THE BURDEN OF LOCAL EXPENDITURE. T HE debate on Monday upon
localexpenditure followed upon lines with which the House of Commons is by this time fairly familiar. From both sides of the House Members rose to complain of the constantly increasing burden of the local rates, and to demand that the Govern- ment should come to the help of the ratepayer. Most speakers seemed to think that they had discharged their whole duty when they had asserted that the burden was too heavy for the ratepayer to bear and that the Government must help. The idea of explaining precisely in what way the Government was to raise the necessary funds only occurred to one or two speakers in the debate. Mr. Hayes Fisher, at the end of his speech, suggested as a possible solution the imposition of a revenue duty on all competing foreign products, apparently not realising that if the foreign products are really competitive a duty placed upon them would tend. to exclude them, and consequently to destroy the revenue which he hopes to raise. Mr. Wedg- wood more boldly pointed to the possibilities of the further taxation of land values, and suggested that this source might be made to yield an additional £10,000,000 a, year. Without going for the moment into the many economic and ethical questions involved in the special taxation of land values, it is sufficient to say that Mr. Wedgwood's suggestion is directly contrary to the arguments used by most of the speakers, even on his own side of the House, for, so far as the speeches were anything more than an incoherent grumble, the general complaint was that rates fell upon a limitei class of the population, and on that ground were unfair. This unfairness would obviously be increased by limiting still further the incidence of rates to the actual owners of land.
The general impression, in fact, made by this debate is that on neither side of the House is there any clear concep- tion of how the problem is to be solved. Not only were the numerous speakers who took part in the debate unable to suggest adequate new sources of revenue, but they were equally unprepared to face what is the primary difficulty— namely, the constant growth of local expenditure. In the ordinary affairs of life, when a man finds that his expendi- ture is outrunning his means he begins to retrench, but that does not appear to be the way of Members of Parlia- ment. Apart from Mr. Lough, and in a lesser degree Mr. Walter Long, everybody appeared to regard the growth of local expenditure as inevitable. As to the magnitude of the growth, it is worth while to quote the figures given by Mr. Fisher ; and incidentally we should like to compliment him on the complete mastery which he shows of the purely financial aspect of the subject. He stated that between 1889-1890 and 1907-8 local rates in England and Wales increased from £27,713,000 to £59,628,000, or an increase of more than 100 per cent. in eighteen years. If thesefigures stood alone they would furnish prima facie ground for the suggestion that the Imperial Exchequer ought to come to the assistance of the local ratepayer, but they do not stand alone. In the same period our national expenditure has gone up, not, indeed, at the same rate as, but to an even larger amount than, our local expenditure. According to Mr. Lough the total increase of national expenditure in the period in question is no less than £53,000,000 a year. Of this increase, £20,000,000 is accounted for by the Navy, £10,000,000 by the Army, and no less than £23,000,000 by the Civil Service. The list figure is specially important, for Civil Service expenditureby the central Government does not greatly differ in character from the class of expenditure upon which the ratepayers' money is poured out. Both poor law and education, which are the two main causes of local expenditure, also involve national expenditure, and the Imperial authorities, when asked for increased local subventions, may fairly reply, " We are already giving these subventions by shouldering a portion of the expenditure which the local authorities would otherwise have had to bear."
As to what is the correct adjustment of accounts between the two sets of authorities, it appears to us that there is no guiding principle to which appeal can be made. Nor did the speakers in Monday's debate make any attempt to indicate any such principle. They merely, like the daughters of the horse-leech, repeated the cry " Give, give." Such a method of dealing with great financial and administrative problems amounts to a confession of impo- tence. Nothing could be more certain to increase the volume of local expenditure than the policy of meeting it from time to time by fresh grants out of the Imperial Exchequer. If the problem is to be dealt with seriously, Parliament must face the question as a whole, and must decide whether local authorities are to have a wider taxing power or whether the persons who now provide the local revenue are to have a more effective control over expendi- ture. The only speaker in the debate who ventured to touch this latter point was Mr. Walter Long, who correctly traced the whole trouble to the voting power of the com- pound householder. In nearly every borough in the king- dom the compound householder, who never personally feels the incidence of rates, possesses an enormous voting power. In some cases he represents a very large majority of the votes. As a rule he is perfectly indifferent to the burden of rates, because it does not touch him directly. That is the real reason -why the cry for economy in local expenditure, which was at one time locally powerful, has ceased to have any electoral efficacy. No candidate for municipal honours would venture to put the claims of economy before those of some sentimental cry such as " Feed the children." It is this electoral factor which prevents any serious effort being made to reduce municipal expenditure. Take, for example, the case of the tramways, to which Mr. Fisher referred. He said that it was hopeless to expect any relief to the rates from municipal undertakings, because directly these showed a profit there was a demand made, as in the case of the tramways, to reduce fares or to raise the wages of the employees. The free-meal question is a still more glaring case in point, for though the experience of charitable organi- sations has shown clearly that by, careful administration the free meals can be cut down to a very small number, the municipal authorities for the most part refuse to adopt the precautions against fraud and deception which the experience of voluntary organisations has shown to be necessary. We contend, therefore, that the central point of th problem is the question of the local franchise. Unti that has been dealt with municipal authorities may groan and complain, but the burden of the rates will increase. By some means or another we have got to reverse the blunder which was made when the compound householder was endowed with voting power. This does not mean that we have got to go back upon the democratic principle of government which has been established in this country, and which must, as a matter of fact, be extended. What it does mean is that we have to bring home to each voter the fact of his financial responsi- bility for the vote he gives. Needless to say, the same consideration applies to Imperial expenditure, and to the Imperial franchise. Thirty years ago, when the taxpayer was a real electoral force, Members of Parliament on both sides were keenly in favour of public economy. Now the average Member of Parliament hopes to win success not by appealing to the taxpayer but to the tax-eater, and as a result expenditure grows without check.
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