HC Deb 09 March 1899 vol 68 cc405-21

On the Motion— That this Bill be now read a Second time,

MR. STUART (Shoreditch, Hoxton)

When this Bill was introduced I refrained from making any remarks upon it, feeling that we should know exactly the details of the Bill before we should trust ourselves to comment upon it. I must to some extent complain, Sir, that this Bill should be brought forward so late in the evening as this, when it affects such very large interests as this Bill undoubtedly does affect. More particularly I wish to make complaint of the bringing forward of the Bill now, because of the way in which the Bill has been brought before the House. The House will observe that at the top of the Bill are the words, "To be substituted for the Bill previously delivered."


The honourable Member is perfectly right, and perhaps he will allow me to make an explanation. It is perfectly true that on the top of the Bill are the words, "To be substituted for the Bill previously delivered." The substitution occurs in the sub-section of clause 2, in a proviso. What I have to say is this. As the Bill left my hands, as authorised to go to the printer, it contained that proviso, and the mistake is entirely the printers. How it has arisen I do not know. That proviso- embodies a recommendation of the Royal Commission, and, though I am speaking from memory only, I am pretty certain I am right when I say that that proviso has been in every draft of the Bill from the first time it was drawn.


Of course, as a private Member of the House I cannot be aware what was the case in the previous drafts, but let me say that I thoroughly accept the explanation of the origin of this paragraph that the right honourable Gentleman gives. But, while that is the explanation, which I frankly accept, of the origin of this paragraph, yet, Sir, it does not diminish the effect of the paragraph, and the enormous difference to the whole Bill that is made by the introduction of this paragraph. As the Bill was first printed. I obtained early copies of it. as many other Members of this House must have done. I took my copy and I looked at it with some of my Friends, and, when I looked down to clause 2, which anyone acquainted with the London Water Question would immediately see was a very important clause in the Bill, and read that clause, I said, "I do not think there is any further need to discuss the Bill, because the Sinking Fund is in it." Now, Sir, you may imagine my surprise or discomfiture—I entirely clear the right honourable Gentleman of any of the fault in the matter—when, after having taken that decision, I found that there was a clause which excluded the operation of the Sinking Fund. Now, Sir, departing for a, moment from the entrance of this particular clause, I may say that the whole Bill in its progress through this House up till now has been somewhat unfortunate, because its introduction as a public Bill, without due notice, helped it to pass through the Standing Orders Committee, and the Standing Orders Committee clearly by their decision were not satisfied with the steps which had been taken in the promotion of the Bill; and, as the House knows, an order was made that certain steps should be taken, or else the Bill should not be proceeded with. The House knows that in connection with a Bill affecting private interests notice would have to be given to those private interests concerned, and that that notice has not been given in respect to this Bill. I am sorry that the Government had not known what they were to do in this matter at an earlier date, but, at the same time, I must admit that they probably did not receive in time to give this notice the Report of the Royal Commission upon which this Bill is founded, but all that proves is that that method of legislation whereby the Government refers to a Royal Commission a vital and important point, and does not itself make up its mind upon that point, is not a method of legislation which is conducive to the good order of proceedings in this House. As I have raised that question of the paragraph on the Sinking Fund, let me ask the House for a moment to look at what that matter means. Now, Sir, it would be quite impossible to discuss the Sinking Fund in the House itself or in a full Committee of this House. Everybody who is connected with, and who has been acquainted with, the extremely complicated conditions of the Sinking Fund, which have been established by degrees and gradually made clear and intelligible to the expert— everybody who knows the conditions and circumstances of that Sinking Fund must know this, that it is impossible for it to be properly considered, and it is impossible for the bearings of its inclusion or its omission front this Bill to be properly considered, without referring this Bill to a Select Committee, and I trust I may hope that that Select Committee will be one which can call for persons and documents, and hear counsel as in the form of an ordinary Private Bill.




