GRANTS TO LOCAL AUTHORITIES IN DISTRESSED AREAS (ENGLAND AND WALES.)

§ The MINISTER of HEALTH (Sir Hilton Young)

May I ask for your guidance on a point of Order. There are two Estimates, one for England and Wales and one for Scotland. It would, I think, be for the convenience of the Committee for the Debate to range over both Estimates, reserving of course the right of the Committee to divide on the two Votes if that be required.

§ The CHAIRMAN

I imagine that it will be for the convenience of the Committee to do that. I do not think that anyone would raise any objection if the two Votes were discussed together. I think that I ought to say, however, that it is only because the discussion will obviously be on the same principle on both Votes and that the difference between them is merely that of geographical area. It is not the same thing as putting together other Votes in Supply; there are objections in other cases to such a course.

§ Mr. KIRKWOOD

Is it not essential that we should have a representative of the Scottish Office on the Front Bench ? The last time we discussed the most serious thing that has been discussed in the House, namely, unemployment, there was no representative of the Scottish Office present all day, and now it is happening again.

§ Sir H. YOUNG

I can assure the hon. Member that the representative of the 518 Scottish Office is out of the House for a few moments and that he will be here shortly.

§ Mr. KIRKWOOD

If I am in order, I will, to impress the Scottish Office, move that the House adjourn until a representative of the Scottish Office is here.

§ The CHAIRMAN

The hon. Member cannot move in Committee the Adjournment of the House.

§ Mr. KIRKWOOD

May I move, then, "That the Chairman do report Progress, and ask leave to sit again."

§ The CHAIRMAN

In view of the statement which has just been made by the Minister, I cannot accept that Motion at the present time.

§ Sir H. YOUNG

I will repeat the state meat which I have just made, that a representative of the Scottish Office will be here in a few minutes and will deal with the Scottish aspect of this subject in the course of the Debate. It is my task to propose this Estimate for a Vote for the relief of distressed areas. The Committee is familiar from previous proceedings with the manner in which the necessity for this Vote has arisen. A certain number of local authorities in the country have particularly suffered from unemployment, and in consequence the burden of out-relief presses with exceptional weight upon the ratepayers. That emergency condition is due to the following circumstances in particular, and they are well known to the Committee: In the first place, to the very long continuation of depression. That is the real root of the difficulties with which we are dealing to-day. The result of the long continuation of depression has been gradually to exhaust, in the particular areas where the burden is heaviest, the resources, or what I might perhaps call the reserves which, in ordinary times, are available to cover any such increased expenses as those due to an increase in unemployment. The resources of the unemployed themselves have been exhausted, that is, their reserves and their family reserves, in the special areas. In the second place, all those auxiliary resources of private help and charity which are always such an invaluable background in our national life have also been largely exhausted in those areas.

Turning to the other side of the picture, the means available to the local authori- 519 ties to meet the exceptionally heavy and long continued depression, we can say that their resources to meet it have also been exhausted. The resources of the ratepayers have been diminished by the same causes as have operated against the reserves of the unemployed themselves. In many cases in the depressed areas of which we are all thinking the balance available to the local authority which has served as a reserve on which to fall back for additional expenses has also been exhausted. So we now have in the country a certain number, not a large number, of authorities of the sort who, owing to the increase in their out-relief expenditure, are confronted with a very difficult situation which calls for urgent and adequate measures of relief to help them during the current year. The second feature of this scheme, as I think the Committee will know, is that it is a temporary one, advanced simply to deal with the emergency and the difficulty of the present year. The permanent scheme will be introduced in the course of the present Session, but it cannot be introduced in time to give the help that is required in the current year 1933–34. It was altogether impossible for the worst of the areas to carry on until next year, and something had to be done in the current year; that is what is now proposed to be done by this action. A word as to the history of these proposals.

The Committee is aware that I originally put forward a proposal in which the more fortunate local authorities would have been asked to make a contribution to the necessities of the depressed areas. I described that proposal to the Committee when I was dealing with that question. It was that local authorities in the more fortunate areas should find the produce of a halfpenny rate, that the Government should add a half to the total sum contributed by the local authorities, and that the resulting sum should be distributed to the distressed areas. An entirely erroneous statement has gained currency as to the amount of the relief which that would have placed at disposal. It has been suggested that there would have been available for the relief of the distressed areas the sum of £1,500,000. No such sum was ever contemplated, was ever discussed or was ever proposed. The halfpenny rate and 520 the contribution from the Government would have placed at the disposal of the distressed areas, in England and Wales, the sum of £650,000. That sum, in the opinion of the Government at the time, was adequate for the purpose, and £650,000 was the maximum sum which has ever been considered in this connection. That scheme fell through. The local authorities rejected it. I did not think that the reasons for which they rejected it were entitled to prevail and if I had thought so I would not have proposed it.

On the other hand, their view was perfectly definite and unanimous, and they were entirely unwilling to alter their opinion. In those circumstances, it would have been wrong and it would not have been, I believe, in accordance with our constitutional theory of local government, nor would it have been in accordance with our common sense or the desires of the House, for the sake of a temporary scheme, to have forced that proposal down the throats of the local authorities. In the circumstances, the Government chose the other alternative of finding the sum themselves, and that sum which is now proposed is £500,000. The Committee may ask why, if £650,000 was first proposed, it is now proposed to reduce it to £500,000. The difference of £150,000 is not perhaps a very big sum, but I would explain to the Committee that, in the first place, time has passed and we are at a later period of the year, and that it is now possible for my advisers to make a closer estimate of the sum which is actually necessary to see the distressed areas through. Further, I am glad to say that there has been an improvement in the general situation as regards employment, and that enables us also to make a closer and smaller estimate as to the sum which is actually necessary. Under the original proposal, the Government would have found £250,000; under the present proposal the Government—that is, of course, the taxpayers—are finding £500,000, so that the contribution which the Government originally intended is actually doubled in the final scheme. Let me pass to the basis—

§ Mr. KIRKWOOD

Before we pass away from that point, I should like the Minister to make it clear. Do I understand him to state that conditions are better in the depressed areas, and that his officers have been able to send on that answer?

§ Sir H. YOUNG

I have nothing at all to alter in the statement which I have made to the Committee. There is a general improvement in the situation and in employment, which makes it possible to revise the estimate as to the cost of outdoor relief and unemployment.

§ Mr. BATEY

Does that apply to the distressed areas?

§ Sir H. YOUNG

It applies to the whole country. Let me pass on to the basis of distribution. The test whether an area is to receive a grant is to be whether its expenditure on outdoor relief is in excess of the equivalent of a 2s. rate for the area, and the amount which a distressed area will receive will be in proportion to the amount of the excess expenditure on outdoor relief over the amount which is equivalent to a 2s. rate.

§ Mr. PIKE

On what proportion will that be based?

§ Sir H. YOUNG

The areas to come in are those which have an expenditure on outdoor relief in excess of a 2s. rate, and the amount which they will receive in relation to each other will be in proportion to their relative expenditure in excess of a 2s. rate. There will be a simple proportional sum on that basis for the distribution of the available amount among the qualified areas. The point about the proposed basis of distribution is this. First of all it defines the type to receive anything, and, secondly, it relates the amount received to the actual distress with which we are concerned, so that it will secure that the aid goes to those areas which we know ought to receive it, and it will go to them in proportion to their needs. Further, it will be of importance to the Committee to know that this basis of distribution is the basis which has been agreed by me in consultation with the representatives of the local authorities nominated by the representative associations of the local authorities. It has been thoroughly thrashed out in consultation between us, and we were all in agreement that this provides the best and most practical basis for the distribution of the money available.

§ Mr. LOGAN

May I ask the right hon. Gentleman, for the purpose of information, whether that amount which he is going to allocate will take all the money, or will there be any surplus?

