HL Deb 14 May 1934 vol 92 cc299-332

Amendments reported (according to Order).

Clause 1:

Arrangements between Central Electricity Board and authorised undertakers.

1.—(1) Notwithstanding anything in the Electricity (Supply) Act, 1926, the Central Electricity Board shall have power and shall be deemed always to have had power under that Act to make arrangements with any authorised undertakers who are the owners of a generating station which is not a selected station, for the following purposes, that is to say, for regulating the manner in which and the purposes for which the station is to be operated and maintained or for securing that the station shall cease to be used as a generating station and where arrangements are made for any of those purposes, the arrangements may provide—

  1. (a) for the supply of electricity—
    1. (i) to the Board by the undertakers;
    2. (ii) to the undertakers by the Board;
  2. (b) for the making of payments, of such amounts as may be agreed, to the Board by the undertakers, and to the undertakers by the Board, in respect of the 300 matters provided for by the arrangements;
  3. (c) for any purposes incidental to the purposes aforesaid.

(2) The provisions set out in the Fourth Schedule to the Electricity (Supply) Act, 1926 (which relates to compensation for deprivation of employment), shall apply and shall be deemed always to have applied in relation to every officer or servant of any authorised undertakers affected by the closing (permanent or temporary), or the imposition of restrictions on the working or use, of a generating station by or under any such arrangements as aforesaid.

(3) No arrangements made by the Board after the passing of this Act for any of the purposes mentioned in subsection (1) of this section shall have effect, unless and until they have been approved by the Electricity Commissioners, and the Electricity Commissioners may approve the arrangements either without modification or subject to such modifications as they think fit or may disapprove the arrangements.

(4) A generating station shall not be deemed to be a selected station for the purposes of this Act or the Electricity (Supply) Act, 1926, unless it is specified in a scheme for the time being in force under that Act as a selected station.

THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR THE COLONIES (THE EARL OF PLYMOUTH) moved, in subsection (1), to leave out "to make arrangements" and insert "by agreement." The noble Earl said: My Lords, the words "by agreement" are to be inserted to meet the point made by my noble friend Lord Elibank and others on the Committee stage, that the expression "arrangements" was of doubtful legal interpretation. I think this Amendment makes it quite clear now that an agreement will be entered into in each case to give effect to the arrangement.

Amendment moved— Page 1, line 9, leave out ("to make arrangements") and insert ("by agreement").—(The Earl of Plymouth.)

VISCOUNT ELIBANK: My Lords, all I wish to do is to thank the noble Earl for having made this concession and inserted these words. The Amendment is exactly what we asked for, and I believe it will be most satisfactory.

On Question, Amendment agreed to.

THE EARL OF PLYMOUTH moved, in subsection (1), after "owners of," to insert "or control." The noble Earl said: My Lords, this Amendment ought to be taken in conjunction with a later Amendment which I am going to move, and it is to meet a difficulty that was envisaged by Lord Falmouth during the Committee stage. It is directed to the point that under Clause 1 it would not be competent for the Central Electricity Board to make arrangements with undertakers such as a joint electricity authority or a power company which may be controlling and operating by agreement a generating station of another authorised undertaker. This Amendment will enable the Central Electricity Board to enter into arrangements with an authorised undertaker who controls by agreement a generating station belonging to another authorised undertaker. We feel it is desirable that the Board should be able to enter into an agreement with an undertaker who controls someone else's station in the same way as if the undertaker owned the station.

Amendment moved— Page 1, line 10, after ("of") insert ("or control").—(The Earl of Plymouth.)

LORD ASKWITH

My Lords, I recognise that the noble Earl has done a great deal on this Bill to meet the wishes of the electricity authorities and has made it unnecessary to oppose any of his Amendments, except in part, with the exception of this one. There is a very strong objection taken to this particular Amendment, partly legal and partly otherwise. The word "control," which comes into this Amendment, is either an extension of the Bill or not an extension. If it is an extension of the Bill it would legally necessitate, one would think, some alteration in the Title of the Bill, which refers to "certain arrangements with authorised undertakers who are the owners of generating stations." This is quite a different thing and may extend the Title of the Bill. "Control" is not a word that is always palatable in Acts of Parliament. It reminds one of "Dora." It is so wide that an attempt is made in a subsequent provision to explain the word "control," and to make it appear as if the agreement was to be made with authorised undertakers who have come to an agreement with non-selected stations. That may be an explanation of the matter, but if so it is really legislation in advance, because under the Electricity Act of 1909 such arrangements as this cannot be made—that is the delegation of authority—with out statutory authority. In that respect it makes this anticipatory legislation, which is most unsatisfactory in an Act of Parliament.

Further, according to the authority for which Lord Falmouth appears to have been speaking, the London and Joint Electricity Authority, that is about the only authority with which such arrangements for control would, as it is anticipated, be made. But that authority, through its Chairman, has already stated that they have done what they have done, and what they propose to do, under the auspices of the law. It was only on April 18 last than an eminent gentleman in the engineering world and a member of the other House, Sir Philip Dawson, wrote a letter in The Times in which he called in question the legality of an arrangement made with one of the authorities in London, Wimbledon. I do not want to go into the Wimbledon matter; I only mention it upon the point of principle. But the Chairman of that authority replied to him, and said that he had acted quite legally. The complaint was that Wimbledon was supplied at a price 40 per cent. lower than adjoining undertakers, and he said: The agreement is perfectly legal and rests for validity upon the powers vested in my authority by the Electricity Supply Acts of 1919 and 1922 and the London and Home Counties Electricity District Order, 1925, and is not affected by the present Bill. He then stated that the Wimbledon agreement is but one of a number of similar agreements and claimed that they are perfectly legal agreements.

If he is right this Amendment is a perfectly unnecessary insertion to make in the Bill, but if it is made in the Bill it gives rise to a strong suspicion that it means a control that is not liked by other authorities. It looks as if it was an attempt to legalise arrangements that have been made of which they are not quite sure, and it is an addition which I trust the noble Earl will consider before Third Reading and not press upon the House now. It is a very technical matter and I beg to suggest that the course which I have just indicated should be taken.

LORD STRABOLGI

My Lords, I think that a word of explanation further is required from the noble Earl about the real meaning of these words "or control." This is not a matter that was pressed for on the Second Reading nor, indeed, in the Committee stage. It seems to us to be quite new. Does this mean financial control, because if so I suggest to the noble Earl that we are inviting all sorts of arrangements to be made by these power companies, interlocking their finances and so on, and there will be no end to the negotiations that will have to be undertaken. I therefore would ask the noble Earl to give a further word of explanation in reply to the noble Lord who has just addressed the House.

LORD GAINFORD

My Lords, may I point out that this is an innovation in the character of the Bill, because the Title of the Bill states distinctly it is: to authorise the Central Electricity Board to make certain arrangements with authorised undertakers who are the owners of generating stations which are not selected stations. Therefore, if you have control in addition to that, you are really going outside the Title of the Bill, and from that point of view something ought to be inserted in the Title. Apart from that, it is a new function, and I do not think it is within the proper province of the Government at the present time to do what the noble Earl proposes. Moreover, it seems to me to be quite unnecessary. The joint electricity authorities are quite satisfied with the legal position without these words, and I hope the Government will not press this Amendment.

