LAMBETH WATER (TRANSFER) BILL.

HC Deb 22 February 1895 vol 30 cc1373-414

MR. J. STUART (Shoreditch, Hoxton)

moved: "That this Bill be read a second time."

The hon. Member said the Bill provided for the purchase of the undertaking of the Lambeth Waterworks Company by agreement or, failing that, by arbitration, the arbitrator to take into consideration all the circumstances of the case. He would not stop to argue that it was necessary or desirable that a community should possess the control of its own water supply; the time was now passed when such a point needed to be argued. The opinions that had been expressed by the right hon. Member for West Birmingham and others, rendered it unnecessary to say anything in support of the general proposition. The London County Council had been practically obliged to bring in this Bill, and the other eight water Bills they had introduced in consequence of the opinions expressed by important Committees of this House. The growth of the views of these Committees was remarkable, and they had advanced steadily in one direction. The Duke of Richmond's Commission, in 1869, reported that the future control of the water supply of the Metropolis should be entrusted to a responsible public body, with powers conferred on them for the purchase or the extension of the existing works. In 1880 there was a Select Committee, presided over by the present Chancellor of the Exchequer; that went a step further than the Commission, and reported that it was expedient that the supply of water to the Metropolis should be placed under the control of some public body which should represent the interests and command the confidence of the water consumers. In 1891 there was another Committee, presided over by a gentleman whose position on the Committees of the House was of undisputed pre-eminence, the hon. Member for Blackpool (Sir M. White Ridley); and that Committee reported that the London County Council was the body to whom the duty named should be entrusted. They recommended that the London County Council, as the responsible municipal authority of London, should have power to inquire into the whole position of the metropolitan water supply and to come to a conclusion as to the policy which, for financial and other reasons, it was desirable to adopt, and, if it were so resolved, that they should have power to promote a Bill or Bills for the purpose of constituting themselves the responsible water authority, and further that the London County Council, if it were the constituted water authority, should be required to purchase, either alone or in conjunction with such authorities in outside areas as might enter into arrangements with them, the undertakings of the eight water companies by agreement, or, failing agreement, by arbitration within a fixed period. It was to be observed that this report was made after the consideration of a suggested water trust, one of the alternatives which had been much pressed upon the public; and the proposal of a water trust was condemned by that important Committee. Further it was stated in the Report that in doing this the London County Council should take over the duties and obligations of the outside authorities to the consumers of water, and then it proceeded to lay down the conditions of dealing with the outside authorities of the counties round about London embodied in the present Bill. In the 1888 Committee, three alternatives were proposed, the alternative of strict regulation of the water companies, of an independent supply and purchase of such of the companies as could be got on fair and reasonable terms. Many papers and documents dealing with the Bill had been circulated in the House. The objection to these Bills seemed to lie in two directions. Firstly, it was said the County Council were about to ruin the debenture-holders; and secondly, that they proposed to confiscate the property of the shareholders. With regard to the debenture-holders, the Bill proposed that their security upon the undertaking should remain. It was said that the water companies had a property worth many millions, yielding a net income divisible at present of a million a year, and that the County Council representing a great and wealthy community would play such ducks and drakes with the property that it would not be able to meet even the £100,000 a year interest on the debentures. He really thought that went beyond the limit of reasonable argument. The County Council would have to reckon with the ratepayers of London long before anything like that came about. As to confiscating the property of the shareholders it was stated in the Press, and in the documents he had referred to, that the County Council were about to propose an arbitration in which every point that went against the companies would be taken account of, and nothing which was to their advantage would go before the arbitrator. That was an utter misrepresentation of the facts. The Bill provided that the arbitrator should consider what, having regard to all the circumstances of the case, was a fair and reasonable price. He wished now to put before the House the origin of the various proposals to be submitted to the arbitrator. They had not emanated from the brain of the London County Council. With one exception, they were all subjects regarded as necessary for consideration in connection with the purchase of the companies by the Committee of the House itself and the Royal Commission which had recently sat. There was the state of the filtration works of the various companies, and the Committee of 1891 said that, should it be impossible to carry out a purchase, it would be necessary to consider what further obligations and further control should be put on these companies, and the County Council were prepared to consider these specific points at the arbitration. The competing powers of the various companies would be taken into account in assessing their value. Lord Eldon, one of the highest authorities on the subject, speaking in the House of Lords, once said— If the object of the Legislature in passing the different Bills for the supply of water in the Metropolis—which may not be supposed to have been that of competition—have been defeated by the different companies joining together to establish a monopoly, I hope your Lordships will not separate without its being distinctly understood that it is perfectly within the competence of Parliament to set that right. One of the documents relating to the Bill which had been circulated in the House, said that— instead of settling the question of water supply, it appears that the County Council contemplate asking Parliament in another Session to sanction an entirely now and costly scheme. The companies themselves admitted that large additional works were necessary for the supply of London, and, therefore, by purchasing the works of the present companies, they could not finally settle the London water question. The additional supply of water required, and the bearing of the matter upon the position of the companies was one of the chief subjects the Parliamentary Committee would have to consider. The great point was, where should they obtain the additional supply, and who should bring it to London? But the purchase of the companies on fair and reasonable terms was an essential preliminary to any proper solution of the question of additional water supply. It was said that they were going to destroy the value of these companies. The arbitration would necessarily be a long and difficult subject, but from the day when it was determined that any company should sell, and that the County Council should buy, the latter would become responsible, and, as the proprietors of the company, would be bound to pay and to continue to pay half-yearly to the shareholders their present dividends. They would take over all the obligations of the company. If the London County Council or any other public representative body were capable after acquiring such undertakings of destroying their value, they would be condemnable in the extreme, and unworthy of being treated with by the House. If this Bill passed its second reading they should go on with the Southwark and Vauxhall Water Bill, because these two Bills stood very much in the same category. They were not making a grab at the most valuable property; on the contrary, they were endeavouring to purchase on fair and reasonable terms the two companies which it was most in the public interest should be purchased. These two companies taken together made the lowest dividend of any of the companies. They were in the worst condition as to their sources of supply, their filtration, and works. They would be bound, if not dealt with by a public authority, to come themselves to the House for very large and extended powers at a very early date. They were the companies about which there had been most dispute as to propriety of their charges, and they charged the highest sums to the ratepayers. Under those circumstances they felt it was their duty, as representing the public in this matter, to deal with these companies first. Many of the companies, like the Kent, East London, and New River Companies, had the larger portion of their area outside the county of London, but these two companies had a very small portion of their area of supply, or of their Parliamentary area, outside the county of London. If the House granted leave to the County Council to purchase these companies they would still be workable, and would not bring them into competition with any other companies. These were some of the reasons why these two companies should form a separate group. The different water companies differed in regard to their powers, charges, and supply, in relation to the counties in which they were situated and to the County of London, and in regard to the water consumer. There was no common body called the water companies of London; they were separate and competing bodies, and they had always been regarded as such. It was essential, therefore, that they should proceed with the consideration of the different Bills in detachments. They had introduced the whole of the eight Bills because they wished to solve the whole water question, and they hoped to be able to proceed with them at a later period of the Session. They hoped also that in some cases they might come to an agreement, and they were not prepared to carry all these Bills before the Committee for consideration at once. They must bring their case before the Committee in their own way. The procedure they proposed was the least expensive for all the parties concerned. They had been met by a proposal of the right hon. Member for the University of London that the further consideration of these measures should be deferred until the County Council which was about to be elected had had an opportunity of pronouncing an opinion. He had never ventured to claim for a moment that the House should wait, hat in hand, to know what it was to do on a great question of public interest until they had received the answer of a local body; yet this was what the hon. Member proposed. Were they going when the County Council pronounced again to listen to it or not? If they were not, why did they defer the matter? It was almost a greater victory for the County Council if the House accepted the hon. Member's proposal than if they passed the Second Reading. But by waiting a couple of months all the parties concerned would be kept in doubt whether the House was going to permit any such legislation to proceed or not, and if the House did not want this legislation, it was in the interests of the rateyayers of the County of London that they should say so. Since 1889 this question had been constantly before the County Council, and only on one occasion had there ever been a Division taken by the so-called Moderate Party against the present water proposals. It was a dream to imagine that the County Council were going to reverse their policy on the water question, because the Progressive and the Moderate Parties alike had never been so unanimous on any matter as upon the policy represented by the Bills in question. The Council wanted the Second Reading now, and, if it was accorded by the House, there was nothing to prevent the present Council or the future Council withdrawing the Bills if afterwards they did not approve of them. But he maintained that a great necessity like this, affecting the health of the largest community in the world, should not be left in the hands of private companies, whose main consideration was, of course, the interests of the shareholders. It was a matter which every municipal reformer interested in the better sanitary condition of our large centres of population must regard as of paramount importance, and in these circumstances he asked the House not to postpone decision upon it, but to pass the Bill he now moved.

