LONDON WATER BILL.

HC Deb 27 February 1902 vol 103 cc1307-424

[SECOND READING.]

Order for Second Reading read.

Motion made and Question proposed, "That the Bill be now read a second time."

(4.30.) MR. SYDNEY BUXTON (Tower Hamlets, Poplar)

I am very sure I am expressing the feeling of the House when I say how glad we are that the right hon. Gentleman the President of the Local Government Board is able to be with us this afternoon. It is with great regret I find it necessary to move the Amendment of which I have given notice, and which involves the fate of the Bill. I had hoped we had arrived within the last year or two at such substantial agreement with reference to the particular points of dispute, that some measure might have been presented to Parliament embodying a settlement of the question which in principle, although it might not go so far as we desired, might have been generally accepted, in the hope that it would be improved in Committee. But the speech of the right hon. Gentleman, and an examination of the Bill itself, convince me that the present proposal would not be a real contribution towards a settlement. Taken as a whole, I believe that if the Bill passes in its present shape the last state will be worse than the first. I say this as a water consumer and as a ratepayer of London. Personally, I would rather be at the tender mercies of the water companies than be a party to the buying up of the water undertakings at an extravagant price, and place the administration in the hands of an inefficient body. I should prefer that this Bill be lost, unless it is to be largely amended, and, therefore, I for one shall give it most strenuous opposition.

I do not intend to go into the history of this question. Every Member of the House must by this be tired of it, but I want to say one word in regard to what has been the policy of the Government during their nearly seven years of office. That policy, I think, can only be described as a dog-in-the-manger policy. They have done nothing themselves, and they have prevented the London County Council from doing anything. We have passed in this House during the last few years Bills giving authority to different water companies to spend something like seven or nine millions, and the result is that that money has been largely expended, not on any general scheme for improving the water supply of London, but it has been spent piecemeal and without system. Moreover, the position of the various companies when the question of the arbitration and price crops up will be found to have been greatly strengthened. Again, if the Government had dealt with this question in the earlier years of their office, when the credit of the London County Council was far higher than it now is, that body would have been able to raise the necessary money at ½ per cent. less than that at which it will now have to be raised. There will thus be an extra charge of four or five millions thrown on the ratepayers in consequence of this delay.

What has been the cause of the delay? It has been necessary to educate the Government and its followers on the question. The schoolmaster, in the person of the London County Council, has been abroad. I am not speaking with any brief for the London County Council. I have never been a member of that body. I am speaking solely as a London Member, a consumer of the water, and a ratepayer of the metropolis. But I consider it was rather ungrateful of the right hon. Gentleman in his speech the other day to refer in depreciatory terms to the policy of the London County Council in regard to this matter, because, after all, imitation is the sincerest form of flattery, and the right hon. Gentleman has now, in reference to the most important points in dispute, practically adopted the proposals of the London County Council. Thus I need not argue the question of purchase, which has been put forward by the London County Council for many years past. I need not, I think, discuss either the question of arbitration and price. The principal points as to which we have been in contention for so long past are now admitted. The way the arbitration should be carried out, and how the price should be fixed, has been the crux of the question for some time past. The Water Companies have objected strongly to the different proposals that have been made, because they have calculated that under them they would not give them a sufficient price; while the London County Council has taken the view that if you are to have an arbitration at all, every circumstance ought to be taken into consideration. They have always contended, firstly, that the so-called Land Clauses should not apply in these matters; secondly, that 10 per cent, should not be given for compulsory purchase; thirdly, that there should be a strong Arbitration Court to decide this question; and, fourthly, that the reference to the Court should be open, and without limitation. This Bill practically concedes those four points to which I have made reference. A circular which has been distributed to-day, on behalf of the Water Companies, states their case before the House of Commons. They say that if the proposals of the Government in these terms are accepted they will be reduced to a state of beggary. According to that circular, the hon. Gentleman the Member for Essex will be turned penniless into the street.

The general principles of the Bill are, as I say, practically accepted, but there are some points in the Bill which are obscure, and others which are objectionable. The actual terms of reference under arbitration are not, I think, mad, sufficiently clear. We have nothing in the Bill to show how far the Court of Arbitration is to take into account all the circumstances of the case. When we come to the question of price, the Court of Arbitration ought to take into account not only the present profits, but what is likely to be the future expenditure of the Companies under their statutory obligations—what they would have to spend. Then, as I understand the Bill, neither the Court of Arbitration nor the Water Board have any option in regard to the question of payment for the value of the Water Company, but must pay in 3 per cent. water stock. Now it seems to me that there ought to be two distinct operations. It is within the competence of the Court of Arbitration to ascertain and declare the value of the Company to be purchased, in cash, but it is outside their competence to say what amount of water stock the shareholders ought to receive for their interests. It is quite clear, and upon that we are quite agreed, that for every £100 of declared value, the shareholders are entitled either to £100, or stock to that value. But I think it ought to be left to the Board itself to decide, when the day came, whether they should pay in cash or in water stock; and what form that stock shall take. The hon. Gentleman, in his speech the other day, said this was a point which the Commissioners had left in some doubt. But the Commissioners were quite clear, they say— The price of purchase shall be payable in cash at the option of either the vendors or the purchaser. By agreement the vendors may be paid in stocks of the Board. But the Bill instructs the arbitrators merely to state the amount of water stock the shareholders ought to receive in lieu of their present capital. And here I am in agreement with the water companies. It seems to me that it will be impossible to foretell what will be the market price of this water stock, either at the moment, or in many cases two or three years hence, when the whole transaction is completed.

MR. BANBURY (Camberwell, Peckham) here interjected an observation which did not reach the gallery.

*MR. SYDNEY BUXTON

The arbitration is to take place at a certain time, while the negotiations with the companies will be carried through at different times, and the water stock given as equivalent will have to be the same with regard to those companies, and it is impossible for the Commissioners to foretell what will be the value of that stock at a given time. This will lead to obvious injustice, the stock will either be put too high, which will be disadvantageous to the shareholders, or it will be put too low, which will be disadvantageous to the ratepayers. It is not for parliament to prescribe to the Board as to the price and way they should deal with their stock. The worst point of all is that this unfortunate proposal has led to this state of things. The inference has been drawn that the stocks are going to be treated alternatively, and that for every £100 they are going to receive £100 of water stocks at 3 per cent. It was quite clear the Commissioners themselves thought most emphatically that the value of the stock which the companies ought to receive should be of the value at which the stocks are at the present time and no more. But if it is proposed to give the owners of a fluctuating stock 3 per cent. water stock, a 3 per cent. stock secured on the rates of the metropolis as this stock will be, that would be a most outrageous proposal. Again, there is no doubt that the considerable rise in water stocks at the time this Bill was mooted, and the considerable rise in them since this Bill has been introduced is largely due to the idea that the Water Board, instead of going to arbitration, will come to agreement with the water companies. Such a rise in price is precluded from the arbitration, and the only inference we can draw is that these negotiations will be carried through by agreement between the Water Board and the company. I am not surprised that outside there should be the idea that the price the companies will receive will be a very high one. The appointed day is very shortly to arrive when they must either agree or go to arbitration, and on the one side we shall have the powerful water companies with every knowledge of these matters, while on the other there will be the Water Board, a chaotic body without knowledge or experience, which will be as clay in the hands of the water companies. And the one body that has the power efficiently to deal with these questions—the London County Council—is excluded by this Bill from having any real voice in the agreement, or any voice in the arbitration. I confess I think that those who deal in water shares are right in believing that the result of this Bill will be to temper the wind to the shorn lamb. The reference to the Commission is not so clear and distinct as it ought to be, and under the present position, unless the Bill is amended, it will lend to an excessive price being given for water stocks. These are possibly questions for Amendment on the Committee stage, and I hope the right hon. Gentleman may say that, in regard to these questions, his mind is still open.

I further object fundamentally to the proposal for the creation of this new authority. If it had been carried out on municipal lines, or if the central authority had been recognised, I should have been glad to have come to some compromise upon the matter and to support the Bill, even though it did not carry out my views entirely. But the proposal of the right hon. Gentleman is of such a grotesque character that it is impossible for us to support it. It creates a fantastic conglomeration of heterogeneous authorities. There are seventy-eight different authorities represented, but none of them will really be in a position to carry out a policy as members of this Trust. As regards a large number of the outside areas, the right hon. Gentleman actually has to create fresh bodies to elect those who are to go on this new authority. To this non-representative holy unfortunately is given the power of creating an enormous debt, and of rating all parts of the Metropolis. The proposal of the Government is altogether contrary to the principles of modern municipal life. For years past we have been endeavouring to get our Local Government out of holes and corners, and to bring it into the pure air of direct representation. But the right hon. Gentleman in his Bill seems to go as far away as he can from the principle of direct representation, and to prevent as far as possible public control over this new body. Such a proposal as this would never have been suggested in regard to any of the great municipalities of the country.

THE PRESIDENT OF THE LOCAL GOVERNMENT BOARD (Bristol, S.)

was understood to say that a similar proposal was made two years ago with regard to Sheffield.

*MR. SYDNEY BUXTON

With the consent of the Sheffield municipality. Of course I meant against the assent of the municipality having the largest interest in the matter. In regard to London, there was a central body ready to hand—the body which, if it had been any other municipality, would inevitably have been selected.

MR. WALTER LONG

There is no parallel between the position of the London County Council and that of the municipal authority of any other great town. The London County Connell is an administrative County Council, and the hon. Gentleman says that in any other case in the country the central local authority would betaken. I will take the best parallel to my hand—that of the County Council of Lancashire. If the hon. Gentleman is right it means that the County Council of Lancashire would be given control of the water supply of Liverpool and Manchester.

*MR. SYDNEY BUXTON

I think the answer to that is that although the London County Council is called a County Council it is to all intents and purposes exactly on the lines of other great municipalities. ["No."] At any rate, we say — and the right hon. Gentleman will not deny this — that it is the central representative authority of the Metropolitan area.

In his speech the other day the right hon. Gentleman disclaimed hostility to and expressed confidence in the London County Council, and he deplored that greater interest was not taken in its elections. Surely it is a curious way of showing one's confidence in a public body to strip it of one of its most important prerogatives! Surely it is a curious way of increasing the interest in the elections of a body to take from that body one of the questions in which electors are specially interested! I suppose I must accept the right hon. Gentleman's disclaimer of hostility to the London County Council, and believe that the Bill is not animated by any such feeling. I can only say that the measure is in keeping with the action which hon. Gentlemen opposite and the Government themselves have almost habitually taken with regard to this great central body, But although the right hon. Gentleman declares this is no hostile action, it is, to use diplomatic language, certainly an unfriendly action. I cannot understand, unless there was something averse to the London County Council in the mind of the right hon. Gentleman, why they should have been practically excluded from any control over the water supply of the Metropolis. Further, since the introduction of this Bill, the right hon. Gentleman in a speech has commended it to his audience— Not alone on its intrinsic merits, but because he regarded it as a step in the direction of the reform of London local government. If the ideal of the right hon. Gentleman in regard to the reform of London local government is represented by this Bill, it amounts to this—to strip the central representative body of those rights and duties it is entitled to possess, and to substitute for the principle of direct representation a system of indirect representation. From such an ideal I, for one, entirely dissent.

I have two objections to the Bill in regard to what the right hon. Gentleman called "Inner London." The first is the inadequate representation of the Inner London as a whole. Under the Bill the representation of the whole of London—I am assuming that of the Borough Councils, the City, and the London County Council to be all London representation — is only sixty-seven or sixty-eight per cent., whereas the ratable value is eighty-four per cent.; and the population eighty-one per cent. The argument of the right hon. Gentleman, as I understand it, was that the population of the outer districts was rapidly increasing, and that therefore a larger measure of representation ought to be given to them. But for the sake of a hypothetical injustice an immediate injustice is being done to the representation of the Inner London—and this unnecessarily; for provision is actually made in the Bill for remedying the injustice at the moment it arises, so that there is no reason whatever for this inadequate representation. The matter is aggravated, in my opinion, by the method in which Inner London is to be represented on the new Trust. It is to be through the Borough Councils instead of through the London County Council. As a representation of London—of inner, water, London—that is a pure travesty. ["Why?"] Let me make it quite clear that I am not casting the slightest reflection on the members of the Borough Councils. I congratulate the Government on having created those bodies; I believe they have been and are going to be a great success. But surely it is no more a reflection on them to say they ought not to have in their hands the administration of the water supply than to keep from them such matters as main drainage, the fire brigade, the parks, and so forth. They have never asked for this power, neither have they been consulted. ["They have"]. Of course I stand open to correction.

AN HON. MEMBER

The Stepney Borough Council have put in a petition to be represented on this Board.

MR. JOHN BURNS (Battersea)

Since the Bill was introduced?

AN HON. MEMBER

No, some weeks ago.

*MR. SYDNEY BUXTON

I meant before the Bill was introduced. They had not been consulted, nor had they asked for this power. Of course they had been bribed by it.

MR. WALTER LONG

It is really going too far to suggest that the Metropolitan Borough Councils have been bribed. The hon. Gentleman says that those authorities have made no application, and that they have not been consulted. I did the best I could to ascertain the general opinion of London. I consulted men representing the Metropolitan Borough Councils and the London County Council, irrespective of Party politics; I tried to make myself acquainted with the opinion of London through the London County Council and the Metropolitan Borough Councils.

MR. JOHN BURNS

Officially?

MR. WALTER LONG

I do not quite know what the hon. Member means.

MR. JOHN BURNS

Did the right hon. Gentleman get resolutions from the Borough Councils?

MR. WALTER LONG

No, certainly not. I did my best to make myself acquainted with the general opinion in the way which I believe Ministers ordinarily adopt. The view of the hon. Gentleman that the Metropolitan Borough Councils are averse to these powers being conferred upon them is absolutely baseless.

*MR. SYDNEY BUXTON

Excuse me. I did not say they were averse to them. I said they had never asked for them, and they had not been consulted. The statement of the right hon. Gentleman entirely confirms what I said. He says that he made attempts to discover what the Borough Councils would like, and he acknowledges that those attempts were absolutely unofficial. Certainly, as far as I know, neither the Borough Councils nor the London County Council were consulted officially in the matter. But I agree that the Borough Councils are not likely to reject the proposal. One ought not to look a gift horse in the mouth, and, though I am glad some Borough Councils have thought the proper authority is the central body, no doubt others will be glad of what the right hon. Gentleman has done. I think, however, they will find before long that what they have received is a pure mockery of representation. They, as Borough Councils, will have no control whatever over the Board, no power of criticism, no power of suggestion, no power of veto; and, so far as they have common interests, they would be much better represented by the central body.