THE EARL or PLYMOUTH

My Lords, the word "control" is defined in a later Amendment which I am going to move. I cannot accept the view that this is any real extension of the Central Electricity Board's powers. As I understand it, at the present moment both the Electricity Board and the joint authorities are able to make these agreements with other authorised undertakings, and this particular Amendment is merely designed to enable the Central Electricity Board to give a supply to the joint authorities so that they can pass it on to these various undertakings. As I am advised, there is no extension of the powers of the Central Electricity Board. The word "control" to which some attention has been drawn is, I think, very clearly defined in the later Amendment which I have on the Paper. I am advised that this is a necessary and, indeed, useful Amendment.

VISCOUNT ELIBANK

My Lords, I hope the noble Earl will not press this Amendment, because it is viewed with the greatest suspicion by the electricity industry as a whole. As the two noble Lords who preceded me have said, it is an innovation. It is something that did not occur in the Bill when it was first presented to your Lordships' House, and I think that the point made by my noble friend Lord Gainford, when he pointed out that the Title of the Bill only refers to arrangements made with authorised undertakers and does not speak of "control", is a, very strong point indeed against the Amendment. I hope that the noble Earl will not find it necessary to proceed with this Amendment in view of the various and very good arguments which have been adduced against it.

On Question, Amendment agreed to.

THE EARL OF PLYMOUTH

My Lords, the next Amendment in my name is drafting. I beg to move.

Amendment moved— Page 1, line 11, leave out ("for the following purposes, that is to say") and insert ("to enter into arrangements with them").—(The Earl of Plymouth.)

On Question, Amendment agreed to.

THE EARL or PLYMOUTH

The next Amendment also is drafting. I beg to move.

Amendment moved— Page 2, line 1, leave out ("made for any of those purposes") and insert ("so entered into as aforesaid").—(The Earl of Plymouth.)

On Question, Amendment agreed to.

THE EARL or PLYMOUTH

moved to insert at the end of subsection (1): Provided that after the passing of this Act the Board shall not enter into any such arrangements except with the consent of the Electricity Commissioners, and the Commissioners shall not give their consent unless—

  1. (a) they are satisfied that the arrangements will not result in a financial loss to the Board; and
  2. (b) after giving to any authorised undertakers who are under contract to supply electricity to, or to take a supply 305 of electricity from, the owners of the generating station in question, an opportunity of making representations with respect to the matter, they are satisfied that the arrangements will not result in any substantial prejudice to any such authorised undertakers."

The noble Earl said: My Lords, I think this Amendment requires a little explanation. I move it as the result of the consideration which during the Committee stage I promised to give to Amendments put on the Paper in the names of various noble Lords having for their object the provision that the arrangements made under Clause 1 should be subject to supervision, and to other points which were brought forward in the course of the discussion on those Amendments. I think the main point which interested noble Lords was that these agreements should be supervised by an impartial body—namely the Electricity Commissioners, and a new subsection devised for this purpose was added to this clause of the Bill at the instigation of my noble friend Lord Eltisley. As I informed the Committee when we were discussing this particular point, the Government were prepared to accept the general principle and this Amendment has been put down in order to carry out the undertaking I gave then. The generally expressed desire was that the Commissioners should be required to satisfy themselves that the various special agreements would not result in a financial loss to the Board, and a possible detriment to other undertakers and, through them, to the consumers generally. The Committee inserted in Clause 4 of the Bill an Amendment proposed by Lord Gainford for this purpose and the Government are prepared to apply that provision to the agreements made under Clause 1. This Amendment gives effect to that.

Certain noble Lords, in particular, I think, my noble friend Lord Gain ford, appeared to be apprehensive lest the rights of the Central Electricity Board by these arrangements to afford supplies to particular undertakers might prejudice other important undertakings who were themselves giving supplies to the same undertaking. The Government have given consideration to that point as well, and have provided that the Electricity Commissioners should give any such undertakers the opportunity of making such representations, and should not approve any such agreement unless they were satisfied that the arrangement would not result in any substantial prejudice to such undertakers. We feel that these proposals meet fully both the general interest common to all undertakers that the Board should not enter into arrangements which would result in a financial loss, and also the particular interest of those undertakers who have a special interest in connection with supplies given to particular undertakers.

Amendment moved— Page 2, line 12, at end insert the said proviso.—(The Earl of Plymouth.)

VISCOUNT ELIBANK moved to omit from paragraph (b) of the proposed proviso the words "are under contract to supply electricity to, or to take a supply of electricity from, the owners of the generating station in question" and insert "appear to the Electricity Commissioners to be affected." The noble Viscount said: My Lords, the Amendment which stands in my name, if it were accepted, would mean that paragraph (b) of the proviso moved by the noble Earl, Lord Plymouth, would read: after giving to any authorised undertakers who appear to the Electricity Commissioners to be affected an opportunity of making representations with respect to the matter, and so on. The noble Earl's Amendment provides that arrangements between the Central Electricity Board and authorised undertakers under Clause 1 of this Bill shall require the consent of the Electricity Commissioners, and that the Commissioners before giving their consent shall give certain authorised undertakers an opportunity of making representations with regard to the arrangements. This opportunity will only be given to authorised undertakers who are under contract to supply electricity to the owners of the generating station with whom the arrangements are made or who are under contract to take a supply from those owners.

I submit that this right of making representations is too restricted because other authorised undertakers may be affected by the proposed arrangement—authorised undertakers, for instance, who are intending to enter into a contract to take a supply of electricity from the owners of the generating station in ques tion. I should like to give an example of this. Take the case of a company undertaker who may be paying the grid tariff for a supply from the Board whereas next door a local authority undertaker may be obtaining a supply at a rate below the grid tariff. The company undertaker is subject to purchase by the local authority under the Electricity Acts. When the time arrives for that right of purchase to be exercised the company's price to the consumers would compare unfavourably with the price of the neighbouring undertaker. That would certainly be detrimental to the company in negotiations with the local authority.

It seems to me that there cannot really be any reason why the noble Earl should not accept this Amendment, because all we are asking the Government to do is to put the Electricity Commissioners in the position of being able to say that this or that authorised undertaker is affected by these arrangements. The Electricity Commissioners under this Amendment will therefore not be limited as they are to-day as to the undertakers with whom they will consult in connection with these arrangements. It seems to me that it is perfectly reasonable—in fact it is more than reasonable, it is only fair to the undertakers—that this Amendment should be incorporated in the proposed proviso. I beg to move.

Amendment to the proposed Amendment moved— Leave out from ("who") in line 8 to ("an") in line 11 and insert ("appear to the Electricity Commissioners to be affected").—(Viscount Elibank.)