*SIR JOHN LUBBOCK (London University)

proposed as an Amendment— That the further consideration of all Bills for the acquisition of the property of the London Water Companies be postponed until the County Council shortly to be elected shall have had an opportunity of pronouncing upon the subject. The right hon. Baronet said, considering this was a matter involving an expenditure of £30,000,000, and that a new County Council was to be elected next week, he thought the hon. Member for Shoreditch would have seen the reasonableness of postponing the question for a few days at least. The true spirit of democracy might have suggested that this opportunity of ascertaining the opinion of the people of London on the question should be taken before any definite course was adopted. He had reason to believe that the majority of the representatives of London would support his Amendment. He was not a shareholder of the water companies, and was acting solely in what he believed to be the interests of the ratepayers. They had been told that the present County Council represented an overwhelming majority of the citizens of the Metropolis, but that was not the fact. The Progressive majority at the last election for the whole of London was 30,000 out of 560,000 voters. Moreover, there were six seats not contested by the Progressives, and, if they allowed the Moderate majority of 2,500 in each, it would reduce the Progressive majority on the whole to 15,000 only. That could hardly be called an overwhelming majority. He contended that the present was a most unsatisfactory time to purchase; and that it would necessarily involve a serious addition to the rates of the Metropolis. The arbitrators who settled the price of purchase would have to look to the profits the company were making. What did the County Council tell them on that point? The Lambeth Company had a Bill before the House which the County Council were opposing, and in their petition the Council stated that— The dividends paid would be found not to be justified if the accounts of the Lambeth Company were properly investigated and proper allowance made in respect of depreciation of capital and superseded works, and that any such profits must undergo considerable reductions in consequence of the additional expenditure and liabilities in which, according to the report of the Royal Commission and the opinion of your petitioners, the Lambeth Company must be involved in the future. With those facts before them, was it right or judicious to enter into the question of purchase? But even supposing that purchase could be effected at a fair price, and that the Council could carry out the work economically—which he very much doubted—there was the consideration of the addition to the rates which purchase must involve. The County Council were already overwhelmed with work, and he questioned the wisdom of their undertaking in addition the enormous responsibility of the management of the water supply of the Metropolis. But, putting that point aside, the House was aware that the County Council were under an obliga- tion to pay off their loans in 60 years. The Water Companies were under no such obligation. If the Council bought the Companies, the present ratepayers would not only have to pay for the water, but for the redemption of stock, and this payment of£30,000,000 in 60 years would mean an addition to the water rate of 4d. in the pound. Moreover, an additional water supply, which the County Council believed was absolutely necessary, from distance might involve an increased expenditure of 20 or 30 millions. Under present circumstances that expense, if necessary and undertaken, would fall on the Companies, but if the Bills of the Council passed it would fall on the ratepayers, involving at least another increase in the rate of 4d. in the pound, and he urged that this was a further strong reason for postponing purchase. He was curious to know how the ratepayers of the Metropolis would vote next week if they fully realised the facts of the case. His hon. Friend seemed to imagine that in introducing this Bill he was acting in accordance with the recommendations of the Committee which sat in 1880. But that Committee, over which the present Chancellor of the Exchequer presided, did not recommend a Bill of this kind. In its Report it said— Without absolutely prescribing tin composition of such a body, your Committee are of opinion that it should include elements lo be derived from the Corporation of London and the Metropolitan Board of Works, together with a due representation of the districts at present supplied by the Metropolitan Water Companies. But that was not what Bill did. Perhaps it might be said that the London County Council was not in existence when the Committee sat. But the areas of the Water Companies extended beyond the boundaries of London, and clearly the intention of the Committee was that the water supply should be in the hands of some body which was coterminous with the districts to be supplied with water. He resided in Kent, and he felt satisfied that the people of that county would very much object to the water supply of their district being in the hands of the London County Council. His hon. Friend stated that there could be no doubt that the tendency of public opinion was in favour of these Bills. He disputed this statement. What had happened on the point? When the Bill of the London County Council was before the House in 1891, Lord Farrer gave evidence in its favour, and, when his (Sir John Lubbock's) opinion was quoted that "such undertakings are, as a rule, more economically managed as private enterprises than by public bodies," the noble Lord declared that "Sir John Lubbock was in a minority of one on the question." Since then that little party had been increased by the addition of the noble Lord himself, for in his evidence before the Labour Commission two years afterwards he said— The action of the London County Council on the Labour question had caused many to doubt the wisdom of transferring to it public undertakings, and it considerably damped his own ardour with regard to the water supply, so that he was almost inclined to think with Sir John Lubbock that the water should remain in the hands of the Companies. An opinion of that kind, coming from so high an authority, must have great weight with the House. Mr. Burdett, in his great standard work on "Stock and Share Companies," referring to Lord Farrer's evidence, says— This evidence indicates a change in public opinion, which now seems to be settling down to the support of the policy of leaving the water supply in the hands of existing companies. He knew he was not bound, in opposing the Bill, to suggest an alternative policy, but he had given the subject the most careful and anxious consideration for nearly a quarter of a century, and he would endeavour to indicate the policy that, in his opinion, ought to be pursued. The Water Companies, with, perhaps, one exception, were limited to a dividend of 10 per cent., and they were bound to apply any additional profit in reducing the price of the water. At present four of the Companies were able to pay the maximum dividend, one was paying 9½ per cent., one 8½ per cent., one 8 per cent., and one 6 per cent. Thus in the case of seven of the Companies practically any increase in their profits must go in the reduction of the price of water, while, if there should be a loss, it would fall upon the shareholders. The hon. Member asked them to surrender that position and to enter into this gigantic speculation. If the under taking improved, the ratepayers would gain no more than under present conditions; but, on the other hand, if it went badly, they would be involved in the loss. They must, no doubt, take into consideration that the Companies were entitled to make up their back dividends to 10 per cent. The Chancellor of the Exchequer's Committee suggested that that right should, as in the case of the Gas Companies, be limited to six years, and he thought that suggestion was a very reasonable one. He would suggest that two or three directors should be placed on each Board to protect the public interest—one from the Board of Trade, one from the London County Council, and, in the case of those Companies that supplied the outside districts, one from the County Council of those districts. He submitted that under that proposal the ratepayers would obtain all the benefit of the water supply, while any loss would fall on the Companies. That arrangement, he thought, would be satisfactory, not only to the ratepayers, but to the Companies themselves. It would save the present endless expense of litigation to which they were put, and it would give them a security for their dividend which would be an ample recompense for any sacrifice of possible future profit. With regard to the manner in which the Companies were treated under the Bill, he said he was sure the County Council had no intention of doing any injustice to the holders of debentures. But what the House had to consider was, not the intentions, but the proposal of the County Council, and that proposal was that these debenture-holders should be bought out at the price of the stock last March. They knew, however, that since last March securities of this kind had gone up, for reasons quite apart from the introduction of these Bills. The House, he thought, would never agree to the Second Reading of a clause which would be so unjust to the holders of these Debenture Stocks. In these remarks, however, he was not making any attack on the London County Council, who did not, he felt sure, intend any injustice; but the House could not deal with intentions, they had to look to practical matters as they were brought before them.

MR. STUART

said he was sorry to interrupt the right hon. Baronet, but surely these were questions for consideration in Committee.