I object to this Bill chiefly as being entirely contrary to the principles which we believed were adopted in regard to London government under the Acts of 1888 and 1899, viz., that those matters which affect the whole of the metropolis should be dealt with by the central authority, while those affecting localities only should be dealt with by the localities. I do not like reading extracts, but I must give one from a speech delivered by the right hon. Gentleman the Leader of the House on the London Government Bill of 1899. He said that an essential part of the government of London was— some kind of central authority dealing with matters common to the whole metropolis, and some kind of local authority dealing with matters that could not, with advantage, be confided to the care of the central body. He then defined the former duties as— those matters in which all the parts of the metropolis are alike interested, and which cannot possibly be dealt with piecemeal by the various local authorities. It seems to me that if there is any question which is purely a central question, a question to be dealt with by one authority for the whole of the metropolis, it is the water question. I am confirmed in that view by a speech of Lord Salisbury's on this very point. He is not friendly to the London County Council, As we know, but referring to the question of what ought to be the respective duties of the central and the local authorities, he said— I am told there are certain subjects it is necessary that a central body should conduct and control. I quite admit that there are such subjects. They are principally connected with the main drainage of the metropolis; with the management of the river which flows through this city; and, if you will, with the water supply; in fact, with those matters which depend upon the natural law that water will run down and will not run up. All these things which depend upon those natural laws are necessarily brought under a central management, but if that management were duplicated or multiplied it would cause confusion. Those two quotations from speeches by members of the Government are, I think, sufficient to prove that the water question ought to be left in the hands of the central body; it is clearly a central question, and not one that ought to be placed in the hands of the Borough Councils.

I would point out that the action of the Government itself has been up till now in that direction also. The Bill of 1896, introduced by the Government, was conceived an expressed by lord James of Hereford, who was in charge of it, as one under which, as he said, the London County Council would have a predominant interest in the new body, and he said that they were entitled to receive the very greatest consideration. Every Member of the House who has studied this question knows that Committees of this House have recommended the same thing, namely, that the London London County Council should become the water authority for the whole of the metropolis. The present Home Secretary said with regard to this matter— He had perfect confidence that the London County Council, if entrusted with the water the supply of the metropolis, would perform its task ably and well, and without a particle of anything approaching jobbery. Having established such a body, it was the proper body to be entrusted with administration of the water supply. Surely, moreover, the whole object of purchase is that you should have one area, one supply, and a uniform charge and a uniform rate throughout the metropolis. One of the first duties of this body would be to so arrange the varying charges now existing throughout the metropolis that they would be made more uniform. For this it seems to me quite clear that you want some body, not so much representing local interests, but able to deal with the metropolis as a whole.

I want to know why the Government have abandoned the principles which they have professed for years upon this question. In his speech the other day, the right hon. Gentleman did not use one single argument as to why he has made this enormous change in the general principles to which we are accustomed in regard to this matter. The only argument he used at all in this respect was an indirect one. He said he had taken the sanitary authorities and grouped them together to form this Water Trust. I do not see what the local sanitary authorities have to do with the matter. But assuming that this is the most important element to be considered, I say the sanitary authority which you ought to take is not the local sanitary authority but the supreme sanitary authority like the London County Council, which at present deals with by far the most important sanitary question. Namely, main drainage. Therefore if you are to deal with this question at all from the point of view of sanitation, it ought to be put into the hands of the central body. There was one other argument used by the right hon. Gentleman which deserves very careful attention. Speaking on the 9th of the February the President of the Local Government board said— Let them ask themselves how they were to make the government of London a part of the life and business of the individual Londoner. The London County Council had done good work, and he had not a would to say against it, but it was a little too remote from the individual elector I agree with the right hon. Gentleman in the object he has in view. I think one of the difficulties we have to contend with in London is that there is not enough interest taken in local matters, and if I though that right hon. Gentleman's proposal would increase local interest, I should be inclined to look upon it favourably. But I believe that his proposal will dimini9sh and not increase individual interest in these matters, and will make public control far more remote by placing it in the hands of the Borough Councils instead of in the hands of the London County Council. Let me give a concrete case. My own constituency is grouped with another for the purpose of the Borough Council Act. We have one Borough Council with four representatives on the London County Council. Great interest is always taken in the election of the four members of the London County Council, who are well known and are accessible to any individual in the constituency, and all the electors, if they like, can have a voice in the election of these gentlemen. The Borough Council area is divided into fourteen wards with forty-two members in all. Each ward is absolutely separate, and each member is elected only by the electors in his particular ward.

Therefore the right hon. Gentleman has put the electors in this position, that while in the case of the election for the London County Council, the electors have an opportunity of influencing by their votes the question of the water supply, in the case of the elections for the Borough Council they possess no such influence at all. Under the present Bill one Member out of the forty-two will be selected for the Water Trust and he will represent one of the fourteen wards, while the voters in all the other wards will have no voice at all in the election of this gentleman, and there will be absolutely no public control over his selection or his connection with the Water Board. Then when he gets on to the Water Board he will have no influence at all and he will only be one of sixty-nine. I say that the influence of each individual elector in the constituency of the Borough Council of Poplar will be infinitely remote in regard to the Water Board, he will have no individual power either in the election or selection for the Water Board, and when this representative gets there he will have no influence over the water supply at all. On the other hand, if the London County Council had a predominating influence he would have full control over the matter and would have a voice in the election of those, who would control the water supply.

We are told that one of the reasons for the creation of this Water Trust is the difficulty in regard to the position of the so-called outside areas of London. I venture to say that these difficulties are no greater in degree than those which have been surmounted in our large cities such as Manchester and Liverpool. My view is that if these outer areas do desire to throw in their lot with London, they are entitled to some representation on the body formed to administer the water supply, and the London County Council themselves have admitted to a certain extent that view. But the question is, do the outer areas really desire to be represented; and if so, do they desire the representation which the right hon. Gentleman proposes to give them? It is clear that any such Board as this will lead to enormous difficulties as to assessments and rating. As far as we have up to now been able to acquire a knowledge of what these outside areas desire, their chief wish seems to be autonomy, and not representation in the direction of any Trust of this sort. It is perfectly true that some of them have rejected the proposals of the London County Council, but it is equally true that they rejected the proposals of the Bill of Lord James of Hereford, and before the Royal Commission they were strongly opposed to any scheme such as the Government now propose. An agreement had almost been come to with regard to this matter some three or four years ago between the London County Council and the outside areas, and I am sorry that the Government have departed from that understanding, I do not think myself that there will be any great difficulty in coming to some popular arrangement with those counties who wish to have their own water supply, and in other cases they might be supplied with water in bulk. I do not think that there is any desire on the part of the outside areas of the different countries to be represented on this Water Trust, upon which they would have very little influence, and upon which they feel that London will have the predominant voice.

There is one final point to which I should like to refer, and that is the question of the size of the body which is proposed. I am not now speaking of its composition. That I have dealt with before, and I have endeavoured to show that it will certainly be a very unrepresentative body. I believe that what I am now going to say will meet with the assent of both sides of the House. We are creating a new body for a new purpose, and we all agree that we want that body to be a competent, efficient, economical, and businesslike body. When I ventured to address the House upon the First Reading of the Bill, I said that, in my opinion, this Trust of sixty-nine Members would be absolutely unworkable and unwieldy, and I was glad to see that that idea received the assent of a considerable number of hon. Gentlemen opposite. As far as I have been able to judge by communications with hon. Members, I have not come across anyone who thinks that this particular question of the administration of the water supply ought to be in the hands of such an unwieldy body as that which has been proposed by the right hon. Gentleman.

There is no precedent for proposing such a large body as this. The body proposed in 1879 by Lord Cross, in a very similar Bill in some respects, consisted of twenty-one members. That proposed by the Government themselves in 1896 was to be thirty members, and Lord James of Hereford stated that in so limiting the number you get specific work and personal responsibility out of the members. The Royal Commission itself, after a most careful inquiry, not only into the question of the water supply but into the duties which the Board would have to carry out, had said deliberately that such a body ought not to exceed thirty members. It is well-known that throughout the country where there are Municipal Water Boards or Trusts in no case do they exceed fifteen or twenty members. It is quite clear, also, that if the existing Boards had been amalgamated under one body the number of directors would not have exceeded something like twenty - five. This Board will be a purely business Board for administrative purposes. It will have no question of policy to decide, and, therefore, it should be a business body with a limited number of members. The result of the setting up of such a Board as is proposed will certainly be that it will get into the hands of a paid chairman and vice - chairman and the paid officials of the Board. If you had a small Board of thirty, the members would attend much better and look into matters themselves, but with such a Board as this, especially when they have no common interest, matters will be arranged by a sort of inner Committee of the Board itself. Why is the Board such a large one as this? It is simply because it is based on this purely artificial basis of sanitary authorities. What is going to happen if the Board remains as it is, sixty-nine in number? It is quite certain that claims will be made from many outside areas, for instance, the Thames Conservancy Board, and other bodies, for a large additional representation on that Board, and if you leave it at sixty-nine we will very soon get up to 100, because it is a purely artificial number. It will be almost impossible to resist the claims of Hertford, Surrey, and the Thames Conservancy Board for a greater representation, on a Board like that. But let me point out to the right hon. Gentleman that he can reduce the number without interfering with the principle on which it is based. He has already in the outer area grouped a considerable number of authorities and given them a certain number of members on the Board, and he could carry on his grouping in regard to other districts just has he has done in regard to outer London.

I apologise to the House very much for having detained it at such length—I believe longer than I have ever detained it before—but it was difficult in moving the rejection of such an important Bill as this not to deal with those matters to which I have referred. There are many other matters to which I will not venture to refer now, though I have no doubt other speakers who are to follow will do so. I shall have an opportunity of touching on them in Committee. To sum up, I think that delay has cost us dear. I believe that the financial parts of this Bill will cost us dearer; I believe that the body which the right hon. Gentleman proposes will be inefficient, uneconomical, and non-representative, and that it will cost us dearest of all.

I venture to make one appeal to the right hon. Gentleman. He will remember that on a festive occasion, not long ago, he said when speaking in a room where there were 225 people, that he had no doubt 224 other schemes better than his own might be produced in that room. It is perfectly clear, therefore, that the right hon. Gentleman has produced this scheme out of his own inner consciousness, and that it will be necessary to subject it to criticism and Amendment. What I would ask the right hon. Gentleman is this. He is proposing to appoint what I hope will be a very strong Committee of this House or of both Houses of Parliament. I want him to assure us with regard to those different questions both of finance and the constitution of the body, and especially in regard to its size, that he will maintain an open mind, and that he will allow all the questions I have referred to, and others, to be sent to this Joint Committee in order that they may consider, one and all, the suggestions that (Efferent Authorities entitled to consideration may make with respect to this Bill. After all, this ought not, and I will not endeavour to make it in any sense a Party question. It is one that interests every one of us in London as consumers of water, ratepayers, and inhabitants. In what I have had to say on the Bill, I have ventured to deal with it and to criticise it from a point of view in which I am sure I am at one with the right hon. Gentleman—the desire to create a greater interest in London for London matters, and to place in the hands of the citizens of London those great questions of administration in which they are all so vitally interested.

Amendment proposed, To leave out from the word 'That' to the end of the Question, in order to add the words— 'This' House, while welcoming the adoption of the principle of purchase and the creation of a special court of arbitration, is of opinion that the authority proposed to be created for the purchase and control of the water supply of London, is unsatisfactory and unworkable, and repugnant to the general principles of municipal government.'" (Mr. Sydney Buxton.)

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

(5.20.) MR. WHITMORE (Chelsea)

I wish to support the Second Reading of this Bill. I have on previous occasions to the best of my ability opposed the schemes which have been brought before the House by the London County Council for the purchase of the Water Companies. The hon. Member said he would not refer to former proposals, but I think that in a few words it is necessary to do so. The present position is this. In past years the London County Council have put forward their own particular scheme for the purchase of the companies, and they have proposed that they should become the water authority in the future. At first they proposed that on the new body they should be alone represented. Latterly they have made some concession and stated that they might be willing to co-opt with other representatives from outside bodies. Well, that scheme has always been rejected in this House. Let me recall to my hon. Friend's recollection that a year ago the Bill of the London County Council was rejected by a majority of seventy-seven. Let me also remind him when he asks why Government have proposed a Body other than the County Council that the Royal Commission which inquired most laboriously into this question, reported emphatically and specifically against the London County Council being the purchaser of these water schemes. In my opinion the report of that Commission made a great difference in the whole question, Up till then, as hon. Gentlemen know, I took the view that the Water Companies might be able to amalgamate, and I still say that if I had my own way, and if my idea could be realised, I should prefer such an amalgamation and control to purchase. Those hopes have not been realised and apparently they are incapable of realisation. The Water Companies are either unwilling or unable to realise that view. The Report of the Royal Commission is decidedly in favour of the constitution of a public authority, and it was against the London County Council being that authority. I think the Report must have made an effect on every fair minded man, and on my own mind this Report made a great impression in this respect. That Report laid stress upon the necessity in the near future of a supplementary water supply for London, and it showed that it was about impossible for the Water Companies to carry out any such supplementary provision. I do not myself think it is necessary to immediately construct new reservoirs or new aqueducts to bring any supplementary supply to London, but I do think that it is not well to hesitate long before we create an authority which will have the power, the requisite influence, and the requisite popular backing sanction to enable it to secure the sources from which that supplementary supply should come.

Under these circumstances, I am not ashamed of coming round to the view that purchase is necessary, and that some public authority must be created. What should be the form of that public authority? I have said that the County Council scheme has been rejected by the Royal Commission, and over and over again by this House. Since the Report of the Commission the new Borough Councils have been created. When the hon. Member says that, we are proposing an authority "repugnant to the general principles of municipal government." I do not know what he means by this phrase. I suppose he means repugnant to the principles upon which municipal government is based. But in London there have always co-existed a central body and local bodies. This system was re-affirmed and re-established by the London Government Act of 1899. The Borough Councils, which were then established, and endowed with new dignity and larger powers, have fulfilled the expectations of their authors. It is interesting to find the hon. Member for Poplar congratulating the Government on the creation of these Councils, although he was one of those who, from that Front Bench, opposed the Second Reading of the Bill.

MR. SYDNEY BUXTON

Perhaps you remember this. We had a debate on the Second Reading, and I am glad to say that all the objections we found to the Bill then were amended in Committee. Therefore I am able to say what I have said today.

*MR. WHITMORE

It is very satisfactory to find that the objections were so little fundamental that they were all removed by Amendments. It might be better in this case, also, that the hon. Member should reserve his opposition for the Committee stage, and not give us the trouble of dividing against the Bill now. These Borough Councils have justified their creation. They have increased local life and spirit in this town, and they have to some extent—an extent which we all wish to see increased— brought into local government the men whom we all wish to see taking part in local government. I think the Borough Councils are popular in their own districts. They are more closely connected with the water supply in its daily uses than is the London County Council, and it does seem to me that so far from its being a strange thing that the Government should propose to put on the Water Board representatives from these Borough Councils, it would have been repugnant to the spirit of municipal institutions if they had been ignored, and I have no sort of feeling that in putting these representatives on this board, we are doing anything against the spirit of municipal institutions. But, after all, surely we should think in creating a new administrative Body of whether or not it will be efficient and business-like, at least as much as of whether it accords with some abstract principles. When I deal with this question I hope the Government will understand that I approach it with all good feeling towards the Bill, but there are certain changes I should like to see in the constitution of this body. I should prefer that the number of it was reduced. I do not intend to go into a minute criticism of the apportionment of members.

