§ Order of the clay for the Second Reading read.
§ Moved, " That the Bill be now read 2a." —(Lord Welby.)
THE EARL OF CAMPERDOWN
My Lords, although in form this is a private Bill it is in essence a public Bill, and a public Bill of a very important character. The London County Council is the first municipal body in the kingdom, and its expenditure is by a very long way the first municipal expenditure, and this 427 Bill affords the only opportunity to your Lordships of passing in review the expenditure of the County Council and their proposed borrowing powers during the year. I am very glad that the noble Earl the Chairman of Committees determined that this Bill should be moved by some one who was responsible for it and who knew its details, because I think your Lordships will all be of opinion that, seeing the large increase of debt and the large increase of expenditure of the County Council, it is very desirable that these matters should be explained to your Lordships in detail.
I must confess that I was a little taken aback when I found that my noble friend had simply moved the Second Reading of the Bill as if it were an ordinary private Bill. Your Lordships probably thought—I certainly did—that a Bill which contemplates giving borrowing powers amounting to more than £12,000,000 deserved some explanation of its details from the Chairman of the Finance Committee of the London County Council, but since my noble friend, who, of course, has perfect discretion in the matter, has elected not to say anything in regard the contents of the Bill, I hope he will at all events favour us with some remarks in reply when the debate on the Bill has closed. In the meantime I must ask your Lordships to pardon me for endeavouring, in perhaps an imperfect manner, to explain the Bill to the House.
Your Lordships will find the contents of the Bill explained in the Schedule. Part I. of the Schedule contains the estimated requirements for capital expenditure by the Council from April 1st, 1906, to September 30th, 1907, a period of eighteen months; and it refers to expenditure incurred under Acts of Parliament which have sanctioned various undertakings, and with regard to which the proceedings of Parliament are now almost purely administrative in allowing the expenditure as it is required from year to year. Part II. of the Schedule— and this is, in my opinion, the most important part—contains the estimated capital requirements upon Bills of the present session, and the amount which is required up to September 30th, 1907. 428 Part III. of the Schedule is a matter of less importance. It deals with sums which may be authorised by the Treasury beyond the amounts limited by the sections of this Bill, a total of £550,000; and Part IV. of the Schedule contains the amounts estimated to be required for loans to other municipalities, with regard to which the London County Council act virtually as bankers. Altogether the Bill confers borrowing powers to the extent of £12,224,000.
I shall occupy your Lordships' attention for a very few moments with regard to i Part I. of the Schedule. There are some undertakings of the County Council which have been completed, and which, therefore, of course, do not appear in this Bill, and with regard to which I cannot say whether the expenditure kept within the original estimates or not. There are in this Part a good many other undertakings which either have lately been begun or at all events are not very far advanced, and with regard to which, of course, there is no revised estimate. But with regard to the headings which represent undertakings approaching completion, if your Lordships will follow them down with me you will see that in a considerable number of cases, certainly in the majority of cases, a revised estimate has become necessary. Under heading No. 3, £155,000 has been turned into £180,000; under No. 7, £436,000 has been turned into £447,000; under No. 8, £484,000 has been turned into £535,000; under No. 10, £219,000 has been turned into £414,500; and under No. 13 £4,864,000 has been turned into £5,136,000. That, my Lords, with the one exception of steamboats, ends the record of the undertakings which are approaching completion.
The word steamboats, I am told, has become a sort of melancholy term in London finance. The estimate there of £280,000 has become £304,000, and I do hope and trust that this revised estimate is the last estimate on capital account which Parliament is going to be called upon to sanction. These London steamboats are an extraordinary instance of failure of municipal calculations. I pass from their original cost, which, after all, is not so important.
429 When we come to their working we have already arrived at this point, that up to the present we have lost one-third— 30 per cent.—of the whole capital. I am now taking the estimates of the London County Council, and the estimates which Lord Welby presented to the Council lately. I will not go back to all the prophecies which were made with regard to the future of this undertaking. The matter came before two Committees of Parliament, before whom the most sanguine calculations were laid. The Chairman of the Highways Committee of the London County Council said that in his opinion it was almost certain that in the first year the steamboats would pay the £90,000 which was necessary in order to establish an equilibrium. There was a statement which proceeded from certain trade unions, that 15,000 trade unionists would travel by these steamboats every morning. With regard to that latter statement, the only commentary that it is necessary to make is that, after a brief experience, no steamboats now starts earlier than 8 o'clock in the morning.
In the same way the whole service has been altered. It was originally a service which was to run from Greenwich to Hammersmith, but now it has been abandoned further than Chelsea, and the portion between Chelsea and Hammersmith left to the private company; but it does not go on for the whole year, even over the diminished course. From April 1st to September 31st there is now to be a fifteen minutes service from Greenwich to Chelsea, but from October 1st to March 31st there is to be a twenty minutes service from Greenwich only so far as Blackfriars. Therefore, my Lords, the service has ceased to be what you may call a service up the river. The actual deficit to March 31st last was nearly £51,000; the estimated deficit for this year is £52,000; and I observe that the other day it was pointed out by Lord Welby that in four weeks £11,000 had represented the expense while £5,400 had been the receipts, his only remark upon that being that in his opinion the receipts from the steamboat .service for the period referred to showed a fair proportion of the cost of working the steamboats for the year. If that be 430 so now, I leave it to your Lordships to judge for yourselves what will be the result when we get between October 1st and March 31st. Although it is a little thing, yet the number of accidents has been so great in managing these steamers that the cost of insuring them, which was only 35s. per £100 last year, has now been put up by the unfortunate insurance offices to £4.
I think I may now leave that matter and take your Lordships to Part II. of the Schedule. Your Lordships will observe the words in several places " if it becomes law." The expenditure here proposed is in virtue of certain proposals which have been laid before Parliament in Bills, and which have been under the consideration of the two Houses. I speak with same slight knowledge of this matter, because I myself have been sitting for nearly the last fortnight on a Committee which has had before it several of the Bills in this Schedule, and which has considered the London County Council (Tramways and Improvements) Bill, and also the London County Council Building Bill. With regard to the Schedule, your Lordships will see that the estimates which appear are not estimates of the whole cost of any improvement. It is merely the Parliamentary estimate of the gross cost which is laid before Parliament—that means, I suppose, for this period of eighteen months up to September 30th, 1907. Taking No. 31, the Tramways and Improvements Bill, the figure which appears there is £043,000 for tramways and £73,000 for street improvements; in all, a total of £716,000. But, of course, your Lordships will not suppose for a moment that that is the cost of the tramways undertakings. The total cost of the tramways undertakings at present in progress is, in round figures, £11,000,000, of which nearly £5,000,000 has been expended up to the present time and £6,100,000 remains to be expended.
The most important tramway laid before us this year was the proposed tramway coming from the other side of Westminster Bridge and going round the Embankment and so crossing over to Blackfriars, and we thought that upon the whole it was a desirable tramway to make. Further, with regard to the tramways as a whole, we thought 431 there was very fair reason to think that in the end they might turn out a successful undertaking. But, at the same time, of course, we felt that great caution was desirable, because the County Council have not half completed their outlay. The Finance Committee of the County; Council are of the same opinion. This is what the Finance Committee said—The Finance Committee agree with the Highways Committee that it is desirable to complete this work—that is, the whole system of tramways in London, north and south—as soon as possible, but the Council would do well to bear this heavy charge in mind and not to entertain fresh schemes of expenditure, however desirable, until we have met the largest part of this expenditure.Lord Welby will remember those words. I may say—but this is merely a remark in passing—with regard to the way in which the capital cost of the tramways is made up, it appears that whenever a tramway is to be laid down near which an improvement can be made, the custom I has been to make the improvement earlier than would otherwise have been the case. It does not follow, of course, that the improvement would be made for a great many years, but in these circumstances it is made immediately and the cost is divided, generally speaking, in this way: one-third to the tram-way, one-third to the improvement, and a considerable portion is found by the borough council in whose district the improvement takes place. I had a Return made out for me by the Controller of the County Council showing the effect of this practice. He mentioned in his evidence before the Committee nineteen cases in which it had been pursued, and made out a Return showing that out of an outlay of £1,056,000, £291,000 had been paid by the local authority, £101,000 through the improvements account of the London County Council, and £364,000 through the tramways account. I merely mention that to show your Lordships on what very favourable terms the capital outlay on tramways is being computed, because, of course, if it were some private company laying these tramways and not the county council, the private 432 company would have to pay the whole of the £1,056,000, or very nearly that amount.