*SIR J. LUBBOCK

That was a point for the House to determine; and he protested against the suggestion to refer a question of great principle of this kind to Committee. It seemed unreasonable to press on a question of such magnitude at the present moment, and he would give a precedent for that course not being followed. When the London County Council was formed six years ago, the Metropolitan Board of Works was terminated some three weeks or a month before the appointed time. Why was that done? Because they were going to commit London to the Black-wall Tunnel Scheme, involving an expenditure of something like half a million. On that occasion Lord Rosebery called a special meeting of the London County Council, and at that meeting said— he felt that a contract of this sort, involving a vast expenditure, which must be defrayed by the London County Council, was one which ought not to be entered into by a body which was about to expire within three weeks. He said he spoke "with a solemn sense of responsibility," and proposed that the existence of the Metropolitan Board of Works should be at once terminated, a view in which the Council and the Government concurred. As Vice Chairman of the Council he seconded that resolution, and therefore he was only consistent in proposing the Amendment now standing in his name. The present case was even stronger. In the first place, the Metropolitan Board of Works had three weeks more to act, and their scheme involved an expenditure of £500,000, whereas the term of the present County Council expired next week, and their scheme involved an expenditure of nearly £30,000,000. Surely, in these circumstances, the consideration of this great question, so deeply affecting the welfare of the people of London, ought to be postponed until the new County Council had had an opportunity of considering it in all its bearings. He concluded by moving the Amendment.

*THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Mr. G. J. SHAW-LEFEVRE, Bradford, Central)

thought it would be convenient to the House if lie took an early opportunity of stating the views of the Government on the question. He had listened with surprise to the speech of the right hon. Gentleman who had just spoken, as the whole of it was an argument against the policy of the purchase. The right hon. Gentleman questioned the policy of purchase from an economic point of view, and in that differed from every authority of importance. The Amendment was not in direct opposition to the Bill, but was one for postponement, and he wished to ask the right hon. Gentleman whether, in the event of the House agreeing to the postponement of the Bill until after the County Council election—and as the ratepayers approved of the policy of the Council they knew what the result of the election would be—he would support the proposals now before the House.

*SIR JOHN LUBBOCK

wished to point out that, if London decided at the next election in favour of the Bill, it would be perfectly useless for him to oppose it further.

*MR. SHAW-LEFEVRE

asked whether he was to understand that, in the opinion of the right hon. Gentleman, the House was to take the verdict of London. [An hon. MEMBER: "Why not?"] He was glad to hear that, knowing as he did what the result of the election would be. His right hon. Friend had a plan of his own in dealing with this subject, but he rather distrusted men who had plans of their own. That plan proposed an amalgamated water company with a representative of London upon the board.

*SIR.J. LUBBOCK

said he had never said so. There would be no amalgamation, because if the companies were amalgamated, arrangements would have to be made as to the different classes of stock, which would be very difficult and expensive.

*MR. SHAW-LEFEVRE

said, the right hon. Gentleman had stated that there would be representation of London on the companies, and, as he understood, one company would be so formed as to be, in the opinion of his right hon. Friend, competent to effect whatever improvements were necessary in the direction of giving fresh water supplies to the Metropolis. And he also gave the impression that it would be undesirable and inexpedient to procure additional supplies from the river Thames. If the water companies were compelled to expend capital out of their existing resources, and in reduction of their present profits and dividends, for the purpose of providing the future supply of London from a distance, it would be a serious burden upon them, and he should not be surprised if the conclusion to which the companies would come was that they had better embrace the present opportunity of purchase. The right hon. Gentleman had quoted Lord Farrer as being almost inclined to leave the supply in the hands of the companies, but he was hardly justified in quoting Lord Farrer. His opinion, no doubt, was a competent one; still, the right hon. Gentleman was not justified in quoting him.

*SIR. J. LUBBOCK

I quote his evidence given before the Commission.

*MR. SHAW-LEFEVRE

I am not speaking without knowledge of the matter. All that Lord Farrer had to say was, that he was almost inclined to think that it would be better to leave the supply in the hands of the companies. At any rate, the right hon. Gentleman had not the support of any large body of the members of the London County Council, the majority of whom had approved the principle of purchase. He believed also that the new Council would not be unwilling to adopt the scheme. The County Council had only followed the example of other great corporations, and they had all proceeded in the same direction—to take over the control of the water supply, obtained through some river passing through the district, from private companies. It had been found necessary then to obtain fresh supplies, and with the view to obtaining that it was always necessary for the corporation to step in. There were cases without end in which corporations had come before the House with schemes of this nature, and they had all been sanctioned by that House on the Second Reading, and approved finally by Select Committees. The House need not be frightened by the great amount involved. There was the case of Birmingham, where the Corporation was ultimately involved in from £6,000,000 to £8,000,000 in perfecting their schemes. They were told the other night by the Member for West Birmingham that London was ten times larger than Birmingham; and if Birmingham spent £6,000,000, why should not London undertake to spend a considerable sum of money? He hoped it would not be required to spend money in the same proportion. It was said, as to repayment of capital, that an increase of 4d. in the £1 would be necessary; but if that were a correct estimate it must apply to every other corporation in the country. There was no instance yet of a corporation being deterred from purchase by fears of that kind. He could not but hope that, by good management by the Council, it would be found that there would be no serious increase of charge. He pointed out that there had been a constant consensus of authority in favour of the transfer of the supply of water to local authorities. They began with the Duke of Richmond's Commission in 1866. Then in 1880 there was the Committee of his right hon. Friend the Chancellor of the Exchequer. Nothing could be stronger than the conclusions of that Committee in favour of the transfer of the water supply to the local authorities. His right hon. Friend seemed to think that the Committee recommended some form of trust; he forgot, however, that the County Council was not then in existence, but the recommendations of the Committee clearly showed that the formation of such a body was in their mind, for these words were used:— In the absence of any single municipal body, a water authority of a representative character should be constituted.

*SIR J. LUBBOCK

said he quoted those words.

*MR. SHAW-LEFEVRE

said, apparently his right hon. Friend did not see the force of them. A central authority had been created, and they might now transfer to it the control of the water supply. Then followed other Committees and other Reports. There was a Committee presided over by the Member for Northumberland, and it reported that the County Council should have the power to promote a Bill with the object of taking over the water companies. He did not propose at this stage to enter into the details of the scheme. Many of the proposals were open to consideration and would receive consideration by the Committee. The proposals in the Bill, however, were not nearly so arbitrary as those in the Birmingham Bill, and the House allowed that arbitrary Bill to pass, on the ground that all the objections should be considered by the Select Committee. He ventured to say that these were not objections which should be taken to the Bill on a Second Reading. In his opinion, the proposal of the County Council was a wise one in the interests of London. He believed that there was nothing in which the people of London were more interested than in obtaining a supply of water. The object of the Amendment was, that the opponents of the County Council might vote against the scheme without showing their hand, and he was confirmed in that by a statement in The Times that morning to the effect that— although ten London Conservative Members would vote for Sir John Lubbock's Amendment on the Second Reading, they were not prepared to support a Motion for the rejection of the measure. They wanted to postpone the Bill and delay it. The effect of postponing the Second Reading would be the waste of another year. In a matter of this great importance it was essential that they should send the Bill to a Select Committee which, at best, could hardly get to work before Easter. If, at the coming election, the policy of the London County Council should be reversed, it would still be open to the new Council to withdraw the Bill at any moment. He had, however, the utmost confidence that the people of London would confirm the policy of the Council, and insist that the control of the water supply must pass into the hands of the County Council.