I am glad to hear that, and so far that will be an orderly and proper proceeding. I will not, therefore, endeavour for one moment to delay the House by any exposition of what the Sinking Fund is, but I will point out this, that for many years every Bill that has been passed into an Act connected with the London Water Companies has had introduced into it a clause which practically makes the public of London sharers in the profits which arise in connection with the new capital raised. That is the effect of the Sinking Fund, and that has never been excluded, in the end from any Bill which has become an Act of late years, and I cannot see on what ground it can be excluded from the present Bill, excepting that the Royal Commission seems to have made a statement about it. Well, but I have followed, as no doubt Members on the other side of the House have done, the proceedings of the Royal Commission with very great care and attention, and I cannot say that they have at any point investigated the bearings of the Sinking Fund upon any such Measure as this. Nov, they have not gone into the Sinking Fund at any length at all. The consequence is that, however that portion of the Report may have come to be made, it has never been based upon an inquiry into the effect of that fund, and the clauses connected with it. Now, before I pass from that point of the Bill; which I venture to say is an extremely important point of the Bill, let me say this, that the water companies have in many instances, and in all the instances in the present year before the House, introduced their Bills without the Sinking Fund, and when they complain of opposition to these Bills, and to expense incurred thereby, let me remind them, and remind the House, that a large portion of the expense which they have had to incur has been because they have not introduced that Sinking Fund clause, which has invariably been introduced by Committees before whom the Bills were contested. Well, now, it seems to me that this Bill bears the same character as the Bills which of late have been introduced by the water companies, and I should hope that before a Select Committee this question of the Sinking Fund would bear the same fate. But look a little earlier into the clause; look at the last wording of this clause. That refers to this very matter before the Sinking Fund itself is excluded. There is a provision which says—clause 2, about line 25—"That they shall make it a condition of their assent." That is, the Local Government Board should make it a, condition of their assent that the stock be raised in accordance with the provisions contained in the most recent Acts for the time being with reference to the issue of debenture stock by a metropolitan water company. What are the most recent Acts for the time being, since these Acts differ amongst themselves? Is it to be the most recent Act, because then we could understand it; or is it to be any definite Act? That clause, which is the most vital clause in the Bill, seems to me not only to have been essentially altered from its first appearance, but it also appears to me to be exceedingly loose in its conception. Passing from that question, I want to look for one moment —and I can assure the House that I shall not delay them long, but this matter is very important for those for whom I speak—at the general spirit of the Bill. What is to be done by this Bill? Connections are to be made under the authority and direction of the Local Government Board between the various water companies for the purpose of supplying temporary deficiencies. Well, Sir, look at what one of the most immediate results of that is. It is that in respect to the vast water famine that may occur in London, the responsibility will attach to the Local Government Board, and not to the water companies. Now, I must say that I think that the right honourable Gentleman is adopting a responsibility for his Department which he will be sorry some day at having adopted, and I do say that he is liberating the companies, who have the right and are bound to supply the districts which they do supply, or part of the districts which they do supply—he is liberating them from a very proper responsibility. It is not that they do not come to Parliament for many facilities. They come to Parliament for many facilities, and they generally get those facilities. Now, as to connections of all these companies. There is only one company about which there has been any real difficulty in this matter, that is to say, the East London Water Company; and the East London Water Company has already, largely by the assistance of the London County Council, which gave it leave to take the first supplies from the Black-wall Tunnel—I presume this from What their reports say—got as much water as its directors believe they require. Well, if you look at the evidence upon which this Bill is founded, you will see the most diverse views of the various water companies as to what should be done, and what is necessary to be done; but at the same time, generally, you will see this expression on their behalf before the Royal Commission,' that what they would do on this account would only be to meet the demands of public opinion, rather than the demands of any essential public necessity. Well, what is the principle upon which this Bill proceeds? It proceeds on the principle of supplying the East London Water Company—for that is what you must focus your eyes upon—with water which is to be given to it from other water companies. Now, what I want to know, in the first place, is, if those water companies are to be allowed to draw more water than they are at present drawing from the Thames, or what sanction is to be given to them? Is the sanction given in this Bill, or is it not? Well, it will be obvious that it is open to contention, and is contended—