THE EARL OF PLYMOUTH

My Lords, during the Committee stage we had a long discussion on this particular point. I then said I would see if I could find words to meet some of the objections raised by various noble Lords, particularly as to whether it would be possible to insert words which would give those substantially affected by any agreement or arrangement of this kind an opportunity of making representations to the Electricity Commissioners. I have put down my Amendment in these particular words because in our view there are no other undertakers who are substantially affected by an arrangement of this kind other than those who were receiving or affording a supply or were under contract to receive from or afford a supply to the undertaker in question. As a matter of fact, it is always open to the Electricity Commissioners to hear anybody they like on any particular question, but I venture to say that it is of the utmost importance that we—

VISCOUNT ELIBANK

Will the noble Earl forgive me for interrupting him? I would like to ask whether that would apply in this case where the Commissioners are deliberately instructed under the Act that they shall consult certain people?

THE EARL OF PLYMOUTH

It would most certainly apply. It is always open to them to receive representations from any one from whom they wish to receive representations on a particular arrangement of this kind. I venture to say that it is highly objectionable that they should be directed by an Act of Parliament, as this Bill will become, to receive representations from certain definite people. It is essential, in order that these operations should be put through expeditiously and without unnecessary delay, that it should not be open to any undertaker who may think he has some kind of interest, or may be technically held to have some kind of interest, in an agreement of this sort, to have the power of delaying matters and of being afforded statutory opportunities of making representations. I venture to say that my words are definite and clear and that they cover those people who are substantially affected by an arrangement of this kind. I venture also to say that these clear words which I have suggested are altogether more appropriate in a case of this kind than the somewhat vague and general words which the noble Viscount suggests.

Viscount ELIBANK

May I ask the noble Earl whether he has taken into account the case which I have just mentioned He said that in his view everything has been covered; but has he considered the case which I quoted of the undertaker who has at stake his purchase rights with the local authority? It may be that a supply is being given at a higher rate through the grid than through the generating station from which he was receiving it. He may, therefore, be in the position of losing those purchase rights because he cannot supply at a reasonably cheap price. I cannot think that the noble Earl has taken that case into consideration. He may have considered all other cases.

LORD GAINFORD

May I ask the noble Earl what would be the position of somebody who obviously is not covered by the words "who are under contract to supply electricity to, or to take a supply of electricity from, the owners of the generating station in question," but might be prepared to contract to do so? Will the noble Earl tell us whether, in his judgment, a representation made by a body of that kind—an outside body prepared to contract—would be considered by the Electricity Commissioners in the event of their application being made? I understand that it is intended to give latitude to the Commissioners, but those words seem to me to prevent an outsider who is prepared to contract from doing so. I should like an assurance on that point before we pass this Amendment.

THE EARL OF PLYMOUTH

My Lords, I am afraid I am not in a position definitely to give an assurance upon that point. As I have said, I understand that it is within the power of the Commissioners to receive representations from anybody who, in their opinion, they may think interested.

On Question, Amendment to the proposed Amendment negatived.

On Question, original Amendment agreed to.

THE EARL OF PLYMOUTH moved, after subsection (1), to insert the following new subsection: (2) For the purposes of this section authorised undertakers shall be deemed to control a generating station if, and only if, they have, by agreement with the owners of that station or otherwise, power to regulate the manner in which and the purposes for which the station is to be operated and maintained, or, as the case may be, power to secure that the station shall cease to be used as a generating station.

The noble Earl said: My Lords, this is really consequential upon the Amendment which I moved previously. It defines the meaning of the word "control." I beg to move.

Amendment moved— Page 2, line 12, at end insert the said new subsection.—(The Earl of Plymouth.)

On Question, Amendment agreed to.

Loan ELTISLEY moved to insert the following new subsection: (3) Section twenty of the Electric Lighting Act, 1882, so far as it relates to the making of agreements by authorised undertakers shall apply to the making of arrangements by the Board under this section, and accordingly the Board shall not in making any such arrangements show any undue preference to any local authority, company or person.

The noble Lord said: My Lords, the object of this Amendment is to ensure that the Central Electricity Board, in making arrangements with authorised undertakers under Clause 1 of the Bill, shall not allow any undue preference to one authorised undertaker over another authorised undertaker. I do not want to make a speech upon this Amendment if there is any likelihood of the noble Earl accepting it. When it was first moved in Committee he gave the undertaking that he would look into the matter before the Report stage. The point is that associations representing electricity undertakers wish to get a definite statement by the Government that the Board will be bound by Section 20 of the Act of 1882 with respect to any arrangements which they make under Clause 1 of the Bill. If we can have that statement I do not think I need labour the Amendment in submitting it to the House.

Amendment moved— Page 2, line 21, at end insert the said new subsection.—(Lord Eltisley.)

THE EARL or PLYMOUTH

My Lords, I can assure the noble Lord of this. As he knows, I undertook to look into this matter after the Committee stage. I have done so and I am definitely advised that Section 20 of the Electric Lighting Act, 1882, which prohibits undue preference, would apply to any arrangement made by the Central Electricity Board under Clause 1, inasmuch as Section 20 of the Electricity (Supply) Act, 1926, specifically provides that the Board shall be deemed to be authorised undertakers within the meaning of the Electricity (Supply) Acts. Furthermore, I understand that during the Committee stage various noble Lords showed some doubt as to the interpretation of the word "arrangements" in this connection. I think, as the result of an Amendment which I moved earlier and which your Lordships accepted, it is perfectly clear that "agreement" has been now defi- nitely incorporated into any arrangement that is made. Therefore I think that clears that point out of the way as well.

LORD ELTISLEY

In view of the definite statement which the noble Earl has made, I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

THE EARL OF PLYMOUTH

The next Amendment in my name is consequential.

Amendment moved— Page 2, line 22, leave out subsection (3).—(The Earl of Plymouth.)

On Question, Amendment agreed to.

THE EARL OF PLYMOUTH moved to omit all words in subsection (4) after "A generating station shall not be deemed to be a selected station," and insert "by reason only that, by virtue of arrangements made for the purposes mentioned in subsection (1) of this section, electricity is generated thereat for the purposes of the Board." The noble Earl said: My Lords, this is really an Amendment of a drafting character, to eliminate any kind of ambiguity that there may be. It is intended to make it clear beyond doubt that although electricity may be generated at certain stations under Clause 1 for the purposes of the Board, they will nevertheless not be selected stations. That was a difficulty which the noble Viscount, Lord Falmouth, had in mind. I beg to move.

Amendment moved— Page 2, line 31, leave out from ("station") to the end of line 34 and insert ("by reason only that, by virtue of arrangements made for the purposes mentioned in subsection (1) of this section, electricity is generated thereat for the purposes of the Board").—(The Earl of Plymouht.)

On Question, Amendment agreed to.

Clause 2:

Amendment of s. 11 of Electricity (Supply) Act, 1926.