MR. E. BOULNOIS (Marylebone, E.)

said, they had been told that the County Council was unanimous for acquiring the water supply of London, but it would not be denied that there was a fair minority in the Council which was opposed to the principle, at all events. He thought these Bills should not be proceeded with until they had more evidence on the financial aspect of the question. The minority did not know the real facts, and they were entitled to know them. He would urge three reasons why the Amendment of his right hon. Friend should be accepted, and they were reasons simply for delay. The first reason was that there was no information before the House upon the financial aspect of the question; the second, that there was no mandate from the electors to deal with it; and the third, that the London County Council did not know their own mind on the subject. With regard to the first point, some members of the Council had tried over and over again to ascertain what would be the effect of this policy on the rates, but all in vain. Even now, it would be observed, if hon. Members looked at the Bill, there was no disclosure as to how the money was to be raised. The outlay had been variously estimated at from £30,000,000 to £50,000,000. Reports received from the engineer to the County Council were not disclosed to the Council, and therefore not to the public, but it was quite clear that the sum involved would be gigantic. That being so, the House should have some indication of what liability the ratepayers were likely to be involved in by the schemes of the County Council before they were asked to assent to the Bill. As to his second point, that there was no mandate from the electors, he had a strong opinion that when the ratepayers knew what the schemes were likely to cost they would hesitate before they pronounced in favour of them. Mr. Arthur Arnold had admitted in the County Council that "they had not made any adequate calculation" as to the cost, and it was generally believed that no calculation whatever had been made by the Council in this matter. The London County Council did not know their own mind. They had presented Bills for the acquisition of the undertakings of the Water Companies, and they knew that tens of thousands would probably be spent upstairs in fighting over those Bills. At the same time they had passed a Resolution which declared that the supplies from the Thames and the Lea were contaminated water and not fit for potable purposes, and the true solution of the problem was to obtain additional supplies from purer sources, and they accordingly instructed their engineer to proceed with the preparation of a scheme. So that next Session the House would see a Bill brought in for this new scheme, and then there would be more lavish expenditure of money on witnesses, on expert evidence, on inquiries. The expenditure on this alone would probably not be less than £1,000,000 sterling. He thought it highly probable that the new County Council, not withstanding what the President of the Local Government Board had predicted, might think that the introduction of eight Bills was inexpedient. It certainly was an extremely costly proposal, and they might think it more expedient to bring in one Bill, and one would have thought that would have been really the better course. It was also probable that the new Council might desire to enter into negotiations with the Joint Authorities of Middlesex, Hertford, Kent, Surrey, and Essex, and avoid their opposition, which would be only reasonable. He was, indeed, surprised that the London County Council had not got on their side these Authorities before coming to this House. At all events the new Council might think it desirable to carry out the recommendation of the Committee of 1891, that the Council should endeavour to purchase the undertakings in conjunction with the Authorities of the outside areas. The object of the County Council had now been openly avowed. They did not intend to acquire the whole of the undertakings. Their determination was to acquire the Lambeth undertaking in the first instance, and the hon. Member in charge of the Bill stated that the principle which induced them to do so was that that Company supplied an area which was almost entirely inside London and very little outside. Now, what were the facts? The area in the County of London supplied by that Company was 25 square miles, and the area outside 46 square miles; the reservoirs in London covered 17 acres, and outside 75 acres. The new Council might think it advisable to deal with the question as a whole, and not to tinker with it piecemeal, as the present Council was doing. Other Corporations which had adopted this policy had, at all events, bought the undertakings in their respective districts honestly and fairly. The London County Council were not doing that, but were approaching the water companies in a very different spirit. It would be said with some truth that the London County Council, in its expiring moments, with only a few hours' breath left in its body, was endeavouring to force upon Londoners a gigantic scheme, involving them in enormous expenditure, whilst after the speech of the President of the Local Government Board it would also be said that an expiring Government were aiding and abetting the London Comity Council in forcing these claims upon what might turn out to be an unwilling electorate.

*MR. H. L. W. LAWSON (Gloucester, Cirencester)

desired to intervene in this Debate as a member of the Committee which sat in 1891 to consider the Water Trust and Water Commission Bills. That was a hybrid Committee, the members of the Party opposite were in a majority, and yet that Committee was absolutely unanimous in deciding that the water authority of London ought to be the London County Council. More than that, they had submitted to them statements to show the successful working of municipal enterprise in water supply from many urban centres and great cities. There was no evidence on the other side, and he recollected the Member for Blackpool saying that the Committee would take as their starting-point the report of the Committee of 1880, presided over by the Chancellor of the Exchequer, and not consider whether municipal ownership of the water supply was a good thing or not, but take it as granted by the reference from the House. Therefore it was not, as the hon. Gentleman who had just sat down contended, a party question; for his own party on that Committee agreed to assume it, and that put it for ever outside the range of party controversy. The Amendment before the House was not for the rejection of the Bill, but to postpone it until after the re-election of the London County Council. He submitted to the House that, although Members of all sides might be rushing about the metropolis from hall to hall speaking for one candidate or another, it was beneath the dignity of the House of Commons to postpone its decision until after the re-election of a local body. Suppose this were the case of the Corporation of Liverpool, or the County Council of Lancashire, would the House be asked to postpone its decision on Bills introduced by these bodies until the re-election of their members? Such a thing was without parallel or precedent. The right hon. Gentleman the member for the University of London spoke of the Board of Works as a parallel case. But that was the extinction of a governing body which had been weighed and found wanting. It could not be compared with the re-election of a body like the London County Council, which carried on the traditions of government and did not lose its corporate existence. It would be very inconvenient for the members of the newly-elected Council to find their hands were tied, and they were unable to proceed with these bills if they decided they were worthy of support. They had to deal not only with the Standing Orders of the House of Commons but of the House of Lords. The hon. Gentleman who last spoke said it was an unprecedented thing for the London County Council to try and buy up the Companies one by one. He had authority for saying they intended to purchase all the existing water companies, but they hoped that by dealing with one or two of them, they would be able to purchase the others by agreement instead of by arbitration, and thus save expense. The Committee would settle the principles, and the arbitrators would work out the figures of purchase. As to the possible economy that might be effected, he did not know that they were called upon to discuss it, but he believed in the unification of the water supply. The concentration of management and machinery would be in itself a saving which would compensate for the extra expense in other ways. But the people of London had had it demonstrated to them during the last week or two that this was not only a matter of pocket, but of health and convenience. The decent comfort of the home depended on water administration. He thought the House would be taking a strong and unprecedented course if they accepted the motion of the Member for the London University, considering that the London County Council was not only following the uniform practice of this House, but the uniform advice given by every Royal Commission and Select Committee that had ever inquired into the subject.

MR. J. CHAMBERLAIN (Birmingham, W.)