Stop a moment; you do not know what I am going to say. And is contended that the water companies, although having, some of them, statutory rights to draw a certain amount, are yet not at liberty to draw those amounts unless it is for their own requirements. Now, if that be so, where is the surplus that they can legally give the one to the other? I want an answer to that question, because it is upon the proposition that they have a surplus which they can supply that this Bill is founded. Now, in the claim that was made by the water companies, and is made, I believe, in the Bill which they are introducing, if I am not mistaken—they claim to have an absolute right to draw from the Thames for any purposes a certain statutory amount—or an amount claimed to be statutory— which they at present, in many instances, fall short of. I say again that this is not a clear matter at all—that they have a right to draw any water at all more than they need each for its own requirements. But passing from that, I want to point out that I believe this Bill has taken up a wholly erroneous method of putting the matter right. The East London Water Company has too little water to serve those people whom it at present supplies, but it is at present supplying no fewer than a quarter of a million of persons who, if they did not supply them, could call upon the New River Company to supply them. That is so. There is a district in East London—as indeed is the case in almost all the areas served by the water companies—wherein these two water companies, the New River and the East London, overlap, and in which the inhabitants, if not supplied by the one, could be supplied by the other. The House must know very well that almost every area in London —almost every area—is within the limits of supply of at least two, in some cases three, and in one case four, water companies. If in the case where there are two water companies one was not supplying them, the inhabitants would have the right to call upon the other to supply them. The water companies, as I understand the matter, after looking into their origin, were established for the most part—at any rate the more recent ones were established—as competitive undertakings against the older ones, and they were therefore placed in areas which over-hipped those of the older ones. But the House will observe that in the course of years they have come to terms with one another, each retiring within a more limited district than that which they had the power to serve. But which has retired? The company in all cases has retired which was at liberty to charge rates which had a less maximum than the other, and the company which has been left to supply the district is the company which has leave to charge the highest maximum; and then the consequence is that that area of London which might be supplied by the New River Company, or might be sun olied by the East London Company, is now wholly supplied by the East London Company, and a quarter of a million of persons are being supplied by the East London Water Company who, if it did not supply them, would have leave to call upon the New River Company. And what is the result? The result is that a quarter of a million of persons pay £11,000 a year at the present moment more for their water than they would have if they had been allowed to be supplied by the New River Company— pay, more, they get a much worse water, because everybody knows that the New River Company is one of the very best companies in London—it is probably the best in London. It is a very fine undertaking, supplying good water, and treating its customers exceedingly well; and in a very large number of cases it is not reaching or levying the highest rate of charge that it might levy, although, as far as I know, the East London Water Company does so in practically every instance. I know very few other instances of water companies in London who are either so good in their supply or are so generous in their charges as the New River Company.


Does the honourable Member say that the East London Water Company supplies bad water?


The people in this large area are prevented from having the advantage of the New River Company's supply; and I think anybody who has the choice of getting the New River supply or the East London supply, even leaving the charges out of account, would not hesitate as to which he would take.




