13° Julii, 1927.]

alteration which consequently arises in the relative proportions of upland and lowland acreage in the case of Norfolk. If your Lordship would kindly turn to page 21 of the Ministry's Report you will see a table at the top of the page which gives the acreage of the various counties. I take Norfolk, the last two columns: within the proposed Ouse Drainage District 135,085 acres; outside the proposed Ouse Drainage District 298,835 acres. Would it be possible for my learned friend to give us now the alteration required in those tables as a result of putting in this fresh plan? Mr. Macmillan.] In a very few minutes I hope I shall be putting in a table which gives the complete figures for every county, classified as my learned friend desires on the Bill as it now stands, and in conformity with the amended plan.

a

Mr. Charteris.] I am much obliged. Mr. Macmillan.] Perhaps I was little too optimistic when I said in a few minutes, but in the course of about an hour or so.

Before I resume the consideration of the specific clauses of the Bill there are one or two small matters I would like to clear up. Your Lordship may have noticed that in the plan upon which we

are

now proceeding, the amended plan to which Mr. Charteris has just alluded, there are two areas, one coloured green and one coloured brown. As yet I have given no explanation of the difference in colouring. The difference is really not material for the present purpose, but it serves to discriminate between the area of the Middle Level Corporation, which is in pink, and the brown and green areas, which, although within the area where the drainage rate is to be imposed, happen to be under different internal authorities. The green area to the north is under one or two separate drainage authorities; the brown area is not in the Middle Level, nor is it in the South Level, but is also under The colouraseparate administration. tion, therefore, merely indicates different drainage administration, but is quite immaterial for the purpose.

Mr. St. John Raikes.] Those three areas are all acting together for this Bill, the pink, the brown and the green. Mr. Macmillan.] As my Lord notices, in the material clause in the Bill it is the "areas shown in colour " upon the deposited map without saying what

area.

[Continued.

colour. Any part that is coloured other than the blue is within the drainage The coloured portions plus the blue constitute the Board's drainage area. The drainage rate area is the area other than the blue; the total area of the district of the New Ouse Drainage Board is the total coloured area embracing all the different colours.

Mr. Campbell.] Everything except the white?

Mr. Macmillan.] Everything except the white, if you please. My Lord, when endeavouring to expound the clause relating to the method of collection of the drainage rate by the hands of the various local Rating Authorities, I find I made a slip. I described it as a method of collection by precept. That is strictly inaccurate. The method of collection by precept means that the authority entitled to raise the money prepares its budget and then serves upon the collecting authority a notice of the certain sum that is requisitioned and required to be raised. It is not exactly that which is contemplated under this Bill. It is rather that should we use the Rating Authority as the collector for the rate which we strike, not leaving it to the Rating Authority to raise the necessary lump sum precepted upon them, but making the rate ourselves and asking them to collect that rate for us. It is only a technical error on my part, but it is a different method from the one which I described yesterday.

Lord Monk Bretton.] You say the Rating Authority. Do you mean the county or the poor law?

Mr. Macmillan.] It is the collecting authority, the county. It is really used to define an existing machinery rather than that we should set up indepen lent machinery for the purpose.

May I resume the important fox th clause which deals with the source of revenue by contributions from counties and county boroughs? I think when the Committee adjourned last night I had been dealing with the twopence contribution from what we call the upland area. The figure of that contribution automatically fixes itself once you have ascertained geographically the number of acres in any county which is in the upland district. Having got that number of acres, you multiply by twopence, and you bring out the number of pence accordingly which are to be contributed

13° Julii, 1927.]

by that county. Then it is left to the county to raise that sum and hand it over to the Board, and the county has a discretion as to how it will raise that money. It may do so either as a part of the expenses for general county purposes, which would put it upon the whole county, or, if and so far as the Council so determine they may include it as expenses for special county purposes charged on the several rating areas, or parts of rating areas, in that part of the area of the Council which is within the uplands. They are left in the case of the twopence contribution with a discretion as to whether the sum to be raised shall be incident upon the whole county or shall be incident upon that part of the county which is upland within the meaning of the Bill. The provision with regard to the county borough is that it also shall pay a contribution calculated at the rate of 2d. in respect of every acre comprised in the upland area. Of course, the alternative is not applicable to their case. Then comes a very important limitation: "Provided that the total amount of the contributions under this subsection in respect of any year shall not exceed one-quarter of the aggregate expenditure." Supposing, in short, after you have done the necessary sums, that is to say, you have multiplied the various upland county areas and county borough areas by twopence and brought out an aggregate sum as the county contribution under the 2d. clause, and you find that that exceeds one-quarter of the aggregate expenditure of the Board for the year, then the sum to be raised by the 2d. contribution must suffer diminution so as to equate that one-quarter of the expenditure of the Ouse Drainage Board; in short, there is an upward limitation upon the amount which may be recovered by this means.