Passing from the tramways I come to the Electric Supply Bill. Your Lordships will see that for the acquisition of land, erection of generating stations laying of mains, etc., etc., a sum of £2,500,000 was the estimate made in the Bill. I thought at first it meant that that was the sum which would be required for this year, and as attention had been called to this by a witness, I asked him whether that was not so, and he replied that it was the total cost of the scheme put toward in the London County Council's Bill in the other House of Parliament. Well, my Lords, all I can say is—and I am speaking with some experience, because I sat for a great many weeks last year on the Administrative Supply Bill, which was a private company's Bill—that I am positive that it is quite impossible to create a satisfactory system of electric supply for London, or anything approaching to a satisfactory system, for less than a sum which may run to from £8,000,000 to £11,000,000. What is the meaning of this estimate of £2,500,000? This Bill has been a matter of very considerable controversy, I believe, in the London County Council, and in November last, when the matter was first taken into consideration, the Finance Committee said that they had no data as to the limitation, the scope, or the cost of the scheme and, in fact, that they really had no figures at all to go upon. After a very considerable debate the matter was adjourned in order to enable a Bill to be drawn up which could be fully discussed by the County Council, with the result that this Bill was introduced with this estimate of £2,500,000. It came before the Finance Committee. Let me read to your Lordships what they said of it—We have had before us certain estimates of working costs and the probable growth of demand for electricity, but the figures are at present only of a provisional character, and we are advised that the publication of any estimates at the present stage might prejudice the Council's case before a Committee of Parliament. We are consequently placed in a position of difficulty, because while we feel that the Council ought to have before it some means of judging as to the financial prospects 433 of the scheme, we are unable for the reasons stated to submit any figures to the Council.Further on they said—We cannot help thinking that the Council ought, before embarking capital in such an enterprise, to have some further security than it will apparently possess.And subsequently they said—Whatever conclusion may hereafter be arrived at as to the probable ultimate financial results of such as undertaking as the Council may obtain power to establish, we are of opinion that the Council must face the probability that during the early years the undertaking will show a deficiency which will have to be made good out of the rates, because from its nature some years must elapse before a sufficiently large amount of business can be secured to make the concern profitable.The filial conclusion in the Finance Committee's Report was as follows—In conclusion, and looking to all the circumstances, we are impressed with the fact that financial risks are inseparable from an enterprise of this kind covering so large an area.The London County Council proposed not only to supply the whole of the county of London, but a number of towns in a variety of counties outside—and that if such risks mature, the burden will fall entirely on the ratepayers of London. Bearing this in mind, we are of opinion that if, on the grounds of general policy, the Council should finally decide to promote the Bill, every endeavour should the made to make arrangements with the existing undertakers for the supply 10 them by the Council of electrical energy in bulk.Do your Lordships consider that that is an approval of this scheme by the Finance Committee of the County Council? I should say that it was a series of very serious warnings to the Council as to what they were proposing to embark upon; but, nevertheless, the Council proceeded to vote, and in spite of the fact that Lord Welby, Sir Francis Mowatt, and all the other persons who are chiefly responsible for the finance of the Council went so far as to vote, I think almost for the first time, against their Party, the proposal was carried by sixty-six to thirty-eight, There was not in the Bill one single obligation of any sort or kind on the County Council. There was no obligation to supply electricity to anybody or any corporation; nothing except to proceed by agreement. There was not a single word about any maximum rates or charges, and not one word about charge 434 of any kind or sort. I do not understand why they should put £2,500,000 in the scheme any more than £1,500,000, or any other figure. The object of the Bill was quite clear. I take it in connection with their action in the last session of Parliament. The intention of the Bill was to occupy the ground, to make it impossible for any private company to come in, because once power had been given to them to supply the London area, the result would be that if any private person came forward and proposed to supply even at a much lower rate we should immediately be told, " You must protect your own rates and you cannot allow any competition with the London County Council." I see there is a recommendation that the London County Council should bring this Bill forward again. A year off is a long time, and we do not know what may happen; but if the Bill ever reaches this House I hope the noble Earl at the Table, at all events, will take care that very stringent inquiry is made as to the charges sanctioned, and that there shall be a maximum rate. Moreover, I venture to think that the maximum ought not to exceed .75 per unit, which was the price at which the company offered last year to supply electricity.
I pass to No. 33—the London County Buildings Bill. Your Lordships will see a sum of £655,000 which appears as the total Parliamentary estimate. It must not be supposed in this case either that this is the total outlay. The total outlay is £1,700,000. That may seem a large sum; but I am giving my own opinion perfectly frankly when I say that it did not seem to me, looking at the whole of the circumstances of the case, that the plan of the London County Council was a bad one, and so far as we on the Committee are concerned, we have recommended your Lordships to approve of it. But this I do say, that when you are laying out nearly £2,000,000 on buildings you ought to be additionally careful as to how you enter upon other costly undertakings, and you ought to consider your finance with reference to your budget as a whole and not simply with regard to the proceedings of independent Committees, every one of whom considers that their own duty and their 435 own sphere is the most important and ought to be attended to whatever may happen to the rest.
With regard to this scheme I have only one remark to make. At the present time I believe there are 1,998 clerks to be provided for, and that within the next two or three years there will be 3,300. I merely suggest to your Lordships that if Parliament entrusts to the London County Council the electric supply of London, and if, in addition, as I see the President of the Local Government Board foreshadows, Parliament also makes the London County Council the body to regulate the traffic of the Metropolis, county councillors will be absolutely unable to fulfil their duties. Indeed, I believe they are not very well able to perform them now, for no less than twenty six are Members of Parliament. How one man can be an efficient member of the London County Council and at the same time efficiently discharge his duties in the House of Commons is beyond my understanding. But if, in addition, they are to have these other duties thrown upon them, then your Lordships will find yourselves called upon before very long to furnish another site, the magnitude of which it is impossible to imagine.
In conclusion, there are one or two remarks which, speaking both from general knowledge and also from experience of the last fortnight, I should like to make with regard to the way in which the London County Council do their business. In the first place I venture to hope that the London County Council will in future go more carefully and more fully into the estimates of undertakings before embarking upon them. That is not my remark; it has been made over and over again by the noble Lord opposite, the Chairman of the Finance Committee of the London County Council, and by the Finance Committee itself. In the next place, I hope the London County Council will pay more attention to Lord Welby and to the Finance Committee than they have hitherto done. The Act constituting the London County Council stated—Every County Council shall from time to lime appoint a Finance Committee to regulate and control the finance of the county.436 My Lords, how has that enactment been observed by the London County Council? Why, they have disregarded it from the very first. The late Lord Lingen was the first chairman of the Finance Committee, and he suggested that the committee ought to occupy with regard to London County Council finance very much the same sort of position as the Treasury occupies with regard to Imperial finance. The London County Council proceeded to rule that down. They said that it was the duty of the Finance Committee to report to them within reasonable terms, I think the words were, what they ought to do, but they maintained that, having done that, the duty of the Finance Committee was performed, and that it was not in any way the business of the Council to give way to the Finance Committee. The consequence has been that since the establishment of the County Council the Finance Committee has been overridden times without mention.
I go further than that. I see a statement in the preamble of this Bill which appears to me, under the circumstances, rather difficult to justify. It is stated that all the estimates contained in the Schedule to this Bill—have been considered and approved by the Finance Committee of the Council, in accordance with the provisions of the Local Government Act, 1888.Your Lordships will remember what I read to the House just now from the report of the Finance Committee. Can any person say that that estimate was approved by the Finance Committee? This question has arisen before the Committee upon which I have been sitting during the last fortnight. What the Finance Committee does, as stated by a witness, is this. The Committee never approves of an estimate. What it does is to make remarks. If it absolutely disapproves, then it disapproves. I dare say that may be quite correct, but I do venture to hope that the noble Lord opposite, if he really acquiesces in this, will take a little higher line with his Council and will point out to them the importance of the Act of Parliament. If the Finance Committee report again as they did in this case upon any proposal I hope he will not allow it to 437 appear in the preamble that the estimate has been approved by the Finance Committee. It is to be hoped that in preparing schemes the London County Council will consider them together and not simply on their merits as apart from each other and without any reference to the total amount of their budget. At present there are a set of independent committees. They put forward these measures in the London County Council, debates take place upon them, and they are approved or the reverse, but there is never, so far as I can see, any bringing together of these matters with the total cost which the improvements are going to entail if made. The result is that a very large expenditure is often sanctioned without anyone being distinctly aware of what is being done.