But there are two more general suggestions I wish to make on this occasion. In the first place, we must all agree that the election of Chairman and Vice-Chairman of the Board is an important matter. That is the first work which this new body will have to do. We should have men of proved ability and devotion to their work. For the practical efficiency of the new body would depend on that. I should infinitely prefer that the Government should, in the first instance, appoint the Chairman and Vice-Chairman of this body. Let it be remembered that this is the specific recommendation of the Royal Commission. The second suggestion I would like to make is that it would be well if all those constituent bodies had the power, not necessarily, but optionally in the first instance, of selecting as their representatives on the Water Board, Gentlemen who were not members of these bodies. Members of these bodies elected at the first elections for the Through Councils might not have experience on the Water question, and certainly they did not come forward as candidates for election to these bodies in the hope of being sent as representatives on the Water Board. I admit that when experience has been gained and when it is known what the duties are, the selection might be restricted to the members of these bodies And now I cannot help alluding before I sit down, to the opposition of a totally different kind which comes from my old friend and colleague a director of the Water Companies. I wish to be perfectly candid with him. I cannot conceive that this House of Parliament is going to be really unfair to the Water Companies; but I do think it right at once to say that what we desire as the outcome of purchase, is that no shareholder should be either the worse or the better off for the sale of his property. This great transaction is rendered necessary by public policy. We do not want to be hard on the shareholder; on the other hand we do not wish him to profit by it. That is the spirit in which we all approach this proposal.

I cannot help saying, in conclusion, that I do not really believe there is much in conflict betweeen my hon. friend and ourselves in this matter. Certainly it ought not to be a Party conflict. We all of us have had to abandon some part of our pre-conceived notions and some part of our previous ideals in regard to the settlement of this question. I have, myself, had to abandon my own preference for a continuation of private enterprise; and I think that hon. Gentlemen opposite must see that they shall have to abandon their ideal of making the London County Council the sole or predominant partner in this water business. The directors must see that they cannot get anything like prizes for their shareholders. Why should not we all co-operate in making this a truly effective settlement? As we must have purchase, why should we not all try to see that that purchase is carried out in an equitable manner? As we must have a popular authority, why should we not see that that popular authority is so constituted that it will be a businesslike body? It is in that spirit and with these hopes that I cordially support the Second Reading of this Bill.

(5.35.) DR. MACNAMARA Camberwell, N.)

There are two main features connected with this Bill that I would like to refer to. First of all, there is the question of the price to be paid for the transfer of the undertakings of the Water Companies; and, secondly, there is the question of the constitution of the controlling and purchasing body. In regard to the question of the price I congratulate the Government upon having at last relinquished the idea of demanding a ten per cent. solatium for compulsory purchase, over and above the reasonable value of the shares. That demand might be reasonable in regard to land, or, buildings, or businesses, or even property possessing sentimental value; but it is quite preposterous in regard to water shares, as the Colonial Secretary indignantly insisted in 1875 in connection with the purchase of the Birmingham Water Company's undertaking The relinquishment of the 10 per cent. solatium is only one of several evidences in the Bill of the fine work done by the London County Council as fiduciaries of the interests of the London ratepayers against the monopolists.

Having congratulated the Government on their relinquishment of this claim, which has been made up to recent times, I desire to say a word)or two about the special scheme of purchase proposed by the Bill. I would like if the terms of the Arbitration Clause were a little more definite and concise. The terms strike me as being rather fluid in respect to this matter. It has been said to-night by the hon. Member for Chelsea that this House has never agreed to certain terms of purchase; but it is the fact that in 1895 this House passed the Second Reading of the London County Council Water Bill, by a majority of 187 to 149. That Bill went upstairs, and its Purchase Clause was hammered out, and a compromise was arrived at in regard to this very question of purchase. It first, that there was to be a special arbitration similar to that in this Bill, and second, that definite orders were given to the Arbitrators. The Clause as adjusted read:— Be it therefore enacted—there should he pail by the Council for the transfer of the undertaking such a sum of money as the Arbitrators determine to represent the fair and seasonable value of the undertaking, together with such further sum as the Arbitrators may award to meet the cost of re-investing such money. The Committee thus secured substantial agreement.

The scheme of this Bill is in many respects admirable. The arbitration clause is exceedingly reasonable. We have it laid down that the Court of Arbitration— In determining the amount of water stock to be issued to any Metropolitan Water Company, shall not make any allowance in respect of compulsory sale, and shall not take into account any enhancement or depreciation of the market value of any stock or shares of the Company, which in the opinion of the Court was caused by or resulted from the passing or the anticipation of the passing of this Act, but the Court may make such allowance as they think just for covering any expenses which have been or are likely to be incurred in consequence of the passing of this Act, and which ought, in the opinion of the Court, to be borne by the Water Board. Now that is all very reasonable, so far as it goes, but the Arbitrators have a perfectly free hand in regard to the amount of money they may award. It may be only a matter of phraseology, but I would like the Arbitrators to be definitely tied down to such terms as were arranged in the Bill of 1895. That is to say that they should award such a sum of money as they, the Arbitrators, determine to represent the fair and reasonable value of the undertaking, and of course the cost of the re-investment of the money. There is no such provision in the clauses of this Bill, admirable though it be.

I want to make this further suggestion. This Bill provides for, a settlement either by agreement or arbitration. I have such little confidence in the constitution of the Board that I should like to eliminate from this Bill altogether settlement by agreement. I would like it to be definitely and exclusively stated that it must be a settlement by arbitration. I have every confidence in the Board of Arbitrators—Sir Edward Fry, Sir Hugh Owen, and Sir John Wolfe Barry, but none in this grotesque, unwieldy, non-representative body to effect a settlement by agreement.

I turn now to the other fundamental feature of this Bill—the consti- tution of the Water Board, The proposed Board is absolutely without precedent in any similar case I reminded the House on the First Reading of the Bill, although my statement has been, challenged here to night, that the great provincial boroughs represent absolutely the case of London in proportion, They are great urban areas surrounded by rural zones. That is the case here, although, of course, you are dealing with much larger areas. I do not know a case, although I gather that the President of the Local Government Board does, where you have a great urban centre surrounded by rural areas and where you have a joint board to manage the water supply. There are cases where a number of boroughs are contiguous that there is a joint board. But take Cardiff, Nottingham, Plymouth, Glasgow, Huddersfield, and Bradford, and Leicester—all these supply a wide area outside the municipal area, but there is no claim for representation of the outside areas on the Water Committee. Bradford supplies pretty nearly as many people outside the municipal area as inside—the former numbering 205,000, and the latter 231,000.

MR. E. FLOWER (Bradford, W.)

The Corporation of Bradford propose to observe Shipley.

*DR. MACNAMARA

My information is from the Town Clerk of Bradford. But I am not aware that there is any proposal to give Shipley any representation on the Bradford Town Council, and there is no suggestion that the outside areas should be represented on the Water Committee. There is also a similar case in the City of Manchester, where the population served with a water supply inside the municipal area is 529,000, and outside is 319,000. There is the curious case of Bolton, which supplies water to a population inside the municipal area of 120,000 and outside of 130,000, yet in neither of these cases have the outside areas any representation on the Water Committees. I entirely sympathise with the desire of the outside areas to be represented; and the London County Council Bills have always provided for their co-operation to the Water Committee of representatives from these outside areas. It has been said tonight, I think by the hon. Member for Chelsea, that the Government could not make the London County Council the purchasing and controlling authority because all the previous Royal Commissions and Select Committees reported in favour of a composite Board. That is not quite the fact. Lord Cross's Commission in 1880 reported that— In the absence of any single municipal body to which these functions could be committed, a Water Authority of a representative character should be constituted. I am, therefore, entitled to argue that had the London County Council been then in existence the Commission would have recommended that it should be entrusted with the duty of purchasing and controlling the Water Supply. Again, in 1891, Sir M. White Ridley's Committee, reported— That power should be granted to the London County Council to expend such further sums as may be reasonably necessary, in order that they may examine thoroughly for themselves, as the responsible municipal authority of London, the whole position of the Metropolitan Water Supply, and come to a conclusion as to the policy which, for financial and other reasons, it is desirable to adopt. And (2) that, if they should so resolve, they should have power to promote a Bill or Bills in Parliament for the purpose of constituting themselves the responsible Water Authority for London, acting through a Statutory Committee, appointed either wholly by themselves, or partly in conjunction with the Corporation of the City of London, as suggested to your Committee on behalf of both bodies. Such Statutory Committee to comprise a certain number of Members possessing special knowledge and qualifications, not necessarily Members of the body or bodies appointing. I do suggest to this house that the Government scheme for this composite body of sixty-nine persons is curiously at variance in what was understood to be Government policy in regard to Local Government. Throughout the whole of the speeches in support of the Local Government Bill for England and Wales in 1888 there was this theme running—we must get unification, simplicity; sweep away anomalies, and consolidate the local government of the country. Again, in 1899, when the First Lord of the Treasury introduced the London Local Government Bill, we had the same endeavour to consolidate, to unify, and to sweep away anomalies, and the creation of this new anomaly is curiously at variance with everything that was said in reference to these two Local Government Bills. A quotation has been given by my hon. friend the Member for Poplar from the speech of the present Home Secretary in introducing the Bill for England and Wales as President of the Local Government Board. May I be permitted to make a further quotation, which seems to me to bear very aptly on the proposed constitution of this Board. The Home Secretary said— We feel that no system of delegated elections would, by any means, prove satisfactory. We believe that it is essential that whoever shall he the representatives of the constituencies on the County Councils should be checked by the healthy test of direct contact with those who elect them. I venture to ask the Government to apply that touchstone to the particular proposal before the House. I think a quotation has also been made from the speech of the First Lord of the Treasury in introducing the Local Government Bill for London in February, 1899. May I make another. The First Lord on that occasion said— Secondary election— and secondary election is the scheme of this Bill— has not a very good record behind it in the case of the Metropolitan Board of Works, and on that account it would excite, not unnaturally, prejudice in the minds of the London ratepayers. The First Lord concluded— I feel confident of this, that we are proceeding on safe and permanent lines because we are taking full advantage of the experience of the past. Having regard to the reference to the Metropolitan Board of Works, I really wonder why the President of the Local Government Board did not conclude his speech with a comment something like this: "We feel our scheme is bound to fad, because in the constitution of the Board we have refused to profit in any way by the experience of the past, as shown by the history and fate of the Metropolitan Board of Works."

I ask the House to look at the proposed constitution of this Board. I will not discuss the representation of the outside areas. I believe they ought to be represented, and I am strengthened by the fact that the County Council has always been ready to accord representation to them. What I want to come to is the extraordinary proposal to secure the representation of the Borough Councils. I do emphatically protest against that from the very beginning. The basis of the representation is bound to be grotesque to the last degree. This is the result of endeavouring to bring Borough Councils into work in which they have no claim to be engaged. The Borough of Camberwell—part of which I have the honour to represent in this House—has a population of 259,339, and is to have one representative on the Board; the Borough of Kensington with a population 176,628 is to have two; the City of Westminster, with a population of 183,011, is to have two. I am well aware of the fact that rateable value comes in as well as population, and I will deal with that in a moment. Chelsea, Holborn, and Stoke Newington have one representative each with an aggregate population of 184,514, or 75,825 less than Camberwell, which is only to have one representative. Having regard to the comments I have heard from hon. Members opposite in respect to anomalies in representation, I think this is rather a neat thing in the way of anomalies. I have said rateable value comes in, but I personally very strongly object to fixing representation on the joint basis of rateable value and population. I object to mixing up these two things; so far as I am concerned population is the only basis of representation. It is good enough for this House, and ought to be good enough for the Water Board. But I admit they are mixed up, and I have no doubt that that is why you get these anomalies.

But, even if I take the two together, I am entirely at a loss to understand how the representation is arrived at. I can find no reasonable basis. For instance, Bethnal Green and Stoke Newington together are to have two representatives. Their rateable value is £860,034, whereas Camberwell, which is only to have one representative, has a ratable value of £1,273,473. I confess I do not know what Camberwell has done to be treated in this way by this Government, having regard to the fact that two of the three representatives of Camberwell in this House sit on the opposite side. I merely mention this fact to show the difficulties the Government get into when they endeavour to settle the basis of representation by bringing in the Borough Councils. Reference has been made by my hon. and gallant friend the Member for Stepney to the fact that the Borough Councils wanted all this. I have taken pains to ascertain the opinions of the Borough Councils since the First Reading, and I find that of the Borough Councils which met and passed Resolutions, this is the result. Battersea Borough Council is against this scheme. That is not surprising, but it is the fact. The Chelsea Borough Council have decided to take no action. The Camberwell Borough Council is against this scheme, I may say by thirty-five votes to twenty-two, notwith-star ding the bribe which was mentioned by tire mover of the Amendment tonight. The Fulham Borough Council is against the scheme, the Shoreditch Borough Council is against it, the Woolwich Borough Council is against it; and—I have got one ewe lamb—the Wandsworth Borough Council is for the scheme. So that notwithstanding this offer of aggrandisement which is held forth, of eight Borough Councils six are absolutely opposed to the scheme, which is a self-denying ordinance on their part.

MIL GOULDING (Wiltshire, Devizes)

They have all Radical majorities.

*DR. MACNAMARA

I think the hon. Member is mistaken as regards Woolwich.

MR. GOULDING

There is certainly not a Conservative-Unionist majority in Woolwich.

*DR. MACNAMARA

The Councils with Moderate majorities must have been very dilatory, because we have not heard any expression of opinion from them yet.

MR. GUTIIRIE (Tower Hamlets, Bow, &c.)

Would the hon. Member excuse me; the hon. Members cannot be so much against the scheme. I am a Member of the Poplar Council, and was not apprised of any such Resolution.

*DR. MACNAMARA

Then the best thing is to state the Resolution of the Poplar Council. They petitioned the Government in favour of a measure dealing with the Water question, and in that petition they declare their opinion that no system will be satisfactory which does not provide for a majority of London elected representatives on any authority that may be constituted. I only suggest that this is cold comfort for the Government. The facts I have been able to quote show that there is absolutely no warrant—

MR. WALTER LONG

What about the others?

*DR. MACNAMARA

I am giving all I have got. There is no warrant for the presence of the Borough Councils on the Board. The rate will be a county rate, and the persons responsible for that rateare the County Council. I do not speak of the personnel of the Borough Councils. It is probably as good as that of the County Council. It is a fiscal reason with me entirely. We do not come to the boroughs and say, "You must contribute so much." We are upon a county rate for the whole of London, and that being so, there is no reason why the Borough Councils should be represented on the Purchasing Board. They may be in the management, and no doubt the County Council may invite them. The Borough Councils were not in force a month before we found them in friendly conference at Spring Gardens, and they exercised such pressure as induced the water companies to withdraw the abortive regulations which they were thrusting on the people of London. That is not the sort of conference which the Government wants. I am sorry to strike a note of discord, and I sympathise with the hon. Member for Chelsea; but I think I see behind this an endeavour to induce Borough Councillors to set themselves up against County Councillors. That is my deliberate view in the matter. Unfortunately, I had considerable experience as a member of the London School Board, and I say deliberately that if there has been one clear purpose running through the policy of the present Government in regard to the two great municipal bodies in London—the School Board and the County Council—since 1895, it has been ingeniously and insidiously to throw the apple of discord between these two bodies in the hope that when these bodies were squabbling progress would be retarded. When I see this new proposal to bring the County Council and the Borough Councils on to one Board, I cannot help seeing in it an endeavour to set these bodies by the ears so that progress may be retarded. So far as the endeavour to which I have referred to get the School Board to squabble with the County Council, it has been a most conspicuous failure, and I believe it will remain a failure until the end of the chapter. In conclusion, if it is intended, I certainly trust that this proposal to set the County Councillors and the Borough Councillors by the ears will be in the result as successful a failure as has been the deliberate endeavour to set the School Board against the County Council.