This subject is one in which I have taken a great deal of interest, and, although not a member of the London County Council, I should like to say a few words based upon my own experience. I cannot altogether on this occasion sympathise with my right hon. Friend who sits beside me. Whatever may be the intention of his Amendment, I think his argument goes further than the Amendment, and does go the length of negativing the idea of the purchasing of the water supply by a public authority. That raises an issue we have first to dispose of. If my right hon. Friend is right in his very interesting speech and in the very weighty arguments he has brought before the House, not only ought we to reject this Bill, but we ought to dismiss, at all events for the present, any idea whatever of any local authority ever becoming the owner of the water supply of London. As I say, I cannot go so far with my right hon. Friend. T do not agree with his view, which, I think, is really rather a novel view, at all events, during recent years, because in all our discussions, both of this London question and also of the question of a similar supply in the provinces, there has been an almost universal consensus of opinion that wherever possible it is desirable that the local authority should become the owner on fair and reasonable terms. That I believe to be the recommendation of various Committees, not speaking of London alone, but of sanitary and other Committees, that in the public interest, every assistance ought to be given by this House to local authorities, to become the owners of their own water supplies. In regard to London, I think the case is very strong indeed. In the first place it is not, after all, in the public interest than an enterprise which is of necessity in the nature of a monopoly, should remain in private hands. We may give every credit to the public spirit of the directors of a private company; but still it is true, after all, that their first duty is to their shareholders, and that the interest and convenience of the public, are likely to suffer if they are at any time antagonistic to the interests of the shareholders. My right hon. Friend has brought forward a new argument in this respect, because he says that, as the companies are confined to a maximum dividend, the ratepayers of London, have the advantage of not suffering loss. If there is a loss they are not obliged to pay more. But the universal experience of provincial corporations, has proved that when a company has secured its maximum dividend, the object for economy has gone. There is no longer any pressing stimulus to effect economy and make further profits which would lead to any considerable reduction in the price of the water or any considerable advantage. I hold that it is most inconvenient, to say the least of it, that a local authority should not have the control of its own streets. When private companies have the power of breaking up streets which are under the control of the local authority there is sure to be a clashing of interests and friction which very often produces very bad results. Then, Sir, I cannot doubt, and this applies especially to the case of London, that there is an opportunity here, without injustice to anybody, of making a very considerable saving. I do not think that any man of business will contend that, if the management of the water supply, after its transfer to the local authority, is wise and prudent, there will not then be an opportunity in the unification and consolidation of all these undertakings, for a very large saving. It cannot be to the interests of economy that there should be eight companies doing the same thing, with eight separate boards of directors and eight separate staffs and all the paraphernalia of eight separate companies. But, Sir, it follows from that if there is, as I believe there is, this great opportunity for the County Council to make an arrangement which would be to the advantage of the ratepayers, that also there is no necessity for them to behave in an illiberal, ungenerous, or unjust manner towards the shareholders in these companies. And, Sir, after all, I venture to say to the House, here is the crux of the whole question. My hon. Friend opposite who spoke last but one, and who is able to speak in some sense for the companies, said incidentally in the course of his speech that, if the companies could get fair terms—the Birmingham terms—there would be no objection on their part to the purchase of their undertakings. An hon. Gentleman below me laughs at that. Birmingham has been held up in this Debate and in previous Debates as having acted wisely in reference to the purchase of the water supply; and I venture to say here that that purchase has been, in the case of Birmingham, satisfactory to the shareholders of the water companies and also perfectly satisfactory to the ratepayers themselves. Why, if you are going to follow the example of Birmingham, should you not accept Birmingham's terms? It may be that there are special conditions in the case of London which render it impossible to accept ipsissimis verbis the Birmingham agreement. Very well, why on earth will you not accept fair and open arbitration? Now, Sir, I hold very strongly—and have urged it again and again to the House on private Bills—that we should not undertake to refuse a Second Reading of a private Bill except on some great question of principle. If it is merely a question of detail, I think the great majority of the House has always been prepared to admit that the House is not a competent tribunal to deal with such a matter, and that it could only be dealt with by a Committee upstairs. I say exactly the same with regard to this Bill, only I find there are principles of the very greatest importance, which are novel, laid down in the Bill of the County Council, and on which the House ought to pronounce an opinion if the County Council adheres to them. What is the principle? In the statement of reasons in support of the Bill I find it alleged that the water companies want to sell their property to the County Council, and, at the same time, to fix the price. I have never seen on the part of the water companies any desire or intention to do anything of the kind, but that is exactly what the County Council propose to do. The County Council in one clause of the Bill proposes that, failing agreement, the valuation of these companies should be arrived at by arbitration, and that the arbitrator should take into account all the circumstances of the case. I think that is perfectly fair, and if the County Council had stopped there, I, for one, would most heartily support their view; but they did not stop there. After having said it is to be a fair arbitration, and the arbitrator is to take into account all the circumstances of the case, they proceed to specify half-a-dozen or a dozen different items and considerations which they think are in their favour and which the arbitrator is specially to take into account. Let any man of business who has ever been engaged in arbitration consider what the effect of that is. The special attention of the arbitrator is called to a number of circumstances connected with the sale of the undertaking, and, on the other hand, no reference is made to any single circumstance which might be held by the arbitrator or the companies to be in favour of the companies. Anything more one-sided, more absolutely or evidently unfair than a condition of that kind it is impossible for me to conceive. I do not know who is responsible for putting that clause in the Bill. Nothing could be fairer than the statement of my hon. Friend in introducing the Bill. What he said was, that they wanted to buy, not one company, but the whole of the companies, and to buy them at a fair valuation. If the Bill had only carried out that statement I can hardly believe there would have been any necessity for even proposing to refuse it access to a Committee. I want to ask those who in this House are entitled to represent the County Council on what they intend to stand. Do they intend to stand by the declaration of the hon. Member who so ably introduced the Bill, or will they be satisfied with a fair and open arbitration, in which the arbitrator shall be instructed to take into account all the circumstances of the case, or do they want to prejudge the matter in their own interest? According to the reply which the hon. Gentlemen give me, my vote will be given on this occasion. If they mean what I regard as a perfectly unfair system of arbitration, I think they are laying down a principle which the House ought not to accept. I protest against the tone of the speech of the President of the Local Government Board. He ought to speak, in a case of this kind, in the interest of the public, and in the interest of this House, if you like; but he spoke entirely in the interest of the Progressive party on the London County Council, and he tried to make electioneering capital out of the matter, which, I hold, is altogether outside party questions. It has already been pointed out by my right hon. Friend (Sir J. Lubbock), who certainly, as a Member of the London County Council, cannot be considered hostile to its general policy, that a very large majority of the County Council have been in favour of the purchase of the water supply, and I do not regard this as one of the questions which is a political question, or even a municipally political question, in considering the questions which are in dispute between the two sides of the County Council. But it is a question in which not only the water companies, but, above all, the ratepayers of London, have the greatest possible interest. Thousands and thousands of pounds have been spent both by the County Council and the water companies in litigation. What is going to be done now? Suppose the House carries the Second Reading of this Bill, there would then have to be a hotly contested fight in Committee of this House and in Committee of another House. Whatever the result of that contest is, many thousands of pounds will be unnecessarily spent in litigation. After that there will have to be an arbitration. Who is to pay these expenses? It is not the water companies, although in the first instance they have to provide the costs. So long as they are within their statutory maximum they can always get out of their rates expenses of this kind. Therefore, in the long run, the expenses both of the County Council and the water companies would fall on the unfortunate ratepayers of London. If there is reason to believe there is no real difference on the merits between the two parties—if, on the one hand, the companies are willing to go to fair and open arbitration, and if, on the other hand, the Member for Shoreditch is willing to stand by his own declaration, and to accept a fair and open arbitration, all that seems to be necessary is that some one authorised to speak for the County Council should agree to strike out the clauses in the Bill which specially confine and direct the arbitrator. In that case I cannot help thinking that almost unanimously we might proceed to the second reading of the Bill. There are two other points about which I do not know there is any controversy. The one is that debentureholders ought to lie made absolutely secure. I do not think any member of the County Council intends to injure the security of the debentures in which trustees have been allowed to invest. The other point is that it would not be fair if it were an ulterior object on the part of the County Council, which I will not believe after the speech of my hon. friend the Member for Shoreditch, to deal with one company only and use the result as a lever to depreciate the value of the properties of other companies. I see that such an idea has been suspected. I say that if that existed it would be monstrous, it would be most unjust, and I cannot believe the House would assent to it. My hon. friend has stated in the clearest possible terms it is the intention of the County Council to deal with the companies in the sense of the recommendation of the Committee of 1880 which was presided over by the Chancellor of the Exchequer, and on which I had the honour to sit as a Member. The spirit of the recommendation of that Committee was to deal with the whole of the water supply of London, and to place it in the hands of one central authority. There can be on difficulty presented by that, and I imagine my hon. Friend would have no objection whatever to make it absolutely clear to the House that the Bills which are before the House and which deal with the other companies would be proceeded with, or, if one were dropped, all would be dropped altogether. These are the only three points at issue. The principal point I venture to say, is the question of arbitration, and I would be much delighted if hon. Members speaking for the County Council would give me an assurance in that respect which would enable me to feel there would be a fair and open arbitration in which the shareholders of the companies would have full justice done to them. In that case I should vote for the second reading. If that assurance is not given, I think we must consider the issue is deliberately raised that this House is asked to say whether it will permit in future a local authority to take the property of individuals, and take it at the price which the local authority itself is to fix. I say to a proposition of that kind I should certainly have to give a negative.