2.—(1) Notwithstanding anything in Section eleven of the Electricity (Supply) Act, 1926, the Central Electricity Board shall have power and shall be deemed always to have had power to supply electricity to authorised undertakers at prices and on conditions other than those specified in the appropriate tariff fixed under that section, in cases where they are satisfied that special circumstances exist and that those undertakers, or other authorised under- takers who are supplied with electricity by those undertakers, will thereby be enabled to supply, to persons whose needs for electricity are of an exceptional nature, an amount of electricity corresponding to the amount of the electricity so supplied by the Board.

(2) So much of any tariff fixed under the said Section eleven before the commencement of this Act as purports to reserve to the Board power in special circumstances to supply electricity at prices other than those specified in the tariff shall cease to have effect but no such tariff shall be deemed to be invalid by reason only that it purported to reserve such a power.

LORD ASKWITH moved, in subsection (1), after "persons," to insert "(not being authorised undertakers)." The noble Lord said: My Lords, this Amendment arises largely as a legal matter. The word "persons" is a very wide word, and really requires sonic limitation in this clause. One has to remember the Interpretation Act, 1889, which defines what "persons" are to be in every Act since the year 1850. It says: In this Act and in every Act passed after the commencement of this Act the expression 'person' shall unless the contrary intention appears include any body of persons corporate or unincorporate. Under that Act this word "person" here would include the case of the supply by one authorised undertaker to another authorised undertaker and it would be extremely unfair to other authorised undertakers if one authorised undertaker obtained specially favourable terms and passed them on, no doubt with a commission and with any special conditions that might also have been obtained, in a manner which might be very detrimental to other undertakings. This Amendment defines what the word "persons" means in accordance with the Interpretation Act, 1889, and therefore I beg to move.

Amendment moved— Page 3, line 7, after ("persons") insert ("(not being authorised undertakers)"). —(Lord Askwith.)

THE EARL OF PLYMOUTH

My Lords, I am prepared to accept this Amendment, because it is quite clear that that is the intention of the clause, but I would suggest to the noble Lord that it would be better to insert those words after the word "nature" in line 8. I think that would really make it clearer. There might be a good deal of ambiguity left if the words were inserted after "per sons" in line 7, as the noble Lord suggests. The clause would then read: will thereby be enabled to supply to persons, not being authorised undertakers, whose needs for electricity are of an exceptional nature". That might be confusing.

LORD ASKWITH

I am much obliged to the noble Earl for accepting this Amendment, and I will take his view as to what is the proper place to put in these words. I move my Amendment in that form.

Amendment, by leave, withdrawn.

Amendment moved— Page 3, line 8, after ("nature") insert ("not being authorised undertakers").(Lord Askwith.)

On Question, Amendment agreed to.

THE EARL or PLYMOUTH moved to add to subsection (1): Provided that after the passing of this Act the Board shall not enter into any agreement for the supply as aforesaid of electricity to authorised undertakers at prices or on conditions other than those specified in the appropriate tariff, unless and until the Board have satisfied the Electricity Commissioners that the agreement will not result in a financial loss to the Board.

The noble Earl said: My Lords, this is an Amendment which I move in order to meet an undertaking given during the course of the Committee stage. The Government are prepared to accept the principle that agreements made under this clause shall be subject to the supervision of the Electricity Commissioners, who shall satisfy themselves that the agreements are not prejudicial to the Central Electricity Board. The wording of this Amendment follows that contained in the Amendment proposed by Lord Gainford on the Committee stage.

Amendment moved— Page 3, line 9, at end, insert the said proviso.—(The Earl of Plymouth.)

On Question, Amendment agreed to.

LORD ELTISLEY had on the Paper an Amendment to insert the following new subsection: (3) Nothing in this section shall affect the application to the Board of Section twenty of the Electric Lighting Act, 1882, and accordingly nothing in this section shall empower the Board to supply electricity to any authorised undertakers at prices or on conditions which would give any undue preference to those undertakers.

The noble Lord said: My Lords, this Amendment is similar to the Amendment on Clause 1, page 2, line 21. In view of the very definite assurance which was given by the noble Earl with regard to that prior Amendment, I do not think it necessary to move it, if the noble Earl will be good enough to assure me that the ground of this Amendment is also covered.

THE EARL OF PLYMOUTH

Yes, it is covered.

Clause 3:

Amendment of s. 12 of Electricity (Supply) Act, 1926.

3.—(1) If it is made to appear to the Electricity Commissioners by any authorised undertakers or railway company that it is in the general interest so to do, the Commissioners may direct that the charges and allowances to be included in the price to be charged for electricity under Section twelve of the Electricity (Supply) Act, 1926, by the undertakers to whom the direction relates shall be computed as if all such electric lines used by the undertakers (for whatever purpose) as are specified in that behalf in the direction—

  1. (a) were transmission lines; and
  2. (b) were used for all the purposes for which any of them were used;
and, unless and until the direction is revoked by the Commissioners, the said charges and allowances shall be computed accordingly.

THE EARL or PLYMOUTH moved, at the beginning of the clause, to insert the following new subsection: (1) The price to be charged under Section twelve of the Electricity (Supply) Act, 1926, by authorised undertakers for electricity supplied to a railway company for haulage or traction purposes shall include—

  1. (a) an amount equal to such proportion of the contributions payable by the undertakers in respect of the expenses of the Electricity Commissioners as is properly attributable to the supply of that electricity to the railway company; and
  2. (b) such charges and allowances in respect of any transmission line or part thereof used by the undertakers for the purpose of that apply as would be included if the supply were a supply in bulk to authorised undertakers."

The noble Earl said: My Lords, this Amendment is moved in order to fulfil a pledge which I gave during the Committee stage. It is designed to cover the Amendments moved by Lord Eltisley and Viscount Elibank, to provide that authorised undertakers affording supplies to railway companies should add trans mission costs and the Commissioners' expenses (including standardisation of frequency expenses) properly attributable to the supply to the railway company.

Amendment moved— Page 3, line 21, at the beginning, insert the said new subsection.—(The Earl of Plymouth.)

VISCOUNT ELIBANK

May I thank the noble Earl for having agreed to this proposal, and for having incorporated it in the Bill?

On Question, Amendment agreed to.

THE EARL or PLYMOUTH

The next is a consequential Amendment.

Amendment moved— Page 3, line 26, leave out ("Section twelve of the Electricity (Supply) Act, 1926"), and insert ("the said Section twelve").—(The Earl of Plymouth.)

On Question, Amendment agreed to.

THE EARL of PLYMOUTH moved to insert at the end of subsection (1): Provided that the Commissioners shall not give any such direction as aforesaid without giving to all authorised undertakers and railway companies affected by the direction an opportunity of making representations with respect to the matter.

The noble Earl said: My Lords, I do not think any explanation of this Amendment is necessary.

Amendment moved— Page 3, line 36, at end, insert the said proviso.—(The Earl of Plymouth.)

On Question, Amendment agreed to

Clause 4:

Supply of electricity by Central Electricity Board to railway companies.

