present general structure of local government is sacrosanct. The average citizen does not care twopence whether he lives in a county borough, an urban district or whatever we call it. He does not care whether it has a mayor or a chairman. or is a one-tier or a two-tier system. He wants service—his home, schools, parks, a swimming pool—provided at a reasonable cost. It is our job to provide a structure which will make those services possible at reasonable cost.
The average citizen does not care whether Queen Anne slept somewhere on a particular night or who determines the particular boundary. The average citizen laughs when he crosses the road from one authority to another and finds a different set of conditions obtaining. Only members and officials of local authorities, Members of Parliament and other such folk talk about preserving ancient historical associations.
Because a large number of local authorities, including many historic ones, have not the financial resources to provide adequate services within their areas. If they cannot do so, they must be superseded by some authority that will provide the services.
Are services like education, housing, planning, police and fire protection to be national services locally administered, with the citizen having the right to expect a standard of service roughly comparable with other areas, or are they to be locally financed with no relationship to national standards, with the standard of service varying from area to area? I take the former view, that these should be national services locally administered. The national Exchequer has never made as large a contribution to them as I thought was necessary. Most Governments have also taken the view that these are national services, but most Governments have disagreed with local representatives about the proportion of the costs to be centrally borne.
We had an interjection from a Government supporter who is an educationist. When secondary education was first introduced there was the famous Cockerton judgment against West Ham Borough Council because the council provided secondary education, although, in 1902, it had not the authority to do so. The Government of the day stopped that local authority from taking the initiative. Some of my hon. Friends have been Members of boards of guardians when the guardians looked after the poor. Some of my hon. Friends had to go to prison when they were really looking after the poor. The Government of the day, a Tory Government, took away from the guardians the right to administer the Poor Law.
We have the same sort of Tory Government today; they never change. They took away the power of the boards of guardians. My right hon. Friend the Member for Poplar (Mr. Key)and others went to prison then because they were providing the poor with sustenance and a Tory Government did not want that.
I did not agree because I think that that was essentially a local government service, provided by local government services, but local government representatives in Coventry said that the Civil Defence arrangements of this Government were foolish and refused to operate them. The Tory Government talk about freedom for the local authorities, but they superseded Coventry City Council and put in directors of Civil Defence.
I am trying to follow the argument of the hon. Member, but in one case he says that it is a national service, locally administered, that he wants; and it seems that the Post Office or telephones are a national service that is locally administered and that is what he wants—[Interruption.] Let the hon. Member make clear what he wants, because in the case relating to Poplar he complains that it was not a local service but a national one and that the local administration was over-ruled.
I could not have made myself clear. I believe that local government is the administration locally of national services that the Government of the day determines. After all, local government works within a framework provided by Parliament and it cannot go outside that framework. It is Parliament's job to set up that framework and set national standards for the services. Then the local authority administers them. The quarrel has always been on the question of cost, but now this Government claim to act on the basis of freedom for local authorities
The hon. Member has mentioned one of the services which is rendered by local authorities, the fire service. During the war there was a National Fire Service. After the war the National Fire Service was given back to local authorities after a speech made by the right hon. Member for Lewisham, South (Mr. H. Morrison), who was then Home Secretary. In other words, after the war the Labour Government gave back to local authorities something that had, in fact, been a national service and the Government paid the total cost, but now local authorities are to pay a proportion.
I shall break my speech to deal with that interjection, because the hon. Member is knowledgeable in local government. He is so knowledgeable that I suggest he ought to remember that the fire service was taken over during the war, and, because local authorities did not like losing a service they had administered, they asked for a promise that when the war was over the local services should be returned. The then Home Secretary, not a Labour Home Secretary, made that promise.
Whoever it was, the Labour Government honoured that pledge.
A lot has been said today about education. That is a service which ought to be of such a standard that every child in the country should have a reasonable expectation of the same educational opportunity. It is a 'national service. Assertions have been made today that there will be provisions for the future cost of education to be borne by local authorities.
Is not the fire service a national service? The hon. Member for Dulwich (Mr. Robert Jenkins)mentioned that during the war we took the service over. Is it part of the defence force of this country or not? Can he tell me why the police force, which receives a 50 per cent. grant, is still within the grant aid, whereas the Fire Service, which receives only 25 per cent., the lowest of all, is excluded?