(6.0.) MR. BOULNOIS (Marylebone, E.)

I find myself to-day in a somewhat unpleasant position. I find myself opposed to the Government and Party to which I have given my allegiance for many years now, ever since I have been in this House, but I have a duty to perform, and I hope the House will bear with me with patience while I endeavour to do it. The mover of the Amendment, the hon. Member for Poplar, and others who have followed him, have dealt with portions of the Bill. I propose to deal with that portion which vitally affects the interests of those whom the Bill proposes to get rid of—interests which are very large and of enormous value. At the outset I say that this Bill does not treat fairly and equitably with those whose interests it proposes to expropriate, and I shall endeavour, as shortly as I can, to give the reasons which lead me to that conclusion.

From the point of view of the Water Companies of London there are three main objections to the Bill. It sets up in the first instance an unheard of and novel Court of Arbitration, and an unheard of and novel mode of arbitration. The Bill also establishes a principle of expulsion which, on the face of it, I think I may describe as unjust and unreasonable. The third objection is that the Bill entirely ignores and disregards nearly all the recommendations of the Royal Commission presided over by Lord Llandaff, and which was appointed by the very Government which is bringing in this Bill. As to the Court of Arbitra- tion, the Bill proposes to set up a board of three eminent gentlemen who are named in the Bill, and they are to have absolute despotic power from which there is no appeal. [Cheers.] That, I am sorry hear, is cheered by my hon. friends behind me, who I always thought were Constitutionalists. Here is a Court of Arbitration set up from which there is no appeal. I believe there are only two instances of arbitrators being named in a Bill at all. One was in the case of the London, Chatham and Dover Bill many years ago, and the other was the case of the European Assurance Society. But those were not purchase cases, and neither was analogous to the Bill before us. Those Bills dealt with the internal and domestic arrangements of the undertakings themselves, and not with purchase. I do not wish to weary the House by quoting the clause of the Bill which sets up the Court of Arbitration and gives it such powers, but I will undertake to say there is no instance on record where any man with property has been dispossessed of it without a right of appeal to a Court of Justice, and everybody who knows anything about arbitration knows that an arbitrator may be fanciful, capricious, or arbitrary, and may refuse to hear evidence; and may refuse to hear counsel, but either party to the arbitration has a right to go to a Court of Justice, and the arbitrator may be compelled to alter his judgment. But in this Bill the arbitrators are absolutely uncontrolled, and enormous powers are given to them from which I say again there is no appeal.

Again, in the Court of Arbitration no basis is laid down—no principle is established—upon which they can deal. I was very much surprised to receive a pamphlet emanating from a society which describes itself as the Metropolitan Division of the National Union of Conservative and Constitutional Associations. That pamphlet, which I received this morning, says: "The truth is, the Bill provides an appeal on questions of law, but of course not on questions of fact." Why of course? The writer of this must be a very ignorant person, and he can have no real knowledge whatever of the ordinary method of arbitration. I can only say it is surprising to me that a body which calls itself a Constitutional body should send out statements which are so calculated to mislead. I undertake to say there is not a legal member of the House who will deny what I say with regard to the Court of Arbitration, that there has never been an occasion in which an Arbitration Court has been set up from which there is no appeal to a Court of Justice on points of fact, and I say it is exceedingly dangerous to establish such a precedent by setting up this Court, and giving to it powers absolutely uncontrolled. The London County Council, as we know, has already a Bill for the purchase of the Metropolitan Water Companies, but in the arbitration clause of their Bill the London County Council do not go so far as this. I observe that the Government has copied a good many ideas from the London County Council with regard to this Bill, and in this particular point have gone one better.

I should like to remind the House that in this matter the Water Companies have had neither voice nor choice in naming the arbitrators. Usually where people go to arbitration, one side names one arbitrator and the other side names the other, and the two arbitrators name the umpire, and if they cannot agree upon an umpire, it remains for either a public body or for some highly distinguished individual to do so. But this course is not taken in this case at all. In this case the vendors—that is the Water Company, if I may call them the vendors, I am rather inclined myself to call them victims—have no voice or choice in the matter. We have been compelled to accept this Court of Arbitration, and I am not going to say one word against the members who compose the Court, but they are selected without any reference or choice being given to the Companies. I could have wished that my right hon. friend would have consulted the Water Companies with regard to that, and with regard to one or two other points. He admits that he consulted the Borough Councils, or some of them, at all events, and other outside authorities as to this Bill, but the Water Companies have had no consultation whatever with my right hon. friend. We could only see the Bill when it was put before us. Of course, with regard to the suggestion thrown out by the hon. Member for Chelsea, I can say nothing except that I am only dealing this afternoon with the Bill as it is before the House. Hitherto, in the case of all property which has been acquired compulsorily by the Government, or by a municipality, or by a public comp my, or by an individual, arbitration has always been taken under the recognised and established laws and customs of the country, known as Lands Clauses, and I cannot conceive myself why an exception has been made in this case. I ask myself, is it because of the magnitude of the transaction, because, if so, I think the reverse ought to hold good. I cannot conceive that any difference ought to be made in the case of one person who may have £1,000 worth of property, and another who may have millions of pounds worth of property, which it is proposed to acquire compulsorily. I think it is a monstrous doctrine to set up, that because the figures are high in this particular case, that what have been hither to the unrestricted rights of property, should be disregarded.

Then I ask myself—Is it because the Water Companies have not done their work properly? There is no evidence of that. On the contrary— [A Voice: East London.] East London, says some hon. Member. Yes; but whose fault was that? Not the fault of the East London Company, but indisputably the fault of the London County Council. There is no evidence that the Companies have not done well. The late Royal Commission in their Report distinctly say— The Companies have performed their duties fairly well, and in some cases extremely well, and I would like to remind the House that during the whole of last summer, when there was a severe drought, and when nearly every provincial town in England and Scotland which was provided with water by the municipalities, was suffering from what is called a water famine, in the metropolis there was no shortage whatever, and no single individual went without a copious supply of pure water for a single hour. Therefore it cannot be said with any justice that the Companies are in default and that we ought, in consequence, to be treated as defaulters. On the contrary I maintain that the Companies deserve the thanks of the community. They brought water to London many years ago, when no one else either would or could; they went without dividends for years and years; they have been subjected to such restrictions and obligations as no other industrial undertaking in this country has ever been subjected to; they have been hampered and worried every year by Parliament and by the London County Council, and notwithstanding all that they have been successful. It is because they have been successful, and because they are successful, that the covetous eyes of either the municipalities or the Government, or some other body which thinks it would like to acquire a good going concern, are cast upon them, and that this Bill is brought in.

Now, I do urge that the usual conditions of compulsory sale should not be departed from, particularly because investors have placed their money in a concern under Parliamentary sanction and Parliamentary protection. Numbers of people—small holders — have been investing their savings because they believed they were protected by Parliament, and many trustees hold stock for widows and children. I maintain that a widow with £50 a year in stock of the Metropolitan Water Companies, ought to receive not less than £50 a year in stock of the new Water Board. I do not ask for more, but I do not think I am justified in seeking less. The income of the stock holders of the Water Campanies ought to be secured, and I believe there would be no difficulty whatever in doing that, by allocating new water stock sufficient to produce the present average income obtained by stock holders from the Water Companies.

I should like to press my point home with regard to the mode in which the Government propose to take over the Water Companies. Will the House listen to the recommendation of the Royal Commission with regard to compensation? In paragraph 48 they say— We see nothing which leads us to suppose that if these undertakings are compulsorily purchased for the public advantage, Parliament will sanction any exceptional provisions— There are exceptional provisions in this Bill—absolutely exceptional. —or depart from the terms of arbitration usual where the property of private persons is taken from them against their will. We I should, therefore, assume that, if the policy of purchase is adopted, the price of the undertakings will be determined by an arbitration conducted on the lines of the Lands Clauses Act; although, possibly, in view of the magnitude of the undertakings, a different constitution of the tribunal may be adopted. The Royal Commission put forward the view that we ought to have acquired under the recognised and established custom of the country. Then, in a debate in March, 1896, on the London County Council Purchase Bill, my right hon. friend the Secretary for the Colonies said— The Water Companies have never been obstructive. They have always said, We admit that the public interest is supreme, and, provided that private rights are respected in the same sense in which they have always bean in the transactions of the House, and that those for whom we are trustees will be fairly treated in any purchase arrangements, we are prepared to dispose of our property.' There you have the three contentious interests (i.e. the interest of the London County Council, the interest of the authorities of the adjoining counties, and the interest of the Water Companies), and I maintain that they can all be conciliated. The Water Companies are conciliated if you give to them the same arbitration clause which has been given in every other case in which a Water Company has been purchased by a Municipal Corporation. An hon. Gentleman said that under these arrangements, Municipal Corporations have paid exorbitant prices. I do not know to what corporation or to what proceedings he refers. That is not true about Birmingham. In the case of Birmingham, we had precisely the arbitration clause which is asked for by the London Water Companies, and although we did not find it necessary to put the clause into effect, because we made a private agreement, yet, certainly, we never contended that the clause imposed upon the ratepayers, or was likely to impose upon the ratepayers, any exorbitant price, and as far as my knowledge of similar municipal undertakings goes, there is no case in which more than a fair price has been paid under an arrangement of this kind. Those are weighty words, and I attach considerable importance to them, coming from my right hon. friend. On the same occasion, my right hon. friend the Member for Sleaford, then President of the Local Government Board, speaking of a Bill introduced in the House of Lords, said— To ensure the speedy passage of the Government measure, it was, of course, in the first place, necessary to disarm the opposition it would be likely to encounter. He soon discovered that to do this it was necessary for the County Council to abandon the arbitration clauses which were at present in the Bill, and to rely on the ordinary law. Then I have one more quotation—I hope I am not tiring die House. A strong precedent for the incorporation of the Lands Clauses Acts in the Water Bill seems to be supplied by the proceedings in Parliament in 1890, on the London Streets (Removal of Gates) Bill. It was generally agreed that the gates and bars which the Bill sought to remove were an inconvenience to the public. It was exceedingly doubtful whether any claim for compensation could be legally established by the person affected, and I believe that, in fact, it turned out afterwards that no such claim was made. Moreover, the Committees of both Houses which considered the Bill, refused to insert a compensation clause. Nevertheless, the House of Lords, on the Third Reading of the Bill, insisted on the insertion of a clause, providing that, if any land should be injuriously affected, compensation should be made under the Lands Clauses Acts, and this Amendment was accepted by the Commons. I wish just to commend some remarks made by the Prime Minister when the Bill was discussed on Third Reading in the House of Lords. He said— I can quite understand the force of the observation which was made by my noble Friend the other night, that it is undesirable to sanction the principle, even in a small matter, that property may be taken away without giving the ordinary right to obtain compensation which is given in every other case. … When. ever you … take land compulsory it is your habit to incorporate the Lands Clauses Acts of 1845, in the Bill which takes it. There is one other point in regard to the position of the Water Companies. The Bill establishes a principle of transfer which is very novel indeed. It proposes to take over the whole of the undertakings on the 1st January next. I do not want to use any strong language about that, but it is ridiculous on the face of it. It is a physical impossibility. ["Why?"] I will tell my hon. friend why. We will assume that the Bill becomes law and receives the Royal Assent in August. After that, everybody goes away for a couple of months. That brings you to the months of November and December. This Board has to be elected, it has to be put together and start operations; the Chairman and Deputy Chairman have to be elected, and the whole machinery has to be set in motion for carrying out the work of the new Board. Therefore I say it is a physical impossibility that that date can stand. But I do not press that point, because under the Bill the Local Government Board have power to postpone the date, and I have no doubt they will find it right to do so. I contend however, that even with the postponement, the proposal of transfer is most unfair. What does it mean? The Companies are turned out. The hon. Member for Poplar made fun of the statement contained in the reasons set out by the Water Companies against the Bill, that they were turned into the street. ["Penniless."] I am coming to that. It is perfectly true. I do not say that we remain penniless for ever. But for the time being we are turned into the street; our books are taken, our offices are taken; our staff is taken; everything we have in the world is taken from us.

AN HON. MEMBER

Your balances at the bank?

*MR. BOULNOIS

I will come to that. All I can say is that it does strike me as a monstrous proposition that we should be thus deprived of absolutely everything, and prevented really from conducting our case satisfactorily before the Court of Arbitration. ["Shame."] It is true that we can go cap in hand to the Local Government Board and ask for money. But it is our money, not theirs; it belongs to nobody but the Water Companies. We can go and ask for a little money to carry on the arbitration, and we can go and ask for facilities for doing what we wish to do in the matter. I ask, under what principle of justice or right are we to be deprived of our undertaking, practically lock stock and barrel, before even the price is fixed and the terms of settlement arrived at? How can a Board of Directors carry on an arbitration under such difficulties and restrictions? I confidently hope that my right hon. friend will see his way at the proper time to make some Amendment in the direction I have referred to. In this connection it has been said that under the Lands Clauses Acts power is given to take land before the price is fixed. We all know that. But the power is restricted. Money has to be lodged, and the amount to be lodged is ascertained by a valuer properly appointed, and there are also other safeguards. I do not know of any instance in which everything a man has in the world is taken from him in this way—his books, his staff, his offices, and even his securities. The analogy of the Lands Clauses Acts in regard to that power does not bear on the point at all.

So much for the attitude of the Water Companies. I have no doubt that my hon. friends who are associated with me in these enterprises will deal with the matter far more ably than I have been able to, from the point of view of the Companies. But there is one other aspect to which I wish to direct the attention of the House. I maintain that purchase is inadvisable altogether, and that no Bill is necessary. I have been told that my attitude as a London Member and as Chairman of the Water Company which supplies the district I represent is not consistent. I may say that in regard to that I have been up for election four times and have been returned by increased majorities each time. I believe that in opposing this Bill I am acting in the best interests of London ratepayers generally and of those of my own constituency in particular. I have maintained all through and I maintain to-day that the ratepayers can derive no benefit whatever from any transfer of the Water Companies to any Board whether it is to the London County Council or to a Trust. As pointed out by the Royal Commission, there are two factors which will operate against this. The Commission point out that the water rates throughout London must be equalised, and it is quite certain that in the process of equalisation the rates will not be levelled up but must be levelled down. I do not wish to tire the House, but on page 59 of the Report of the Royal Commission I want to draw attention to paragraph 143, which reads as follows:— It will be difficult, if not impossible, to maintain these varying rates of charge, if the purchaser is an elected body equally representing all the districts of London, which will have equal claims to consideration. Mr. Dickinson himself, who spoke with commendable caution on this subject, thought the County Council would be bound to establish a uniform rate over London in the course of a few years after purchase. He did not think they would be bound to reduce the water rates to the lowest at once, although it was probable that that was what it would have to come to. He thought it would be a gradual process; that a certain sum would have to be raised by a general water rate (on the ratepayers); and that banks and similar establishments, which now get easy terms, would have to be charged more for water. We are disposed to think that the process would be more rapid than Mr. Dickinson allowed himself to hope, and that the County Council would very speedily find themselves driven to reduce the water charges to the lowest level. It was estimated before us that to reduce the charges of the different Companies to the level of the West Middlesex Company's statutory charges, which are 10 per cent. above their present actual charges, would mean a loss of water income amounting to £161,155 per annum, in the administrative County of London; and, if the same levelling down took place throughout Water London, the loss of income would be approximately £250,000 per annum. That is a very large sum, but in addition the Royal Commission has pointed out that there must be a Sinking Fund provided, and they state that it should be on the basis of repayment in sixty years. Putting the value of the water companies at £42,000,000 that would mean that upwards of £260,000 a year must be set aside and that with the £250,000 mentioned and the equalisation of the water rate means £600,000 a year. That money has got to be provided somehow, and it must be met with an increased water rate or a borough rate. I should like to observe that there is no provision in the Bill for the making of a water rate at all, and the policy of this new Board might be to distribute water for nothing. That is a doctrine which has been preached from a Socialistic platform in Trafalgar Square. It is pretty certain that that is not the policy of the present London County Council, but I do not know what the large ratepayers will think of it when they have to pay an extra borough rate. I refer more especially to brewers and other traders who have their own wells and use no water at all from the water companies. So much for London in general as to the benefits they would get from a transfer.