The CHANCELLOR of the EXCHEQUER (Sir W. HARCOURT, Derby)

I am sure that on matters of principle there will be on difference between us. As the right hon. Gentleman has said, he and I sat on the Water Committee of 1880, and, according to a practice which is common, we collaborated and produced the report of that Committee. What was the principle of that report? It was that it was for the public interest that the water supply of London should be in the hands of the local authority. In the report we stated that the great misfortune of London was that there was no central local authority. We constituted, with the material at our disposal, a body which should act for London in respect to water supply. What we looked forward to then was that, whenever a central authority for London was created, one of its first duties should be to acquire the water supply. So far the right hon. Gentleman and I are in absolute agreement. All the great towns of England have acquired an abundant supply of pure water. Why is it that the moment it is proposed to do for the five million people of London what has been done for Birmingham, Liverpool, Glasgow, Manchester and Leeds, there should arise a vehement opposition? The right hon. Baronet (Sir J. Lubbock), who is himself a most distinguished member of the County Council, argued against such a proposition. That, however, is not the effect of his amendment on the paper. The amendment is one which I confess I have not been able to understand. What is the meaning of postponing the consideration of this matter until after the elections? Would you do that with any other municipal body? Such a proposition would be laughed out of the House at once. The right hon. Baronet seemed to assume that in the next Council the majority might be opposed to the Bill. To postpone the consideration is not the way to meet a proposal of this kind. If the Bill is read a second time, the next Council will have the opportunity of supporting the measure or otherwise, just as they please. We do not bind ourselves to the details of the Bill in giving a vote for its second reading. All we have to look at now, in my opinion, is whether the Public Authorities ought to be intrusted with powers to acquire the property of Water Companies. In the Report of the Committee of 1880 we suggested an alternative—and I have always thought it a very powerful alternative—which was a separate supply. If anyone chooses to look at the production for which the right hon. gentleman and I are jointly responsible, they will see that it was on that alternative supply we relied, so as to ensure that the people of London get fairer terms, and a proper supply of water at a fair price. There are only two courses open to us—an alternative supply or purchase. If they cannot purchase on fair terms, the alternative supply is the only other course open to the people of London. I do not see any question of principle that divides the right hon. Gentleman the Member for Birmingham from us. He spoke of the nature of the arbitration and of the security for debenture-holders. These, surely, are questions for the Committee. Under all these circumstances I for one come to the conclusion, being still of the opinion I maintained on the Committee of 1880, jointly with the right hon. Gentleman—namely, in favour of purchase, if it can be made on fair terms, and in favour of an alternative supply if purchase cannot be effected on fair terms—and, the representative body of this metropolis having came forward with a proposal in this matter, I do not see how we can possibly take any other course except to vote for the second reading.

MR. G. J. GOSCHEN (St. George's, Hanover Square)

My right hon. Friend the Member for West Birmingham has raised a point to which no Member of the County Council has yet replied. The right hon. Gentleman who has just sat down says it is a question for the Committee whether the arbitration is to be open or not. But as a London Representative, I wish to speak in regard to the naked question put before the House by my right lion. Friend the Member for the University of London—namely, whether this matter should be referred to the next County Council. The Chancellor of the Exchequer asks, by way of reply to that question, whether such treatment would be applied to any of the large towns in the provinces. But what is the position? Important Members of the minority in the County Council have stated, in this House, that they do not consider the present County Council has given sufficient information to enable the constituencies to judge fairly on this question. I ask, is it right, on a question of this stupendous magnitude—because I think the President of the Local Government Board will admit that this may be a question of £40,000,000 or £50,000,000—that there should be so strange a reticence on the part of the London County Council to give information? Is not that a strange proceeding on the part of the present County Council? I think my right hon. Friend is perfectly justified in believing that, when the London County Council is differently constituted, it may take a different view as to what is the fair method of dealing in a case of this kind.

SIR W. HARCOURT

And so they may, even though the Bill be read a second time.

MR. GOSCHEN

Yes, after all the expense has been incurred, and after our constituencies have been committed by a Vote of this House. But I think the speech of my right hon. Friend the Member for West Birmingham affords us an opportunity to come to an arrangement upon this question. There stand on the Notice Paper two Instructions. One, in the name of the hon. Member for Peckham (Mr. Banbury), is as follows:— After Second Reading of Southwark and Vauxhall Water (Transfer) Bill, to move:— 'That it be an Instruction to the Committee that the arbitration shall be an open arbitration, and that the arbitrator shall consider impartially all points that are favourable to both sides.' I think that is the point on which the right hon. Gentleman the Member for West Birmingham wishes an assurance. Then the other Instruction, which is to be moved by the hon. Member for Chelsea (Mr. Whitmore), is:— That it be an Instruction to the Committee to insert a clause providing that the said Bill shall not become law until the whole of the Bills dealing with the Purchase of the London Water Companies by the London County Council have received the Royal Assent. If an assurance were given that these two Instructions will be acceded to by the Friends of the County Council, I am sure the matter would be settled without a Division.

MR. B. L. COHEN (Islington, E.)

said, it had been urged that the London County Council ought not to be treated differently in a matter of this kind from the municipalities of Birmingham, Manchester, or of any other large provincial town. But he should like to know whether there was a practice on those municipal corporations of having reports and accounts presented to Sub-Committees of these Standing Committees, kept back from the Members, as reports and accounts were kept back on the London County Council; and not alone kept back from the Members, but returned to the officers who drew them up because, forsooth, they had not satisfied the calculations which had been expected from them! He had been a Member of the Finance Committee of the London County Council ever since that body was instituted by Parliament, with the exception of three weeks, and he was sure the House would be surprised to hear that there had not been laid before that Committee any Report of any kind as to the probable effects of this proposed gigantic acquisition of water companies on the finances of the London County Council and on the ratepayers of London. No person would dispute the advantage and necessity of an abundant supply of water, which was one of the primary necessaries of life, to the people of London; but he did not believe there was a Corporation in England, and he was quite sure there was not a business body in the world, that would approach such a project without having first inquired into its probable cost. If such reports existed they were withheld from those who were entitled to them. At a recent meeting of the London County Council, he asked the Vice Chairman, who was also Chairman of the Parliamentary Committee, whether any Report had been presented by officers of the Council as to the financial burdens that would be entailed on the Council and on the ratepayers of London by this undertaking. The reply of the Vice Chairman was, that no such inquiry had been instituted. On the next day, at a meeting of the Finance Committee, he again inquired into the matter, and was startled to find that such a Report had been presented. Perhaps, the fact had escaped the memory of the Vice Chairman, but it was a surprising fact that that Gentleman was in the chair when the Report was submitted to the Committee, and was, for some reasons he did not know, referred back by them for re-examination. Therefore, while he was not in any way opposed to the transfer of water undertakings from private Companies to public authorities, he thought the action of the London County Council was of a character so much calculated to inspire misgiving, if not distrust, that there was abundant ground for postponing the advance of these Bills until they could be considered by the new County Council. The President of the Local Government Board said that all knew that the next London County Council would be of the same constitution. That confidence of the right hon. Gentleman was not shared by those who were opposing this Amendment; because if they really had that absolute and precipitate confidence in the return of another Progressive majority it would be less rather than more reason for opposing the Amendment. If it were the intention of the London County Council to proceed on the equitable and almost rudimentary principles suggested by the right hon. Member for Birmingham, then the postponement of the Second Reading at this moment would not retard, but would promote, the ultimate passage of the Bill. Instead of costly and dilatory fighting probably in both Committee-rooms, they would speedily and readily get the just terms.

*MR. J. FLETCHER MOULTON (Hackney, S.)

said, that the greater part of the hon. Member's speech seemed to be utterly unworthy of the dignity of the House. In saying this, the hon. Member would know that he meant nothing personally unpleasant to him, because they were the best friends on the London County Council. Here was a great municipality asking, as other municipalities have done, to have the charge of its own water supply; and was it worthy of the dignity of the House to have dissentient members of a particular committee grumbling as to the amount of information furnished to them, and as to the unsatisfactory reply given to a certain letter? Parliament having created a municipality in London could listen only to the voice of that municipality, and must believe that it had done its work properly. If it had not its constituents were the tribunal to judge it. It was beneath the dignity of the House to go behind the conduct of a responsible municipality. The right hon. Member for West Birmingham had put forward a question with regard to the terms of purchase. At present the question was only one of whether powers of purchase should be granted, and on arbitration terms. But the suggestion had been made that the terms provided in the Bill were unfair and inequitable to such an extent as to constitute a matter of principle rather than of detail. He would call the attention of the House to what the proposals in the Bill were. He thought they were perfectly equitable, and that if any addition had to be made to them to make their scope clearer, it could well be done in Committee. The first proposal was that, if an agreement could be come to, the London County Council was authorised to enter into the agreement. Arbitration for compulsory purchase was only in default of agreement. It was suggested by the right hon. Member for West Birmingham that the County Council were to fix the price.

MR. J. CHAMBERLAIN

The hon. and learned Member is only reading a part. I hope he will go on and read the rest.