I agree, but the Government are now taking 25 per cent. away. In future, the fire service is to be covered out of the general grant. I can see what will happen. There will be a conflict between the education committee and the fire brigade committee. If the education committee wins, the standards of fire protection will fall. If there is a fire at a local school and the local fire brigade has insufficient manpower or equipment to deal with the outbreak, there will be an outcry about loss of life due to parsimonious expenditure by the local authority on its fire services.
I know hon. Members opposite too well. When I was associated with the Ministry of Civil Aviation, the biggest fight I had with them was in making provision for fire and crash units. They complained that firemen were standing about during the day.
The fire service is an important service in this country. Unfortunately not long ago we had a national dispute in the Service. It was called the "spit and polish strike", but the basis of it was that the police grant was 50 per cent. whereas the grant for the fire service was only 25 per cent. The local authorities said, "If you give us 50 per cent., as you do for the police, we will meet the cost of the award made by the Whitley Council".
Having been taken from my brief by that interjection, I return to it to suggest that these are national services and that the citizens of this country have a right to expect a standard of service based on equity between one part of the country and another. The Government's proposals mean that, in future, local authorities will have great difficulty in meeting the cost of the services, that they will let some of the standards fall and that we shall not have the general standard of services which we ought to have. All this is in the name of freedom.
I expect that the Parliamentary Secretary, in his reply, will say that my example of the fire brigade and education committees will not arise in practice because the Government will keep the fire and education services up to standard by their control at key points. Although the Minister spoke for a very long time today, he did not say where that control on key points would be or what the key points were, and we are no wiser now than we were at the beginning about what the Government mean by this control of key points.
I am fairly certain that within the right hon. Gentleman's Ministry the financial effects of these proposals on every local authority in the country have been worked out. Many local authorities have worked them out for themselves. I am certain that the Ministry has them.
Why have they not been published? If we are discussing these proposals, why not have their effects published as well? I may be unduly suspicious. I may not be giving the Minister the credit to which he is entitled. From his past actions, I think that that is justified. But, in the absence of the publication of the figures and of their effect on local authorities, I think it is fair to assume that, in the main, they are to the disadvantage of the local authorities, and that if they were published now there would be such a riot that the Bill which the right hon. Gentleman is proposing to prepare would not be allowed to be prepared.
The excuse that the Minister makes for the change in grant formula is completely outside my own experience. My hon. and learned Friend the Member for Kettering completely refuted the suggestion, and quoted authorities to show that the percentage grant has not caused local authorities to be spendthrifts. My experience has been that it has very often worked the other way; that local authorities have, at each budget review of their own finances, cut out many grant-aided projects that should have been included, because of the likely effect on the rates.
Never once in my experience of local government, which extends over all types—borough, urban and county—have I known members of a committee, chairmen of committees, or officers of local authorities, saying, as one hon. Member opposite suggested they said, "This is a grant-aided service. Let us do all the things we want to do, and some that we do not want to do"——
Then all I can say is that I have been fortunate in the local authorities that I have served on, and the hon. Member has been unfortunate. As a member of a local authority, and particularly as chairman of committees, my experience has always been of a fight at the annual budget meeting with the chairman of the finance committee to put through the proposals of my own committee in such a way as to meet the requirements of the finance committee. That committee has told us, "This is the rate that we consider can be borne by the ratepayer," and we have had to cut our budget to that rate. I have never known services to be undertaken that were not necessary——
If the block grant is so irrelevant why is it likely to cut expenditure? It will, because, at the moment, of course, if there is an increase in teachers' wages—[An HON. MEMBER: "Salaries."] If the word "wages" is good enough for one, why is it not good enough for someone else? No matter what it is called, it does not buy any more in the shops, and under a Tory Government it has less value every week.
If a local authority is at present incurring expenditure, 50 per cent. of which it meets and 50 per cent. of which comes from the Exchequer grant, it means that only 50 per cent. comes from the local rate charge. If, after this, it all goes on the local rate charge then, in fact, it will mean—as it means now, very often—that local authorities will tend not to incur expenditure beyond a certain point.
The hon. Gentleman says, "Hear, hear," but we say that that is what this is intended to do, to stop local authorities providing that standard of service which the ratepayers have a right to expect——
If the hon. Gentleman is so certain of his ground that the 50 per cent. is paid by the Exchequer is not influencing expenditure, then let him clear up the point, because he cannot have it both ways. He cannot claim that the 50 per cent. issue is irrelevant, that finance is not taken into consideration, and then turn round and say that the question of money under the block grant is so relevant that the money will not be spent by the authority.