I wish to say one word as to the particular district which is served by the company of which I am the Chairman. In the West Middlesex dstrict the water rate is the lowest in all London. In that district a man who has a house rated at £100 a year pays £4 10s. 11d. for his water whereas, in the East End of London in the same rated house he would pay an annual water charge of £7 17s. 6d. which shows a very large difference. The West Middlesex Water Company have given a rebate or discount of 10 per cent. to all their consumers, and that 10 per cent. discount would probably today have been 15 per cent. if they had been left alone, and not have been hampered by all kinds of legislation. The consumers in my constituency will be deprived of those benefits. Very shortly afterwards according to the Report of the Royal Commission the equalization of the rates will come in, and the consumers in my division will have to pay so much in the pound on the borough rate. I daresay that many people are surprised that the people in that borough do not rise and oppose this Bill I may say the reason why they do not is because they have listened to the sophistries and claptrap which issue from Spring Gardens. And of course I am looked upon as a prejudiced and interested person. Recently a lantern lecture was delivered in the Town Hall of the borough of which I have the honour to be Mayor, and the lecturer was Mr. Dickinson, who is quoted as one of the greatest authorities on the Water question certainly in Spring Gardens and frequently in this House. At this lantern lecture the President of the Royal College of Physicians, Sir Thomas Barlow was in the Chair, and during the evening Mr. Dickinson informed his audience that he believed that the London County Council could supply Londoners with water at the cost of 1d. a week per family. When such stuff as that is talked by a recognised authority upon the water question with the President of the Royal College of Physicians in the Chair giving all his importance and authority to the occasion, small wonder is it that Londoners prefer that the Water Companies should be expelled and those who offer more liberal terms should come in and that water should be supplied upon at very modest price which I have mentioned.

I am afraid that I have been detaining the House, but I think this is a bad Bill and it is because I think it is had that I oppose it. I think it is a bad Bill for the unfortunate people whose property is to be appropriated, and I think it is bad for the ratepayers whose burdens it will increase. I also think it is a bad Bill for the Government whose reputation it will diminish. I may say in all honesty and sincerity that I never thought I should have lived to see the day when a Bill directly attacking property and destroying valuable safeguards would be brought in by a Tory Government. I do not despair of inducing my right hon. friend the President of the Local Government Board to place us in a better position of security. If I fail, then I fail. If upstairs I cannot get my right hon. friend to listen to reason and to give the water companies some Amendment which I think would be only, fair and right then I shall ask here in this House for justice and fair treatment, and. I am satisfied that I shall not ask in vain.

(6.42). SIR ROBERT REID (Dumfries Burghs)

I am not going to follow the hon. Member upon the question whether the Water Companies should be obliged to sell their undertakings or not. I think that question has been settled practically by the concurrence of the whole of those who are interested in this subject. The question therefore is whether this Bill can be justified upon business principles, and it is to that question that. I wish to address myself for a short time. The hon. Member made one or two complaints to which I hope he will allow me to make a slight correction. He complained of the tribunal of arbitration which was to value the undertakings to be purchased. He did not complain of the distinguished men who were to be the arbitrators, but he said that this new court would not have the opportunity which he conceived was enjoyed by other courts of arbitration of having its opinions upon questions of fact reviewed by a Court of Law. The fact is that the finding of every single arbitration court in this country is final on questions of fact and value, and there is no review upon a question of fact. The hon. Member opposite has asked us whether there is any instance in which the decision of an arbitrator could be reviewed upon a question of fact. My answer is that the findng of the arbitrator cannot be reviewed, but his finding whether right or wrong is final, unless there are special circumstances. No Court has a right to review the finding of a valuer unless it can be shown that he is wrong in the principles of law on which he has acted. The hon. Gentleman also said that he wanted the tribunal constituted under the Lands Clauses Act. A tribunal under the Lands Clauses Act consists of three persons, and is the most unsatisfactory tribunal that can be imagined to try the value of anything, and any Gentleman who is conversant as I am with such a tribunal is aware of the fact. It has, unfortunately, become a recognised practice for either party to appoint, not an impartial arbitrator, but to appoint each a partisan who is more an advocate than the counsel who appears before him, and they appoint an umpire, who is the sole person who really decides in the event of a dispute. It is a waste of money, and it puts people in a perfectly false position affecting the judiciary. All those who have experience in the strongest degree deprecate it, and we should be sorry to see it applied in an instance of this kind. I do not think there is anything to be said against this Court. On the contrary, I think the tribunal itself is an excellent one, and, so far as I can judge, very well qualified to discharge its duties if it is rightly guided. There is one point which was made by the hon. Gentleman. He made a complaint that the usual sum of 10 per cent. allowed for compulsory purchase is not allowed by this Bill.

*MR. BOULNOIS

I did not make any claim. What I said was that it was customary to allow 10 per cent., and I merely asked that we should be treated under the Lands Clauses Act. But no one has a legal right to 10 per cent.; it may be given or not. I did not claim it.

SIR ROBERT REID

I am very sorry. It was, no doubt, my misunderstanding. I accept the correction at once. I think the Bill has a clause inserted which shall forbid any extravagant sum being paid for compulsory sale. Under the circumstances, what is bought is not land merely or mainly, but an undertaking of an industrial character, and it would he quite improper to go outside the usual practice and give a sum for compulsory purchase. I am very glad that I misunderstood the hon. Gentleman.

Then there is another point I should like to notice in connection with the Bill. It is in regard to the part which provides that nothing is to be paid for enhancement or depreciation of water shares caused by the passing or the anticipated passing of the Bill. I think that is only just, and it ought to be a universal principle. Legislation of this character is passed for the purpose of giving absolute fair play to the owners of property, and that they shall have the value of the property taken, neither more nor less, and I think it would be wrong in principle, and unfair to those who are to find the money, that any increase of value created by a speculative rise in the price of stock, in consequence of its being anticipated that Parliament was going to interfere, should go into the pockets of the people who own the property. These provisions are fair and sound, and I congratulate the Government on having introduced them into this Bill. I am afraid that the protection which they give and the measure of justice which they contain is liable to be diminished or jeopardised by one of the other provisions of the Bill, to which I desire to draw attention. There has been, I believe, a great rise—a considerable rise, at least—in the value of these Water stocks in the market. [An HON. MEMBER: They have fallen again.] I understood that there had been a rise. Certainly there was at the beginning of this year. [An HON. MEMBER: There was.] I believe that was very considerably due to the anticipation of increased value being given by virtue of this Bill. Now, the reason I think for any increase in the value of these stocks in the market is to be found in the clause relating to the purchase price. Will the House allow me to refer to that matter `I It is a very serious thing indeed, involving several millions of money, The shareholders, according to this Bill, are to be bought out in Water stocks, which are to be fixed as bearing 3 per cent. interest. They are not to be paid out in cash at all, but simply by exchange of stock for stock, and the amount of stock they are to he given in exchange for the shares they are to be deprived of is to be what the arbitrators think "most just and fit," — that is the expression—and no more. Now that sounds very plausible. I do not wish to use the word plausible except in the way it is likely to impress people who have not studied the subject, but it leaves unsettled a most vital question, which is this. I will deal with it by way of illustration. Supposing one takes a block of these Water shares now worth in the market—I mean, apart from artificial inflation—the sum of £1,000,000, and, suppose these shares are producing £35,000 a year; that is to say, they are standing as a 3½ per cent security. That means that, of course, there is some risk, but not very much. Three and a half per cent. is a very good security, but it is not so good at all as the security in Consols or the security in London County Council stock. Under this Bill that £1,000,000 of shares would be extinguished and Water stock would be issued in its place. How much Water stock is to be given for that £1,000,000? Is it the claim of the hon. Gentleman? There is nothing in the Bill to exclude it. He made his claim that there should be given enough to provide an income equal to that which is being taken away. [An HON. MEMBER: No.] I beg your pardon, the hon. Gentleman said so; otherwise the whole of his argument would fall to the ground. He says that for that £35,000 a year there must be given enough of the new Water stock to produce £35,000 a year again. That will be, roughly speaking, £1,166,000. The result is that for £1,000,000, which was the value of the old Water shares, there is to be given in this new security £1,166,000. I say that is the claim. I am not saying that the Bill says so at all, but it is not excluded by the Bill. That is my point. That is the claim made, and if that be so, it is far more than 10 per cent. for compulsory sale. It is an enormous bonus put into the pockets of the holders of this Water stock, and would be, as I submit, most unfair to the ratepayers of London. On the other hand, of course, the contention of the purchasing authority no doubt will be that Water stock ought to be given which has a capital value equal to the £1,000,000 of stock taken away. Which of these views is right? I submit to the House that this debate ought not to close with that matter left in doubt. There is nothing in this Bill which will enable any person to say which is the right view, and it is most unfair to the House that the matter should be left in any doubt at all, for the question underlying it is this, whether the Water Companies are entitled to get more than the market value of their undertaking, because the purchaser has very high credit in the market. That is the question, and I think it ought to be perfectly explicitly answered. It is not a new question, as the right hon. Gentleman knows perfectly well.

MR. WALTER LONG

Hear, hear!

SIR ROBERT REID

It is a question which has been ventilated and discussed by Royal Commissions, and by witnesses before Royal Commissions, and the amount is enormous, because some of the stock of. these Water Companies is 3¾ per cent. stock, and not 3½. The result is that in a comparison between one company and another, if the principle contended for by the hon. Gentleman opposite be adopted, the less the security that the company have for the dividends to be paid, the greater will be the profit made by being taken over by purchase under this Bill. Now, all this difficulty arises because in the Bill the Government think fit to fix the new Water stock to be created at 3 per cent. I do not know why they should arbitrarily fix it at all, and do not allow cash to be paid at all. Nor do I know why they omit to specify in the Bill the principle on which these shares are to be allowed. I think the proper course is that which the Royal Commission recommended. The Royal Commission say that the shareholders ought to receive such a sum of money as will purchase an equally good security, producing the same income, and that they ought to receive it in cash. In my opinion, the proper course would be, that the Water Company should be permitted to pay cash, if they thought proper, and that the purchasing authority should be at liberty to give cash if they thought proper, leaving them, if they choose, to agree between themselves to give value in securities, instead of giving payment in cash. I know it is said that difficulty might arise—that it would be difficult to find the loan of so much money as would be required to pay in cash. I do not think that would be so. I am not a financial expert, but I am told that it would not be so. But if it were necessary to provide for payment in the form of stock, instead of payment in the form of cash, I say you have no right, in this House, to throw at the head of three gentlemen, however eminent, as arbitrators, the difficult duty of settling a matter of principle of this importance, all the more that they will settle it, as they always must do, without any opportunity of appeal, if their decision be good according to law. It is a matter of policy, and a matter of policy ought to be settled by Parliament itself.

I only want to add a few words upon one other point which was touched upon by my hon. friend. It is with regard to the character of the new water authority that is to be created for the purpose of carrying out the purchase and administering the water supply. I cannot help thinking that it is too large a body, and that it would far better, especially as you are going to have nominated Members, that these Members should be nominated direct by the London County Council, the Corporation of the City of London, and by the Essex, Kent, and Surrey and other County Councils. You would then have each County Council taking an interest in the proceedings of the members whom they nominated, which would not be the case under the proposal of the Bill, by which the members are elected by seventy or eighty authorities, some grouped together, and the others each appointing one or two members. You would then have a homogeneous body which would have a corporate existence. Under the present proposal there would be no homogeneity and continuity of policy. I do think that it would be far better, if you are not going to have direct representation, to have the nearest approach to it, viz., nomination by the different County Councils concerned within the water area.

(7.2.) MAJOR RASCH (Essex, Chelmsford)

I should not have the audacity to offer to the House my trivial views on this subject of the Water Bill, were it not for the fact that I have been for fifteen years the Chairman, and practically the manager, of a Water Company within the Metropolitan Police District. Therefore I ought to know something about the subject, an advantage which I do not understand is shared by the hon. Member for Poplar, who, I think, knows very little of Water Companies. He spoke like the German Professor who evolved the idea, of a camel, which he had never seen, out of his own inner consciousness. I do not think the hon. Gentleman knows the difference between a stand-pipe and a turn-cock, or between a filter bed and a reservoir. All the same, the hon. Gentleman made a very clever and adroit, if a somewhat lengthy, speech on the subject, and he no doubt thinks he will induce Members on this side of the House who are water men like myself to vote with him, and also carry with him into the lobby Member on the other side who are supporters of the London County Council. So far as I am concerned, all I can say is "In vain is the net spread in the sight of any bird." I have not the slightest intention of going into the lobby with the hon. Member for Poplar although I am a water Member.

The head and front of the Government offending, so far as I can understand from hon. Gentleman opposite, is that they have not thrown the water Company into the arms of the London County Council. I should like to say that I have no Prejudices whatever about that august body. I fully believe that the London County Council has done an immense amount of good in London, to the river Thames, and to the County, a part of which I have the honour to respect in Parliament. I have the greatest respect and admiration for my hon. friend the Member for Battersea, whom I always consider to be the epitome and incarnation of the London County Council in this House. But I do think that this august body has about as much as it can do already, and, if I might use an American expression, the House will not think it a liberty on my part if I say that it has bitten off more than it can chew, even as it is, at the present time. I do not think their previous record with reference to certain little matters such as the Works Committee, the North Woolwich drainage, and such as the answer given the other day by lord welby to some interpolator with reference to bricklaying work, and their litigation in reference to omnibuses, which was commented upon rather severely by a learned judge—all this record does not incline us to put more property than they have got already, to the value of 40,000,000 or 50,000,000, into their hands.