*MR. J. F. MOULTON

said, that it was impossible to read more than one part at a time. He had no intention of stopping until he had put the House in full possession of the terms— For the purpose of the arbitration under this part of the Act, the Council shall appoint one arbitrator, and the company shall appoint one arbitrator, and then the two arbitrators shall, before proceeding to the reference, appoint a third arbitrator, who shall, if necessary, act as umpire. That was not only a fair tribunal, but one appointed in the ordinary way for such arbitrations. Then again— The consideration to be paid by the Council for the transfer of the undertaking, if determined by arbitration, shall be such sum of money as the arbitrators determine to be fair and reasonable value of the undertaking, after allowing for the liability involved by debenture stock, and having regard to all the circumstances of the case. In determining the fair and reasonable value of the undertaking, the arbitrators shall, among other matters, have regard to the following. Anyone who had had anything to do with arbitration knew how very vague an expression "all the circumstances of the case" was; and it was necessary, when there was anything peculiar in the arbitration, to put in terms pointing to matters which ought to be considered by the arbitrators. There were a number of things mentioned in this case, not one of which was unfair, and in order that these might include "all the circumstances of the case," the County Council would not object in the slightest degree to the Committee putting in those in favour of the other side. These terms specified were only those which the Council believed that they must have in, in order to get a fair judgment of the case. He quite agreed that the arbitrators should impartially consider all points favourable to both sides; and he was sure that the London County Council did not desire to exclude any point which would be in favour of the other side. Knowing the long history of these water companies, and knowing the peculiarity of their position, the London County Council would not have been doing their duty if they had not secured, in other than the vague words, "all the circumstances of the case," the proper consideration of many different points. One of the things to be considered was: "The condition and state of repair of the reservoirs, filter beds, &c., of the Lambeth Company, and the probability of future expenditure thereon, together with any liabilities or obligations in connection with their undertakings, which the Lambeth Company might reasonably be expected to bear." Another consideration was the probability of the limitation of the company's legal powers. The adequacy and efficiency of the present sources of supply, and of the reservoirs, filter beds, &c., to meet the present and future requirements; the probable necessity of the future introduction of a new source of supply, and of new and improved works. Were not these considerations which ought to come into a fair and equitable valuation of the undertaking? There was no objection to other things on the other side being mentioned, but on the Second Reading of the Bill, it was not for the House to go into details which the Committee could deal with. Again— The legality of the charges now made or claimed to be made by the Lambeth Company, together with the circumstances under which powers have been granted by Parliament. The deductions from such claims may be reasonably made by reason of the insufficiency of the present storage or filtration of the Lambeth Company, or of the deficiency of the supply. The deductions to be made in respect of works, lands, or appliances, which have become wholly or practically useless. These were also fair matter for consideration. [The Hon. Member then read the remainder of the conditions.] Those were the whole of the conditions which had been suggested, which made an unfair arbitration. They were all included, in one sense, in those words "all the circumstances of the case;" and it seemed impossible to suggest that they were unfair, or to make it appear that the question whether they ought to be added was a question otherwise than for the Committee to whom the Bill would be referred. He submitted, that this was a question with reference to which Committee after Committee had said that it was the duty of this Municipality to get possession of London's water supply. The County Council took powers in the Bill to agree; without agreement it took powers to lay before an impartial tribunal after considering "all the circumstances of the case." He submitted that the House ought not in a matter of this kind to depart from the custom which it had always observed—namely, that of encouraging Municipalities, the greater the better, and most of all London, to get into their own hands that on which the health and comfort of the population which they governed so largely depended.

SIR R. E. WEBSTER (Isle of Wight)

said he would have been better pleased with the eulogy of the London County Council by his hon. and learned Friend, if the hon. Member had not himself been so prominent a member of the Progressive Party of that body. In reading the directions in the Bill, however, his hon. and learned Friend had omitted to observe that from beginning to end there was not a single direction which was in favour of the Water Companies. He had the good fortune to enjoy considerable experience of the work in connection with arbitrations, and he frankly said that he had never seen any directions to an arbitrator which were so onesided and so obviously put down for the purpose not only of enabling the arbitrator to take into consideration "all the circumstances of the case," but entitling him to speculate on matters upon which no arbitrator ought ever to take into consideration in a question of this kind. Had any hon. Member ever heard of an arbitrator taking into consideration "the probability of legal powers being limited in the future? "Again, the arbitrator was to inquire not only into the legality of the charges, but into the circumstances in which such powers and charges had been granted by Parliament—that was to say, into the history of the undertakings for the last 40 years. It was all very well for his hon. and learned Friend to say on behalf of the London County Council that no doubt they would be willing to insert any other clause which the Water Companies desired in the Bill; but he was afraid that when the London County Council got a Bill into Committee, the story would be very different. If a promise of that kind was to be given in the House, he thought that the opponents of the scheme would rather see it in writing, and they would be more impressed with the impartiality of the London County Council after it had shown an indication to be fair in this matter on the face of the Bill itself. It was in his judgment a very strange thing that the circumstances which were to be enumerated were all on one side; the circumstances in favour of the other side were to be left out. He did not possess the interest of a farthing in any Water Company undertaking in London, directly or indirectly; he approached the question simply as a ratepayer of London, and with a desire to see fair terms of acquisition fixed by the London County Council. Again, what was to be the position of the outlying authorities, and had that position been considered? He believed that there was no case in which either for water or gas a County Council or Corporation had been allowed to purchase powers extending outside the boundaries of the municipality without terms being imposed in the Bill providing that the outlying authorities should have the power to come in and purchase their interests on the same terms as the County Council. He remembered the terms under which Birmingham acquired its water and gas, and Stockton its water; before schemes of this kind were allowed to be pressed forward the interests of the outlying authorities had been considered, and those authorities had been consulted. What step had been taken here to consider the interests of Kent, Surrey and Hertfordshire, and to see whether they were protected or interfered with by the Bill? Another point was this, that there was nothing to prevent the County Council, after securing the passage of one Bill, delaying to go on with the others in the meantime. He submitted that the water supply for London ought to be acquired as a whole, as part of one scheme. Surely it ought to be a part of any scheme promoted by the London County Council that it should not be granted power to acquire the powers of one company without acquiring the powers of them all. There ought not to be an attempt on the part of the County Council to rush these Bills through in order to secure some advantage; measures ought to be submitted showing a feeling of impartiality with reference to the interests about to be acquired, and some care that the procedure was to be such that those authorities whose interests were to be taken were properly represented. If there had been a real desire to deal fairly with this question, the offer of his right hon. Friend the Member for St. George's, Hanover Square (Mr. Goschen) would not have been treated with so slight notice by the representatives of the Country Council. He there fore asked the House to pause before it allowed those Bills to be rushed into Committee at a time when the question was engaging the attention of the electors of the Metropolis, and until the provisions which ought to be inserted in the Bills securing justice to the companies had been adequately considered by the representatives of the County Council.

THE UNDER SECRETARY OF STATE FOR THE COLONIES (Mr. SYDNEY BUXTON, Tower Hamlets, Poplar)

said, the question had been raised by the last speaker as to whether all the Bills ought to be taken at once. The County Council had no intention to go through with all the Bills at once, but they believed that by taking two Bills first it would, in the first place, be a shorter, less expensive, and more expeditious process than if all were dealt with at once. They thought also that if the Committee laid down certain principles with regard to the acquisition of the Companies it would be less difficult for the two parties to meet without incurring further expense in coming to the House or otherwise; and the other Companies might come to terms with the London County Council.

MR. J. CHAMBERLAIN

said, in these circumstances he supposed the promoters would have no objection to allow locus standi to the other Companies?

MR. SYDNEY BUXTON

said, the County Council would not oppose the granting of locus standi. As to the more important matter, the terms of instruction to the Arbitrator, he believed, as far as he knew anything of the position and feelings of the County Council, they had no desire, by special instruction, to narrow down and prejudice the case of the Water Companies so that the Arbitrator should not be able to take into account any circumstances favourable to the Companies. But the position surely was this; the only matter favourable to the Companies which could be taken into account was the present value of each undertaking as a going concern. From that there were certain deductions to be made, and the County Council had stated them clearly in the Bill; but they quite understood that the insertion of them would not preclude the Committee from adding other points, and would not preclude the Arbitration from taking into account all matters favourable to the Company as well as unfavourable to them. If it would meet the views of the House and obtain a unanimous vote, he was authorised on behalf of the County Council to say they would accept, as an instruction to the Committee, in lieu of the somewhat crude one which was on the paper in the name of the hon. Member for Peckham (Mr. Banbury), the following words:— That the Committee have power to insert in the Bill directions to the Arbitrator to take into consideration any points favourable to either party in addition to those specified in the Bill." [Laughter and Opposition cries of "No, no."] That was his olive-branch; and, as it did not seem to be acceptable, he would only say that he believed the County Council had no intention in any way to exclude anything from the arbitration which might be favourable to the Companies.