The hon. Gentleman has had greater educational opportunities than I have had. I only went to night school. Perhaps that is why it is clear to me at this time of night.
In fairness to the Parliamentary Secretary, I must sit down now, although there is much more that I should like to say. These proposals make no contribution at all to the problems which face local authorities today. They are far too timid. There ought to be a much greater amalgamation of smaller authorities, particularly rural authorities with urban and borough authorities, where the standard of service is low and cannot be provided with the rateable value that is available to them.
Equally, on the financial side, this will mean the holding back of local government services, the varying of standards between one part of the country and another, and I hope that when the vote is taken tomorrow night the House will take the opportunity of expressing that point of view. In any case, I ask the Government to think again, to take these proposals back and bring forward other proposals far more bold and revolutionary in the amalgamation and structure of local government, and equally more revolutionary in the provision of finance for local government.
The hon. Member for Wellingborough (Mr. Lindgren)in his rumbustious and knowledgeable speech raised two points to which I will endeavour to reply. The first was that there should be national standards of education. The second was that the amount of the general grant must take into account the need to develop the education service. On both those points I shall hope to give him, from his point of view, a completely satisfactory reply.
Before saying anything else, however, I feel that it would be the wish of the House that I should add my congratulations to the hon. Members for Bristol, West (Mr. Robert Cooke), for Newcastle-upon-Tyne, North (Mr. R. W. Elliott)and East Ham, North (Mr. Prentice)who have pleased the House very much today with their excellent maiden speeches, the more acceptable, I think, because in total time they took twenty-nine minutes; this will make the House look forward all the more to hearing them on a future occasion.
This has been a very good day's debate. I am sure we are all grateful to my right hon. Friend for the very full and painstaking way in which he announced the Government's proposals, and we all immensely enjoyed the speech of the hon. and learned Member for Kettering (Mr. Mitchison)which followed it.
I should like to add this personal note before replying to the debate. It is now almost six months since I first had the opportunity of replying in this House on behalf of my noble Friend the Minister of Education. During this period of six months I have had the opportunity not only to listen in this House to hon. Members with a far wider knowledge of the subject than I shall ever have, but I have also visited nearly twenty local authorities in many parts of the country.
I have not the very least doubt that education is today perhaps the most important of all our social services, nor that the revolution in education which followed the 1944 Act of my right hon. Friend the Lord Privy Seal has proved possibly the most important single instalment of social reform during this century. Furthermore, I doubt whether the people of this country even now fully realise quite how much we owe to the teachers during this difficult period of the bulge. I hope that, however much hon. Members may disagree with the proposals of the Government, they will be in no doubt as to the sincere concern which my noble Friend and I both feel for the morale of the teaching profession and, indeed, for all those who bear direct responsibility for our system of education.
Let me start by enunciating one principle with which I think there will certainly be no disagreement. The Government favour the principle of the distribution of power and of the balance of power which was laid down in the Act of 1944. They regard it as their duty to reconcile this principle with the necessary development of the education service.
Furthermore, I think that there is fairly widespread agreement, not least in local government circles, that local government is today declining in status and in effectiveness. The Government believe that an important cause of this decline is the growing dependence of local authorities on specific Exchequer grants, to which my right hon. Friend referred. The main trouble about specific percentage grants is that they must inevitably undermine the responsibility of an authority for allocating its total resources in accordance with its judgment of the needs of its area.
The hon. and learned Gentleman the Member for Kettering made the rather remarkable statement that the Government's proposals would lead, as he put it, to battles in the council chamber. Surely, if local government is to have any vitality at all, that is just what ought to happen far more than it does today. After all, the chairman of the finance committee, to whom the hon. and learned Gentleman referred, has only one vote just like the chairman of the education committee. Both have to argue in the same assembly, and I should have thought that it was a very bad thing if either one or the other always won the dispute. If the Government's proposals lead to increased debate and increased vitality in the council chambers, the Government certainly will not he disappointed at that.
I confess that it is a matter of regret to me that we do not in these days ever seem to have an all night sitting in this House.
I will answer about the police at once. The very large proportion of police expenditure incurred by authorities in the Metropolitan Police district made it quite impossible to include in the weighted population formula any weighting which would produce an equitable result for all authorities. The primary reason the police have been left out is that it was impossible to devise a formula which would work fairly. Many people have had a shot at it, but it has not been possible to devise one which would work reasonably and fairly in respect of the police.