I do not know whether it would be an impertinenece on my part to address hon. Members on this side of the House who oppose the Bill. For the life of me I do not see what they have got to complain of, and I think there is a considerable amount of moral obliquity in the ground my hon. friends have taken up. They say they do not wish that up. They say they do not wish that their undertakings should be handed Over until the valuations have been got out and the price fixed. If the Water Companies' undertakings are over until the valuations not to be taken have been made, we will be here for the next ten years. They surely must know that those Gentlemen connected with the legal profession, whom I see below and around me, are not going to allow these valuations to be fixed and carried through to the House of Lords in less than ten years time. As to the 10 per cent. For disturbance, which they complain of not getting, it seems to me that if the London Water Stock—I do not speak as a business the man, but as a man connected with a Water Company, and of some common sense—has behind it the backing of the London rates, it will not be long before the water Stocks goes up, not 10, but 25 per cent., and I do not think that the shareholders in the Water Companies' will have much to complain of in not getting 10 per cent. compensation for disturbance. If their Water stock is going up at the rate of 25 per cent. in a few years time, surely it is obvious that the holders of that stock ought to be glad to throw themselves into the arms rather of the Local government Board than of the London County Council, because if they wait long enough it is absolutely certain that the London County Council will come in and decide the question in a way the Water share holders will not like. I have quite sufficient faith in the Water Board, and in the arbitrators who are going to be appointed. I cannot believe that a Government which has behaved so nobly to the Hungarian horse coupers, will behave any less handsomely to the people who hold the stock of the London Water Companies. I have taken a high moral standpoint in advising hon. Members and those who own shares in the Water Companies that they should accept the offer of the Government. I ought to say it is quite possible that my own Company may not be included in the purview of the Bill. I think that probably it will, but I must say that I should have taken up the same altruistic standpoint in giving the advice I have done were my own Company included in the Bill, and were my shareholders going to have an offer on the extremely fair terms the Government are going to propose.

(7.10.) MR. HALDANE (Haddingtonshire)

This has been a most gloomy debate so far as Members on the other side of the House are concerned. The hon. and gallant Gentleman has in his usual racy fashion given the reason why he is going to support this Bill, although those reasons are not on the merits of the Bill. But my hon. friend below him is going to vote against it. But the gloom of that hon. Member was even exceeded by the depression of the hon. Member for East Marylebone. He spoke of the covetous eyes of the Unionist Government, and went on to ask why this thing should have been done. It was said of the great Lord Eldon that, in his latter days, in despair of the Tory Government of the day, he announced that if he had to commence life over again he would begin it as a Whig. I think the hon. Member for East Marylebone, if he had the chance of beginning life over again, would be prepared to begin it as a Progressive. Depressing as a speech of the hon. Member was, the speech of the hon. Member for Chelsea was worse still, because, though he commended the Bill, and said many good things as to the courage of the Government in entering on this matter at all, he proceeded to point out various very important matters in which the Bill could be improved, but improved in such a fashion that the Bill would cease to exist. In the first place, he said the numbers of your Board are too large. Well, but the numbers of the Board are of the very essence of the Bill. Why, the very theory and substance of this proposal of the Government is that you should put the control of this question, not into the hands of the London County Council; not into the hands of any such small body as was proposed by Lord James Hereford; but into the hands of a large body which should be representative of the great mass of sanitary authorities of different kinds and descriptions which are taken from the Metropolitan area. Therefore, if you are going to reduce the numbers of the Board, I do not see how you are to preserve the principle of the Bill at all. Then the hon. Member for Chelsea went on to advise the Government to make another change in the Bill. He said— "Do not trust a huge body like this. My friends do not trust it altogether. Let the Government appoint the Chairman and the Vice-Chairman." But if you do that, you are going hack on the principle of the Bill, which is that the control of this matter should be in the hands of those who represent these various bodies. Then he suggested that the Borough Councils should be allowed to appoint specialists, outsiders, if I understand him aright, thereby conveying to my mind, what had already suggested itself to the minds of other people, that he does not think that the Borough Councils are just the persons from whom to select representatives to deal with such a question as this.

*MR. WHITMORE

The only suggestion I made was that the Borough Councils should have the power of electing members to the Water Board from the outside, at the beginning; because the first Borough Councils were not elected in view of their members, being appointed to Water Boards, nor had they experience at present of the Water question. But, in future when they had that knowledge, were elected with the possibility of serving on the Board, I should not pursue that suggestion.

MR. HALDANE

I follow my hon. friend's suggestion, which I think is very wise; but I point out this peculiarity—that when you come to the next election of Borough Councils there will be odd results. The members of these Councils are, I think, first elected to hold office for four years, and afterwards for three years; and if they are elected to the Water Board in the middle of the tenure of their office on these Borough Councils, the result will be that those who had been elected as members of the Water Board will be in existence as members of that Board when they have ceased to be representatives of the constituents of the Borough Councils. I am far from saying that that is wrong; in fact, I agree altogether with my hon. friend's suggestion. It is an ameliorative suggestion, but it goes to this, that there is no co-incidence between the sort of authority given to the members of this Water Board, and the sort of authority possessed by the Borough Councils from whom it is proposed to take a large portion of its members. I do not dwell further on that criticism.

Some things were, I think, very justly said by the hon. Member. For instance, he, I think, spoke quite wisely and fairly when he said that we should get on best if we went on the principle that no shareholder in the Water Companies should be either the worse or the better for the transfer. I think that is a thoroughly sound principle in dealing with the properties, and it is because I am not perfectly sure that that is carried out by this Bill that there are some criticisms which I would like to make upon it. This Bill shows the extraordinary difficulty in which by even touching this question the Government has been placed. It is not a Water Bill; it is a Hot Water Bill. The Government have got themselves into trouble over point after point, and the reason why they have got themselves into trouble is that it is impossible for them to please so many different sets of clients who have got the most conflicting interests. When this matter was first started, the Conservative Government of the day was in a position in which the matter was open. They had not given any hostages of fortune; they had not entered into pleges. The proposal of Sir Matthew White Ridley's Committee in 1891 would now be considered as revolutionary. The principal recommendation made by that Committee, of which a Conservative Cabinet Minister was Chairman, was to give the London County Council powers of purchase. In this matter the Government have gone back step by step until they have reached a state of affairs in which it is impossible for them to bring forward any scheme without its being said that they have betrayed this interest or offended that interest. The Plunket Committee was a Committee which was appointed at a time when a different Covernment was in office, and it sat upon a Bill which dealt with matters in a fashion not very much difierent from that of the Sir Matthew White Ridley proposals, and in a way which very nearly became law. And there again, although the proposals were not satisfactory as they emerged from the ordeal of the Committee, they had this merit, that it was a Bill with consistent principles the working of which you could follow out. Then came the Commission over which Lord Llandaff presided, and in that the difficulties of the Government increased more and more. But even there you never got to any proposal of such dimensions and magnitude as the Board which is proposed at the present time. Thirty members according to the proposal of the Lord Landaff Commission was the utmost limit which the board should attain. Now what have we got? We have proposed a huge, unwieldy Board, composed out of elements which were never called into existence for this purpose at all, and upon the top of that it is given powers which make this body a new rating authority for the metro politan area. That will cause the greatest confusion and difficulties in this matter. You must have, and you are bound to have, conflict between the various interests of the different elements which compose that board. It is a question of rating which will involve every local authority, and that must lead to friction. It is called a board, but it is something more than that, for it is more like a Parliament. I doubt not that there will be on this board Progressives and Moderates and Party Divisions, and all these matters of friction will arise upon a body which has had no time to work out its own experience, and instead of being an administrative board it will turn out to be something very much like the London County Council itself.

Under these circumstances, it is not at all surprising that the Government have got into difficulties, and they seem to have got into those difficulties from one simple cause, and that is dislike and distrust of the London County Council. I for my part feel it to be a great misfortune that this dislike should have grown up. I do not think it is justified, and I know that opinion is shared by a good many hon. Members on the opposite side of the House who have had experience of that body, and who have sat as representatives of London constituencies. When those hon. Members have emerged from their period of service on the London County Council, they have been much more Progressive than they were before. We shall see the effect of this prejudice more in the later stages—probably upon the Committee stage. We have had experience of this kind of thing already this session in the House. I feel that it is a misfortune that there is this prejudice against this body which has not always acted wisely, and in this respect the London County Council is no exception to the rule—but which is distinguished for its efficiency and the capacity with which it has handled large questions. I am sorry this body should have incurred a certain amount of dislike which has deflected the policy of the Government in the history of its dealing with this question. It was in the year 1895 that this House began to turn its mind to the London Water question, and there has been a change every two years in the policy, resting largely upon the feeling that it could not be brought to trust the London County Council with anything like a large share in dealing with this question. There is one matter however upon which I think we are all agreed, and that is that it is time this question should he taken up. Remember that what London pays for its water supply is based upon the increase of ratable value. Your ratable value is going up, and the price you will have to pay for these water undertakings is growing larger and larger. I do not wish to deal unjustly with the London Water Companies or with any other commercial companies. I do not think there is anything which is more calculated to impede real progress than attempts to deal unjustly with private property, and I am one of those who think that you go much faster if you have the reputation of being scrupulously honest. But when you are dealing with the history of these water companies, you are dealing with a number of things which set up the back of the rational business man. The way in which the value of Water stocks has gone up, not for services rendered, but because of the increased ratable value of the places with which the water undertakings had to deal, has brought elements of complication into this question which one would have fain seen removed from it. Therefore it is all to the good that the Government should have decided to deal with this question even at the eleventh hour.

I feel that this matter might be very much smoothed if some element of compromise could be introduced into the situation. I do not think that the notion of a Board or a Body of this kind ought to be scouted altogether. We would rather have things done either by the London County Council alone or in conjunction with other organizations represented in proportion to their magnitude and the importance of the interest they represent. But if this cannot be, and if it must be managed by a Board, then why should it not be a working authority? Why should the right hon. Gentleman not respond to the invitation of the hon. Member for Chelsea and other hon. Members who have made criticisms in this House upon the constitution of the proposed authority? It is perfectly true that that would involve a departure from what is the principle of the Bill. But, surely, it is better to depart from the principle of the Bill, and make modifications which you can carry out at a later stage, than have the friction and unwieldiness which this piece of new machinery promises to bring about. I congratulate the Government upon having brought themselves to deal with the water question, which has not only become urgent in our time, but will become much more urgent in the days not very far ahead. It would be good if we could go to the later stages of the Bill with some assurances from the Minister in charge that he is not going to hold us to a hard and fast principle, which promises in the eyes of some hon. Members to make the measure unworkable.

(7.23.) COLONEL LOCKWOOD (Essex, Epping)

The question as to what body of men the management of the water companies should be handed over to is one with which I am not going to deal. Upon that subject I am perfectly indifferent, and I will leave it to the London Members to decide as to what particular form the Board of Management shall take. As regards the principle of purchase, although I am opposed to it, I cannot shut my eyes to the fact that this principle has been growing among hon. Members of the House for some time, and it is now practically an accepted theory, and I shall therefore not attempt to argue it. We come now to another underlying principle, and that is the compulsory acquisition by the State of private property. To that theory I am intensely opposed, for it has always been repugnant to Conservative feeling. I have heard nothing in the course of this debate which leads me to believe that it is a right thing for the State, compulsorily, to acquire private property on which money has been paid by private people, before the State was ready to undertake the duties which private companies were willing to undertake. I look upon State purchase as the elder brother of municipal trading, and I am deadly opposed to both those principles, and this is a principle of the Bill which I shall always believe to be objectionable. Here, again, I confess that that is a principle which has been accepted by the House. Therefore, the purchase and the compulsory acquisition of these undertakings has met with agreement amongst hon. Members on both sides of the House. But, even admitting that those two principles are agreeable to the House, I think I may fairly presume that the Government, of which my right hon. friend is so distinguished a Member, has no desire to confiscate our property, but desire to deal fairly with us. All the public utterances of my right hon. friend and other Members of the Government lead me to this conclusion.

But does this Bill carry out his intentions? I maintain that it does not. I believe that his intentions are good, but the Bill is not. I cannot say that the Bill is bad all through, because I do not think it is, but there is "no beast so fierce but knows some touch of pity." My right hon. friend has in some ways met the companies fairly. The first step was the appointment of a Royal Commission, which issued a Report. I do not wish to go into that Report or into its conclusions, which are well known to everybody who takes an interest in London matters. But what did they recommend? You know from the Report itself what were the recommendations, but how far has this Bill Followed those recommendations? It strikes me that you have followed them so far as it suited you, and no further. You have adopted some of them, and others you have dropped out. The price fixed is from £38,000,000 to £40,000,000, and that is a gigantic sum. These undertakings are to be purchased by the ratepayers and paid for by them. But is that any reason for not giving adequate justice to those whose property is purchased? I do not mind so much what the amount of the purchase money is, but principles of justice compel you to give to the companies the proper value of their undertakings. I do ask that the shareholders shall be fairly dealt with, and that they shall be recouped the value of their undertakings to them, and that they shall not be deprived of their income. That principle has invariably prevailed whenever property has been taken from the owner, and it ought to prevail in this case. My objection is that in the present Bill you very materially and prejudicially depart from this principle in two ways, firstly, by the method of determining the price, and, secondly, by the mode of transfer. As to the first, there is an arbitration without any rules or precedent to guide the arbitrators, and, this being a novel and untried scheme, the arbitrators will naturally conclude that Parliament did not mean the usual principle to prevail, or they would have laid down that the price was to be determined by the Land Clauses Act, which for 60 years has been the invariable law of the land applicable to all cases where property is taken compulsorily. if the water companies are to get their fair value for these undertakings, why not adopt that principle today, instead of adopting an untried and precarious method which may and pretty certainly will not do full justice to the shareholders.

The adjustment of difficulties between Councils under the Act of 1888 is not at all analogous to the case of the companies to he taken over by this Water Board; that was to adjust financial obligations and. burdens. There was no existing settled law applicable, and a tribunal to establish the proper mode of dealing with those points of detail had to be created. It is true that the exact mode of assessment is not laid down, but the Act plus the cases decided on it has established a well-defined procedure and principle which it is very dangerous to depart from, and if Parliament now departs from it, it is, quite certain the Court of Arbitration will do so. The companies do not ask for a greater percentage for compulsory sale or solatium than the Commission recommended. There will be no difficulty in amending this Bill and laying down the Lands Clauses Act as the guiding principle to a Court of Arbitration and a restricted solatium. It is recognised that there is every wish to deal fairly with the companies, but I venture to think that the Bill as it stands does not ensure this. Then as to the mode of transfer, why not adopt the universal practice—ascertain the price and hand it over in exchange for the property? What is the rethat makes it necessary in this case that you should take their property on an appointed day from the companies; their offices, their money, their books, their cash balances and then afterwards at some future date determine the price to be paid? I know, it is perfectly true, that you reserve to yourself the power of postponing the transfer for a year. But why this Bill? The appointed day is fixed as the 1st of January next; this Bill cannot obtain the Royal Assent until the autumn; the new body cannot come into existence before probably November at the earliest, and this early date close; the door to any possible negotiations. I submit that there is no possible reason for such a course, and the Local Government Board ought to consider the advisability of postponing the date of transfer for one year more, and giving one year more after that, at the discretion of the Local Government Board. It is perfectly true that the taking over the companies was suggested by the London County Council in their Bills, but those Bills were rejected on the advice of the Government now in power. The Secretary of State for the Colonies then stated of these provisions— These terms are so exorbitant and unreasonable that they could not be conceded by the Government or any other interests concerned.

MR. WALTER LONG

My right hon. friend's reference was not made with regard to this paragraph. He was dealing then with the arbitration clause.