cr

Then comes the provision with regard to the lowland county and county borough contribution. Subclause (2): "The council of every county and of every county borough whose area, any part of whose area, is situate in the lowlands "-that is the coloured area on the map other than the blue-" shall, in respect of every year, pay to the Ouse Board by way of a contribution towards the expenses of the Board an amount calculated at the rate of sixpence in respect of every acre comprised in such part of the area of the council as is

[Continued.

situate in the lowlands." The result is therefore that every county whose territory embraces part of the district of the Board other than the blue area will be called upon to make a contribution to the revenues of the Board quantified in this way: Ascertain first the lowand area of county, multiply by sixpence per acre, and so bring out a figure which represents the county contribution in respect of the county's lowland area. Similarly with regard to the county boroughs in the lowland area. In this case there is no limitation imposed as there is in the upland county and county borough contribution. That is to say, the total sum is to be contributed. Whatever the sixpence into the number of acres gives you is to be contributed without an upward maximum as there is in the case of the upland contribution. There is this further distinction which I now read: "and the amount so to be paid shall be defrayed, in the case of the council of a county, as expenses for general county purposes.' In the case of the lowland county areas accordingly there is not a discretion or option given to the County Council as to whether they will raise the contribution from the whole county or from the part within the area in question. It is to be raised as part of the general county purposes expenses. The reason of that is that the lowland areas are assumed-the county are assumed in respect of the works which will, of course, be situate in the lowland areas, to derive a general benefit to the county as a whole by these works, and in that respect it is not necessary to give the county an option as in the case of the uplands, which are different in character and who may claim that the benefit is not the general county benefit.

Then the next, I think, is machinery merely, and then comes in Clause 5 in italics, the one clause in the Bill which is received with universal applause. My learned friend says not by the taxpayers. "Subject to the provisions of this section, the Minister shall, out of moneys provided by Parliament, contribute to wards the expenses incurred by the Ouse Board in respect of the works specified in Part I of the Third Schedule to this Act, or in respect of the matter specified in Part II of that Schedule an amount not exceeding one-half of the expenses so incurred." Putting it in popular language it is pound per pound for the revenue for these works.

13° Julii, 1927.]

Third

Turning to Part I of the Schedule you will see there set out a series of works which are the works recommended by the Commission. Part I enumerates on pages 37 and 38 an important series of works upon the main or arterial system of drainage within the Board's area, and these are the works in respect of which the Government is prepared to shoulder half of the cost. Part II merely relates to certain bridges and is a relatively minor matter, but in respect of the payment to be made under Part II of the Third Schedule the Government is also prepared to shoulder half the cost. Then there comes a series of consequential provisions necessary and appropriate where public money is to be used: "No contributions shall be made in respect of any of the said works unless the plans and sections for that work have been approved by the Minister, and unless the Minister is satisfied that the work has been properly carried out." Then there is provision for settling differences.

Sub-clause (2) deals with payments as the work progresses. Then a provision is made in sub-clause (3) for variation of the works as occasion may arise in the course of carrying them out. It is not, of course, desired in the case of engineering works of this magnitude to tie down the parties to an absolute programme, and it is necessary to allow a little latitude, but that is saved by this, that the approval both of the Minister and of the Treasury is required to any such variation.

My Lord, there you have the main provisions of this Bill from the point of view of finance, and may I put it in a sentence and in a very simple form. First of all, ascertain the total expenses of carrying out the works and meeting the costs under Part I and Part II of the Third Schedule, that is to say, estimate the cost. As regards that total cost of those works, the Government contributes 50 per cent. The other 50 per 'cent. becomes a liability of the New Ouse Drainage Board. How is the New Ouse Drainage Board to get that money? is to get it from various sources-the sources I have described in the Bill. Taking first of all the Upland Counties and County Boroughs, that is to say, those which are included within the Upland area, the maximum of their contribution will become one-eighth of the total cost of the works, because they are limited to a maximum contribution of one quarter