There are a great many things in this world which are desirable. We should all like to have everything perfect, but it is impossible for any corporation or any individual to make all the improvements that are wanted at one time, and what a sensible private person, at all events, does in these matters is to consider the length of his purse and what he can afford, and I think the London County Council would do well to do the same. I will, in conclusion, quote the words of my noble friend Lord Welby, and I do not think I can conclude better than by reading them to your Lordships. The noble Lord said—He was very jealous of the credit of the Council, and his jealousy led him to one opinion—that at the present time the Council was in danger of overstraining its credit. They ought to be alive to that danger, as their credit ought to be the first after that of the State, and he could not say that at present it held that position. The large propositions for expenditure which came from various committees showed that the Council was not alive to the danger of overstraining its credit. He wanted to justify the grounds of his statement by a reference to the capital commitments of the Council. During the last few years many millions had been spent on street improvements, involving heavy borrowings. The Strand and Westminster improvements cost £7,000,000. Those schemes would, perhaps, in time provide recoupment of the cost, but for some time the ratepayers had to bear the burden. While he was a zealous adherent of the tramway policy of the Council, and while lie believed the time would come when the tramways would pay their way and provide large profits, he could not help saying that the chairman of the Highways Committee, Mr. J. Allen Baker, was an expensive luxury to 438 London, and the millions which he asked for from the money market were, again, a great strain upon the credit of the Council…The Council had chosen at that time to commit itself to a work which some time would be perfectly legitimate but not so now—nearly £2,000,000 for a new County Hall, involving another heavy call on the money market. Again, it was likely, in view of the change of Government, that immense schemes like the Port of London Bill might be brought forward at any moment.And Lord Welby went on to say—The policy by which the Council passed scheme after scheme was a strange one. In one year the Council passed a scheme involving huge expenditure, put it aside, forgot all about it, and looked upon it as if the thing were done. The next year fresh schemes were produced, and the process repeated.It is unnecessary for me to add anything to that; and I have to thank your Lordships for listening so patiently to what I am afraid has been a rather tiresome speech.
§ LORD WELBY
My Lords, my noble friend has brought a very grave indictment against the finance of the London County Council. He has, I venture to think, somewhat coloured the picture, but at the same time I make no remonstrances on that point. I am only too glad that the finance of a great body like the London County Council should be submitted to review, and I believe a review, if it be a fair review, in Parliament is the best restraint, the best caution, which a large public body like the London County Council can receive. Though my noble friend is perhaps somewhat hard upon the London County Council, I think your Lordships will agree that no critic more competent could be found.
There is one point which I am sure your Lordships will consider with fairness. My noble friend has quoted rather largely from remarks which I have made at different times. May I point out to the House that the Finance Committee of the London County Council is placed in a position of considerable difficulty. My noble friend, comparing small things with great, has pointed out the the Finance Committee of the County Council should occupy something of the same position with regard to the expenditure of the county of London as the Treasury does with 439 regard to the expenditure of the State. But may I call my noble friend's attention to this point, that the Treasury, in its remonstrances with and representations to the other great Departments of the State, makes those remonstrances and representations within closed doors. Any question arising between the Treasury and the great spending Departments is decided by the Cabinet, and the decision goes out to the public as the decision of the Government as a whole. Unfortunately for the Finance Committee of the County Council, we are not in that position. According to the form which the administration of the County Council takes, the different committees present their reports to the Council, and the Finance Committee, either in presenting the estimate or in making their own report, make a representation which is printed in the agenda of the Council, and the warnings and representations which they think it right to make to the Council are thus published to the world. I think your Lordships will, in fairness, admit that that places the Finance Committee of the County Council in a very difficult position if they are really to do their duty in the manner my noble friend thinks they ought, for they have to bear in mind the use that will be made of any remarks they think right to make to the Council. My remarks are made more pointed at the present moment because I am told that in Committees of the other House of Parliament the reports of the Finance Committee have been used freehand largely, not in the way of ordinary, criticism, but by interested opponents, by opponents who have legitimate interests against the Council's scheme, to upset the Council's policy. I think your Lordships will admit that I have some justification for bringing before you that difficulty under which the Finance Committee and its chairman work. Your Lordships will notice that in such cases as this the ordinary warnings which the Finance Committee give to the Council are magnified into a representation that the Finance Committee are opposing the Council and entirely disapproving of the policy of the Council. The difficulty which the Finance Committee feel in consequence is extremely great.
440 I remember when the noble Viscount who was lately Chancellor of the Exchequer thought right to point out in Parliament the dangers of the large increase of expenditure. I do not think the noble Viscount would have been at all disposed to do so had it been supposed that in giving such a warning as that he was opposing the finance of the Government of which he was a member, or that he was making it appear that the financial position of the country was unsound. Following somewhat on the same lines, I venture to point out to your Lordships that the Finance Committee, when they bring these questions to the notice of the Council, are not necessarily condemning the policy of the Council or representing to the Council that their finance is in an unsound condition. On the contrary, the proper function of the Finance Committee is to be what has been called the watch-dog of the Council. That is to say, their business is to warn the Council when they think they are entering upon any course in which some restraint is necessary. And here let me say that I agree with my noble friend opposite in many of the remarks he has made. I think it is the business of the Finance Committee to point out when the Council are entering on too large schemes and incurring a large amount of expenditure under too many heads at the same time, it is their duty to impress upon the Council that some prudence, some restraint, in these matters is desirable. In doing that I venture to point out that the Finance Committee are only performing their strict duty, and I do not think that words that may be used in the discharge of that duty ought fairly to be turned against the person whose duty it is to utter them, as if he were condemning or finding fault with the policy of the Council generally.
My noble friend has noticed many points, but on a great many of them I think there is no material difference between us. I cannot entirely agree, however, with his remarks upon the steamboat service. Free comment has been made upon that undertaking for many months past, both inside the Council and by the public, and I for one certainly should not come down to your Lordships to represent that as, up to the present time, a fortunate experiment on the part of the London County Council. At the 441 same time, I would ask your Lordships, in fairness, to remember that we have only the facts of a broken period of ten months before us, and although I cannot say that I am hopeful on the subject, yet at the same time I think that the Council may be fairly granted a longer period than that before it can be said positively that the experiment is of a kind to merit the ridicule which my noble friend poured upon it.
With regard to the next point—the division of the cost of widening streets between the tramways undertaking and the improvements account—I may say that this matter has received and is receiving the attention of the Council. The charging of one-third in the manner in which it has been carried out up to the present has not been thought a just or right division, and the Finance Committee are now I engaged with the other committees concerned in endeavouring to lay down principles by which the partition will be made in a more satisfactory manner.
As far as the tramways are concerned, my noble friend did not find fault, I think, with their administration generally or with the results. I would venture to go a little further. From what I have, been able to learn, I am most sanguine about the outcome of the tramway i undertaking. During the comparatively short time that the tramways have been in our possession a sum of £293,000 has been paid over to the rates; no less , than £600,000 has been put aside out of profits to sinking fund: and if you add to that a sum of between £100,000 and £200,000 for depreciation, and bear in mind that every expense that can fairly be put against the undertaking has been paid off, I do not think that the critics of the County Council act fairly if they represent that that is in any respect a I failure. Your Lordships are generally somewhat suspicious of what I may call municipal trading. As far as the London County Council are concerned, putting aside for one moment the steamboat experiment, the Council have never undertaken more than two experiments—oneis the tramways, about which I have just given the results, and they are not, I think, results of which the County Council I need be ashamed; and the other ex- 442 periment is in connection with the housing of the working classes.
The housing problem has been taken up as a one of the first duties of the country by every class and every section of the community. In dealing with it the London County Council laid down as a precedent condition that they would undertake no scheme for re-housing the working classes that involved a charge upon the rates. In order to give effect to that decision they resolved that they would pass no scheme for re-housing the working classes unless they had an assurance from the Finance Committee that they believed it would be self-supporting. I may say, as a member of the Finance Committee, that I have had, in common with my colleagues considerable anxiety in giving that certificate, if I may call it so, but it has always been given after very careful consideration of the figures laid before us, and I am happy to say that the results, as far as we have them up to the present, show that in practically every case the order of the County Council that a charge should not be imposed upon the rates has been fulfilled. To be perfectly frank with your Lordships. I make one exception. It is an exception which proves the rule. During the time that these houses are being erected, and before any rent can be received in respect of them, the expenditure is bearing interest but brings back no return. A sum of about £40,000 under that heading has been inflicted on the ratepayers; on the other hand the surplusage, small as it is, because it is not the policy of the County Council to make a profit out of the working classes, has been sufficient very nearly to cover the sum fairly charged on the rates while the houses are in process of building.