§ Sir H. YOUNG

The whole of the money is to be distributed in the proportion I have explained among local authorities. I think that a good many of these points will probably arise in the remainder of the observations I hope to be able to make to the Committee. It may be asked why was the figure of 2s. fixed upon, after discussion with local authorities as the limit, expenditure above which would entitle authorities to receive relief. It was arrived at in this way. The average expenditure on outdoor relief of all local authorities in the country as a whole is 1s. 3d., and the marginal 9d. above 1s. 3d. was thought a reasonable margin for these two reasons—first of all, in order to secure that the relief available should go only to the most distredssed areas, and, in the second place, because it was thought right—and I think the Committee will agree with this point of view—that there should be some recognition of the responsibilities of local authorities for economy and good standards of administration, and, just as they have the responsibility of distributing the money, so they also should have this margin of responsibility for raising the necessary funds.

The Committee will desire to know the method of the distribution of this available sum. I cannot to-day give information to the Committee on particular cases—as to whether this or that area will receive anything, and if so how much. I cannot do that, because we have to get in the necessary statistics on which to base, and make calculations of relief, and work those out, and, of course, verify them with the local authorities. We have to collect the statistics of excess expenditure and the amounts of a penny rate. When that is done, we will ascertain the sums and at once notify all local authorities concerned as to what they will receive. They will receive a notification from the Ministry, and at that time, if the information be desired, as I have no doubt it will be desired by the House, as to the result of the calculations, it can he supplied to the House in detail.

§ Mr. LOGAN

Will any allowance be made for the rise and fall in expenditure?

§ Sir H. YOUNG

I am not sure that I follow the hon. Gentleman, but the figures taken will be those available for the last complete year. The next point of interest to the local authorities is to 523 know how and when this grant will be paid. It is proposed that the grant shall be paid in respect of the present current financial year, that is, the year 1933–34, and that it shall be paid into the general funds of the local authorities for general purposes. The first instalment of the money will be paid in September, and the second instalment will be paid at the end of the financial year, in March. Let me hasten to add, in order to relieve what might be a natural anxiety at present on the part of local authorities in that respect, that the first instalment in September will cover the bulk of the grant, and that the final instalment at the end of the financial year, in March, will be an adjustment payment to cover the balance to complete the actual sum.

I have seen it suggested in certain quarters that it is the intention of the Government to impose arduous and difficult conditions upon the payment of this grant. Let me say what the conditions will be. The first condition is this: It really only applies to the classification of the authorities who are to receive a grant. It is not proposed to pay a grant to any authority which would, on oar calculations, receive less than the equivalent of a penny rate. I think that the reason for that is obvious. It is in order not to fritter away the available relief in tiny sums which would go to a large number of authorities, and be no help to them at all. The relief is to be concentrated upon the authorities which really need aid. It is well known to the fire brigade that it is no use wasting your water in driblets over the whole of the fire, and that you should pour the full stream upon the centre of the fire. In the second place, there is a condition which, I think, will commend itself to the common sense of Members who have closely followed this matter. It is that the money shall be made available for the relief of the ratepayer and not used for the increase of expenditure. It is to help those authorities in real difficulties, and, of course, the unfortunate ratepayers in the areas of those authorities are those who feel the difficulty.

§ Mr. PIKE

Before the right hon. Gentleman leaves that point, might I ask him whether the excessive payments being made by local authorities, and which have 524 culminated in their replacement by commissioners, will be included in the 2s. rate?

§ Sir H. YOUNG

The hon. Gentleman is talking about transitional payments, which have absolutely nothing to do with this proposal, which deals only with outdoor relief. There will be no other conditions at all. I think the situation may be put in this way. When you see a man in a hole, the first thing to do is to pull him out and not to stop to argue that it is his own fault that he got there. After you have got him out, you can begin an argument. It is an argument which it may be necessary for the Ministry of Health to carry on with local authorities, but we are dealing now with an emergency. That is the only excuse for so remarkable a course as the proposition of an exceptional Estimate for £500,000 outside the Statutory grants. We are dealing with an emergency, and when you are dealing with an emergency you deal with it promptly and simply. The occasion will be taken, as is the duty of the Ministry in discharge of its functions, to go into questions of good standards of administration with the local authorities. But no conditions will be imposed before the payment of the grant. When we come to the permanent scheme, of which this is, as it were, only an introductory preliminary, no doubt the situation will be otherwise. In a permanent scheme for the assistance of distressed areas, there must be safeguards and conditions for the protection of good standards of administration, and the interests of the taxpayers as a whole.

I think that I have said what it is necessary to say, and all that can be said at the present stage, to explain the way in which the proposals will work. I am aware that it is very easy to anticipate the criticisms that will be made. It will be said that enough money is not being found, and it will be said, as regards the money that is being found, that the distressed part of the country which is represented by the particular critic should receive more, and others less. It requires, as I say, no great effort to prophesy and anticipate this course of debate. I have seen such criticisms already propounded in a circular issued by a great authority in local government matters, the Lord Mayor of Man- 525 chester; but let me say that the figures quoted in the circular appear to me to be absolutely irrelevant to the true basis of this grant. They deal with the gross expenditure on outdoor relief. It was never proposed, and nobody ever suggested, that the Government should undertake to relieve the local authorities of the whole of their expenditure on outdoor relief. That is impossible. Our national financial system is that this form of expenditure is laid, in the first place, on local authorities with the assistance of the block grants from the Government, calculated in relation to unemployment, and so on, and settled by the settlement of 1929.

What we are doing on the present occasion is finding part of the sum which is necessary to make both ends meet in exceptionally difficult cases, and we have to consider not the gross expenditure but the marginal expenditure which is necessary in order to save the situation in exceptionally difficult cases. Regarding the possible criticism as to the distribution of the money, I would ask the Committee to consider that the representatives of local authorities, who are so well qualified by full information, and by the absence of any prejudice, to consider the conditions of the country as a whole, have come to the conclusion that this scheme of distribution is the best and the fairest that we can find. I think the Committee would be very reluctant to disturb the conclusions which have been come to on that subject.

One last word about the total amount which the Government are finding. I have emphasised that this is a temporary scheme to deal with the emergency in which we are at the present time. It has been a difficult duty to find the just balance between the interests, necessities and difficulties of the ratepayer, on the one hand, and the taxpayer on the other, and I would ask Members of the Committee, when they are considering at first hand the necessities, each in his own area, to remember that this money goes on to the national Budget, and, in going on to the national Budget, becomes a burden upon the industry of the country as a whole. It would be a grave breach of duty on the part of myself as Minister of Health, and it would be grave misgovernment on the part of His Majesty's Government, to propose to the Com- 526 mittee at the present time one pound of grant more than is necessary to deal with the actual necessities of the case, because to do so would be to increase the general burden on the country as a whole, and would exercise some influence in the prolongation of those root factors which go to make the unemployment which necessitates our grants. In the considered judgment of the Government, the amount which I now propose is the amount which is adequate, and which is no more than adequate, for the purpose for which it is proposed. If anybody remains dissatisfied, let me, in conclusion, recommend to him the spirit of an Elder of the Church who thus wound up his impromptu prayer: We thank Thee, O Lord, for Thy smaller mercies, unworthy as they may at times appear to finite intelligences, either of our merits or of Thy Majesty.

§ Mr. J. P. MORRIS

Would the right hon. Gentleman confirm what he said in his opening remarks, that, in his statement of policy for the ensuing year, the amount to be expected from the inure fortunate areas was only confined to a ½d rate? Was there any mention of a ½d rate in the Minister's statement when he introduced the policy in the House?

§ Sir H. YOUNG

As far as I remember, I made no such statement when I was speaking in the House. What I said was that enough would be sought to meet the necessities of the case.