That is my opinion. The consumer gets better treatment. Now, Sir, what are we going to do by this Bill? The East London Water Company, having taken on its back the quarter of a million persons who might be supplied by the New River Company, what does it now do? It goes to the New River Company, and it gets New River Company's water under this arrangement to supply indirect to these persons, and it supplies it at a higher price than that at which the New River Company would supply it direct. And what does this Bill do? This Bill stereotypes that position. The proper method of dealing with this matter would have been to confine the area which the East London Water Company supplies within the limit of the powers of that company to supply, and if these portions which might be supplied by the New River Company were cut off from the East London Company it would be a far better and more sensible and more just method of procedure. Then take the case of this Bill—-for this Bill, as I pointed out. accepts the position that the East London Water Company shall supply people in areas which the New River Company would have to supply if the East London Water Company were not there, and then it arranges for the New River Company to supply the water, which it might supply direct, to the East London Company, and thereby charges the inhabitants £11,000 a year more than would be charged if they got that water direct. I say, therefore, that the whole idea of this Bill in dealing with this temporary difficulty is wrong— that the idea should not be to supply water from a cheap company to a company which can charge dear for it, and can collect more from the inhabitants, but it should be to rectify the boundaries of these various water companies' areas of supply, limiting them in their own areas to those districts which they can supply with their water, and not permitting them to go into other areas where a cheaper supply might be given direct. After having first pointed out in this Bill the immense question of the Sinking. Fund, I have now pointed out what I believe to be the fundamental error in the whole Bill. But there is a point in the Bill where it says that— If the undertaking of any of the Metropolitan Water Companies is purchased within seven years from the passing of this Act, otherwise than by agreement, by any public body or trustee, nothing in this Act shall authorise the company to bring into account or make any claim in respect of any advantages conferred upon it by, or resulting from, the passing of this Act. Well, that is, in other words, to prevent this Act increasing the saleable value of these companies. But, Sir, I remember very well when, two years ago, the South-wark and Vauxhall Water Company brought in a Bill which was introduced in this House for gaining access to larger supplies of water, I pointed out that that would increase their saleable value, and when I pointed that out it was stated that a clause of this kind would be introduced, and I pointed out then to the House that, even in respect of that clause, there would be a very large increase in the purchasable value of the company. I pointed out at that time that if the clause was not introduced there would be something like a million of money added to the value of the shares of that company. I found that, of course, that clause had had some effect in reducing that large sum, but whereas the shares of the Southwark and Vauxhall Water Company stood at something like 166 before that Act was passed, they stand at something like 200 at the present time. In other words, more than £300,000 has been added to the value of the shares of that company in the market by that procedure. Now, although that may, perhaps, enable any purchasing body to plead that the market value in these shares is in no sense a sign of what their purchasable or saleable value ought to be, still it is quite clear that the public believe in purchasing these shares, that the value of that company has permanently increased, and I venture to say that, even with this clause, such a Measure as this will raise the purchasable price of these companies. Sir that is only one of the many proofs that we have had in the last few years of the extraordinary disadvantage to the ratepayers of London that the delays in the carrying through of a purchase scheme have created. As we have pointed out, if the water supply of London was in one hand, then all that this Bill contains would be done, and perfectly easily done, without the necessity of an Act of Parliament. This Bill is an endeavour to ride two horses at once: in the one case, to continue the authorities that at present exist—namely, the water companies, for the supply of London: and, in the other case, to introduce some system of unity or amalgamation. Sir, you have before you only two methods really of dealing with the water supply of London. One is amalgamation, and the other is purchase. So far as this Bill goes, it is an effort in the direction of amalgamation. I have endeavoured to show that it is faulty in the most important details, and that it is wrong entirely in the concention of how to remedy the difficulty.

*SIR F. DIXON-HARTLAND (Middlesex, Uxbridge)

Sir the honourable Gentleman who has spoken last has entirely missed the grand principle of this Bill.' It is a Bill which it is difficult to attack by the special pleading to which he has given expression. The Bill is one which has been most carefully considered by the Thames Conservancy: it affects them very closely, and it is one to which they have given their most urgent attention. I can only say that the principle of this Bill is not to increase the powers of the water companies, but only to amalgamate them. Last year I brought in a Bill, myself in this House which had a similar clause to the Government Bill—to allow the various companies to amalgamate during a certain time. That Bill was killed by the London County Council, which objected to it because they said that it did not agree with the Standing Orders. I am only too delighted to see this Bill brought before Parliament this year by the Government. The real object of this Bill is this: We are to take a step which is to make it impossible in future that a water famine should occur in any' part of London, such as has existed, unfortunately, of late in East London. But if we look back upon the question of water famines in East London, we cannot forget this one point. that the East London Water Company applied—in 1893 I think it was—for leave to increase their storage capacity, and that Bill was thrown out at the instance of the London County Council, and if that storage had been allowed, that year the water famine which has lately existed in the East London district, if it had existed at all, would have been very much curtailed to what it has been lately, and which we all so much deplore. I do think that this Bill is a grand Bill in this way, that it will prevent in future any feeling that one company which has more storage than another is unable to help the other company that wants water. I have no hesitation in saying that in the Thames there is enough water to supply London for a great number of years to come, if only it is taken in the proper way—-that is, in the way of storage. What we object to is that the river should be run low in dry times. What we want is that navigation shall not be interfered with—as that is the primary interest and duty of the Conservancy—by having water drawn off when the river is at its lowest point, but that all the companies should take into large reservoirs the water which is running away to waste at other times of the year, and that those reservoirs should be used in times of drought, so as to supply London without diminishing the water required for the navigation of the River Thames. This Bill certainly has that effect. Enormous loss was incurred in East London in consequence of the water famine last year, but that loss would not again be incurred if this Bill became law, because the companies would have the power of helping one another. We think that this is a Bill which thoroughly deserves the attention of the House of Commons, and we understand that the rights of the Thames Conservancy are not in any way interfered with. These companies have a right to draw 130,000.000 gallons a day out of the Thames, but some of them draw considerably less than they are allowed to The difference can be utilised in the way suggested, and if this Bill passes there is no doubt it would be used in that way, to the great benefit of London generally. What the London County Council think about the matter is nothing to us. We do not care two straws whether the passing of this Bill would increase the purchase value of the com- panics or not. What we have to look to is the benefit of London, and to see that there is no recurrence of the recent water famine. It has been proved before the Royal Commission that the Thames water is the finest water that can be supplied by any means whatever to this city, and there is no doubt that if this Bill is passed every part of London will have the advantage of that water. On behalf of the Conservancy, I strongly support this Bill, and I hope it will be passed into law.