The noble Earl also alluded to the Electric Power Bill. Here, again, the noble Earl has been rather severe upon me in respect of the words in which I laid the hesitation and doubts of the Finance Committee before the Council.
THE EARL OF CAMPERDOWN
I intended to convey no imputation. I thought the words used by the noble Lord were excellent. All I said was 443 that I hoped his deeds had been as good as his words.
§ LORD WELBY
I think that my words and the words of the Finance Committee were entirely justified. I have had a very long experience at the Treasury, and I certainly think that in matters of the same kind, letters from the Treasury to the great Departments would have been expressed in very much the same terms. But, as I have said, whatever the Finance Committee say unfortunately goes at once to the public and is made use of against the body who are receiving the advice. So far, I consider that the comments which were then made were justified, and did not mean that to the policy of the scheme the Finance Committee need have been opposed. We urged that the finance of the scheme should be carefully considered, and I imagine from what I have heard that its finance has been carefully examined and discussed in Committee of the other House.
With reference to the County Hall, there, again, I am not disposed to quarrel with my noble friend as to the manner in, which he has spoken of the desirability of what we call co-ordinating expenditure; I that is to say, when very large works have been undertaken, there is very fair and proper ground why the Council should hesitate before undertaking fresh works. An expenditure of £1,700,000 is a large one, but when the whole of the circum stances are considered I venture to think that the undertaking is by no means a uneconomical one, or one that is not very much called for. Certainly the outside criticism which I should apply to it would be this, that it is economical and desirable in itself, but it might be open to question I whether, considering the very large expenditure involved in the tramways, it might not have been postponed for a year or so.
As to the comment which my noble I friend made upon the preamble of the Bill, I think the statement is justified that the Bill had the approval of the Finance Committee. The fact of the matter is this. Capital expenditure is submitted to the Finance Committee, and I do not think the committee can escape the responsibility, when they have passed 444 that expenditure, of what is involved in the word " approval." The Finance Committee are perfectly at liberty to make any comment they please upon the estimate so placed before them.
My noble friend has dwelt on the total amount which appears at the foot— £12,000,000. Unluckily—and this objection is not by any means confined to the County Council, for I remember perfectly well the same difficulty used to occur at the Treasury with regard to the provisions made for local loans—the people who estimate what they will want by way of loans always estimate largely. The gentlemen who used to come to the Treasury on behalf of the different Departments, stating what was wanted for different works, invariably estimated largely in excess of the amount they required, and I have known Chancellors of the Exchequer who were troubled at the amount which had to be placed in the Bills laid before Parliament because they knew those amounts would not be reached, while at the same time it was impossible for them to take the responsibility of cutting down that which had been put forward. The same thing, again in a minor way, occurs with us in the County Council. Large demands are made upon us which we are obliged to put into the Bill. There are no means of transferring a surplus on one head to meet a deficiency on another. All the compartments are watertight, and the consequence is that we have to make full provision. But with regard to this £12,000,000 may I give your Lordships the result of four years experience of these loans?. I will take the tour years from 1902 to 1905. We put into the Bill, after some pruning had taken place by the Finance Committee, on the average of the four years, £7,000,000. The actual expenditure on the average of those four years was exactly half that amount. I venture to call the attention of my noble friend opposite to this, because I think that, as a fair-minded man, he will at all events accept that as some modification of the remarks he made about the very large sum contained in this Bill.
I have been charged with making out that the finance of the County Council is unsound. Speaking for the Finance Committee I have not 445 shrunk, by their advice and with their consent, from uttering the warnings, if I may call them so, to which, allusion has frequently been made, and I venture to think that in so doing I have not in any way made it appear that the finance of the County Council is unsound. Noble Lords are apt to regard it perhaps from too narrow a point of view, and in judging whether the finance of the Council has been on the whole soundly administered I like to take a somewhat larger view. When you look at the large amount of capital expenditure that has been laid out and take into consideration how much has been paid off, I think the result is directly creditable to theCountyCouncil. I am aware that the amount of the sinking fund is stated by Parliament, and, therefore, I am not claiming for the County Council more credit than it deserves. Let me take what I think your Lordships will agree to be one of the finest sites in Europe—the Embankment. The Embankment cost very nearly two millions and a quarter. At the present moment the action of the sinking fund has paid off 75 per cent, of that debt, and the present ratepayers are in possession of that magnificent work with only a quarter of the expenditure which was necessary to secure it for them yet to be paid. I turn to another point, and take the street improvements. Street improvements are to a great extent a matter of option. The sum of £24,000,000 has been laid out on street improvements. Of that no less than £13,000,000 has been paid off. Of all the cost of street improvements that has beenincurred 60percant has been paid off. Take the Holborn to Strand improvement. The excess was only caused by including a further site in the land which vas taken for the purpose of the improvement, and which was therefore outside the original estimate. I think your Lordships will agree that it is a very difficult tiling indeed to make an estimate of the amount required by such a site as that, and I think it reflects great credit on the expert officer, our valuer, when I say that I am informed on good authority that the acquisition of that very fine site is within the estimate which he originally laid before the Council, and which the Council sanctioned.
446 On these grounds I do venture to think that there is good reason for saying that in its main lines the finance of the Council has been conducted on prudent principles. I will take another great work—the main drainage. The main drainage cost, altogether, over £9,000,000. Half of that sum has already been repaid. I think that when your Lordships criticise what has been done and express the opinion that the County Council occasionally try too much atone time, you ought to recollect what has been done. I am sure you wish to be fair to the County Council and give them credit for the good work that has beer, accomplished. I do not think your Lordships can be aware of the pressure which is put upon the County Council to incur expenditure. Much of the expenditure to which exception is taken by my noble friend has not so much originated within the walls of Spring Gardens itself as from pressure outside. I do not mean to say for a moment that the County Council ought not to be responsible for the decision it takes in such a matter, but let me say that both the Press and the public are very exacting. I will give one instance. Nothing has given us more difficulty on the County Council — I grieve to say it—than providing for the increasing number of lunatics. The number of fresh asylums that have hail to be built has been a very heavy call indeed on the finances of the county. Owing to their desire that the expenditure on new asylums should not be too heavy at one time, the Council erected temporary buildings at Colney Hatch Asylum. By a great misfortune a fire took place there. The Press, instead of understanding the reason which led to the temporary buildings, almost unanimously condemned us for not spending more money. We have to face this pressure which is put upon us from outside, and we have to do our best with regard to it. I do think that, considering the claims that are put upon us, considering the enormous amount of work, much of it having been handed on to us by Parliament, which we have to do, the County Council have not a bad record to show. I think they are able to show that they have done good work for London, and I 447 venture also to say that, looking at their finance generally and the results of it, fair-minded men will agree that they have accomplished a great deal and in so doing, up to the present, at all events, have not put an undue strain on the finance of London.
§ LORD AVEBURY
My Lords, we are under a great obligation to my noble friend Lord Camperdown for having initiated this discussion, and I think it is only fair to say that, great as the expenditure of the London County Council has been, if it had not been for the moderating influence of the noble Lord who has just sat down the County Council's expenditure out of the rates would probably have been still higher. There are two points in his speech upon which I should like to say a word or two. In claiming for the tramway earnings a measure of relief for the rates he omitted to distinguish between the two tramway systems, that on the North and that on the South of the Thames. It so happened that when the London County Council took over the tramways a similar amount of money was involved in the northern tramways as in the southern tramways, and the profits were approximately equal. But the London County Council leased the tramways on one side of the river to a company and worked the tramways on the other side themselves.
There is a very interesting article in the Statist of this week which contains an exhaustive examination of the working of the tramways, and the main result is that, whereas the ratepayers have received £190,000 from the tramways which were leased they have only received £24,000 from the tramways which were worked by the London County Council themselves, and I cannot help thinking that it clearly follows that if the County Council had leased both systems instead of only one the ratepayers of London would have been about £170,000 better off at the present time than they are. Moreover, if a sufficient amount of the central charges, and for depreciation had been allowed, I doubt whether there would have been any profit at all. The amount of nominal profit which has been received from the system worked by the Council has been gradually diminishing until last year it came down to £4,000, and, if the deprecia- 448 tion had been treated last year in the same way as it had been treated hitherto, instead of there being a small profit there would have been a loss on the working of several thousand pounds.
§ LORD WELBY
The noble Lord must not forget that we have been, entirely recasting the traction. I think it can hardly be expected that there should not be a considerable falling off in receipts during the time the whole traffic was put out of gear in the course of the electrification of the tramways.