§ Mr. MORRIS

The Minister has stated this afternoon that there never was any question of an amount greater than £650,000, but that it was confined to a ½d rate.

§ Sir H. YOUNG

Yes, and I repeat that assertion now with absolute certainty. No greater sum was ever contemplated.

§ Mr. ARTHUR GREENWOOD

I beg to move, to reduce the Vote by £100.

I move this reduction for reasons which my friends and I hope we may he able to make clear during the course of the Debate. The right hon. Gentleman this afternoon has spoken with a hopefulness of manner and with a complacency which seemed to me to indicate that he has really no grasp of the human tragedy that lies behind this matter.

Viscountess ASTOR

Oh !

§ Mr. GREENWOOD

I may offend the Noble Lady more—

Viscountess ASTOR

Not half as much as I could offend you.

§ Mr. GREENWOOD

The Noble Lady will find it difficult indeed to offend me. On this question I think many of the supporters of the Government feel that the Government itself has cut a very sorry figure. Not only has it mishandled the problem from the start, but it has by its own deliberate policy intensified the situation in the depressed areas. The Minister, at the beginning of his speech, spoke of the factors in the situation. He spoke of the long-drawn-out trade depression, the fact that the reserves of the unemployed were exhausted, the fact that the auxiliary resources of private charity were also exhausted—although the Government's primary appeal, so far, for help for these people, has been to charitable sources, as can be proved by reference to more than one speech by the Prime Minister—and the fact that the revenues of the local authorities themselves have become exhausted.

There are two sides to this problem. Every year for the last dozen years, with the continued trade depression and the general economic situation, local authorities in certain areas have found themselves in greater and greater difficulty. They are what I call the necessitous areas of old standing. Those of us who have been in the House for some years know how year by year those areas have made their voices heard here. But during the past two years we have had a new category of depressed areas-areas which, prior to two years ago, held up their heads proudly and would have been ashamed to describe themselves as necessitous areas. Liverpool is a case in point; Manchester and Salford are others. They have come into the category of necessitous areas within the last two years, very largely as a direct consequence of the Government's deliberate policy. With an increasingly grave situation in the local government world, the Government has not relieved their necessities. Its very policy of economy, its general policy of economy, has reduced the purchasing power in distressed areas and has intensified their troubles.

528 The policy of the Government in other directions has embarrassed some of the most hard-pressed areas in the country. Its policy of Protection has put the ports in a position of greater difficulty. I need only ask the Minister of Labour to produce his own figures to corroborate what I say about the situation of the ports. The imposition of the Russian embargo intensified unemployment in one of the most depressed areas in the country, namely, Tyneside. And now the Government, having made this problem worse, comes forward with its solution. Let me remind the Committee of what the situation is with regard to the local authorities in the country as a whole. I go back to the time when the Labour Government took office in the middle of 1929. From that time down to our leaving office there was a fairly steady reduction in the number of people in receipt of poor relief, notwithstanding the fact that we were facing the economic blizzard, which now—

Viscountess ASTOR

You were not facing it.

§ Mr. GREENWOOD

Unemployment during those two years was increasing in the world, but it happened that it did not increase in this country at the same rate as it did in other industrial countries. It did, however, increase here, but, notwithstanding that fact, the number of people in receipt of poor relief diminished, and did not increase. [An HON. MEMBER: "Why?"? It increased because, by our own measures, we took them off the Poor Law. The hon. Member who interrupts me happens to be sitting in his first Parliament, and perhaps he might look up the facts. Month by month since this Government took office the number of persons in receipt of poor relief in England and Wales and in Scotland has increased. The number of unemployed in receipt of out-relief has more than doubled, and for this reason, that it has been the deliberate policy of the Government, so far as it could, to cast these people off unemployment insurance, and on to the Poor Law. When we left office, the number of people in receipt of outdoor relief was lower than it had been for over two years. Month by month since that time the number has increased, and it is still increasing. The number of unemployed persons and their dependants who were in receipt of Poor Law relief 529 when the National Government took office, in September, 1931, was rather over 281,000. At the end of March this year it was over 602,000. The total number of people on out-relief had increased from just over 750,000 to nearly 1,200,000. Those arc facts, whatever the explanation may be, which the Committee cannot refute.

Now I take the position of particular towns, where ratepayers see their fellow ratepayers, where it is not a question of mere figures but a question of human beings whom they know to be, for one reason or another, out of work. In Liverpool—a new necessitous area, which never claimed to be one prior to 1931, when the late Labour Government left office—there were, in that city with a population of 750,000, nearly 49,000 people in receipt of Poor Law relief. At the end of March this year, the number was over 76,000. In Manchester, during the same period, the figures increased from 35,000 to over 57,000. On Tyneside the figures are much the same. In Newcastle-on-Tyne, as an example, between September, 1931, and March, 1933, the number of people in receipt of Poor Law relief increased from 14,000 to 21,000—an increase of 50 per cent.

§ Mr. WISE

I am sure the right hon. Gentleman would not willingly mislead the Committee. I have looked up the figures of the total numbers in receipt of relief, which in 1930 was 1,205,000 and in 1932 1,250,000. That does not show the increase that the right hon. Gentleman has given.

§ Mr. GREENWOOD

I do not know the source of the hon. Member's figures. If anyone on the Front Bench cares to challenge my figures, he can. They are official figures. The Minister will not challenge them. The Minister of Labour, from whose Gazette many of them are drawn, will not challenge them. They have the advantage that they are comparable figures, because they have been built up during that period in the same way. Even if it were true that they are wrong by 50,000, or whatever it may be, I stand by this fact, which cannot be denied, that there has been a very substantial increase in the last two years in the number of people who are driven to the Poor Law for assistance.

§ Mr. MAGNAY

The right hon. Gentleman knows quite well that he is leaving out a very important factor, what happened under the Anomalies Act.

§ Mr. GREENWOOD

I am leaving out nothing. I am making no explanation at the moment. I am dealing with facts, and the facts are that in the hon. Member's part of the world, since the Government that he supports took office, the number of people on the Poor Law who are unemployed has substantially increased, whatever the reason may be.

§ Mr. PIKE

Not overspending at the rate of £1,000,000 a week.

§ Mr. GREENWOOD

Hon. Members seem to be getting very annoyed at this disclosure of ugly facts. I should have thought they would be glad, especially those who represent distressed areas, to have the facts brought out. The Minister told us that one of the reasons why they had scaled down the sum necessary for the distressed areas was because of the improvement that had taken place in the general situation. In the most hard-hit districts in the country in the first three months of this year there was, in a very considerable number of areas, a substantial increase in the number of people on the Poor Law. The right hon. Gentleman may argue about the World Economic Conference and the general economic situation, but he has no results. The only result on which he can go is the burden that is falling upon local authorities. The last ascertainable facts that he has will be those for the first quarter of this year. I am leaving out those areas where before the end of the year the number of people in receipt of poor relief was less than 300 per 10,000, although in some of them there has been a most striking increase. I am leaving out also the Welsh counties, where in the first three months of the year the number in receipt of poor relief increased. It may be that it may be stationary during this quarter, or the figure may decline a little, but in view of the increase in the first quarter of the year we have to regard a prospect of a further increase in the autumn and during next winter and, if the right hon. Gentleman is going to justify the scaling down, he must do it on rather better grounds than that there has been a general improvement in the situation since the discussion in the House first took place.