It really is no answer to point out with regard to education that it represents, in money terms, a very high proportion of the percentage grants which it is proposed to replace by a general grant. On the contrary, it is precisely because these percentage grants for education have grown so large that one cannot help feeling concern about the future of education as a local government service. What I propose to say now is, I know, controversial, but I can only give the House my own impressions which I have gained during the last six months.
It has seemed to me that local education committees in general are showing an increasing capacity to forge closer links with the Ministry of Education than with their respective county councils or county boroughs. Of course, I know that there are those who would not regard such a development as a had thing; there are those who would like to take education altogether out of local politics. But I think that it is important to remember that those people are not merely opposed to the Government's proposals but they are really passing a vote of no confidence in local government, at any rate so far as the education service is concerned.
As against their view, the Government stand firm by their convictions. First, we ought, as a matter of principle, to make a greater reality of local government. Secondly, we can fulfil this principle without sacrificing the specific objective of a flourishing and developing education service.
Turning, now to some of the objections which have been brought against the Government's proposals, let me make it absolutely clear that I fuily realise that anxieties are felt in many quarters about this matter, and not only by educationists but also by a number of hon. Members with long experience in local government. My noble Friend and I have done our best to keep abreast of all the contributions which are being currently made on this controversy. One question which has been asked is this: in so far as we are to have local option, will not this lead directly to variation in the standards of education provided?
That point was raised very ably by the hon. Member for Wellingborough. Surely, whatever else the system of percentage grants has achieved, no one could possibly claim, or, I should have thought, would wish to claim, that it led to uniformity in educational standards. Historically, our experience has always been in the opposite direction. In any case, I have always thought that variety was the very lifeblood of our national educational system.
So far as uniformity is concerned, surely the really important thing is that there must be standards below which no local education authority shall be allowed to fall. I have said on a previous occasion in the House, and I repeat the words tonight, that the Government see no reason why the change in the method of calculating grant should affect the apportionment of statutory responsibility between the Minister and the local authorities. There may well have to be certain more or less technical amendments to the Education Acts to take account of the change in the grant system, but the Minister's powers to lay down minimum standards, and, in the last resort, to enforce them, will remain. I can assure the House that there is no question at all of going back on that pledge.
I now come to my next point. Granted entirely what I have said about minimum standards, the question is then put: how is the Minister to secure these minimum standards in things which are not susceptible to what might be called quantitative measurements, such as the provision of books—a matter in which the hon. Member for Fulham (Mr. M. Stewart)is very rightly interested—science equipment, and so on?
Surely the first point to notice here is that the existence of a percentage grant obviously does not in itself solve the problem. Even at the present time there are authorities which are generous in these respects and those which are not so generous.
The second point is that the powers of my noble Friend to supervise and encourage authorities in these matters will certainly be no weaker under the conditions of a general grant than they are today under the conditions of a percentage grant. My noble Friend will still have his powers of inspection, which are of the highest importance.
In the last resort—I would emphasise this—both my noble Friend and the local education authorities have to rely on public opinion and public interest in education, and, after all, this public interest is growing all the time.
Since I have mentioned the subject of books, I would say that I was most encouraged to find the other day when opening a new school in the Midlands that the parents of the children at the school had clubbed together and presented a large number of extra books to the school library. That seemed to be an absolutely admirable thing to have happened.
Does not the hon. Gentleman realise that under his system of grants, which provides an average grant for, for example, what is spent on books, any authority which spends less on books will benefit at the expense of a progressive authority which spends more on them?
The hon. Gentleman does not invalidate my point that there are variations under the present system, which does not secure uniformity. My noble Friend will still have powers of persuasion, inspection and supervision under the new system.
I now want to say just a word about those aspects of local education which most often excite criticism in the local Press. I am thinking of the equipment and furnishing of schools, and so on. I am one of those who think very definitely that standards of beauty and design are things which concern everyone in our society. For that reason, I am never too happy about that rather over-worked phrase "the frills" which one still hears fairly frequently. I will not make a point about this, but, personally, I am sorry when I hear that phrase used. At the same time, it will not be a wholly bad thing that local education committees will have a greater incentive to persuade both their colleagues and the general public that the expense which they are incurring is worth while and that they are getting good value for money.