It

[Continued.

of half of the works. Therefore, if you were to make out a short account of the sources of the money, you would first of all attribute 50 per cent. of it to the Government, then taking the other 50 per cent. you would parcel it out in this manner: You would say, we can rely upon the and Upland Counties County Boroughs for one-eighth. Then you are left to find three-eighths of the total cost of these works. The three-eighths in turn is to be derived from (a) The Lowland County and County Borough contribution, upon which there is no limit, other than this, the limit of sixpence per acre of the area of those authorities in the Lowland district. You would calculate out that amount, the remaining balance is the sum which would have to be found by means of a Drainage Rate in the Lowland district, that is to say, an individual rate upon owners in the actual Drainage area. These are the various sources to which the Bill looks for the requisite funds to carry out this work.

then and

Mr. Riley.] May I ask Counsel as to whether the estimated three-eighths of of the balance would be realised by the 6d. per acre upon the Lowland area?

Mr. Macmillan.] Only in part, Mr. Riley; a part of it would be derived from that, the other part is made up of the product of the Drainage Rate the rate as distinguished from contribution. I think the simplest thing to get in one's mind is the distinction between rate and contribution. There is first of all a Government contribution, then an Upland County and County Borough contribution, then a Lowland County and County Borough contribution, then a rate

Mr. Riley.] May I ask whether an estimate has been made as to how much the 6d. per acre will fall short of what is required?

Mr. Macmillan.] I can give you that. In a few minutes we will put before the Honourable Committee a table which will give you the outlook on the whole financial situation. That is the general scheme and it is, of course, manifestly a scheme which is open to criticism, but in placing it before your consideration, I think the Committee will realise that it is really a scheme which must be looked at as a whole. The fixed sum with which we shall have to start will be the amount of the cost of the works. We place that on the table. Then if the works are to

13° Julii, 1927.]

be carried out that money has to be got from somewhere. That is the position of matters. Having to get it from somewhere, the method the Bill sets out is the method which we have been advised by our expert Commission is a fair way of getting the money, and, if I may define the really main issue which will be submitted to you for your consideration, an interesting and undoubtedly important question is just this: Is that method of finding the money a method which approves itself to this Committee: is it a method which you are prepared to report in favour of to your respective Houses after the whole matter has been considered by you? When this topic was discussed at the Second Reading stage in the House of Commons, there was considerable criticism on one side and the other of the method adopted. I am not surprised that that was so. Indeed, I think it would be impossible to devise any method of raising the necessary money which would be exempt from criticism. The question really is: Is this method an advisable, an expedient, and a fair method? We have, I am afraid, no alternative to put before you. We are natuarlly proceeding upon advice which we have obtained and which assures us that this method is an equitable settlement of this long-standing controversy. If, of course, the Committee were minded to alter the system in any shape or form, I fear they would have to bear in mind that in so far as they relieved one party or another, it would be necessary to find the money-because that is the fixed datum-from some other source, but from one source or another if the works are to be carried out. If you are satisfied the works are proper works; if you are satisfied with the estimates that will be put before you, then we have to start really with this: This work being necessary, and this work costing so much, whence are the necessary funds to come? and any person who proposes that he should be relieved has, I think, a duty to assist the Committee by indicating from what source the balance will have to come, which will be represented by the exemption which he is advocating. The money, at any rate, must be got from some source or another.

The financial scheme, as I say, therefore, all hangs together, and it is based upon the principles which I endeavoured

[Continued.

to expound yesterday to the best of my ability.

I think, at this stage, it would be convenient to bring before you the Tables which Mr. Charteris asked me for a little time ago, and may I say that what we have done is this. We have endeavoured to provide what I venture to call a ready reckoner, which embraces in one Table all the statistical information which the Committee will desire to have. I introduce it with a certain amount of trepidation, because it is even a larger Table than those which one is commonly in the practice of introducing to the notice of Committees, but if my Lord and his colleagues would be good enough to bear with me while I explain the method on which it is compiled, I think their dismay may be turned into gratitude, because when you understand the structure of the Table, it is an exceedingly convenient one and saves putting in a whole series of different Tables, and it is invaluable to the opponents here, because they will get all the material with which to attack the Bill in the Table. (The Table is handed in.) (Vide Appendix.)

Colonel Heneage.] May I ask a point before you start. Do these Tables take into account the alteration due to the revised map?