531 If hon. Members who seem touchy about the figures would like some quoted as regards the increase in the numbers of people going on to the Poor Law in the first three months of the year, I will give them with the greatest of pleasure. This enormous amount of poverty in our industrial areas costs a good deal of money, and it is this enormous financial burden in relation to the resources of local authorities that has created the problem of the necessitous areas. Let us look at the actual expenditure of the Poor Law. The right hon. Gentleman has told us that it is not his business to deal with the question of increased local expenditure, but my contention is that, if the increased expenditure is the direct result of Government action and policy, the Government is morally responsible, and by far the greater part of the increased expenditure on the Poor Law is due to the increase in the number of unemployed persons and their dependants who are driven to the public assistance committees. In Liverpool the Public Assistance Committee's estimates for this year show an increase of £402,000 over the previous year's estimates, equivalent to an increase of 1s. 4d. in the £ on the rates. In the County of Durham the expenditure on public assistance increased last year by £167,000, figures which it is well to bear in mind in relation to the £440,000 that the Minister is going to distribute. In most of these areas there is no spendthrift Labour majority. The administration is in the hands of sane Conservatives and Liberals. It is not due to wicked extravagance. In my native City of Leeds increased expenditure on poor relief has resulted in an increased charge of over £65,000, equal to a 5½d. rate on the current year's expenditure.

The Minister tried to explain that the letter from the Lord Mayor of Manchester was irrelevant. The figures are very relevant to this discussion. In the case of Hull, during the current year £178,000 is to be found for relief directly attributable to unemployment, the equivalent of a rate of 2s. 4d. in the £. Liverpool, which is spending a sum approaching £2,000,000 this year in poor relief, finds that nearly £750,000 is to be spent arising directly from unemployment, equivalent to a rate of 2s. 7¼d. in the £. To take another case, Sheffield, which is approach 532 ing the £1,000,000 mark in expenditure on poor relief, is having to find £304,000 for relief in cases of unemployment, equivalent to a rate of 2s. 4¾d. in the £.

Some of the 51 specially necessitous areas that the Minister has talked of —I like the qualifying word "specially"; it limits the number he has to deal with—have during the current year to find a very much larger additional sum than they have ever had to find before. The right hon. Gentleman spoke about 1s. 3d. being the average rate per for poor relief and, with that generosity to which the Committee has become accustomed, he said, "We will take 26 in the £ as our standard for specially necessitous areas." There are in England and Wales alone, amongst the county boroughs, excluding county councils, 26 authorities whose poor rate is more than 4s. in the R. I mention these figures, not because I care to quote figures in the House but because they ought to bring home to the Committee the size of the problem which the necessitous areas are facing, having to find all this additional money because of the Government's own action. On the Government's admission, their resources are smaller than they have ever been, the unemployed are harder driven than they have ever been, and the sources of private charity have dried up. Faced with this problem, local authorities are to be offered, in all England and Wales, £440,000.

I have not time to deal with the actual living conditions of the people in some of these necessitous areas. Within the last week or two documents have been published by people who have been undertaking social research in places like Hull and Sheffield, not people whose bona fides can be questioned, not doubtful Socialist agitators, but reasonable people. [Interruption.] I am going to stand by the word "reasonable"—people who are not concerned with the play of party politics. They show that in cities like Hull and Sheffield there is a mass of human suffering and misery which the nation ought not to tolerate and which has been increased during the time the National Government has been in office. To deal with this tragic problem, which is breaking down local government in some areas, the Government makes in its first effort a proposal that the more fortunate areas should be willing to come to the assist- 533 ance of distressed areas in making contributions, and that it was then to add 50 per cent.

I suggested in the House at the time that the local government authorities of this country would of course reject this proposal with contempt. They did, and for two reasons: In the first place, some of the so-called more prosperous areas have their own problems, and the poor in their areas would have suffered in order to give a little grain of comfort to the poor in other areas. The second reason was that the local authorities have taken the view for years that it was not their business to deal with the problem of unemployment, and they naturally refused this simple plan of feeding the dog with its own tail and giving 50 per cent. of the Government's tail as well to make the meal. I was not surprised to see Press comments made when local authorities rejected the proposal of the Minister. I have no doubt that he knew in his own heart that local authorities would not be enthusiastic in accepting it. But I feel that for the education of the Liberal Members of the House it is worth reading the comment made in a leading article in the "Manchester Guardian" of 23rd June, when the Government scheme had been turned down out of hand by local authorities: It said: But no excess of sympathy need be lavished on the Government. They have been ready enough to shuffle off their responsibility on to voluntary charity or on to the back of local authorities whose expenditure had the one virtue of net appearing in the national account; they have now to taste some of their own medicine. As a result of the castor oil applied by the local authorities, we now have a new scheme—2500,000 for Great Britain. The right hon. Gentleman has told us, and I must refer to his statement, that it was never contemplated that the sum should be more than £650,000, a sum which he said was the maximum sum thought of by the Government, a sum which he described as adequate. I have a recollection that the figure of £750,000 was widely used in this House and widely reported in the Press, but I have to remind the right hon. Gentleman that he has now made a disclosure. On 11th April, in the House, when the Solicitor-General was pressed concerning how much was going to be produced by the Government, he said 534 that he did not know. Now we know that the Solicitor-General at that time, when this scheme was being considered by the Government, unfortunately and probably unconsciously misled the House.

§ Sir H. YOUNG

The House certainly does not know that, nor is the right hon. Gentleman entitled to deduce that from any single word that I have ever said.

§ Mr. GREENWOOD

I am not dealing with the Minister at present. The Minister of Health has told us this afternoon that the £650,000 was the maximum sum ever thought of by the Government.

§ Mr. J. P. MORRIS

He never said it. I challenge that.

§ Mr. GREENWOOD

I am not listening to your challenge. The Minister may deny my statement if he wishes.

§ Sir H. YOUNG

The right hon. Gentleman is doing the Solicitor-General a great injustice. At the time the Solicitor-General spoke, no sum had yet been arrived at in the Government's calculations.

§ Mr. GREENWOOD

I do not wish to do the Solicitor-General an injustice, but in that case this is more of a scratch plan than I thought. I had at least given the Government credit for having thought about it for two or three months. Now we know that they had not it in mind on 12th April. Anyhow, it is true—as the Minister has said—that this £650,000 was regarded as the maximum sum, to which the Government were to contribute about £250,000. They regarded that as the measure of their responsibility to deal with the distressed areas. Now they have increased this sum to £500,000, and the difference between £650,000 and 2500,000—a difference of £150,000, which the Minister describes as not large—is explained by saying that time has passed and that a closer estimate has been made, and, as I have already explained, that there has been an improvement in the general situation.

There are, on the Ministers' own showing, 51 specially distressed areas. I must keep using this word "specially," because the Minister used it himself; it limits his responsibility. In England and Wales—I am not dealing with Scotland—there is a sum of £440,000 to be divided among 51 specially distressed areas. In February 535 of this year the Parliamentary Secretary in answering a question, said that the aggregate rate income of the eight most populous towns in Lancashire for the year 1932–1933 was estimated to be £829,756 in excess of the sum for the preceding year. Last year the eight largest towns in Lancashire alone found themselves having to provide an additional £830,000 during a year when they had been pressed by the Government to carry out economies in every direction, which no doubt they did but in spite of their economies there was a net increase in eight towns of £830,000 in their expenditure, most of it attributable to increase in Poor Law expenditure and ancillary expenditure. In Hull for instance, more school meals have to-day to be provided for children; more dried milk has to be provided for nursing mothers and children.

We are to be provided with a sum of £440,000 for 51 specially distressed areas. How much of that sum is a city like Liverpool, or Sheffield, or Manchester going to get? When the suggestion was originally made—I think I am right in saying—the Mayor of Salford, who sat in this House and listened to a Debate, said that if all this happened Salford would not get sufficient to meet 10 per cent. of the additional cost it was having to bear for the unemployed. This sum of £440,000 is obviously miserably and ludicrously inadequate to deal with the situation. Why, Liverpool, with its poverty to-day, could swallow that sum. There is not a big industrial city that could not stake out a legitimate claim, and when those claims were put together they would amount to a sum 10 time as large as £440,000.