4.—(1) Subject to the provisions of this section, the Central Electricity Board may supply electricity directly to any railway company upon such terms and at such prices as may be agreed:

Provided that the Central Electricity Board shall not enter into any agreement with a railway company for the supply of electricity to that company under this section for use within the area of supply of any authorised undertakers who own a selected station without the consent of those undertakers, so, however, that such consent shall he deemed to have been given if, on the application of the Board, the Electricity Commissioners determine that the withholding thereof is unreasonable:

Provided also that the Central Electricity Board shall not enter into any agreement with a railway company for a supply of electricity to that company under this section unless and until the Board have satisfied the Electricity Commissioners that the supply of electricity to the company upon the terms and at the prices proposed to be stated in the agreement will not result in a financial loss to the Board.

LORD GAINFORD moved, in subsection (1), immediately before the proviso, to insert: Provided that no agreement shall be made under this subsection for the supply of electricity by the Board to a railway company without the approval or the Electricity Commissioners, and the Electricity Commissioners shall not approve any such agreement unless notice of the application for the approval has been given by advertisement or otherwise in such manner as they may direct and an opportunity has been given to any authorised undertakers who appear to the Electricity Commissioners to be affected of making representations thereon.

The noble Lord said: My Lords, this Amendment I regard as a somewhat vital one in connection with existing undertakers. The railways, in the judgment of a great number of us, can secure their supply of electricity from existing undertakers, but the noble Earl in this Bill proposes to extend to the Electricity Board the power of providing railways with electricity. We are grateful to him for having met us in regard to the principle that persons aggrieved may go before the Electricity Commissioners, and this particular Amendment is only aimed at securing further justice for parties who are aggrieved. Under the 1926 Act it was possible for all railway companies to apply to the undertakers and to get their electricity. So far they have applied, and there has been no grievance whatsoever. I think that in most cases the big companies would be able to supply any electricity on reasonable terms if the railways wanted it.

Of course we say that the terms on which electricity is supplied by the Board should be fair, and in this particular Amendment we ask that the approval of the Electricity Commissioners should be obtained before an agreement is entered into by the Electricity Board with the railway companies. If noble Lords will read this particular Amendment they will see that I propose that the Electricity Commissioners should not approve of any agreement made by the Electricity Board for the supply of electricity unless notice of the application for approval has been given by advertisement or other wise, in such manner as they may direct. The Commissioners are given a great deal of discretion as to how they are to make public the fact that they are proposing to give power to the Electricity Board, and my Amendment then goes on to say: and an opportunity has been given to any authorised undertakers who appear to the Electricity Commissioners to be affected of making representations thereon. In a matter of this kind we think that aggrieved undertakers ought to have an opportunity of being heard by the Commissioners, and the object of the Amendment is to secure that the Electricity Board should net supply electricity without the approval of the Commissioners.

Many of these large undertakers are already supplying electricity, and they consider that it is not necessary for the Electricity Board to step in and take away what was conferred upon undertakers by the Act of 1926. It is only reasonable that there should not be any overlapping of powers already existing, and the Electricity Board may want to interfere with legitimate powers which exist. The public are thoroughly well protected, and it does seem to me to be reasonable that a any rate inquiry should be held in, the few cases where the Board consider that they are in a better position to supply electricity than the big companies. If the big companies cannot supply, the case will then be considered by the Commissioners and fairness and justice will be done. What we ask is that at any rate opportunity should be given to all the undertakers to be heard by the Commissioners before the Board set themselves up as an authority against the big undertakers. I hope the noble Earl will accept the Amendment.

Amendment moved— Page 4, line 4, at end, insert the said proviso.—(Lord Gainbrd.)

THE EARL OF PLYMOUTH

My Lords, I am afraid I must oppose this Amendment on a number of grounds. To begin with, it introduces the very prolonged procedure which is at present required before consent can be given for the use in one area for incidental purposes of supplies given by an ordinary undertaker for haulage and traction purposes in another undertaker's area. That procedure is referred to in a later proviso of this clause. In an Amendment which I am going to move at a later stage, page 4, line 43, considerable concession is being made by the Government, in that as the result of that Amendment authorised undertakers owning a selected station will have their position somewhat strengthened. But it is entirely against the principle of this clause that any other authorised undertakers who will receive their supply from the grid and can only pass it on to railway companies, as provided by Section 12 of the Act of 1926, should have the right to oppose any proposed agreement under Clause 4 between the Board and a railway company for a haulage and traction supply.

After all, the main object of this clause is to facilitate the electrification of railways and to enable the railway companies to make one contract and one agreement with the Central Electricity Board, for the supply of current without the area of electrification and in that way to avoid the necessity of their having to make a number of separate contracts with various authorised undertakers. The procedure envisaged in this Amendment is that which is applied by this Bill to applications for consent to the use of electricity given for haulage and traction purposes and for other purposes, such as the lighting of stations and hotels. In cases of that kind, I may incidentally say, where there is a good case and where there has clearly been an expenditure of capital for a particular purpose the Minister no doubt would take that matter into consideration in coming to any decision.

But the issue is really an entirely different one in this particular case. After all, these incidental purposes are entirely subsidiary to railway electrification generally, and in their particular case the local undertaker may quite well be giving that supply. At the present moment, as I understand it, power companies and the larger authorised undertakers have the power to supply railway companies with electricity for use in the areas of other authorised undertakers without having to submit to any intervention on the part of the Electricity Commissioners, or without any appeal being provided for to the Minister or any other authority. I cannot really see that there is therefore any argument which would compel one to adopt the view that there is justification for differentiating between the Central Electricity Board and those other large power companies. This Amendment is very closely connected with a later Amendment in the name of the noble Lord and other noble Lords, but I do not wish to argue the points raised on that Amendment now.

On Question, Amendment negatived.

THE EARL OF PLYMOUTH moved to leave out the first proviso in subsection (1). The noble Earl said: My Lords, it is necessary for me to move this Amendment, which is really of a drafting character, to make room for an Amendment I am going to move later on in order to deal with a matter which the noble Lord, Lord Eltisley, introduced during the Committee Stage, and the substance of which I accepted in principle, but which, I foreshadowed, might require a certain amount of alteration. I think that my Amendment entirely carries out the undertaking that I gave.

Amendment moved— Page 4, leave out lines 5 to 14.—(The Earl of Plymouth.)

On Question, Amendment agreed to.

THE EARL OF PLYMOUTH

My Lords, the next two Amendments are drafting.

Amendments moved— Page 4, line 15, leave out ("also"). Page 4, line 21, leave out ("stated in") and insert ("provided for by").—(The Earl of Plymouth.)

On Question, Amendments agreed to.

LORD GAINFORD moved, at the end of the second proviso in subsection (1), to insert: and that the receipts on income account in respect of the supply of electricity to be given by the Board under that agreement shall over a term of years to be fixed by the Electricity Commissioners (not exceeding five years) be sufficient to cover expenditure on income account incurred in giving such supply together with a proper proportion of the Board's general expenses, including interest and sinking fund charges.