§ LORD AVEBURY
I was going to mention that some allowance, of course, ought to be made for the loss on working pending the conversion to electric traction. But my noble friend took credit for an amount of £210,000 as profit from tramways, and it is important to remember that of that amount no less than £190,000 has been derived from the tramways that were leased. I submit, therefore, that if we are really to embark in London on this further expenditure on tramways, the County Council should consider whether it would not be wiser to lease the lines than to work them themselves.
With regard to housing schemes there are two great differences. There are cases in which works are carried out and people displaced, and it is necessary to re-house them. In those cases the London County Council are under a statutory obligation, and have no option except to take the course which they have taken. But when it comes to carrying out housing schemes for the increase of accommodation for the working classes, the case stands on a very different footing. I had the honour of being vice-chairman of the London County Council at the time when this was first suggested, and I put myself in communication with the great concerns which have done so much to provide housing: for the working classes. I asked them what the effect on their operations would be if the London County Council were to engage in this work. They one and all replied that if the London County Council, with the bottomless purse of the ratepayers, were going into the business, they themselves would not carry on any further operations of the kind; and I cannot help thinking that there would have been just I as many or even more buildings for the 449 working classes in London as at the present time if the London County Council had never built any. It is quite true that any loss on the operations, has been trifling comparatively; but I cannot help believing that in London and elsewhere, if it is known that the local authority are going to undertake this business themselves, private enterprise ceases, and in reality they defeat the very object they have in view.
My noble friend spoke of the finance of the London County Council, and I entirely agree with him that the credit of London justly stands very high. I for one have never complained of the finance of the Council, but only of the great expenditure of the Council. If this great expenditure is to be made, I do not know that we can severely criticise the manner in which the money has been raised. I think we owe a debt of thanks to the Finance Committee for the efforts they have made to control the expenditure and keep it within reasonable bounds; but the words in the Act, if I remember rightly, were that the Finance Commitee should " control" the expenditure. I have always understood that to mean that the Finance Committee were to act in the matter of the London County Council's finance somewhat in the same manner as the Treasury acts with reference to our national finance. Unfortunately, however, the system of separate committees proposing expenditure " subject to the consent of the Finance Committee" has tied the hands of the Finance Committee very much. They not unnaturally consider that the County Council had committed themselves to the expenditure, and that all they could do was to see that the expenditure was carried out as economically as possible.
I also agree with what my noble friend said with reference to the necessity of a County Hill. I know from my experience as chairman of the London County Council not only the great inconvenience, but the expense involved in the present arrangement, and the difficulty of working a great business with clerks scattered over a large number of houses. But I also feel with him that considering the enormous amount of expenditure in other ways, the County Hall scheme might have been postponed 450 for a time. I sincerely trust that the discussion which has taken place in your Lordship's House this afternoon will tend to strengthen the hands of the Finance Committee, and that they will realise the very great responsibility which is thrown upon them to control the expenditure of the Council.
§ LORD MONTAGU OF BEAULIEU
My Lords, there is one point that I should like to call attention to before this Bill passes. A great deal of the money which is to be raised by this Bill concerns locomotion. The method in which this money is to be spent is one of the most important subjects that could possibly be discussed. Two Members of your Lordship's House—the noble and learned Lord on the Woolsack and the noble Lord opposite—sat on the Royal Commission on London Traffic, and I very much regret that their recommendation has not yet been carried out. That Commission recommended that, owing to the very complex nature of the locomotion of London, a board should be constituted to deal with the problem as a whole, and a great deal of private enterprise in this direction has been refused to be sanctioned by Parliament, on the ground that until the traffic board has been constituted and the whole policy outlined, it would not be wise to give private companies any powers in this direction.
I am not at all certain that at least a portion of the £6,000,000 which I understand still remains to be expended on tramways will not be expended at considerable risk, if not wasted. It is a question now whether the railed system of locomotion is the most economical and fastest in great cities. No one can doubt that the motor omnibus is going to play an important part in conveying the millions of London, and I must say I think the London County Council are running a very grave risk in, so to speak, putting all their eggs into one basket. As to the figures, I would point out that the cost of running motor omnibuses has already diminished to 10½d. a mile, and I do not think that the County Council can claim to run their cars at less than 10d. a mile. Having regard to the short time motor omnibuses have been on the streets, I think it is a great risk for the Council to 451 lay out so much money on tramways which may eventually be a dead loss to the ratepayers. Mr. John Burns, in an article in the Pall Mall Magazine of last month, expressed the opinion that the County Council ought to be the traffic authority for London. I entirely disagree. I fully acknowledge that the County Council have done a great deal of good work in regard to street widening, but on the question of traffic they are to a certain extent biassed, and to constitute them the Traffic Board would be to entrust this important duty to a body not possessing that independence of judgment which such a body should have. I can hardly conceive that the noble and learned Lord on the Woolsack or the noble Lord opposite would have appended their names to a Report recommending the constitution of a Traffic Board unless they had been convinced that it was the best thing for London; and in my opinion, Parliament should be very careful before they authorise the expenditure of any more money by theCountyCouncil in this direction pending the setting up of the Traffic Board recommended by the Royal Commission.
§ LORD LUDLOW
My Lords, as a member of the London County Council, I was surprised to hear the statement made by Lord Camperdown to the effect that the tramways were, in his opinion, a paying concern. I have devoted great attention to this matter during the three years I have been on the London County Council, and I have no hesitation in saying that the tramways do not pay, and that that is the opinion of the Moderate Party on the Council. The noble Lord drew his conclusion from the amount of the receipts, but the noble Lord,the Chairman of the Finance Committee of the London County Council, has proved conclusively that these receipts are worth nothing as a guide in this matter. Lord Welby stated that the County Council admitted that the proportion paid from the highways account and the proportion paid from the tramways account in the matter of improvements were not relatively correct; I mean by that that when a street widening takes place for the purpose of making a tramway the greater portion of the cost is debited to 452 the highways account. The County Council admit that that is wrong, and that there ought to be a fairer division. Therefore, I venture to think that the figures as to receipts are worth nothing. It. is now agreed that in future a great deal more of the cost of these improvements should be debited to the tramways account. But we want more than that. We say that for the last ten years this has been going on and we want the Council to go back and revise the whole of the accounts. If that were done we submit that there would be a great deficit on the tramways account.
The County Hall is talked of as a thing which is necessary, but I cannot agree that that is so. The building is also spoken of as if it were already erected, and we were going to walk into it, but during the whole time of its erection we should still be occupying the same premises as at present and paying rent, rates, and taxes. I have had the honour of being on the Finance Committee for two years, and I can fully bear out the statement that Lord Welby and the Finance Committee do all they can to keep down the expense of the London County Council, but the drawback is that we have no budget. We do not draw up a budget at the beginning of the year; but, as the various recommendations are brought forward, we have to find the money. We do not know at the beginning of the year what our expenditure is going to be. At the Finance Committee, Lord Welby is always calling attention to the excessive way in which the Council are spending money, and at the meetings of the County Council he repeats that we are borrowing to such an extent that our credit is being ruined, and that whereas five or six years ago we borrowed money at 3½ per cent.we now borrow at 4 per cent.
§ VISCOUNT GOSCHEN
My Lords, there is only one point connected with this very important subject to which I wish to be allowed to refer, and that is the present credit of the London County Council. I think that my noble friend Lord Welby took the criticism of my noble friend behind me in excellent part, and that he welcomes any support he can obtain from public 453 opinion and from Parliament in, I will not say thwarting the expenditure of the enthusiastic reformers who are on the London County Council, but at any rate in restraining the pace at which they are going. My noble friend dropped a phrase which shows that he is entirely in accord with that principle. The works to be undertaken may be excellent in themselves, but there must be a certain moderation in taking up the vast number of schemes to which the London County Council commit themselves.
This question is not only a Metropolitan one; it almost becomes a national question. If the other great boroughs see that the London County Council, the premier council in this respect of the whole Empire, borrowing at the pace at which they have been borrowing, and producing" Bills for £12,000,000 at a time like the present, I think it is calculated to have a disadvantageous effect on municipal finance generally. My noble friend Lord Avebury said that the credit of the London County Council was good, but I am surprised to hear that it is not as good as the credit of Manchester, Birmingham, and Liverpool. I do not know whether my noble friend would confirm or dispute that, but I am told that these cities are able to borrow more cheaply than the London County Council. If that is so, it appears to me that it is a most serious warning to the London County Council as to the degree to which they are straining their credit, and it is a circumstance which should induce the Council to look to their ways.