But that is not the whole of the story. I was not myself very much interested in the allocation of this miserable sum, but when conditions are attached about "good administration," I prick up my ears. Unsuspicious and unsuspecting as my mind is, when the Minister of Health speaks about good administration I feel a tremor. I know what he means by good administration. I can see him using the weapon of this miserable sum to bring down the scales of out-relief of certain local authorities. Good administration. I can see him insisting on harsher conditions for the distribution of out-relief, in the interests of good administration. I 536 can see him getting out of this £440,000, not any comfort to the local authorities, but more misery to the poor and a harsher administration of the Poor Law system. There is also a permanent Bill in the offing, and what local authorities are going to get out of that Bill will depend on a system of good administration—to be determined by the Minister, because he has £440,000 in his pocket to distribute to 51 specially distressed areas.

This sum is nothing. It is true that local authorities have agreed to the method of allocating it, but, as the Minister admitted, the local authorities have never agreed to the adequacy of the sum. I am aware that local authorities would never agree to the adequacy of any sum. I have had to deal with them, and I know. But I speak as one who does not represent a specially distressed area, but an area whose poor rate has gone up this year in spite of improving conditions, and I am satisfied that this sum is far too small to do anything to meet the necessities with which these local authorities are faced to-day. There has been a great campaign engineered, not by my hon. Friends on this side of the House, but by supporters of the Government. They have forced this issue; and let me say that they have been more effective then we should have been, for they have wrung £440,000 out of the Government. Are they satisfied with this sum? Are they prepared to challenge the Government on this miserable expedient of theirs to tide over this next two months? If hon. Members of this House from the high-rated, hard-pressed areas of this country are sincere—as I have no doubt most of them are—in wishing to secure justice for these authorities, then it will be their business to follow us into the Lobby to-night when we vote on the reduction of this Estimate.

§ Sir WILLIAM RAY

We have just listened to a speech by the right hon. Gentleman in which I think he endeavoured to throw the whole burden in regard to the increase in unemployment in this country on to what he very vaguely described as the policy of His Majesty's Government. He had two words, economy and protection; but beyond the two words he never went one inch nearer to proving that the growth of unemployment was in any way connected with the 537 policy of His Majesty's Government. One would think, in listening to the speech, that there were no distressed areas during the period 1929–31. One would imagine—

§ Mr. GREENWOOD

I think the hon. Member will give me credit for the fact that I enlarged on the fact that there were two types of necessitous areas, one that we have had ever since 1921. I admitted that.

§ Sir W. RAY

The right hon. Gentleman is very touchy about anyone else throwing in one interjection during his speech, but he has started already when I have not been up 60 seconds. No one would imagine from the right hon. Gentleman's speech that there were any distressed areas between 1929 and 1931, because he never then in his position as Minister of Health endeavoured to do even what he described as the miserable attempt that is being made by the present Minister of Health. He went on with his indictment of His Majesty's Government on the two vague words of economy and protection, with no reference, as was mentioned by an hon. Member on a lower bench, as to the result of the Anomalies Act for which he was largely responsible. Because there was after he left office, and because there was due to that Act of 1929, a better system of administration in this country in regard to the Poor Law, it is perfectly obvious that the differences which he has found would be accounted for in that way.

He has drawn a fanciful picture this afternoon as to what happened when the local authorities were invited by the Minister of Health to discuss this question of the levying of a rate by the local authorities to assist the distressed areas. The right hon. Gentleman was not on that conference and he knows nothing, apparently, of what took place, and I want to say to him, as one who was chosen as the spokesman of that Conference, that there was no question of any repudiation of the Government's offer with contempt. If the right hon. Gentleman had only read the short report that was printed in the Press a day or two later, he would have known that the utmost sympathy was displayed by members of the Conference, and the only reason for declining to accept the suggestion that was made was that the matter was to be dealt with nationally 538 later in the Session and that it would be unfortunate to bring into the municipalities of this country a disturbing element when the whole thing was to be settled on a national basis within a few months time.

I think the right hon. Gentleman is guilty of very extreme exaggeration in endeavouring to show that the authorities which met the Minister of Health were in any way antagonistic to the suggestion that something should be done for the distressed areas. It was not even a selfish policy on our part, because we would have been prepared, and we have been prepared for years, to see that the burden of the cost of the able-bodied unemployed in this country should be a national charge. The only difference about it is that we who believe in a policy have got His Majesty's Government to adopt it, whereas the party of which the right hon. Gentleman is a leading Member have always stood up and advocated a policy when they have not been in office but have never put it into effect during the time that they were in office. That is the only difference, so far as I can see, on the question of the able-bodied unemployed being made a national charge.

The question of amount is one on which I feel sure there will be very divergent views in all parts of the Committee. Those connected with authorities which will not be in receipt of any of these additional grants have perhaps no right, or it would be indiscreet, to state whether the sum mentioned by the Minister is sufficient or not. For my part, I think it will be a very tight go if both ends are to meet, but I do feel that, inasmuch as this is not an attempt to solve the problem of the distressed areas but merely an attempt to deal with it in a temporary fashion pending legislation, it is not an ungenerous offer at the moment. If it were presumed to be put forward as a settlement of the problem of the distressed areas, it would be totally inadequate, but inasmuch as it is only a temporary expedient I think probably it might be looked upon with a little more kindliness than has been displayed in many quarters.

I felt a little happier this afternoon when I heard the Minister refer to the fact that good administration will have 539 something to do with the distribution of the grant. I can understand the right hon. Gentleman opposite shuddering at the very words "good administration." He has never been connected with good administration and consequently to hear in the House of Commons a Minister daring to suggest that financial assistance might be dependent upon good administration must be something shocking to the mental outlook of the right hon. Gentleman. I would go further than the Minister of Health. I feel that the finances of this country, national and local, should demand that, all things being equal, the expenditure of a local authority should be reduced by the amount granted by the Government on this occasion. I venture to say that a local authority which spends £500,000 and is to receive £50,000 from the Government—I will take that as the figure; the right hon. Gentleman is free with his figures so I might as well be.

§ Mr. WALLHEAD

Not so free as that, anyway.

§ Sir W. RAY

Well, you are used to getting everything free. Well, I will put it a bit lower in order not to offend the susceptibilities of hon. Gentlemen opposite. Suppose a local authority is expending £500,000 and suppose it receives £5,000 as a grant under this scheme. I maintain that, all things being equal, the expenditure of that local authority for the next year out of local rates and Government grants should not be more than £495,000. I fail to see why the addition of a Government grant of this nature should be allowed to be used by local authorities for a development of expenditure that they would not otherwise incur, and I hope, as far as the administration of the money goes, that there will be no allowance, except under the most exceptional circumstances, for a local authority to be able to expand its budget because it is receiving an additional Government grant for this purpose.

I think we ought to be grateful to the Minister of Health for at last laying it down that administration of a good type is something which is to be aimed at in this country if a local authority is to secure further financial assistance from the Government. Such things have been done, and only recently. In spite of the increased burden thrown upon them 540 by the unfortunate position of the labour market at the present time, there are local authorities who have by sheer good administration coped with the situation. I have a few figures here and I want, if I may, to quote an example of two or three towns. If you take Liverpool, you find that in 1930–31 the rates for out-relief amounted to 1s. 8½d. in the £ and for 1932–33, that is two years later, 3s. 2.3d. in the £, an increase of 1s. 5¾d. in the £ in those two years. Liverpool's rates only went up by 1s. 6d., so that Liverpool had met that increased demand for out-relief and, so far as these two years were concerned, had only added a farthing so far as the ordinary administration of the city was concerned. If you take Manchester, for 1930–31 the rate for out-relief was is. 3.6d.; for 1932–33 it was 2s. 2.7d., an increase of just over 11d. in the £, but Manchester's rate had gone up by 1s. 9d. in the £ and, although one speaks without any authority as to the causes of that increase, unless there was some exceptional reason for an increase in the local expenditure in the Manchester City Council and unless it is doing its utmost at the same time to cut its local expenditure according to its cloth, it is going to be hard work to justify public money being poured into the city.