The noble Lord said: My Lords, this is a very important Amendment. On the Committee stage I indicated that electricity might be supplied to the railway companies at prices that might result in a financial loss to the Board, and it is found necessary clearly to state what that loss might mean. In order to secure that adequate justice is done some words such as these ought to be accepted by the Government. Originally the Board was set up in order to pool the resources of the electricity stations generating current in the country. £40,000,000 were expended by the Electricity Board, and the charges had to be covered, and they fell back upon authorised undertakers. Therefore the authorised undertakers have already been at considerable expense, and they can only charge according to the grid tariffs. But, having had to contribute already to the grid system, it does seem unfair that now there should be excluded the general expenses, including interest and sinking fund charges.

The Amendment suggests that the receipts from the supply given by the Board under the agreement should over a term of years fixed by the Electricity Commissioners (not exceeding five years) be sufficient to cover expenditure on income account incurred in giving such supply together with a proper proportion of the Board's general expenses, including interest and sinking fund charges. This is a definite proposal so as to define what the losses will be and how they are to be met. What I am asking the Government to do is to say that the railway company should have to bear the Board's interest and sinking fund charges, and that they should not be imposed upon the authorised undertakers, because it would only mean that you would then be subsidising, from the existing undertakers, the railway companies in order to provide an uneconomic price. An uneconomic price is not fair on the existing undertakings, and I move this not only because you would be poaching on the preserves of the existing undertakers by supplying the electricity to railway companies at an uneconomic price, but because the undertakers have already incurred considerable expense, and they ought not to have to meet other expenses, such as might be incurred by the Board in carrying out the arrangements for the supply of electricity to railway companies.

It seems to me that the period of five years mentioned is a reasonable period to suggest. It is quite impossible to say what surplus or loss may be incurred in any year, and, in order to fix prices, it is usual under the contracts made at the present time for all these large undertakings to arrange for a period of from three to five years in which they can have the prices fixed. In all the agreements made with large undertakers there are fixed periods, I believe, of from three to five years, and it is suggested that ten years is outside all reason. There is a provision in all these agreements that at the end of this period of from three to five years there should be a revision of prices based upon the existing circumstances of the day which justify revision. Therefore it seems to me that my Amendment is absolutely reasonable. It is merely placing the undertakers on a right footing financially and preventing their being unduly required to provide current at an uneconomic rate. I beg to move.

Amendment moved— Page 4, line 22, at end insert the said words.—(Lord Gainford.)

LORD ASKWITH

My Lords, I desire to endorse what Lord Gainford has been saying on this matter. This is a most reasonable request. It may be that the noble Earl may think the proposal is too wide as to the number of persons who may appear before the Commissioners but, if so, that could be amended. But the broad principle that the railways should not be supplied at an uneconomic rate is reasonable. If the rate is uneconomic there ought to be an opportunity of its being put on an economic basis. If it is economic, nothing whatever would be said.

VISCOUNT ELIBANK

I should also like to support this Amendment. This is an Amendment on which undertaker companies feel very strongly indeed. As my noble friend who has just sat down said, if the railway companies are to be supplied direct, as under this Bill they will be supplied direct by the Board, then at least they should be placed in the same position with regard to their supplies as any other undertaking in the country, industrial or other. Unless something like this is provided in the Bill it will be possible for the Central Electricity Board to supply the railways without taking this matter into account. The noble Earl shakes his head. I am glad to see him shaking his head, but I would much rather see words included in the Bill so that there is no misconception about the position at all. That is the difficulty. If you leave this question in the air, when occasion arises you cannot conceive of the Central Electricity Board looking up the OFFICIAL REPORT to see what the Government meant when they were passing this Bill. No, they Will look at the words in the Act as it stands, and they will take an interpretation of it as it stands. If words like these are left out they will be perfectly justified in interpreting the Act according to the words that stand in it. So I hope the noble Earl will meet us in this case and see what he can do to put something into the Bill that will meet this position. Like my noble friends I appreciate that the Government have met us in a number of directions, but there are one or two points still on which we feel strongly and this is one of them.

LORD ELTISLEY

My Lords, I should like to reinforce the arguments which have been submitted by my noble friends. It appears to me that our request is a very modest one. It is merely to clarify an Act of Parliament so that the price to the railway companies may balance expenditure, including interest and sinking fund charges. I believe that is the intention, and I cannot myself see any great objection to making the intention absolutely and indisputably clear in the Bill.

THE EARL OF PLYMOUTH

My Lords, I must confess I am a little bit puzzled by noble Lords setting so much store by this Amendment. After all, there are very definite words in the Bill at the present moment to the effect that the supply of electricity to a railway company shall be upon terms and at prices which will not result in a financial loss to the Board. We discussed this type of Amendment very thoroughly during the course of the Committee stage, and I did hope that your Lordships would not press me to include in a provision of this kind such detailed instructions as are included in the Amendment of the noble Lord opposite. I really do not think they are appropriate in a case of this sort. It is perfectly true that these words area taken from Section 11 of the Act of but in that case they apply to the general tariff of the Central Electricity Board spread over the whole country, and they are not in this particular case at all appropriate.

May I repeat the position as I see it? First of all the Commissioners must satisfy themselves that the price at which the supply is given does not throw upon the Board any financial loss. Your Lordships have been talking of uneconomic prices. I cannot conceive that the Central Electricity Board would supply electricity to a railway company at a price that was not remunerative to them. Cases may well arise in which the price, while contributing to the overhead charges of the grid which have to be borne in any event, does not cover the average of these charges. These supplies are given at rates which, while they are of general advantage to the Board—and indeed the Board would not give those supplies unless there were advantage accruing to them as the result of giving those supplies—do not necessarily make the full contribution towards interest and sinking

THE EARL OF PLYMOUTH moved to insert the following new subsections: (3) Notwithstanding anything in this section no electricity supplied thereunder to a railway company by the Central Electricity Board shall be used within the area of supply of any authorised undertakers who own a selected station without the consent of those undertakers, so, however, that such consent shall be deemed to have been given if, on the application of the Board, the Electricity Commissioners determine that the withholding thereof is unreasonable.

fund charges and other overhead expenses which have to be borne in any event. I am told that it is the ordinary practice of all electrical undertakings catering for large industrial supplies to make special contracts at reduced rates which contribute less than the average to the overhead charges including interest and sinking fund. I venture to say that the proviso, as it stands, achieves all that the noble Lord opposite desires, and that to attempt to tie down the Electricity Commissioners with detailed instructions of this kind is really quite inappropriate and is against the spirit of the whole purpose of this clause. I hope that your Lordships will not accept this Amendment.

On Question, Whether the proposed words shall be there inserted?

Their Lordships divided.—Contents, 14, Not-Contents, 36.