COLONEL LOCKWOOD

This taking over of the property was one of the cardinal points of the Bill so condemned, and, that being so, I think it is extraordinary that the Government should copy such provisions from a Bill which they condemned so strongly. What would the Government say if any Member or any public body introduced a Bill enabling them to take any man's business or house against his will, and took the business or property out of his hands and used it, and then at some future date went to arbitration to settle the price that should be paid for it? Is this fair? I have been told that in the case of a railway company they can take possession of land before they pay for it, but in that case there is a price fixed, and the money is paid into Court. There is an object there, and without some such machinery one landowner might delay a line being made for a very long time. In that case the landowner is fully protected, so there is no analogy. But you have a machinery ready to hand, and why not adopt it in the present case? The Royal Commission presided over by Lord Llandaff, appointed by the Conservative Government in 1897 to consider this very point, after a prolonged inquiry, extending over eighty-four days, and hearing all sides, came to the unanimous decision that the Lands Clauses Act, with a special Board of Arbitration, who should not allow the 10 per cent. usually allowed on a compulsory sale, was the fair course. I am quite ready to concede that. I am perfectly ready to accept the recommendation of the Royal Commission that the solatium to he given shall not include the 10 per cent., which the Commissioners thought to be inapplicable confidently appeal to the Government to adopt the recommendation of the Royal Commis- sion, and not to adopt an untried method as an experiment where such large interests are involved. Let them, by adopting this recommendation, follow the invariable practice adopted in all other cases, including Birmingham. I beg them not to establish a dangerous precedent which may, and I say will, enable the undertakings to be purchased without giving to the shareholders, thousands of whom are trustees and small investors, the value to them of their property. If this scheme of arbitration is carried, one of the arbitrators may, and it is extremely likely, will lay down such a point of procedure as to seriously embarrass those who follow him, when, in other cases, they are called upon to settle the value of land compulsorily purchased by arbitration.

(7.38.) MR. WHITLEY (Halifax)

Up coming from such a wide and scattered been Practically a duel between the Water Company director on the one hand, and the London member on the other, I wish to offer a few observations on the Bill which is now under discussion from another point of view. Although I do not clime to be London Member, I think we all claim, even those who do not represent any actual constituency inside London, to have a great interest in the first city of the Empire, and beyond that I claim also that in a matter of this importance we cannot pass it over as if it were a matter which concerned London alone, because a great Bill like this now before the House must stand or fall by this test—"Is it, or is it not, likely to be successful from the standpoint of progress in local government?" It is from that point of view that I venture to criticise the measure now before the House. If this Bill is not a success, if it means that the water question will be no better managed in the future than it was in the past, it will not only be a condemnation of His Majesty's Government, but will carry away with it the whole principle of local government, which in recent times has made such successful advances in all part of the country

It seems to me there are two ways of giving a sham popular control. There is the plan of giving a complete systems of popular control, so far as it goes to a popu- lar body, but at the same time putting over the popular body a controlling body with entirely opposite sympathies, opposite tendencies and temperament, which checks in every way the efforts and endeavours of the popular body, such as the plan which the government who now bring in this Bill adopted in Ireland. In Ireland we have an example of how not to give popular control. There you have a great systems of County Councils with popular government, and over them the system usually called "Dublin Castle"—aboulutely contrary in sympathy to the bodies which were created to carry out the local government of the country. Another plan is, I think that which is proposed by the Bill now before the house, which proposes to give an indirect elected body, constituted of elements so diverse, coming from such a wide and scattered area, that there can be no element of cohesion in the body that the paid Chairman and paid officials of that body will be its master and not its servants. I think that kind of supposed popular control is in every way as much a sham as the local government supposed to be given to Ireland in the recent Act, for I cannot conceive how a body consisting of sixty nine members, the greater number of whom have separate interests, can form an efficient body to control a great business like that of supplying water to the metropolis. I imagine the only raison d'être of this Bill. Or any proposals with regard to a water supply, must be—there can be no other reason—that the new system is going to be better than the one it is going to replace. I must confess that, with considerable experience in other municipal work in other part of the country, I cannot see that a Board constituted in this way will be any improvement on the administration of the existing Water companies. If you do not give real popular control, and leave the matter in the hands of the municipality, or a Trust which you can watch and control in many ways and make more efficient, you had better leave the matter where it is.

It seems to me that the Government in this matter have gone out of their way to produce an unworkable scheme. There were at least two plans that the Government might have adopted, either of which would have produced efficiency, economy, and good management. If the Government were determined to touch the question, surely, instead of having members drawn from all these varied authorities, ten being the largest number from any single body, and many members representing more than one constituency, it would have been possible to have produced a scheme far more simple, and, because more simple, more concentrated, under which a body might be formed to deal with this great problem. For instance, take a plan, to which, personally, I am not able to see the objections, which, if the Government were still de-determined not to give the controlling voice to the natural body—the London County Council—they might have taken. Instead of representatives from the Borough Councils, the Government might have taken representatives from the four County Councils mainly interested in the question, and formed a joint Board to control the water supply of the whole district—of London and of the outer districts. There would then have been only four elements, and it might have been possible to make a body strong enough to have a definite policy of its own, and to be both economical and efficient. The second plan the Government might have adopted is that which has all municipal experience behind it, viz., that they should have chosen the largest central body interested in the question, and given them the absolute control of the supply and distribution, at the same time giving to all the smaller authorities requiring supply from the same source a properly arranged and guaranteed supply at a fixed price. That system has been proved all over the country to be a successful one. Such a plan would have been far better for the outside authorities, and it would have put them in a much better position than they will be in under this Bill. By the present proposal they will have their single representative with one vote on this great and unwieldy body. Under the plan I have suggested they would their supply guaranteed to them, delivered at their boundary, for them to distribute at a fair price fixed by the Local Government Board. They would be masters within their own boundaries; they would levy and collect their own rates, make their own profit, or otherwise; and I am convinced they would have got their water much more cheaply than they will do under the Bill we are considering.

My municipal experience happens to have been in connection with a borough which has, although, of course, on a very much smaller scale, circumstances similar to those of London; that is to say, it has to supply a great number of authorities outside its own area, with a population practically equal to that inside. When that authority wished to claim certain sources of water supply, miles away in the hills, Parliament very properly said, "You must first agree to give a proper supply at a reasonable price to the other authorities whose natural source of supply you are taking up." The result is that those outside authorities obtain a splendid supply of water at a price actually lower than that which has to be paid by the people who manage the whole concern. Therefore, looking at the matter from the point of view both of the consumer in London and of the consumer outside London, and also of the ratepayer in both directions, this is not a good Bill, it will lead to neither efficiency nor economy, and the last state of the water supply of London, if the measure is passed in anything like its present form, will be worse than the first.

I ask Members of the House who are interested in this matter, not from a personal or local point of view, to look at the Bill from the standpoint of business efficiency. I cannot imagine any group of business men considering whether this scheme was workable or unworkable without coming to the conclusion that there was never a greater sham in the way of an extension of local self-government than this Bill. It will be a pity if the whole of the discussion before the measure goes to a Committee is confined to water directors on the one side, and to London Members on the other. This is too big a matter for that. It concerns us in the provinces. To every one who cares for the real efficiency of local government all over the country it is a matter of importance that this Bill, in whatever form it is passed, should be a real and not a sham Bill, and should constitute a real step towards the popular control of these great and necessary supplies. I therefore appeal to the House to consider this matter in a broader spirit than has hitherto been adopted, to approach it not merely as a London question, but as something affecting the credit of the House as a piece of legislation. Finally, I would urge that if the Bill is referred to a Select Committee, that Committee should consist, for the greater part, of business men, men who had seen something of the management of great concerns of this kind. It would be fatal to the reputation of this House, and damaging to the future interests of popular control of these matters, if a Bill were passed which made the water supply no better, but a great deal dearer, and, in addition, placed yet heavier rates on the shoulders of the already burdened London ratepayer.

(7.55.) MR. HAY (Shoreditch, Hoxton)

As the only London Unionist Member who voted for the London County Council Water Bill of last year, I desire to make a few observations with regard to the measure before the House. I shall support the Bill because I think it is a fair and reasonable solution of a thorny question which for too long has hung over London. Though I find myself taking that view not quite in accord with the Borough Council of the district with which I am connected, I am able to realize that the general opinion of Londoners who are not partisans is that the Bill proposes a reasonable and businesslike treatment of the subject. Mention has been made of the fact that the election of the new Water Board is an indirect election, and the hon. Member for Halifax has described the Bill as an instance in which sham popular control is produced by legislation. That is not an accurate statement. Take the Borough with which I am connected. What do I find? The members of the Borough Council are all men who reside in or are closely connected with the life of the locality, whereas of the four members representing the Borough on the London County Council, three, I believe, had never set eyes on the constituency until they were adopted as Radical candidates for the local County Council elections. Therefore, when the Borough Council is asked to depute one of its members to represent it on the Water Board, I cannot but feel that my constituents will be better represented than through their County Councillors, who are known only as partisans, and are not in such close contact with the daily life of the locality as the Borough Councillors. The hon. Member for Poplar described the provision for the election of members from the Borough Councils to serve on the Beard as a bribe. I have never been able to find any evidence in support of that statement, although it has been made outside the House as well as in. What we do find is that Londoners as a whole are desirous of getting some businesslike body to deal with this matter, and I do not believe they set so much store upon having that form of representation to which the hon. Member attaches such importance. The House must remember that the work of this Water Board will in reality be more largely done by the local committees than by the Board as a whole, and who could better judge of the needs of the localities than those who as members of the Borough Councils have a most intimate knowledge of the districts they represent? Again, the demands of any particular locality through such a Committee will be properly checked and controlled by the fact that you will have on this Water Board, when assembled at the central office, men who will be able, as experts on water matters, and drawn from all parts of Water London, to prevent the demands of one locality interfering with the just claims of the Metropolitan area as a whole.

Another remark made by the hon. Gentleman on the Front Opposition Bench who spoke first this evening was to the effect that the stocks of these companies had risen since the Bill had been introduced. I have inquired into the matter, and I find that that statement is not correct. I am informed by one of the leading dealers in these stocks that since this Bill became more known Water stocks have fallen some fifteen per cent., and they have fallen within the last few weeks, though, in common with all high class investment securities, they had risen since last summer. From this the conclusion may be drawn that the proposals of the Bill are air and reasonable. They have neither satisfied the stockholders nor the political partisans. Therefore, we may fairly describe the attitude of the Government as one which gives justice and does not show undue generosity to the stock holders in water companies. If the Water stocks have been unduly affected by the production of the Bill, I venture to say that it is the work of water companies' directors, who have raised a bogey with which to frighten the stock holders and of trying to intimidate His Majesty's Government to drop their measure. What I have always held outside this House is that the persons who are to blame are not the long suffering public nor the stock holders of these companies, who are as powerless against their directors as railway shareholders are; but it is the directors of the water companies who ought to be blamed for the friction they have caused in the management of their undertakings. They have never shown any desire to equalise the charges for water throughout London, and they have been perfectly indifferent in regard to the wishes of the consumers. The conduct of the water directors has imperilled the property of the shareholders in this sense, that a confiscatory feeling has arisen, and it has led many people who did not hold such views as a rule to regard the water companies as a fair prey in the public interest. It is because I feel that His Majesty's Government have staved off the evil day that such feelings might bring about, and which might take legislative shape, that I appeal to hon. Members to look at this Bill in a friendly spirit, and I believe that His Majesty's Government have not been actuated by any motive except that their proposal will lead to the establishment of a businesslike body to deal with one of the prime necessities of life throughout the metropolis.

I would venture to remind hon. Gentlemen who hold that the shareholders will not be fairly treated under the arbitration clauses of this Bill that they seem to be rushing too rapidly to conclusions. You have, in the first place, three gentlemen of the highest eminence and impartiality, and with the most perfect knowledge of the subject to adjudicate upon all matters brought before them. In the second place, whatever amount of stock these stock holders in the water company may receive they will always have this as a solatium and security that instead of being the owners as shareholders of a private company, the life of which is threatened, they will become the holders of stock which practically is a Government stock, and which has behind it the whole security of the rates of the metropolis. When we hear the gloomy forecasts from the hon. Member for East Marylebone—and I may here say that the hon. Member seems to me more the Member for water companies than for Marylebone—as to the confiscatory character of the proposals of this Bill, I venture to say that the wish is father to the thought, for he has had to resort to criticisms which I am sure the bulk of hon. Members of this House will agree do not hold water.

The only other observation I would like to make is that when you compare London in these matters to other large towns you fall into a false comparison. The magnitude of the questions to be dealt with in the metropolis, with its vast needs and complications, make any scheme a matter which must be regarded from a broad point of view, and must not be looked at through partisan spectacles. I am one of those who has endeavoured to approach this subject from that standpoint, and I wish empathically to declare that I am never going to join in any of the attacks upon the London County Council to whom I think a great meed of praise is due, for the earnestness and presistence with which they have followed up this question. I have not always agreed with the general policy of that body, but what I do say is that if a less narrow spirit had prevailed not only on this side but also on the other side of the House last year, the Bill which that body then introduced might have been made the basis of an arrangement which would have made the discussion of this Bill much easier. The fact that the London County Council elections upon the last occasion gave such an enormous majority for the Radicals was entirely due to a feeling throughout London that His Majesty's Government were not likely to keep their pledge in regard to the water question and to outrageous regulations of the Water Companies. The Ministry have now redeemed their promise by producing this measure, and I hope that the London County Council will feel that it has earned the gratitude of London in its action throughout the campaign which has led to the production of this Bill. I hope the London County Council will not now adopt a dog-in-the-manger policy and say that because they are not the authority to transact this business they will oppose the scheme tooth and nail. I believe if the London County Council will recognise the true bearings of this Bill they will become more deep seated in the confidence and affections of the people of London, and I believe if they show hostility all along the line to this Bill they will find that London will not retain the same confidence in them. If I have been able to gather the feelings of the House aright this Bill must of necessity be somewhat altered in its details, and I am perfectly certain that my right hon. friend who is in charge of this Bill will, as he always has done, shows a conciliatory spirit to any suggestions which may be made to him. It is in the hope that this spirit will lead to the passing of this Bill this session that I cordially support it, and I am satisfied that it will solve one of the most serious of metropolitan problems. [8. 12.]

(8.45.) MR. REMNANT (Finsbury, Holborn)

I hope the House will allow me to intervene in this debate. As representing an important London constituency, I should be failing in my duty if I took a silent part in the discussion. If there is one district in the whole of London that is likely to be seriously affected by this Bill, it is the Division I have the honour to represent in this House, and while I candidly admit that we shall be hit, we do not object to pay, provided that we get good value for our money. In dealing with this question we have endeavoured to look at it, first of all, from the benefit that is likely to be given to the whole of London, and secondly, we look at it from a business point of view. May I congratulate the Government on having brought forward this Bill, which we all welcome as an honest attempt to settle a very vexed and difficult question.