There are authorities all over the country which have endeavoured to meet this unfortunate call upon the ratepayers in one direction by a system of administration which has reduced the call upon the ratepayers in another direction, and I do press upon the Committee that it ought to be one of the chief things considered by those connected with the administration of this fund to see that the administration is carried on in the way indicated. In spite of what the right hon. Gentleman opposite has said, I firmly believe that so far as economies are concerned we have not carried economy far enough. It is a dangerous doctrine to preach in these days, but two years ago we were all enthusiastic about economy. Some of us tried to carry it out, and I regret very much that it has not been carried out to a much larger extent by His Majesty's Government and by many of the local authorities in this country. I had the honour of being made chairman of the committee set up at the request of the Chancellor of the Exchequer, not to suggest economies but to ensure economies—a most delightful and 541 unusual word to come in a Government letter. We showed that it was possible to reduce local government expenditure in this country by anything up to £40,000,000 a year without injuring—and I want to repeat that deliberately—without injuring the efficiency of the social services of which we are all proud. It is unfortunate that the Budget should be unbalanced so early by the giving of £500,000. It is regrettable that at this date, so early after the introduction of the Budget, it should be necessary for a Cabinet Minister to come to the House and ask for £500,000 and for him to be told that even that is not enough. We could have saved that £500,000 10 or 20 times over if any real vigour had been put into the movement behind economy in local administration.

This £500,000, and indeed as much money as the right hon. Gentleman wants for his particular purposes, could have been found without the slightest difficulty and without the slightest diminution in the efficiency of the social services of this country, if the suggestions that were made by that responsible Committee on Local Government had been carried out. It was a Committee consisting of a couple of Socialist Members, at least three Liberal Members, three or four officials, and only about four Tories. It was a committee representative of every shade of political thought in this country who put forward for the consideration of the Chancellor of the Exchequer nearly 140 recommendations by means of which economy could be secured. Only 11 dissentions from those 140 recommendations were made by this committee of all shades of public opinion, and out of those 11 recommendations there were only three of any substance whatever. If the Government had wanted some strength behind it in regard to economy there it was. Our friends opposite would have had to repudiate the members of their party, and Gentlemen below the Gangway would have had to repudiate the ideas of members of their own party.

I am amazed at the position when I realise that local authorities in this country who have tackled the problem of administration from an economical point of view have been able to save this money without any diminution in the efficiency of the services which they have to administer. I have finished my little 542 rebuke—perhaps I have been saving it up for some little time—but in supporting the policy of the Government this afternoon, I simply want to say that it has been a policy with which many of us on this side of the House have been connected for years. It was not a monopoly on the part of the Socialist party that the cost of the able-bodied unemployed should be a national charge. The great body over the water with which I am connected passed a resolution to that effect some six or seven years ago.

§ Sir NICHOLAS GRATTAN-DOYLE

It would not have been a halfpenny in the £.

§ Sir W. RAY

We could not agree to a halfpenny in the £. My hon. Friend has evidently not heard my explanation of that conference. If he did not hear my explanation, it was an unfortunate interjection to make. I only wish to say that the policy to be taken up by His Majesty's Government in the autumn of the maintenance from public funds of the able-bodied unemployed was never the monopoly of hon. Gentlemen opposite. When they had their chance of bringing that policy into being they neglected it. It has always been a convenient weapon to use in beating some of their opponents, but when they had the opportunity of putting their promises into practice they did not take advantage of it. The state of affairs in this country to-day, leaving out the world economic position, is, as most candid people will realise, very largely due to some of the administrative acts of the Government of which the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) was a member. It is undoubtedly due to the series of acts which precipitated the crisis in 1931 and which meant the departure of him and his friends and the introduction of a new party.

Sir JOHN SANDEMAN ALLEN

The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) called our special attention to the fact that a number of reasonable people did not consider it desirable to bring the distresses and troubles of this country into the play of party politics, and for that reason I do not propose to say anything in reply to what the right hon. Gentleman the Member for Wakefield has said. A certain 543 part of the remarks of my hon. Friend the Member for Richmond (Sir W. Ray) was also covered by the same principle, and, no doubt, his remarks were occasioned by what he had already previously heard. I want to confine myself—because I speak for one of the distressed areas—to what is entirely outside party politics. Whatever has been said on any side of the House which has a non-party bearing on this question should have every weight in this Committee this afternoon.

We listened with great interest to what the Minister had to say. I do not hesitate to say, and I am sure that no member of a distressed area would hesitate to say, that we do not feel as though we had had a completely satisfactory deal. I am not discussing or criticising what the Minister has done, but merely stating the effect on the minds of those in the distressed areas. We had hoped that we should have had something which would appear to us really adequate to meet the difficulties of the situation. I shall be very interested, and no doubt the Committee will be interested, when, later on, the matter is discussed more fully and when the Minister has all the facts before him, to learn how the Government will be able to say that in their opinion the offer is adequate. It is rather important to draw that distinction. I have no doubt that the Government have done their best under difficult circumstances. The hon. Member for Richmond gave a reason which, I think, it would be as well if all the distressed areas and everybody else would appreciate rather more fully than has been the case. We have been extremely sore over the answer which was given by the areas which are not distressed. But frankly, if I had been sitting on a council in such an area, I should have backed their view. There are always two sides to a question.

The hon. Gentleman explained to us clearly that the reason why the matter was not proceeded with further was that it was only a, temporary matter and that it undoubtedly raised the great principle of the broad issue of local government. I cannot but feel that there is a great deal to be said for his view. But what really does give us satisfaction and what we lay hold of in this Debate, as we have done in other Debates, is the certain 544 promise of the Government that they will bring in a Bill to deal with the question on sound lines, namely, that the country 'as a whole shall undertake the responsibility for the able-bodied men who are out of work. That is the one comfort. I speak to-day for Liverpool, and I am sure that I am speaking for many other distressed areas, when I say that that is the most satisfactory thing with regard to a, matter which has troubled us for the last six months. It is so clear and definite. On the other hand, it is difficult to see how the money is to be distributed. The rate in question in Liverpool—and I probably know more about Liverpool than about any other town—as has Already been pointed out in the discussion, is 2s. 7¼d. According to what the Minister has said, you take off your two shillings, which leaves 7¼d. A penny in the pound in Liverpool produces about £25,000, so it will be seen from that calculation that, a very large sum will come to Liverpool, and yet it will only be about one-third or one-quarter of what Liverpool ought to get.

I feel satisfied that we should accept this proposal. The Government have been in great difficulty and have had to face a number of difficult questions. The matter has been delayed rather longer than they expected. They have tried a temporary experiment. It has failed and now they are going forward, and instead of paying £250,000 they are to find £500,000 out of national funds. It might be said: "If you can make it £500,000, why cannot you make it 21,000,000?" I do not want to go into that matter. The Government have not merely given a promise but they have given an earnest of what they wish to do, and for that reason I think that we ought to be grateful. I know that it sounds like looking a gift horse in the mouth, but we are the trustees for other people, and even if it is a gift horse we have to be sure that the money gets into the right channels.