I associate myself with what has been said with regard to Lord Welby. I think that London is fortunate in having my noble friend as its chief Finance Minister, if I may use that term. He is a trained economist; he is an economist by nature; never was there a greater economist whom I have had the pleasure of knowing in my administrative experience, and it is an irony of fate that my noble friend should have to guide the financial counsels of the London County Council at this time— I will not say in the most extravagant moments of the Council, because I have, no wish to say anything derogatory to, 454 the Council, or to express any kind of censure. All I wish to do is to add to the note of warning which has been given, and from the way in which your Lordships have received the speech of my noble friend Lord Camperdown, I feel sure that this House is desirous that a note of warning should be conveyed through my noble friend to the London County Council.
My Lords, I would venture to say a few words in answer to the observations which have been made on the other side of the House, and I think I am entitled to do so, having had greater experience of the London County Council than any member of your Lordships' House. I have sat upon it since the beginning, and have fought six contested elections. At each of those elections the various points made by noble Lords opposite have been brought forward and considered by the ratepayers, and on every single occasion except one, when the voting was equal, the policy of the predominant party on the Council has always prevailed. The noble Viscount (Viscount Goschen) smiles. If the noble Viscount means to say—and I hope he does not—that the expenditure of the London County Council is extremely foolish, then I think he must also add that the ratepayers—
§ VISCOUNT GOSCHEN
I was thinking of another instance where there has been extreme extravagance by a board of guardians elected by the ratepayers. I did not intend to smile at the London County Council.
I am surprised to hear that the rate at which money can be raised in Birmingham is less than that which has to be paid by the London County Council. That is remarkable, because the debt of London is barely one and a quarter times the annual value of the property in London, whereas in Birmingham the debt is twice the annual value of the property. The unremunerative debt of Manchester, again, is more than three times the annual rateable value, so that it does seem to me that, if it is the case that the London County Council have to borrow on worse 455 terms than Manchester or Birmingham, it must be for some other reason than that of extravagance.
I should like to say one word as to the position which has always been occupied by the Finance Committee of the London County Council. We hold on the Council —and I do not think this is a question between Moderates and Progressives—that the Council must be supreme over its committees, and, when noble Lords talk of the analogy of the Treasury, it seems to me that the Finance Committee of the County Council is very much in the same position as the Treasury. The Treasury can be over-ruled by the Cabinet; the Finance Committee of the County Council can be over-ruled by the Council. The only difference is that we do not know when the Cabinet over-rules the Treasury, but we do know when the Finance Committee of the County Council are overruled.
I desire to make one observation with regard to tramways. The tramways of the London County Council are going through a transition period, but nobody who has had experience of the systems on the north and the south of the Thames will deny that where we are in command the tramway is more efficient than where a company is in possession. As to steamboats, the running of steamers on the Thames is purely an experiment. It has always been so treated in the London County Council. There was a unanimous demand that the experiment should be tried. I was not at all sure that it would be successful, but it was impossible for the Council to withstand the pressure applied at the last election. After all, if the experiment is to fail it is not a very disastrous failure. I am afraid we shall lose £50,000 next-year, but the service seems to be getting more popular, and if we continue it for another year probably the deficit will be very considerably reduced. The noble Earl (Lord Donoughmore) laughs at that suggestion, but I can assure him we have reason to suppose that the steamers are becoming more popular. I happen to live on the river and I see the steamers pass my drawing-room window in a crowded state in the summer, and I hope that in the near future they will not impose much urden on the London ratepayers.
456 I would like to have said a word about housing, but as my noble friend Earl Carrington wishes to deal with that subject, I shall say no more beyond this, that just as in the case of steamers we had no option but to try the experiment, so in the case of housing there was a unanimous demand at every county council election that we should carry out a housing scheme. I entirely associate myself with all that has been said as to the extreme value of the services of Lord Wolby and of the Finance Committee of the Council.
THE EARL OF DONOUGHMORE
My Lords, after the very interesting debate that we have had I do not intend to detain the House at any length, but I am sure your Lordships were all delighted with the enthusiasm of the noble Lord who has just sat down for the work of the London County Council. He naturally is proud of the institution of which he has been a member since its birth, but he will forgive us if we do not all quite entertain the same enthusiasm. Your Lordships have a very special responsibility in considering a Bill such as the one now before us, because the position of the London County Council as regards their financial proposals is a very peculiar one. Most of the local authorities do their work under the guidance, and I might almost say the check, of a Government Department, but the London County Council are an exception to this rule. The London County Council do not submit schemes for raising capital to any Government Department. Instead of doing so, they come annually to Parliament with a Money Bill such as this. One cannot help noticing that local authorities have not always liked the check to which they have been subjected by Government Departments. I read the other day an interesting article in the Pall Mall Magazine by one of His Majesty's Ministers. In this article Mr. John Burns spoke of the improvements carried out by the London County Council—in the teeth of the cold neutrality or thinly veiled hostility of every Imperial Department that has intervened in London affairs only too often in the past to restrict or hamper them.I am sure it is a matter of congratulation I to Mr. John Bums that the check which 457 he has felt so sorely in the past can now be removed through his own efforts.
I would refer briefly to one or two points which have been raised by representatives of the London County Council opposite. Lord Wolby, I thought, suggested that the County Council Lad been unfairly criticised for putting forward estimates at times which had not always proved justified or accurate, and he quoted cases in which accuracy had been attained, and claimed that they were extremely creditable to the various committees concerned. I do not deny that a satisfactory estimate is a credit to the author, but some of these estimates shown in the schedule of the Bill now before us are of a very extreme character, and I think that the animadversions made upon them by the noble Earl behind me were fully justified. Turning to No. 8, I find that the original estimate presented to the Council for rebuilding Vauxhall Bridge and the construction of approaches, including the purchase of property and compensation, was £484,000. The revised estimate is £535,000. The revised estimate is 10 per cent, over the Parliamentary estimate, and 18 per cent, over the estimate that was originally submitted to the London County Council when they decided in 1894 to promote the Bill to build the bridge.
§ LORD WELBY
The reason of that increase is that more land was found necessary for the improvement than was originally estimated for. It was not a mistake in estimating.
THE EARL OF DONOUGHMORE
I can only say that if during the last two years I had made such a mistake as to calculate on too small a portion of land being taken for work in which the War Office were concerned I should have had a very ugly time with the officials at the Treasury. But in the case of the London County Council apparently nobody takes any notice at all. The cost of the Tower Bridge northern approach was 112 per cent, over the original Parliamentary estimate; the cost of the Greenwich tunnel was 16 per cent, over the Parliamentary estimate, and 160 per cent, over the estimate originally submitted to the 458 Council in June, 1896. If a public Department dared to make such a mistake as that they would not hear the end of it for months, but this sort of thing appears in the schedule of a Bill promoted by the London County Council and moved by the noble Lord opposite without a single word of explanation. Again, much has been, said about the steamboats. Noble Lords opposite do not like our suggestion that the steamboats are an extremely bad speculation and they plead for more time. What is happening in this matter, to put it in one sentence, is that the London County Council are spending £2 to earn £1. They can go on doing that so long as they like, but if they continue on that basis they will have some difficulty in persuading your Lordships that they are embarked on a profitable undertaking.
One word with reference to the tramways. I was extremely glad to hear from the noble Lord opposite that the Council felt that in future more than one-third of the cost of improvements should be charged to the tramways account, but I would remind the noble Lord that theory is one thing and practice another. I would quote the case of the St. John's Street, Clerkenwell, improvement. The ordinary arrangement was made as to the terms on which that widening should be carried out, and one-third of the cost was charged to the tramways account; but I noticed in the annual report of the proceedings of the London County Council for the year ended March 31st, 1905, this statement—The widening of St. John's Street, Clerkenwell, authorised by the London County Council Improvements Act, 1900, was completed on April 8th, 1904, and the maintenance and control of the widened thoroughfare has been handed over to the Finsbury Metropolitan Borough Council.The report went on to give details, and stated that one-third was to be charged to the tramways account. But here is the kernel of the matter—The Council, however, on October 29th, 1901, agreed to relieve the tramways account of this liability on the understanding that the liability should be revived and be met at a future time if the profits from the proposed tramway should prove to be sufficient to meet such liability in whole or in part.That means that if the profits of a particular tramway are sufficient to justify 459 it, this charge will be made, but if the profits do not justify it the result is that the capital is cut down and charged to something else, and the true capital cost of the tramway is not shown. I hope there may be some reason for this procedure on the part of the London County Council, but the result must inevitably be most unfortunate, for the public sees accounts in connection with these tramways which do not show truthfully and properly the true state of the case as regards the expenditure that has been incurred upon them. I hold most strongly that when municipalities engage in these enterprises they should be under exactly the same obligations with regard to the presentation of their accounts as a public company, and that this watering down of capital is wrong. I hope that the influence of the noble Lord the Chairman of the Finance Committee of the London County Council will be exerted in future to obviate a repetition of this kind of thing.