Mr. Macmillan.] Yes. That is what Mr. Charteris asked me for. He wished to have the facts upon the basis of what I am now promoting, and these figures, I am advised, are in conformity with Map B which we now have.

Before I trouble your Lordship with the Table, I must explain the principle upon which it proceeds. The first thing, of course, is to ascertain what will be the annual charges which will require to be defrayed. You will find, my Lord, upon page 33 of the Commission's Report a tentative budget for the works recommended. In Article 110 of the Report, the Commission state: "The total estimated cost of the new works in and about the main channel is, as we have stated, £2,500,000." Then they proceed to consider the service of that money. "A loan of this amount raised at 42 per cent. and repayable in 50 years would involve an annual charge of just under £132,000." My Lord, 50 years has been taken as the currency because of the permanent nature of the work. It is often a question as you know, very frequently raised by the Department,

13 Julii, 1927.]

as to what shall be the proper period for the currency of a loan. In this case it is recommended the currency should be 50 years, because of the nature of the works." It will be understood that this sum would only be gradually reached in the course of some 10 years as the works would not be completed in less time than that, but thereafter the charge would remain constant till the loans were paid off. (111) On the assumption that the overdraft and other outstanding liabilities referred to above (excluding the loans) were extinguished before the main portion of the new loans were raised, the annual charges falling on the district would amount to, roughly-Loan charges for new works £132,000; Proportion of charge in respect of loans now outstanding £1,000; Administration and. other charges, say £9,000; Maintenance and miscellaneous work, say £1,000," in all £143,000. I pause there and take that figure. As regards the loan charges for new works, it is manifest that the Ouse District Board would have to raise 56 per cent. of that. The Government would contribute 50 per cent., the Board would, therefore, have to raise £66,000. Then the figure in respect of loans now outstanding, £1,000, would have to be found by them in every year, and administration and maintenance and miscellaneous work together amount to another £10,000. Consequently the total annual charges upon the Board in respect of their liability for 50 per cent. of the new works and those other items of outstanding loans, administration, maintenance and miscellaneous work, would be £77,000 a year. That is what they would have to find. Then working that down through the method proposed in the Bill, there would be first of all the contributions from the County Councils and County Boroughs in respect of the Uplands. The total area of the Uplands -I just want to state this shortly, I am not going to give the total just for the moment-is 1,613,172 acres. That at 2d. per acre equals £13,443, which does not exceed one-fourth of the sum to be expended by the Board under the limitation which I read and would be required in its entirety. In respect of the Lowland area, 430,907 acres, that 430,907 acres at 6d. per acre gives £10,773. Now, Mr. Riley will get the figure he desires. Adding these two together gives you as the total contribution from the sides

the

[Continued.

of County Councils and County Boroughs total of £24,216, deducting that from the £77,000 leaves a balance of £52,784 to be raised by a Drainage Rate in the Drainage area, that is to say, the coloured area other than the blue. That gives you, my Lord, a conspectus of the position.

Mr. St. John Raikes.] I have asked Mr. Macmillan if he can add one figure to the last paragraph: "Amount for which annual rates must be levied by Ouse Drainage Board, £52,784." should like the acreage which has to pay that amount?

Mr. Macmillan.] That will be the whole Lowland acreage, 430,907. These figures that I have just given you, my Lord, are contained in a paper apart from the Table which I think has been handed in to you. It is attached to the long Schedule. That little summary there is what I have just been giving you. The sum is done there to save your Lordships figuring out the calculation for yourselves.

Now may I ask attention to the long Schedule? I think one never expects gratitude from one's opponents, but I think they will find it a convenient compilation. May we just look at the various compartments of it for a moment? Reading from left to right, in the conventional expression in journalism of the day, you will find in the first compartment geographical information. You will notice that in all there are in the very first column, 12 administrative Counties. In the second column, which is called column I, the total area of each of those Counties is given. In the second column, as it is headed, the assessable value for general County purposes of the whole of each of those administrative Counties is given. That is general statistical information. Then the next thing we do in the next compartment of the Table is to divide the area of each of those Counties in the catchment basin between Uplands and Lowlands. Column 5 gives you the total area of each County in the catchment basin, and the figure at the foot of column 5 gives you the total acreage of the catchment basin 2,044,079; that is the figure I gave you yesterday. That is the total acreage of the catchment area. That is distributed among the 12 administrative Counties in Column 5. That figure in column 5 is distributed between Uplands and Lowlands in columns 3 and 4;