The question arises as to how to ensure proper government and see to it that the money is not wasted. I conceived this difficulty when I heard the Minister making his proposal. Are you to take the extravagant municipalities in the country and the careful municipalities and give them the same remuneration? We have, on the other hand, to remember 545 that this is only a single occasion, and therefore we do not want to make too much of it. Are municipalities which have proved—Liverpool is one of those municipalities, and there are others—that they are careful in their administration and have been cutting down all the time to receive less treatment than the municipalities which have not troubled to reduce expenditure at all, or is the matter to be taken into consideration when the question of administration arises? Speaking as representing the feelings of the City of Liverpool, I know that they are not happy about this matter, but their one satisfaction is the promise for the future. Therefore, we have not the remotest intention of supporting the Amendment that has been moved, because it is not the sound, reasonable people who are prepared to bring the distresses of the country into the play of party politics. Let us keep these distresses out of party politics. Let us look at the position in the country generally and get a fair deal for everyone, regardless of what their politics may be. We are all fellow-citizens in the same trouble, and we have to face the distress in the country as a whole. It is not a question of party politics, and we cannot put down the cause to this or that Measure. There have been grave national and international crises. Let us stand together, stop all this nonsense about party politics, and deal with the question as a sound and fair attempt on the part of the Government to meet a very difficult situation.

§ Mr. LOGAN

I cannot allow the opportunity to pass without making a few observations on the speech of the hon. Member for Richmond (Sir W. Ray). He said that those who were interested ought not to pass any comment, but he went on to comment in regard to the question of how the Labour party dealt with this problem. I would like the Committee to realise the exact position of a Minister of the Crown faced with a difficulty and trying to solve it without powers being applied, and without coming to Parliament to ask for necessary powers in the form of an Act. He graciously and courteously approached those districts, of which Richmond is one, that are better circumstanced. One would have thought that they would have been only too ready 546 to come to the assistance of the Government in dealing with the distressed areas. I do not think that I can be contradicted when I say that those areas, although they were doing very well, did not feel inclined to be generous to the distressed areas. They took solace in the fact that these provisions were only of a temporary character, and that a permanent Measure was about to be brought in. One might find consolation in knowing that at a later date procrastination will solve the difficulty of the distressed areas, but it has been only a modified consolation to the distressed areas to know that at some later date some permanency is to be secured in the relief to be given. The emergency is immediate and urgent.

We have been told that the question of politics, happily, is not to enter into the matter, but responsibility enters into it. When a crisis arises in the nation, we have to take a national view and adopt measures apart from party politics. I cannot disabuse my mind of the responsibility that attaches to me as one of the representatives of the City of Liverpool, realising what the present proposal means. When it comes to giving expression to the feelings of Liverpool, I note that there is one Member of the National Government's supporters from Liverpool present. I am disconcerted to find that eight others are absent, instead of being present to face their responsibilities as representatives of the city. There is no difference of opinion between the hon. Member for West Derby (Sir J. Sandeman Allen) and myself in regard to the views of Liverpool on this question. It will be conceded that where the government of a city is wisely and carefully carried on, where no maladministration can be shown and we can put up a good case, we have a right to the ear of the Government. I know something of the administration in Liverpool, having sat 10 years on the administrative board, which gives out assistance in the city, and I say that, quite apart from party politics—and the administration is mainly by the Tory party—the administration in Liverpool is second to none.

What is the problem with which we are confronted? I have never been in favour of the Anomalies Act, but we are not discussing the Anomalies Act to-day. We are discussing the allocation of £500,000, £60,000 of which is to go to Scotland, 547 leaving £440,000 to England and Wales. The sum of £500,000 is stated to be the allocated amount, but originally when the matter was mentioned, and we were having a discussion on it, it was said that £500,000 would be raised, and that the Government would find another sum representing £250,000. The figure stated in the House to-day is £650,000, but the figure originally mentioned was £750,000. The last time that £650,000 was mentioned I raised a point in connection with it, and no reply was given to me. It is not only on my authority but on the authority of the Town Clerk of Liverpool that £750,000 is mentioned. I have received a letter from the Town Clerk of Liverpool and, as it is not marked confidential, I assume that I have the right to read it, particularly as every member of the City Council of Liverpool has received a similar communication. The letter says: It was recently intimated by the Government that endeavour would be made to meet the immediate necessities of such areas by a redistribution of the block grant to local authorities, whereby the sum of £500,000 would pass from the more fortunate areas for the relief of the distressed, and the Exchequer would add a further £250,000. That makes a sum total of £750,000. I do not want to go into the question of the more prosperous areas. The view of the Opposition is that the Amendment gives an opportunity to discuss the merits or demerits of the proposition before us. We are told that this is a temporary matter. Let me tell the Committee that £1,934,000 is our estimated expenditure in Liverpool for 1933–34—nearly £2,000,000—and the amount attributable to relief of unemployment, under Tory administration, by the strictest economy in the city, is £739,000, or £300,000 for unemployment purposes in excess of last year's amount. That increased demand comes upon the sorely depressed ratepayers of Liverpool. It is a severe burden upon the trade of the city, upon the shopkeepers, and it means decline in values in the city. This condition of things, irrespective of creed, party or class is due to the terrible problem that now besets the whole country, and it is a logical conclusion that in this great burden the nation ought to bear a greater share, and not make worse the conditions of the depressed industrial areas.

548 I can honestly say, as a representative of Liverpool, that every penny administered there is well administered as far as possible, and that we have a just claim upon this Committee. Other areas may be feeling the pinch of poverty very badly, but we submit that, owing to the important position that we occupy as a seaport, we have a claim for special consideration. We are the great centre for the Western world and for the Seven Seas. The shipping that comes into the Port of Liverpool makes it a great emporium, of benefit to every city and town in the country, and because of that we say that the sum of £500,000 is most inadequate to meet the demands of the Port of Liverpool and of the other distressed areas. I am concerned for the welfare of the City from which I come, irrespective of party, creed or class, and I say that the Government must take the responsibility. They have the power. Regardless of whether there are any complaints against the Labour Government, the Government in power must assume the responsibility. The one that has the purse and can administer has no right to complain that the child dies of starvation, while complaining of the faults of its predecessor.

The Government have the power to deal with this matter, and they are not exercising it. They have the power to increase the amount of money and, as a National Government, they would be wisely administering the affairs of the nation if they gave more assistance to the distressed areas. The demand has not been met, and the Government leave us with no option but to move our Amendment. We move our Amendment because it is the only chance we have, under the procedure of the House of Commons, for our views to be heard. I trust that before the discussion concludes, the Government will, in the goodness of their hearts, find that they can increase the amount which they can give in the form of relief which the depressed areas so sadly need.

§ Sir N. GRATTAN-DOYLE

I intervene in order to make an appeal to my right hon. Friend the Minister of Health to implement what was not exactly a promise but which every hon. Member representing a distressed area thought he could rely upon. It will be remembered that on 12th April, on the occasion of a 549 Vote of Censure on the Government moved by the Socialist Opposition, the Minister of Health, in accepting an Amendment moved from this side of the House, made the confident suggestion—I put it no higher than that—that the more fortunate areas would accept his proposal and contribute a ½d. rate in the £, which would produce so much. There is some dispute as to whether the amount was £500,000 or something a little more or a little less. My appeal to the Minister is to put us in no worse a position than we understood would be the case from his speech on 12th April. There is some difference of opinion as to whether the original amount was £750,000 or £650,000, but if it were £650,000 there is a difference of 2150,000, which is a considerable sum. I do not wish to look a gift-horse in the mouth. I want to compliment the Government on being able to do something and to compliment the Minister upon having steered a course, through a great many shoals, channels and difficulties which has brought him to the position at which he has arrived today. I ask him to go a little further and implement what was understood in the Debate of 12th April, that the amount would be at least £650,000.