Now let me turn for a few moments from the principle of the general grant to the question of the amount of the general grant. Here again, I remind the House of what has been said more than once on other occasions, namely, that the Government fully recognise, as my noble Friend has pointed out in several speeches that expenditure on education must continue to increase. Development of the education service is an important element in the Government's social and economic policy and it will remain so.
Secondly, the Government do not propose that the burden of the cost of the development should be borne exclusively by the rates. In fixing the amount of the general grant the Government will take account of the need to develop the education services and I can assure the House that we will aim at keeping a fair and reasonable balance between grant and rate-borne expenditure. It is not something about which it would be sensible to be precise.
I know that in this context some concern has been expressed about paragraph 26 of the White Paper on finance, and I particularly wanted to bring in this, because it has been widely noted. The paragraph says:
It is most important to reduce this dependence of local government on Exchequer grants if it can possibly be done.
I ask hon. Members to note the context of that paragraph. I can assure the House that those words are used in reference not to the general grant, but to the rerating of industry and to the Government's proposal. I should have thought it inherent in our whole approach to the problem of local government finance that the product of rerating should be offset by some reduction in grants.
Of course, as sub-paragraph (c)of the key paragraph 19 points out, when the amount of the general grant is being negotiated, the Government will have to bear in mind not only the need for development in any particular service, but the general state of the economy as well. Surely there is nothing wrong with that. However keen we may be to develop the education service, we ought not to be too upset if local authorities want to expand at a faster rate than the total sum of our resources will allow. In a democratic society in which more and more people realise the value of freedom—after all, the idea of increased range of choice is surely the very essence of democratic society—there is always bound to be a conflict of this kind.
Lastly, I come to the argument—and we had this from the hon. and learned Member for Kettering, and my noble Friend and I fully realise that this is a serious argument—that while proposals for general grant secure greater certainty for the Government, there will be a greater measure of uncertainty for the local authorities. The hon. and learned Member put this point very fairly in the concluding parts of his speech. However, it would be very unwise to under-value the assurance given in paragraphs 19 (b)and 20 of the White Paper. In the first place, paragraph 19 (b)specifically provides for the grant to take into account any general rise in costs due to inflation or, as the White Paper put it,
…factors beyond the control of local authorities…
The House may feel that the specific assurance given in paragraph 20 is even more important. That paragraph recognises:
…that there may be unforeseen increases during the grant period of such magnitude that they cannot reasonably be carried in full by the local authorities. In this event the Government will be prepared by way of exception to consider interim revision of the grant.
I am sure that the chief anxiety in the minds of many people is the prospect of an increased Burnham award coming in the middle of a grant period. An award of this kind would certainly come within the category of increases to which paragraph 20 refers.
All I have been saying so far concerns the general changes affecting the country as a whole. So far as individual authorities may have to deal with circumstances beyond their own control, for example, an increase in population, this should be covered by the formula, but if a local authority embarks upon a deliberate expansion of the education service as an act of local policy it is the deliberate intention of the Government, and it is inherent in their proposals, that this should in future be the local authority's own affair, in the matter of finance.
I think that I have time to reply to the several hon. Members who asked me about the abolition of divisional education executives. I hope that hon. Members will forgive me if, owing to the lateness of the hour, I do not give way to an argument upon this subject, but I will try to answer the point. The proposal to abolish these executives follows naturally from the proposals agreed among representatives of the local authority associations themselves. These agreed proposals, in providing for some devolution of the functions vested in county councils, were based on the principle that any devolution should be to the elected councils of existing local government units, that is to say, the county district councils, and in the case of education this meant a delegation to appropriate county district councils and the abolition of divisional executives.
Do not let us forget that the cost of divisional executive administration amounts to between£3 million and£4 million, out of the local education authority total expenditure on administration of about£18 million a year—which is quite a high proportion. That expense is probably the chief single reason why administration has proved more costly in counties than in county boroughs.
My noble Friend and I fully realise the doubts which exist in the minds of educationists, but I believe that those doubts are due to the fact that many people, in their sincere concern with education, do not realise the revolution which is going on all the time in the nation's thinking. Today there is a much greater national passion for education than ever before. The controversy in the Press and elsewhere about the organisation of secondary education and the 11-plus examination is a clear sign of the extent to which people are alive to what education means. I think that under those circumstances we can, at the same time, aim at the principle of giving greater independence to local government and also achieve the objective of a developing and flourishing education service.