I apologise to the House for rising so early in the Debate, but the object of this Bill is so simple, time is of so much importance, the question is of such considerable urgency, and, moreover, the scope of the Bill is so strictly limited to one branch, and one branch alone, of what is called the London Water Question, that I shall not detain the House except at very short length. I hope, therefore, the House will allow me to make an appeal to them to pass a Second Reading of this Bill. My honourable Friend opposite, who spoke first in this Debate, complained, in the first place, that we should take this Bill at so late an hour. We are obliged to cut our coat according to our cloth, and if was not within my power to do what I should have liked to have done—namely, to have taken the Bill earlier. The honourable Member said the Bill was introduced without the due notices that ought to have been given with regard to a Bill of this kind. I frankly acknowledge that that is true, but it was impossible for the Government to give the necessary notice on this occasion, and for this reason—which I think the honourable Member will admit is conclusive—that the Bill is founded and based upon the Report and recommendations of the Royal Commission, and the Report of the Royal Commission was not issued until a period after the date on which these notices ought to have been delivered. It was, therefore, absolutely impossible for me to comply with that rule which usually holds good in these cases. Then the honourable Member complained of that provision in the Bill which exempts the companies for these particular works from the operation of what is known as the provisions with regard to the Sinking Fund. The honourable Member said— Every Bill of late years has contained a clause which makes the public sharers in the profits which are to be provided by this investment of capital. But in this particular case, so far as I have been able to ascertain, there are going to be no profits in which the public can share. The honourable Member threw some doubt upon the opinions of the Royal Commission, but still the Royal Commission has had the opportunity of hearing everything that can be said for and against this particular provision, and the conclusion which they came to was a very simple one. It was this— It was contended before us, on behalf of the companies, that, inasmuch as the money raised by the issue of debenture stock could not yield revenue or profit to the companies, the Sinking Fund clauses, which are founded on the assumption that the debenture capital is expended so as to produce revenue and profit, were not applicable in this case. We think that there is force in this contention, and that this debenture stock might be exempted from the application of the sinking fund clauses. On this point it is really a question between the opinion of the honourable Member opposite and the opinion of the Royal Commission. Though I value the opinion of the honourable Member, I prefer, without any disrespect to him, to rely upon the information of the Royal Commission. Then the honourable Member said the Local Government Board were taking a very great responsibility upon themselves. Well, Sir, that may be the case, and if it is so I am quite ready to take it, having regard to the great object which we have in view. What is that object? That object is to prevent, so far as it is possible for us to do so, any recurrence of the curtailment of the water supply in the East End of London, which inflicted so much hardship and suffering during the prolonged summer upon thousands of the poorer inhabitants. Nobody who has witnessed the results of water famine in the East End of London, as I have done myself, can fail to sympathise strongly with the objects of this Bill. The honourable Member also asks whether the Bill sanctions the taking of more water from the Thames, and he contends that without that provision the Bill would be practically useless. There is no provision of the kind in the Bill, and I am of opinion that it would be improper for me to introduce it into a Measure of this description. But there is surplus water available at the present time, and the purpose of this Bill is to establish connection between the works of the different companies, so as to enable the surplus water of one company to supply the 'deficiency of the other. There is nothing, I think, very surprising in a proposal of this kind being made. The honourable Gentleman says he finds some difficulty in respect to the price to be charged for a supply of water by the New River Company, whose charge is lower than that of the East London Water Company. On that ground he takes some objection to the Measure, but that question will depend entirely upon the price which the New River Company may demand from the East London Company. If there is any difference of opinion between them, it is provided that the whole question shall be settled by arbitration. The consumers will pay no more than they do at present, because the price which the consumers in East London have to pay is settled by Statute. Therefore, their interests will not be prejudiced in the least, but by the passing of this Bill the position of these people in East London will be improved, and the short supply of water to which they are now constantly liable will become a thing of the past. The honourable Member has contended that what is wanted is to rectify the boundaries of the different companies, and then to allow each to supply its own district. But if that were done, the position of affairs would be no better than it is at the present moment, for there is not water enough within the resources of the East London Water Company to supply their customers during a period of drought like that of last year, while there would be no water famine if this Bill passes. This really is a matter of very considerable urgency. The object of the Bill is to prevent the poor people of East London from again enduring all the troubles, hardships, and difficulties they have undergone in the past, and there are no other means, in my opinion, of accomplishing this object than those proposed in the Bill. The Bill in no way affects the larger questions of the future water authority of London, the purchasing value, or the interests of ratepayers and consumers. The question of the water authority is left absolutely untouched by this Bill. On that question I preserve an entirely open mind until the Report of the Royal Commission is furnished, when it will be my duty, if I am still a Member of Her Majesty's Government, to come to a decision upon it. With regard to the second question, the purchase value, there is a special clause in the Bill which provides that it shall not in any way authorise the companies to bring into account, or make any claim in respect to, any advantages conferred by or resulting from the passing of this Measure. Upon the third point, the object and the effect of the Bill is quite certain to be an improved water supply. Honourable Gentlemen need be under no fear whatever on these grounds. With regard to the fourth point, I think I have said enough to show that it is directly to the interest of the ratepayers, and of consumers in particular, that this Bill should be passed. The details to which honourable Members may take exception can be threshed out before the Committee, and, in the interests of the hundreds of thousands of the poorer classes in East London, I appeal to the House to allow this Bill to be read a second time, so that it may proceed on its course, and become law at the earliest possible moment.