CONTENTS.
Reading, M. Mersey, V. Hutchison of Montrose, L.
Pentland, L.
Balfour, E. Askwith, L. Stanmore, L.
Eltisley, L. Strachie, L.
Cowdray, V. Erskine, L. Wargrave, L.
Elibank, V. [Teller.] Gainford, L. [Teller.]
NOT-CONTENTS.
Sankey, V. (L. Chancellor.) Halifax, V. Hampton, L.
Hereford, V. Hanworth, L.
Aberdeen and Temair, M. Hay, L. (E. Kinnoull.)
Dufferin and Ava, M. Alvingham, L. Mildmay of Flete, L.
Balfour of Burleigh, L. O'Hagan, L.
Feversham, E. Barnby, L. Palmer, L.
Leven and Melville, E. Bayford, L. Redesdale, L.
Lucas, E. [Teller.] Biddulph, L. Rennell, L.
Munster, E. Clanwilliam, (E. Clanwilliam.) Rockley, L.
Plymouth, E. Sanderson, L,
Vane, K. (M. Londonderry.) Ernle, L. Snell, L.
Gage, L. (V. Gage.) [Teller.] Strabolgi, L.
Falmouth, V. Greville, L. Templemore, L
FitzAlan of Derwent, V. Hamilton of Dalzell, L.

Resolved in the negative, and Amendment disagreed to accordingly.

"(4) Any electricity supplied under this section by the Central Electricity Board to any railway company shall be used in such manner as not to cause, or be likely to cause, any interference (whether by induction or otherwise) with any telegraphic line belonging to or used by the Postmaster-General, or with telegraphic communication by means of any such line:

Provided this subsection shall not apply in relation to any undertaking or part of an undertaking in respect of which the railway company is authorised to use electricity by Act of Parliament or by an order confirmed or having the effect of an Act of Parliament containing provisions for the protection of the telegraphic lines of the Postmaster-General in respect of the use of electricity.

In this subsection the expression 'telegraphic line' has the same meaning as in the Telegraph Act, 1878."

The noble Earl said: My Lords, this is the Amendment I referred to a short time ago. The new subsection (3) re-enacts the provisions of the first proviso to the clause as amended in Committee on the Motion of my noble friend Lord Eltisley. The new subsection (4) is in connection with the Post Office. It affords the same protection to the Post Office in respect of electricity supplied to railway companies under this clause by the Board as is enjoyed by the Post Office under an earlier Act in respect of similar supplies by joint electricity authorities and power companies. I beg to move.

Amendment moved— Page 4, line 43, at end insert the said new subsections.—(The Earl of Plymouth.)

On Question, Amendment agreed to.

VISCOUNT ELIBANK moved to insert the following new subsection: (3) Where by reason of any supply of electricity given by the Central Electricity Board to a railway company under this section any capital expenditure incurred by any undertakers for the purpose of supplying electricity to the railway company is rendered wholly or partly unremunerative the Board shall pay to the undertakers a sum equal to the then value of the works represented by such capital expenditure or a fair proportion of such value as may be reasonable in the circum stances. Any dispute between the Board and any undertakers under this section shall be settled by arbitration.

The noble Viscount said: My Lords, this Amendment is to provide that where an authorised undertaker is to-day giving a supply of electricity to a railway company for haulage and traction purposes and also for ancillary purposes, and that supply is taken away from the undertaker by the Central Electricity Board under the provision of Clause 4, then the Board shall reimburse any loss the undertaker might have incurred in expending capital for the purpose of giving the supply. This is an absolutely fair and just Amendment, and without it considerable hardship may arise. In the Committee stage the noble Viscount, Lord Falmouth, moved an Amendment in these terms, and I supported him. Ultimately he withdrew his Amendment on the noble Earl objecting to it on the ground that it would load the Central Electricity Board with subjects with which it ought not to be loaded.

It is the case that in certain contracts for the supply of electricity for the Brighton line there is a proviso that the Central Electricity Board may take over these supplies if they become authorised so to do. This is a very important point. When these provisions were arrived at and accepted in these contracts the various undertakers had no idea that Parliament would ever grant such powers to the Board as are indicated in this Bill. Not only that, there are actually certain cases where power companies have expended considerable capital on plant and equipment to supply carriage works for a railway company and for other purposes. I know of one case in the Midlands where this has been done and where the supplies are given at fourteen miles in different directions from the generating station of the power company itself. The company had to establish and equip a special sub-station for locomotive works, and they have also equipped a number of pumping plants and lighting installations in various parts of this district all for the purpose of supplying the ancillary requirements of a railway company.

If no Amendment is included in the Bill of the nature of the one I am moving it will be possible for the Central Electricity Board to take away the supply from the existing undertaker and give that supply direct, without any compensation whatsoever to the undertaker who has undergone all this large expense and who would, moreover, be left with this equipment and plant on his hands as scrap. The noble Earl in his reply on the Committee stage said, so far as I remember, that in his opinion other parts of the Bill would enable the Central Electricity Board to take this question into consideration when they were taking over a supply and were going to give it to the railways. The undertakers who are specially interested in this—and they are not only undertakers in the Midlands but undertakers in the South of England and in London—are not satisfied that this point should be dealt with purely by inference through other clauses. They ask that the matter should be made quite clear in the Bill. It is for that reason that I have put down this Amendment again. I hope that the noble Earl, after looking into this matter again, has realised that there is a great deal of justice in the demand that they are making.

Amendment moved— Page 4, line 43, at end insert the said new subsection.—(Viscount Elibank.)

THE EARL OF PLYMOUTH

My Lords, as I promised, I have looked into this matter again, but while I am sympathetic with the noble Viscount I really see no just cause why this subsection should be included in the Bill. The noble Viscount has referred to a particular instance where a company has spent a lot of money in installing special machinery for dealing with a certain supply. He continues to argue that that was done at a time when there was no idea whatsoever that the Central Electricity Board would be given permission by Parliament to supply direct to the railways. But he told us at the same time, as I understand, that in the contract between the undertaker and the railway company was a clause to the effect that if the Central Electricity Board should be able to supply direct to the railway the contract was terminable at six months notice.

VISCOUNT ELIBANK

May I interrupt to say that that applies in certain contracts, but that it does not apply in all contracts? Some other cases that I have mentioned have not got that clause in the contract.

The EARL OF PLYMOUTH

I fully understand that, but let me take first the instance where the contract does contain that particular clause. I do not think it can possibly be argued seriously that in that event the possibility of this situation arising was not contemplated at the time. Otherwise there would have been no object in putting that provision into the contract. On the other hand, in a case in which there was no clause of this kind, my answer is that there is nothing whatsoever in this Bill which enables railway companies to break contracts which they have made with authorised undertakers for the purpose of obtaining a supply from the Central Electricity Board. There is nothing in the Bill which alters the force of the contract or alters the position of the railway company in respect of any particular contract which they have entered into. In that case I imagine any undertaker giving a supply to a railway company would naturally so make his arrangements as to meet this kind of position, which I think it must be admitted they must have contemplated would possibly arise. I really cannot see that there is any justification for introducing what is a quite novel idea in Electricity (Supply) Acts, that compensation should be given because a railway company fails to renew a contract. In conclusion I would only point out that joint electricity authorities and power companies who are entitled to give railway supplies are under no obligation of this nature, and I see no reason why the Central Electricity Board should be differentiated from other undertakers.