SIR HENRY JAMES (Bury)

believed the House was getting into an unnecessary mess, which could be avoided if matters were allowed to take their natural course. If the special instructions in clause 6 were struck out there would be no difficulty. The Arbitrator would be bound to take into consideration everything on one side and on the other, favourable and unfavourable, and, if it were thought that he made any mistake, either party could obtain the opinion of the Judges as to whether any ingredient had been unduly considered or left out of consideration. If the instructions in Clause 6 were in accordance with the existing law of compensation they were not required, and they would only confuse the Arbitrator; but, if they referred to subjects which ought not to be taken into consideration, then they were put in specially in derogation of the rights of the Company and in order to prevent them obtaining proper compensation. If the House would only say to the promoters of the Bill, "The special instructions shall come out," no instruction to the Committee would be necessary. If the promoters would not consent, it would be evident that the considerations named were intended to take away from the Companies something they were entitled to get.

MR. J. STUART

said, he could not withdraw Clause 6, but was perfectly prepared to give locus standi to all the Companies in the first Bill—[An hon. MEMBER: "You can't"]—on the understanding that the Second Reading of the other Bills was deferred.

Question put, "That the words proposed to be left out stand part of Question."

House divided:—Ayes, 187; Noes 149.—(Division List, No. 11.)

Motion agreed to.

Ordered,—That the Bill be referred to a Select Committee of Nine Members, Four to be nominated by the House, and Five by the Committee of Selection.—(Mr. James Stuart.)

Motion made, and Question proposed, That subject to the Rules, Orders, and Proceedings of this House, all Petitions against the said Bill be referred to the Committee; and such of the Petitioners as pray to be heard by themselves, their Counsel, Agents, or Witnesses, be heard on their Petitions against the Bill, if they think fit, and Counsel heard in support of the said Bill against such Petitions.—(Mr. James stuart.)

Amendment proposed, in line 1, to leave out the words "subject to the Rules, Orders, and Proceedings of this House."—(Mr. Boulnois.)

The hon. Member objected to the appointment of a Hybrid Committee, and contended that the ordinary course should be followed and the Bill referred to a Committee appointed by the Committee of Selection. A Hybrid Committee did not partake of the same judicial character, and added enormously to the cost both to promoters and opposers. He quoted the opinion of the Secretary of State for India (Mr. H. H. Fowler), when President of the Local Government Board, in support of his contention, and hoped the hon. Member in charge of the Bill would consent to its being referred to an ordinary Committee.

MR. E. B. HOARE (Hampstead)

agreed with the remarks of the previous speaker. In Hybrid Committees, the Divisions were on Party lines and he had known an hon. Member vote purely as a Party man without a having heard any of the evidence. He hoped the House would consent to the Bill being referred to an ordinary Select Committee.

MR. STUART

reminded hon. Members that the proposed Committee was similar to that which dealt with the Streets and Buildings Bill, and gave so much satisfaction, last year. The promoters of the Bill thought it was much too important to be referred to an ordinary Committee and divisions on Party lines had been guarded against.

MR. GOSCHEN

wished to ask those best acquainted with the practice of the House, what was the ordinary way in which a Bill for Birmingham or Liverpool would be dealt with. His impression was that they were never referred to Private Bill Committees, and he did not see why they should depart from the usual practice and refer this Bill to the same kind of Committee as Bills from the municipalities of the places he had referred to.

MR. STUART

said, he could not accept the Amendment, as they desired that petitions might be presented within six days of the sittings of the Committee, and to give a locus standi to Water Companies whose interests might be considered to be prejudiced.

SIR R. E. WEBSTER

said, the London County Council were assuming to themselves the powers of the House. If other Water Companies than those immediately concerned were to have a locus standi words should be inserted specially providing for it.

MR. STUART

said that should be done. If there was any difficulty he would give notice of his intention to move the insertion of the necessary words.

Amendment, by leave, withdrawn.

Main Question put, and agreed to.

Ordered,—That subject to the Rules, Orders, and Proceedings of this House, all Petitions against the said Bill be referred to the Committee; and such of the Petitioners as pray to be heard by themselves, their Counsel, Agents, or Witnesses, be heard on their Petitions against the Bill, if they think fit, and Counsel heard in support of the said Bill against such Petitions.

Ordered,—That the Committee have power to send for Persons, Papers, and Records.

Ordered,—That Seven be the Quorum.—(Mr. James Stuart.)

MR. F. G. BANBURY (Camberwell, Peckham)

moved:— That it be an Instruction to the Committee to provide that the Arbitration shall be an open Arbitration, and that the Arbitrator shall consider impartially all points that are favourable to either side. The hon. Member remarked that the effect of his Instruction would be that instead of those points which were favourable to the County Council being alone considered, the points which were favourable to the Water Companies would be considered also. Thirty or forty millions of money were involved in this rate. These were undertakings in which people had invested their money on the faith of an Act of Parliament.

MR. STUART

declined to accept the instruction, but said they were willing to insert the words suggested by the Under Secretary for the Colonies, which would do all that was necessary.

SIR R. E. WEBSTER

pointed out that the County Councils could scarcely refuse this instruction. They would be prepared to assent to the Arbitrator being allowed to take into consideration what was fair to either side. Why then, if those were the terms on which the Arbitrator was to preside, was he to have specific directions given to him which referred only to one side. He was quite sure his right hon. Friend the Chancellor of the Exchequer would agree that every single clause of these directions was intended to depreciate—whether fairly or unfairly the property of the water companies.

House divided:—Ayes, 143; Noes, 157.—(Division List, No. 12.)

MR. STUART

gave notice that he would move on Monday, 25th February, that the Committee have power to insert in the Bill directions to the Arbitrator to take into consideration any points favourable to either Party in addition to those specified in the Bill.

MR. C. A. WHITMORE (Chelsea)

moved:— That it be an Instruction to the Committee to insert a Clause providing that the said Bill shall not become law until the whole of the Bills dealing with the purchase of the London Water Companies by the London County Council have received the Royal Assent. The hon. Member said that if a Central Representative Body was to acquire the Water Companies at a fair price, the transactions should be carried out as a whole, and not in a piecemeal manner.

MR. STUART

said he could not accept the Instruction, because there might be Bills rejected by the House and others passed.

Motion put, and negatived.

MR. E. BOULNOIS (Marylebone, E.)

moved:— That it be an Instruction to the Committee to delay proceeding with the consideration of the Lambeth Water (Transfer) Bill and the Southwark and Vauxhall Water (Transfer) Bill until the remaining six Water (Transfer) Bills have been read a second time and referred to the same Committee. The hon. Member said he would simply move the Instruction formally, although he attached great importance to it.

MR. STUART

said, the Instruction was in direct opposition to the arrangement arrived at by the House, namely, that they should defer the other Bills, go on with the two in question through the Committee, and get the locus standi upon them. He therefore could not accept the Instruction moved. He would put down on Monday a form of words which would give the locus standi to the two Bills.

MR. T. F. HALSEY (Herts, Watford,)

wished to point out that there were several Local Authorities affected by those Bills, and one, in particular, to a very large extent. He wished to know whether locus standi would be accorded to those Local Authorities whom, he thought, it would be very unfair to shut out.

MR. STUART

said, he should like to consider this question before giving an answer to it, because he did not know to what it might lead. He was not satisfied that it would not lead to great difficulty on the Committee. He would, however, be prepared to answer the question on Monday.

SIR J. SAVORY (Westmorland, Appleby)

asked, whether the Corporation of London would have a locus standi on the question.

MR. STUART

said he did not understand that the London Corporation opposed the Bills.

SIR J. SAVORY

They are opposing them.

MR. STUART

said he could not answer the question then.

Motion put, and negatived.