MR. BUXTON (Tower Hamlets, Poplar)

I certainly am not going to oppose the Second Reading of this Bill nor to talk it out, but I should like an assurance from the right honourable Gentleman that, so far as this particular Measure is concerned, he looks upon it as temporary, and that it will not be allowed to prejudice the question of the best means of inter-communication between all the companies. This Bill, as I understand the explanation of the right honourable Gentleman, is only intended for an emergency. I cordially sympathise with the object the right honourable Gentleman has in view, and I think he can be trusted to see that the Bill will not be allowed to prejudice the ques-tion of the best means of inter-communication between the companies.

*MR SINCLAIR (Essex, Romford)

Mr. Lowther—Sir, representing, as I do a very large constituency, portions of which suffered very much indeed in con-sequence of the very limited supply of water afforded by the East London Water Company, I hope, at this very late hour, I may be allowed to say a few words on the subject in question. I first of all wish to assure the House that it is not my intention to talk this Debate out. I see that I have exactly seven minutes before me, and in that short time I hope I may express my satisfaction that this matter has been found of such importance that it has moved the Government to adopt some Measure to remedy the great evil occasioned by the drought and the non-fulfilment by Water Company of its obligations. I would like to point out that I do not think the Bill adequate enough for the needs of the case, but it is a step in the right direction, and that is the reason that I will not throw any impediment in the way of the Second Reading, and will reserve to myself, on a future occasion, the privilege of going into the various and many grievances my constituents underwent through the want of that most necessary article to our very existence. I will only mention one point, and that is that the East London Company said that the suffering, in a great measure, resulted from the action of consumers in not having cisterns to store their water. Now, Mr. Lowther, I wish to point out that it is not the duty of consumers to store the Company's water. It is the duty of a water company to give a good and ample supply to the persons who pay for it, and I hold that these cisterns which they advocate have been proved to be a source of the greatest danger to those who have them. They are death traps to those who do not have them cleaned frequently, and in small houses, often inhabited by a number of people, it is most important that the water should be pure, and that they should have enough of it. I am glad. Sir for more reasons than those I have time to show, that the Government is alive to the exigencies of the case, and shall hope that the sufferings of many of my constituents have endured will, thanks to this Bill, be greatly mitigated in the future.

Question put.