LORD STRABOLGI

My Lords, before this Amendment is divided upon, if the noble Viscount and his friends intend to go to a Division, may I be allowed to add this further consideration to what has been said by the noble Earl? Not only is this a new principle in dealing with arrangements for the supply of electricity, but it is an entirely new principle in the whole question of compensation when public utility companies are substituted for private companies. It therefore raises a very big matter of principle and my noble friends were very interested to hear what the noble Earl had to say on behalf of the Government. If I may be allowed to say so, we entirely support his point of view. What is being asked for by the noble Viscount and his friends is that compensation should be paid to people who, in anticipation of certain developments in the future, provided rather more machinery and power than they otherwise would have done.

VISCOUNT ELIBANK

I think the noble Lord is mistaken in that. There is no such intention. All that is asked is that where there is certain plant and equipment, where certain capital expenditure has been undertaken for the purpose of supplying railways—usually for ancillary purposes—at any rate that capital expenditure, or such part of it as the Electricity Commissioners may think fit, should be reimbursed to the undertakers, nothing more nor less.

LORD STRABOLGI

If the noble Viscount was asking only for compensation for the plant put down for ancillary purposes there would he a great deal more justice in his demands.

VISCOUNT ELIBANK

That is the Amendment.

LORD STRABOLGI

I repeat that what he is asking for is compensation for possible loss of hypothetical profits. If in certain eventualities, after all these barbed wire entanglements have been got over and all these safeguards of going to the Commissioners have been satisfied, some concern thinks it is not going to get in perpetuity the profits it hoped to get, then compensation is to be given by the taxpayer, because that is what it comes to in the long run. The Electricity Board owes its existence to the act of your Lordships' House and of the House of Commons. In certain circumstances it raises money on Government guarantees. If it fails in the long run it is the taxpayer who will have to pay. This compensation which the noble Viscount is asking for will eventually have to come from the taxpayer.

VISCOUNT ELIBANK

May I ask why it should come out of the taxpayer's pockets? It would come out of the railway company's pockets.

LORD STRABOLGI

No, not if the whole supply comes from the grid. A great deal of money has been raised with the implied guarantee of the Treasury.

LORD PENTLAND

No.

LORD STRABOLGI

With the support of the Act of Parliament. In the long run the taxpayer would have to make good the loss. Suppose you take the other ease: suppose the noble Viscount succeeded, and very heavy compensation was claimed, and the claims were upheld under the Amendment which he is now pressing upon the Government. In that case the compensation would fall on the Central Board and they would have to recoup themselves by higher rates. Then the taxpayer would pay not as a direct taxpayer but as a consumer of electricity, as we all are in some form or another.

VISCOUNT ELIBANK

That is another story.

LORD STRABOLGI

Yes, it is another story, I quite agree, but it shows that I was not so very far wrong when I said that this is a, national responsibility. What the noble Viscount is really asking for is that people who have not provided for this very thing happening, who have not been far-sighted enough to provide sufficient amortisation or sinking fund and so on to pay for the extra plant, are to be able to come to the Central Board and be compensated. I therefore very much hope that the Government will stand firm against the noble Viscount and his friends, and if they divide on this question, in view of the principles involved we will certainly support the Government.

LORD GAINFORD

My Lords, I think the noble Lord who last addressed the House really did not understand the position which I think this Amendment was intended to meet—namely, the case where an existing undertaking firm with large powers has naturally assumed that under the Act of 1926 they would be called upon to supply electricity in bulk to the railways if the railways were electrified. As a matter of fact, by means of increase of capital and increase of plant they have been supplying a lot of ancillary operations connected with railways, for instance, the approaches to the railway stations and the workshops of the railway companies. They have put down plant and expended capital, and we will assume that they are at the present time supplying all those ancillary undertakings. They naturally anticipated under the Act of 1926 that in the event of the railways being electrified they would have to supply electricity to the railways rather than that a new body such as the Central Electricity Board should step in and take the work over.

The case which this Amendment seeks to provide for is where the railways are electrified and the railway companies say: "Not only do we want to be supplied with electricity for the natural traction of the railways, but also that the electricity shall be supplied by the new Electricity Beard to the workshops, approaches, and other ancillary undertakings of the railway." It does seem to me in that case to be fair that some claim for compensation should be permitted. I hope that the noble Earl in charge of the Bill, if he is not prepared to accept this Amendment which might cover possible expansion in the course of the electrification of railways, at any rate will cover the just claims of concerns who already are supplying electricity to the ancillary undertakings but the supply to which will be taken away from them.

LORD ASKWITH

My Lords, the noble Lord, Lord Strabolgi, seems to me rather to have misunderstood the situation. He is really proposing now to rob Peter to pay Paul. He says that this is a call upon the general taxpayer, under the misapprehension that the Central Electricity Board is being financed by the general taxpayer. If the Central Electricity Board comes to grief regarding its finances, then I suppose the nation will have to step in; but it really is a different thing to take it away from an undertaking which has done special work in order to supply a railway company and, under the powers of Clause 2, to grab it for yourself. I have had put into my hands an instance of this, and a very striking one, the case of the Northampton Company in the Midlands, where no less than fourteen miles of line and all sorts of ancillary matters were specially constructed to give supplies, in one case to the London, Midland and Scottish Railway for their carriage work at Wolverton, and in another case to the London and North Eastern Railway works at Woodford Halse in Northamptonshire. Those places are fourteen miles in different directions from the generating station of the Northampton Company, and they have had to establish and equip a special sub-station at Wellingborough locomotive repair shop as well as quite a number of pumping plants and lighting installations in various parts of their widespread district. This has been certainly done for the sake of supplying the railway companies. Now the Central Electricity Board are getting power to take all that away from the company, to mulct the Northampton Company, to place it within the supply which the Central Electricity Board are able to give to other undertakings, and to reinforce them at the expense of the Northampton Company. I think that is a most unjust proposal. The Amendment may be a little too wide in its present form, but I shall certainly support the noble Viscount, and I hope he will go to a Division.

LORD BARNBY

My Lords, it would be reasonable to suppose that there must be some confusion of thought upon this particular Amendment. I should like to associate myself with the explanation which has already been given by the noble Earl in charge of the Bill, and I think your Lordships may rest assured that all necessary safeguards have been provided for. At the same time I would like to remind the House of the correction which has already been made of the remark of the noble Lord, Lord Strabolgi, and also remind the House that this large sum of money which has been referred to was found entirely without Government guarantee.

On Question, Amendment negatived.

Clause 5 [Short title, citation, interpretation and extent]:

THE EARL OF PLYMOUTH

My Lords, the Amendments to this clause are drafting.

Amendments moved— Page 5, line 2, after ("and") insert ("shall be construed as one with") Page 5, line 3, after ("and") insert ("those acts and").—(The Earl of Plymouth.)

On Question, Amendments agreed to.