The noble Lord who has just sat down stated that in his opinion the relations of the Finance Committee to the County Council were very similar to the relations of the Treasury to the other Government Departments. I can only say that that is not the opinion of the Finance Committee of the Council. I will read a short extract from the annual report of the Finance Committee for 1903—We have for a long time been impressed with the desirability of establishing some system by which the Council shall be able to co-ordinate its expenditure and thus regulate to some extent the amount of its borrowings from time to time.If their position were the same as that of the Treasury they would not find it necessary to advocate a change in that direction. I venture to think that noble Lords behind me have been right in urging that the position of the Finance Committee of the London County Council is not a satisfactory one,and not in accordance with the intention of the Legislature in 1888. I trust that this evening's discussion may at any rate have one result— a result which has been hoped for by several speakers this evening, that of strengthening the hands of the noble Lord opposite and of securing that in future he will be in reality the Chancellor of the Exchequer of the London County Council 460 and not the mere registrar of their financial decisions.
§ LORD WELBY
Having had some experience in both departments. I venture to think that the functions of the Finance Committee of the London County Council very closely resemble those of the Treasury. I will not take up the time of your Lordships by further explanation, but I think the instance which the noble Earl brought forward is hardly in point in that respect.
§ THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (Earl CARRINGTON)
My Lords, I think the House ought to remember that we have been discussing simply a Money Bill-All these works have been authorised, and we are merely asking the House this afternoon to pass the Bill which is to provide the money. I believe I am correct in saying that on no previous occasion has such a Bill of the Council's been discussed. I am of opinion, however, that nothing but good can come of a discussion in this House or in another place as regards the finances of the London County Council. London is a great city equal to a kingdom. It has a population of over 5,000,000, more than that of the whole of Australia. To keep that great population in health and comparative comfort a great expenditure of public money is, of course, necessary, and it is not surprising that £12,000,000 annually should be spent for that object.. The chief point of attack on the London County Council this evening has been the very vexed question of steamboats. As to the Council's steamboats, that scheme is after all, only an experiment, and not a very costly one. The most that it can cost this year is £50,000. The real municipal enterprises of the County Council are the tramways and the housing schemes. I was very clad to hear my noble friend Lord Camperdown say that he thought the tramways would turn out a successful undertaking.
THE EARL OF CAMPERDOWN
I said that so far as I could form a judgment from such limited experience as I had obtained from sitting on this Committee and hearing the evidence, it seemed 461 to me there was a fair chance of the undertaking's turning out a success.
§ EARL CARRINGTON
I am glad that the experience of the noble Lord leads him to make that statement in public. I would remind the House that the tramways are of the most vital importance to the people of London. I do not think I am exaggerating in the slightest degree when I say that better locomotion is the only wav of solving the housing problem which is always before us. Viscount Goschen gave a timely note of warning as to municipal extravagance, and he referred to the amount required for loans by the different municipalities. I think I ought to remind your Lordships that £3,000,000 of these loans which the County Council have to find, and which are in this Bill, are loans over which the London County Council have no authority whatever; they are merely bankers for the local authorities and have to find the money.
§ EARL CARRINGTON
They have very little to say to it. When the London municipalities were brought into being it was foreshadowed by the late Lord Salisbury, when he advised his followers to capture the different seats on the London County Council and to smash it, that they were to be in no way subservient to the County Council. They were to be practically independent; and this great sum is brought on the rates for which I do not think we on the County Council can honestly be held responsible.
THE EARL OF CAMPERDOWN
If the noble Earl will look at Clause 6 he will see these words—The Council may lend to such corporation or other public body, and such corporation or other public body may borrow from the Council such money as the Council think fit.
§ EARL CARRINGTON
I quite agree. I now turn to the question of housing, which I think may be considered one of the most important of the London County Council's responsibilities. We have been taken to task for the expenses that have been incurred in that very necessary enterprise, but I would like 462 to remind the House of Lords that by their clearances of the Clare Market and Boundary Street sites the County Council have reduced a mortality of forty per 1,000 to one of ten per 1,000. Even if we have made some mistakes in small matters, such as steamboats, I surely we may claim credit for those great I works which have been of such incalculable benefit to the people of London. I need not refer to what has been done at Millbank and other places or to the two I great model lodging - houses on the Rowton pattern which the London County Council have built, but I would I ask your Lordships always to remember I that the Council's rehousing schemes are on a self-supporting basis. If the Council I have done so badly and been so extravagant, I ask, how is it that the Progressive I majority keeps up to the level of two to, one? Indeed. I think that majority I is too large, and all lovers of London would be only too glad if the Moderate Party had some policy to lay before the people and so were able to capture some seats.
I honestly think that we on the London County Council have nothing to be ashamed of. Look at what has been done in connection with parks, bands, the fire brigade, the bridges, main drainage, street improvements, asylums, weights and measures—I venture to think that in all these things we have done our duty fearlessly and courageously. One noble Lord said that Mr. Baker, the Chairman of the Highways Committee. I was an expensive luxury in the matter of I tramways. I would ask your Lordships to consider what a luxury these electric trams are, and how vitally necessary they are to the women and girls of South London who have to travel long distances to their work, and who, through the unhappy mistake of your Lordships last year, have now to walk over the bridges instead of being able to ride without any extra expense in the comfortable, warn, and well-lighted trams of the London County Council. In spite of all our alleged wrong-doing I honestly believe that London in the main endorses our policy. I have been on the London County Council, now for fifteen years. I have fought five contested elections. My first majority was 120, but my majority at the last election was 1,500. I have 463 consistently supported the Progressive policy during those fifteen years, and I do not think that the people of my own constituency—West St. Pancras—which Las a huge working class population, have lost their confidence in me or have failed to recognise with satisfaction the efforts of the County Council to promote the welfare and ameliorate the conditions of the over-worked and heavily-taxed people of the Metropolis.
LORD STANLEY OF ALDERLEY
My Lords, I wish to put in a word of caution against a suggestion thrown out by the noble Earl who raised this discussion. This is a Money Bill. We are dealing with finance more than policy, and I do think that to adopt the suggestion that the London County Council, merely because they have discretion whether or not they advance money to local authorities, should exercise that discretion in accordance with their judgment as to the wisdom of the purposes for which the smaller authorities borrow, would be most disastrous to the interests of London. I would also point out that it is to the advantage of London that all its debt should be as far as possible in one Stock.
§ THE MARQUESS OF LANSDOWNE
My Lords, the noble Earl the President off the Board of Agriculture will pardon me if I suggest that his defence of the London County Council was scarcely so successful or so relevant as that of my noble friend Lord Welby. I cannot see that the fact that the supporters of the noble Earl are as two to one in the County Council, or that he has himself had for a long time the honour of representing an influential constituency have very much to do with the matters which we are discussing. The noble Earl rather took exception to, or suggested that there was something novel or unheard of in, the House of Lords attempting to debate a Money Bill of this kind. All I can say is that if this is the first occasion upon which your Lordships have debated a London County Council Money Bill I hope it will not be the last.
But the noble Earl seems to imagine that there is a desire in the minds of some of 464 your Lordships to stand in the way of these great municipal improvements. He is quite mistaken. I think we all of us admit that the age in which we are living is one when all classes insist, and rightly insist, upon having the surroundings of their daily life made more healthy and more attractive, and I for one am sincerely grateful, not only to the London County Council, but to other municipal bodies, for what they have done in giving us better thoroughfares, better lighted and more cleanly streets, better buildings, and other improvements of many kinds. But what we feel is that it is not desirable that all these things should be done at once. It is, as my noble friend Lord Goschen said, a question of pace, and I wish to add my voice to that of those who have made a plea this evening for what I might call imposing a speed limit on the London County Council. We have a right in this House to offer these criticisms and suggestions, because if they are not made here I do not quite know where they are to be made. The London County Council enjoys an amount of independence not enjoyed, so far as I am aware, by any other municipal body in the United Kingdom. It is, as has been already, I think, pointed out, allowed to proceed with little or no intervention from the Local Government Board. It is theoretically under the control and guidance of its own Finance Committee, but the evidence which has been brought forward this evening shows how very unsubstantial that control is.