§ Mr. LECKIE

I, also, should like to emphasise the inadequacy of the proposed grant. The announcement which has just been made will cause grave disappointment. When the first announcement was made, which I thought was a sum of £750,000, it was felt that it was too little. It has now been reduced considerably, and is, therefore, all the more disappointing. Some of us have been pressing this matter on the Minister for a long time. The first meeting of the Distressed Industrial Areas Committee was held on 21st June, 1932, more than a year ago, and the first deputation was received by the Minister on 30th June last year, so that more than a year has elapsed since strong representations were first made to the Minister on this subject. Over all that long period we have been getting nothing so far as finance is concerned. All last year and up to the year ending 31st March last the distressed areas have been getting nothing. It may be said that half a loaf is better than no bread, but I should like to assure the Minister that the half loaf would have 550 been much more acceptable six months ago than it is to-day, because of the additional period that has elapsed without any financial assistance. It may be that in some places there has been an improvement. I am glad to know it, but the long continued unemployment in South Staffordshire and the Midlands has brought ratepayers to a very low level. Shopkeepers are being bled to death, all their reserves have gone, and it is impossible for them to go on paying the high rates which are now called for.

I should like to pay a tribute to the Minister for what I know is his genuine sympathy with distressed areas. He has shown his sympathy by his actions as well as by his words, but I am sorry that he has not put up a better fight than he has for them. After all, I feel, and most of us feel, that the wealthy areas ought to have met the Minister when he approached them some little time ago. This is a Christian country, and one of the fundamental principles of our religion is that the strong shall help the weak. It is disappointing that the appeal which the Minister made to the low-rated areas did not meet with success. I have been looking at some of the facts relating to this question, and I find that on 18th October last the hon. Member for Newcastle-upon-Tyne North (Sir N. Grattan-Doyle) asked the Minister of Health whether any steps had been taken during the recess for the relief of distressed areas; and the Minister replied: In accordance with the undertaking which I gave in this House on 13th July last, I have been having an investigation made into the working of the rules which govern the calculation of the General Exchequer grants under the Local Government Act, 1929, and, in accordance with the statutory requirements, I am taking into consultation on the matter of the basis of these grants representatives of the associations of local authorities concerned. But I am not yet in a position to report the result of the investigation and consultations.—[OFFICIAL REPORT, 18th October, 1932; col. 4, Vol. 269.] We have never had any report on the result of these investigations. Let me refer to the wording of the Act itself. Section 110 of the Act of 1929 says: The Minister shall, before the expiration of the second fixed grant period, in consultation with such associations of local authorities as appear to him to be concerned and with any local authority with 551 whom consultation appears to be desirable, cause an investigation to be made into the working of the Rules contained in Parts III and IV of the Fourth Schedule to this Act, and of the provisions of paragraph (b) of sub-section (1) of section ninety-eight of this Act, and shall cause a report of the result of the investigation to be laid before Parliament. I understand that that investigation has been made, and I am sure that we shall await the report with great interest. But the Act did not mean that it should end with that. After the report was presented to Parliament, it surely meant that some steps should be taken to remedy the inequalities which, I have no doubt, the inquiry brought to light. I have no doubt that the inquiry has exposed great inequalities in the formula, especially in the unemployment factor, and I ask the Minister at the earliest opportunity to take his courage in both hands and revise the formula, so far as the unemployment, factor is concerned. Personally, I was not too hopeful of the appeal to the low-rated areas, because I know how difficult it is for elected representatives of any authority to give away anything voluntarily, but I do not think that should deter the Minister from going forward on the lines obviously suggested by the Act. A suspicious attitude seems always to be taken by representatives of well-to-do areas towards the authorities of depressed areas. I have heard hon. Members speak of the wastefulness and extravagance of these areas, that they are spendthrifts, and so on.

I could not follow the arguments of the hon. Member for Richmond (Sir W. Ray) in trying to make out the case that areas which had not really spent up to the hilt in regard to social services should be penalised. Local authorities have had to make savings somewhere, and in order to carry on with the Poor Law they have had to cut the social services to the bone. Now it is suggested by the hon. Member for Richmond that they should be penalised for so doing. If an authority goes on spending on the ordinary services in the same way while the Poor Law service is costing so much more, they would certainly have been rightly accused of extravagance; and that must be borne in mind when the matter is considered. I can only speak of my own area, the district of South Staffordshire, and I say that it is a ridiculous 552 caricature to suggest that these authorities are wasteful or extravagant. They have had to struggle along as best they can, confronted in every way by long continued unemployment and high rates. They deserve the sympathy of the Committee and of the country.

I cannot say much about the White Paper issued this morning giving particular of the grant and the method of its distribution. I have not had time to find out its effect even in my own areas, and I have no doubt other hon. Members are in the same position, but, on the face of it, it seems to me that the proposals for distribution are fair. It is only right that increased expenditure on out relief should be the basis. I think it is a satisfactory basis. Whether the limitations given in the White Paper, that the grant is only to go to those authorities which exceed a 2s. rate in respect of out-door relief, and that no authority is to receive more than the equivalent of a 1s. rate, are wisely thought out, I cannot say, but I have no doubt that the Minister has had the figures before him, and has thought the matter out well. What I want to emphasise, however, is that £500,000 is quite inadequate to tide local authorities over until 31st March, 1934. There are nine months of the year still to run. These representations were commenced over a year ago and local authorities have had nothing for the last year. Now this inadequate amount is to cover them for the year ending March, 1934. I hope that the Minister will recognise the inadequacy of the sum, and will make fresh representations to the Chancellor of the Exchequer and the Cabinet in order that what is now a great hardship may be redressed and an adequate amount voted for this purpose.

§ Mr. WISE

It is with extraordinary regret that I have listened to not one but several supporters of the Government, who were elected undoubtedly on a programme of national economy, urging the Government to spend a great deal more of the national finances than the Government are proposing to do, and I would like to put it on record, as the representative of an industrial division, that I sincerely congratulate the Government on not having given way to the clamour from the distressed areas for a form of relief which is financially unsound. The hon. 553 Member for the Scotland Division of Liverpool (Mr. Logan) who is, I think, more clear-thinking than his colleagues, has announced that high rates ruin cities and it is only a step from that to the realisation that high taxes do the same for the country. Unless the most rigid economy is still maintained I feel certain that the evil which we are trying to cure will merely be aggravated by forced injections of national money which should be saved.

I wish to refer briefly to the speech of the right hon. Gentleman the Member for Wakefield (Mr. Greenwood), who accused the Government and the local authorities of having, by their economies, destroyed purchasing power. I have always failed to see how you could destroy purchasing power by leaving the money to be spent by the taxpayer, instead of spending it as a State. It is spent, whether the taxpayer or the State spends it, but there is this difference, that the taxpayer spends it more rapidly and more efficiently than the State, and the circulation of the money is of more benefit to the population of the country. The Minister told us that this was an emergency measure, and he used this very adequate simile, that when you found a man in a hole you did not ask him how he got there—you first pulled him out of it. After listening to some of the speeches from the benches opposite, we can have no doubt as to who pushed him into it, and I think the right hon. Gentleman the Member for Wakefield—I am sorry he was not able to remain in his place—did undoubtedly so overstate his case as to destroy any credibility in the claim which he is making.

Perhaps it was due to the fact that he was, as he said, endeavouring to educate the Liberal party. He was setting himself, a laudable but an impossible ideal, but he must remember that if he is going to adopt the cap and gown of the pedagogue he must also adopt pedagogic accuracy in regard to figures. When he made his statement as to the enormous increase of expenditure on Poor Law relief and the enormous number of people who are applying to public assistance committees for relief under what he called Tory administration, I think he was ignoring the figures which show that in 1930 under his administration the cost of Poor Law relief was