§ THE MARQUESS OF LANSDOWNE
I accept that if the noble Lord says so. Like many other people, I was greatly reassured by knowing that he and a distinguished colleague of his, Sir Francis Mowatt, were members of this Finance Committee. They were regarded by us as towers of strength, but I am afraid we must admit that in their re-incarnation, if I may say so, as members of the London County Council, they are considerably shorn of the great powers which they used to exercise when we knew them as high 465 officials at the Treasury. I can remember times when great Departments quailed before the eye of my noble friend and when Ministers were anxious to convert him to their views. He is now only, if I may say so, a pale ghost of his former self, and we have listened to, I might almost say, pathetic extracts from his speeches, in which he gave the soundest advice to his colleagues, only to have that advice put on one side with something very like indifference.
What has been the result of this wholesale expenditure, this wholesale borrowing on the part of the London County Council? Lord Welby put before the House what I think he called a broader view of the financial position of the County Council, and he showed that, after all, they had only hypothecated one year's annual revenue, whereas other great cities were in debt to double that extent. But, my Lords, that does not seem to me really to affect the argument which has been used to-night. The argument which has been used is that these indiscriminate borrowings have had the effect of shaking the credit of the London County Council, and that, I think, has been proved to the hilt by the fact mentioned by Lord Goschen, that three great cities—Birmingham, Manchester and Liverpool—are at this moment able to borrow on cheaper terms than the London County Council. Not only is that the case, but I believe I am right in saying that the securities of the London Water Board are quoted at a higher figure than the securities of the London County Council.
§ LORD WELBY
The Water Board has the whole of the water rental as well as the rates as its securities.
§ THE MARQUESS OF LANSDOWNE
I accept that as far as the Water Board is concerned. But it does not convince me as regards the relative credit of the London County Council and the three great cities I have named. Lord Monkswell referred to this point, and said the comparatively low credit of the London County Council had to be explained by some other mysterious fact. I do not think there is any mystery about it. 466 It is accounted for by the fact that in the City it is known that the London County Council are constantly making these applications for new loans, and that nobody knows what other applications there may be lying behind those which are scheduled in this Bill. A year ago a well-known member of the London County Council, and an ex-Chairman of that body, used these words—The commitments of the Council are appalling. Its financial position is one that I look upon with grave doubts as to what is to be done in the future.That is the view that is held, I believe, by a great number of those who have anxiously watched the progress of County Council finance, and this Bill bristles with illustrations of what I am saying. I am not going through the schedule again, because it has been quoted, but here is n, Bill which, by a stroke of the pen, adds £12,000,000 to the debt of London, and there is nothing in the Bill to show how far any one of those heads of expenditure is a final head of expenditure, or whether they represent only mere instalments on account. We know from experience that these County Council estimates have not been by any means trustworthy in the past. My noble friend Lord Donoughmore referred to half a dozen of them in which there were wide discrepancies between the original Parliamentary estimate and the revised estimate made a year or two afterwards. One word as to the Hotel de Ville—I do not know what the proper title of the building is.
§ THE MARQUESS OF LANSDOWNE
I quite understand that there should be a very great advantage in concentrating under one roof the many scattered offices in which the work of the County Council is now done but one would expect that such concentration would lead to reductions in the strength of the staff and to a more economically worked office, but we are told that the number of clerks, which now stands, I believe, at 2,000, is to be increased to 2,300, and if all these additional and extraneous schemes of which we have heard are taken up, where is the end 467 to be? Your building, large as it is, will not be large enough, and you will have to add to its dimensions. I was much struck by the sagacious remark which fell from Lord Welby during the course of his speech, when he told your Lordships that in his view this particular enterprise might well have stood over for the present.
With regard to the future, we can only hope that the result of this debate may be to convince the County Council and the public that we do stand in need of greater frugality and moderation in the expenditure of the ratepayers' money. I hope, above all things, that the County Council will be induced to avoid taking up what I would venture to describe as fancy enterprises—enterprises of which these steamboats, about which we have heard so much to-night, are a type and an example. My noble friend Lord Carrington, in his light-hearted way, treated the loss upon the steamboat account as quite a trivial matter; but surely £51,000 a year, representing the interest upon, I suppose, over a million of money, is not a piece of extravagance to which we can be absolutely indifferent. I would venture to make a humble suggestion. I gather from something which has been said this evening that this flotilla has been so destructive to other shipping in the river that the rate of insurance upon it has been increased. Could not the whole flotilla be handed over, on cheap and tempting terms, to some third-rate Power in some other part of the world?
I have also been told that the County Council contemplate or have made a beginning in supplying the county with ambulances. That seems to me to be a matter scarcely within their proper functions. The same may be said, I think, of the desire evidenced at every turn to embark in municipal trading of all sorts— for example, the supply of electricity in bulk, even, I understand, outside the limits of London. Surely that is going beyond the legitimate scope of the operations which we should expect this great municipal body to undertake, and the effect cannot be otherwise than detrimental. It must have a deterrent effect on private enterprise. If those who desire to develop private enterprise find themselves at every turn competing with some huge 468 Government agency, they will naturally draw in their horns and we shall hear no more of them.
Then there was another point made by my noble friend Lord Montagu which certainly ought not to be lost sight of. We are told, for example, that these tramways will in time be extremely remunerative, but we must never allow ourselves to forget that science never stands still, and that as years go by the inventions which are up-to-date to-day become the obsolete inventions of the future, and if that should happen you may find your municipal authorities loaded with all sorts of enterprises, promising indeed when they were first started, but in their old age useless and ruinous to those who have invested money in promoting them.
I will bring the few words I have to say to a conclusion by repeating that I am one of those who are proud of the city of London, and desire to see it made as attractive, healthy, and beautiful as possible. I do not wish in the least to stand in the way of legitimate improvements, but these things can be overdone, and I do not think that we shall make London a better place to live in in the long run if, while we try to tempt people to it by improving its thoroughfares and beautifying its buildings, we at one and the same time make it such an expensive place to live in that people are inclined to fly beyond its limits.
§ THE LORD PRIVY SEAL (The Marquess of RIPON)
My Lords, I do not raise the smallest objection to the interesting discussion which has taken place in respect to this Bill. The purpose of bringing the Bill before Parliament is that if this or the other House think fit to discuss it, they shall be perfectly free to do so. I have no doubt advantage will be derived from the discussion which has taken place to-night. I hope and believe the London County Council will give full consideration to the various criticisms which have been made of their proceedings. No doubt they stand in a special position. We have never heard, and we never shall hear, of any such discussion in respect, to the expenditure of any other of the rest cities of this Empire; but, of 469 course, it is natural, the London County Council not being subject to some of the restrictions which lie upon municipalities generally, and Parliament having this Bill brought annually before it, that it should be discussed and that any criticisms which noble Lords or others choose to make should be raised.
But I cannot help having a certain feeling that noble Lords opposite are very unnatural parents. The London County Council is their creation, yet it has been the object of the criticism and hostility of the Party opposite almost from the day of its birth. I hope, nevertheless, that its members will carefully consider the criticisms which have been so freely made. I am bound to say that, although I do think there is a little of the stepmother element in the view which has been taken of this question by the Conservative Party almost from the beginning, the criticisms to-night have been made in a more friendly and less carping spirit than some we have heard, I will not say in this House, but elsewhere on previous occasions. Something has been said about the credit of the London County Council. Your Lordships probably know that the last loan raised by the London County Council was at 97. That does not indicate anything very b id in the nature of their credit. Many securities have fallen greatly and very rapidly within the last few years. Even Consols themselves have tumbled down to a very serious extent, and at a very rapid rate at times. When you talk about the borrowings of the London County Council, one thing must be considered. It has been said that the London County Council are under fewer restrictions than other municipal bodies, In a certain sense they are, but in one respect they are under a very curious restriction which does not make for economy. The local boroughs created a good many years after the establishment of the County Council have an appeal to the Local Government Board if a loan which they desire is refused by the London County Council. A good deal of the borrowing of the London County Council is due, I suspect, to that source. All I wish to say is this. You have here a great body, a body that I believe has done a large and very valuable 470 work for this Metropolis. You have here a great body, representing, upon a basis which commended itself to noble Lords opposite, the people of London. I do not say that that is a reason why you should not criticise its proceedings, as this annual Bill gives you the power of doing if you think fit; but I do say that this great body, performing such valuable work for the county, is entitled, whenever you do criticise its proceedings to the most respectful consideration of this House.
§ On Question, Bill read 2a and committed.