With regard to the principle of the Bill, I do not think there is any one who will object to it. In fact, we have now got to the position that the principle of the Bill is admitted on all sides, and we only differ as to details. I had the honour for nine years to serve on the London County Council, and during that time I also served on the Thames Conservancy, so that when I say that the London County Council are not the best authority to control the water supply, I hope I may be taken as knowing something of what I am talking about. I hope when I say that, that I shall not in any way be understood as belittling the excellent work done by the Council, because there is no doubt at all that they have done an enormous amount of good. My complaint is that they have attempted more than they were ever intended to do, and in attempting that they have failed, where otherwise they would not have done so. As to the Board outlined in the Bill, I think there is a general opinion that from a business point of view, it is too large and unwieldy; but when the hon. Member for Poplar talked about the representation of the Borough Councils as being a mere travesty of representation, I differ from him most strenuously. He apparently has forgotten that in the elections for the Borough Councils, over 45 per cent. of the registered voters polled, whereas the majority of the London County Council can only claim to have polled just under 20 per cent. of the registered voters, showing that the larger interest is taken in the Borough Councils as against the London County Council. Another complaint I have to make against this Board is that we have the advice and strong opinion of the Royal Commission, presided over by Lord Llandaff, and which sat for over two years against it, and it is somewhat astonishing to find that after all the labour of the Commissioners the very Government that appointed them throws them overboard, and appoints a Board against their recommendation and advice. They advised a permanent body if possible, with a Chairman and Vice-Chairman appointed by the Local Government Board, and they also advised on other points which are totally disregarded in the present Bill. I think it is most desirable that the members of this Board should be as few as possible, and as strong as possible, and that those who compose it should have the necessary experience and business capacity for managing the works they would be called upon to manage. I would suggest to the right hon. Gentleman that one reduction might be made in this way. At the present time the Thames Conservancy and Lea Conservancy have on their Boards representatives from the London Water Companies. Why should not the new Water Board send representatives to the Thames Conservancy and also to the Lea Conservancy; and in the same manner, and by that means reduce the number of members. I throw that out merely as a suggestion that a possible reduction might be made in that way, and I believe also in other directions to the advantage of the Board.

As regards my own constituency, I have said they are likely to be hit, and I honestly believe it. I believe the tendency of this Water Board—and my opinion is confirmed by a distinguished member of the London County Council, Mr. Dickinson, and by others—will be to reduce the water rate to the lowest possible level, and if they do that, according to the evidence and Report of the Royal Commission, there will be a very large amount to be made up in the course of the year over the whole of London. In addition to that, we have under this Bill to provide a Sinking Fund after twenty years. If we have that Sinking Fund involving possibly an extra cost to London of a quarter of a million a year, as the Royal Commission pointed out, we will have a sum which it will take a great deal of economy and increased ratable value to balance. The consequence will be that there will be an extra cost thrown under the Bill on the general rates of London. I disagree with the policy of throwing this extra cost on the general rates. I would rather have seen a special water rate started, so that we should know where we are and what we are doing. Nothing can be easier at the present moment than to throw an extra burden on the rates without the cause and wherefore being easily discovered. I maintain that it is only by having a special water rate that we shall be able to see how this experiment is being carried out. In addition to the Sinking Fund, for which an extra charge is likely to be entailed, I would mention one or two other small matters, all tending towards an increase of the rates. I may mention the uniform standard service which will be required in London. At present we have not got a high standard all over London and therefore it would be impossible when this Bill is carried into effect that we should have in one part of London, one sort of service, and in another part another service. Therefore we would have to have one standard service throughout London and also one uniform charge, and the whole of this will tend in my opinion to largely increase the rates. As I have said before, I can only speak for my own constituency. We do not object to paying extra for those who are not so happily situated as ourselves, but we do like to see that what we are buying is good value, and that we are not paying heavily for a mere sentiment. I do not think that it can be honestly contended by anyone if this Bill becomes law that the supply of water will be better, that the quality of the water will be better, or that it will be in any way cheaper.

I do hope that the Government when they come to consider these questions will make some concessions to us; and that they will meet, if they possibly can, my contention that there should be a special water rate, rather than that the expenditure should be thrown on the general rates. Then there is another point which affects us closely, and that is that no provision is made to safeguard those who have provided themselves with their own water supply. A great many traders and others in my constituency have, at great expense, provided themselves with their own water supply, and surely we are not going to put upon the manufacturers and traders of this city extra burdens in order to drive them out of London. I have heard those who advocate schemes for rehousing say that the best way to set about it is to drive the manufacturers out of London. I hope we shall not start in this way in trying to carry out that policy. I do not believe it is a right policy; and I believe that if no provision is made to safeguard those who have spent money in providing their own water supply we shall be extremely disappointed. As regards the arbitration clause, I must say that I most heartily agree with those who have called attention to the findings of the Royal Commission. They say— We shall therefore assume that if the policy of purchase is adopted the price of the undertakings will be determined by an Arbitration Court conducted on the lines of the Land Clauses Act. Surely that is fair and reasonable. Why should not the Water Companies who, for no fault of their own, are being bought up to supply a public want, be treated differently from other companies whose properties have been taken away. There is no reason why they should not be paid a percentage for disturbance. There is another point which seems to be somewhat peculiar. We are going to purchase these Companies, and we fix the date of January 1st, 1903, as the time for taking them over. That makes it almost impossible for any agreement to be made. The Bill will get the Royal assent in the summer, then comes the vacation, and practically there will be only about two months left to fight out the difficult points with regard to purchase. Surely the right hon. Gentleman the President of the Local Government Board was scarcely serious when he nodded his assent when the hon. Member for North Camberwell stated that he wished for a settlement by arbitration and not by agreement in regard to this matter.

THE SECRETARY TO THE LOCAL GOVERNMENT BOARD (Mr. GRANT LAWSON, Yorkshire, N.R., Thirsk)

When the right hon. Gentleman nodded his head he was merely assenting to what the hon. Member for North Camberwell was saving; it was not in answer to his query.

*MR. REMNANT

I hope the Government will at all events extend the date for taking over these properties to the limit laid down in the Bill — January, 1901—so that it will be possible to settle this matter amicably by giving sufficient time to the parties to the arrangement to arrive at some scheme. I am glad to hear that that suggestion will be considered, and I have to thank the Government for meeting us so far. One point that strikes me as being peculiary hard is that you fix a date, and from that date you take away, whether the price is agreed or not, or fixed by arbitration or not, their brief. You take away all their papers, books—every single thing, even the servants of the companies.

MR. JOHN BURNS

No, no.

*MR. REMNANT

But you do; from that date you are going calmly to turn the directors out of the companies.

MR. JOHN BURNS

Only the directors, not the officers.

*MR. REMNANT

What is the difference? They are the officers responsible for working the companies, and you do not allow them to have access without permission to the offices. You are practically turning the men out who have managed their companies right well and leaving them to get up what case they can without their books or servants to help them. You say you must go to arbitration; we shall make no agreement and you must do the best you can. It has been said you turn them out penniless, and you do so in a sense because they have to brief counsels for the arbitration and pay their costs, and unless the arbitration goes in their favour they will have to pay the expense out of their own pockets. Is that the way to do business? I call it a great insult to both the directors and the shareholders, but I am not here to fight the battles of the companies—I am not a water director—I am here as a member of the Constitutional Party, and desire to maintain the traditions of that Party in fairly compensating those whose property is taken from them for public purposes. In conclusion, while accepting the principle laid down and generally accepted that the public demands and ought to have the control of water supply, I hope the Government will see its way to give the Companies fair and reasonable consideration on the lines I have suggested.

(9.6.) MR. MELLOR (Yorkshire, W.R., Sowerby)

I am not at all sorry for the deterination of the Government to raise this question for the consideration of the House, as I think it is a very desirable question to be debated. Now I am very much surprised at the way in which the Report of the Royal Commission has been treated—a Royal Commission appointed by the Government itself—and when I read to the House the names of the hon. Members who formed that Commission, I think they will share the astonishment which I express and feel I find that in this Bill there is only one thing on which the Commission has been able to convince the Government, which is that the water companies ought to be purchased by a public authority. Let us see who the Commissioners were— Lord Llandaff, who, as Mr. Henry Matthews, was well known as a Home Secretary under a Conservative Government; my hon. friend opposite, who I suppose was as well able to deal with this question as anyone in Parliament or out of it the. hon. Member for Gloucester, my friend Mr. Cripps, who unhappily died just as the Commission concluded its labours, who was a man who knew, I suppose, more about former Water Bills and kindred subjects than any other man in the Commission. He was a learned and experienced man, and most valuable to the Commission. With regard to myself, I have had some experience as Chairman of this House, and have had to deal with all kinds of water Bills, and was not exactly incompetent to deal with this question. Then there was Sir George Bruce, a well-known engineer, and Mr. De Bock Porter, the Secretary to the Ecclesiastical Commissioners, and one of the most experienced men of business, Mr. Lewis, a gentleman competent to advise on matters of finance, and General Scott, the Water Examiner for London, and who had been Water Examiner for years. He unhappily died just before the Report was ready. We eight set to work to inquire into the whole of this matter; we sat for more than a year; we had before us everybody who was supposed to know anything of the subject as witness; we heard all the witnesses put forward by the County Council, who managed their case remarkably well, and all the witnesses put forward by the water companies, who also managed their case well; we had eminent engineers and chemists produced by other persons in order that we should be well informed as to the whole matter. The question was an extremely intricate, complicated, and difficult one; we were comparative strangers to one another, and we began by looking at this matter from different points of view, as Commissioners do, and the result was that we who commenced by differing on every conceivable point, eventually by the sheer force and weight of evidence, were brought together to a common opinion, so that we were able to produce and sign the Report which has been furnished to Parliament. It was a Commission appointed by the Government.

Now, what is the use of these Commissions I should like to know? This was the third Commission which considered question. There was the Duke of Richmond's Commission, Lord Balfour of Burleigh's Commission, and then this Commission. This matter has been most thoroughly thrashed out and examined, and I believe if I could take any number of Members of this House and let them see the witnesses and hear the evidence they also would have come to the conclusion that we did. The witnesses were good witnesses, and we had a great number of eminent counsel and every advantage. Now, if you appoint a Royal Commission of this character, you must do one of two things. You must either put confidence in the Commission you appoint to do that which the House itself is not competent to do, or you must read the whole of the evidence which they had before them. I am very much disappointed at the way in which this Report has been treated. The Royal Commission established two points interesting for this House to know. We came to the conclusion that the water was good and pure. We came to the conclusion that the water of the Thames, at all events, was much better than people supposed. And finally we came to the conclusion that these companies, in the interest of the ratepayers of London, ought to be bought out by a public authority.

Having established that, there was the important question of how the authority should be constructed. The whole success of any scheme for this purpose depends on the construction of the authority. The manner in which the question is dealt with will make the difference between a great success and a stupendous failure. It is a large question; there are great interests involved. The Commission came to the conclusion that the matter required the greatest possible care in administration. That was the deliberate conclusion of the Commission. We were all agreed that it was essential that a body should be appointed, consisting of men who should be able administrators, able to devote themselves to administration and nothing else. We thought the outside limit of the body should be thirty members, and the only doubt in our minds was whether that number might not be too large. Let us consider what that body was to be. We thought and reported that it was to be a permanent, not a mere shifting body, selected on account of business capacity, and, if possible, with knowledge of matters connected with the water supply. We wanted a body of business men, capable of dealing with these vast interests economically, for the benefit of the ratepayers. That recommendation of ours has been passed over; it has been treated as though it had never been made; and the Government come forward and propose a body which, as far as I understand the question, will be really unable to administer this matter as it ought to be administered. Just consider, sixty-nine members! We proposed a small administrative body; the Government have constructed a sort of debating society. Instead of a body of men who will look after the interests of the ratepayers—that is what we want; I am a ratepayer, and speak feelingly—we are to have all the difficulties of Progressives and Moderates, and I do not know what; the members will be unaccustomed to deal with such great interests as are here involved, and, what is one of the great evils of the suggestion, they will probably not remain long enough to learn the business. That this should be the case is much to be deplored. It is not a political matter; it is hardly a Party matter; and I hope the House of Commons, having duly considered it, will take the question in their own hands and explain to the Government that this Bill will not do, that if they want a Bill useful to the ratepayers they must reconstruct the Board. I hope it will be reconstructed on the lines suggested by the Royal Commission; the matter was there very carefully considered by people who certainly understood the matter with which they were dealing.

Then there is another thing. A body drawn together in this way will hardly be economical. One of the objects for which the Commission was appointed was to consider the interests of the ratepayers in this matter. The instruction to us was, "Take financial matters into your consideration, and let us know what sort of body you think will administer the water supply economically." Does anybody suppose for a moment that these sixty-nine members will be economical administrators? They will be far too much occupied in contradicting one another to be paying much attention to economy. I deplore that the money of the ratepayers should be wasted in this way, and that in a matter so essential as water the ratepayers should be liable to have put over them a body who may spend the rates like water and with very little responsibility.

With regard to the Board of Arbitrators, I have not the slightest objection to the names proposed. A better man than Sir Edward Fry could not, probably, have been appointed; he was a Lord Justice for several years; before that he had been a Judge of the Court of Chancery; and he is an experienced and capable man. The other two arbitrators are also well known. But I do think there is an objection to throwing this thing at their heads without some indication of the opinion of the House and the Government, For the life of me I cannot see why our suggestion with regard to the Lands Clauses Act was not acted upon. An hon. Member opposite said he would not object to the usual 10 per cent. But there is no law as to 10 per cent. All that is provided under the Lands Clauses Acts is that one whose property is taken from him shall be indemnified. That is, as I understand, exactly what the House wishes in this matter. That is the common-sense and the common justice of the thing, and that is the meaning of the Report of the Royal Commission. But in this Bill the matter is left at large, and I am afraid there is something in the suggestion that the arbitrators may say, "Oh, the matter is left at large; we can do as we like; we can lay down any rule we think fit. Parliament has excluded the Lands Clauses Act, and therefore we can adopt some other system." I put it to the Government that it is very undesirable that such a course should be taken. As to the 10 per cent. for forced sale, there is a very wide difference between taking a man's house or his real property—perhaps the house in which he was born, or the land on which he had been brought up—and taking his property in Water shares. If you take a man's property in Water shares he will probably put his money in some other shares or in some other Water stock; he will be none the worse off if you take his company and indemnify him. That is what the Commission meant, and it is desirable that this clause also should be reformed, and some guide, at all events, given to the Arbitrators.

I hope the Government will not refuse to listen to these suggestions, because I think this is a favourable opportunity for settling a very difficult, embarrassing, and important question. If the Government will reform the Board in the direction I have indicated, and alter the clause as to compensation, I think their difficulties will disappear. They will satisfy those who advocate the interests of the County Council; they will satisfy those who advocate the interests of the Water Companies; above all, they will satisfy that long suffering individual, the London ratepayer, whose interest ought, at all events, to be considered in so important a matter as this.

(9.26.) SIR JOHN DORINGTON (Gloucestershire, Tewkesbury)

I should like to say a few words to endorse what has fallen from my right hon. friend and colleague on the Royal Commission, the Member for the Sowerby Division of Yorkshire, especially with regard to the arbitration clause. That clause as now drawn is in distinct contradiction to all that the Members of the Commission contemplated when they wrote their Report. Doubtless the Government believe that they may place implicit confidence in the three gentlemen they have named, and that they will act strictly in accordance with those principles which we believe to be right; and I need hardly say that I have the highest opinion of them personally; but I do not think it is safe to trust to anybody no matter how high his position, absolutely without direction in matters which concern so large interests, and the interests of so many persons, as are involved in this question. There ought to be some security as to the direction in which these gentlemen will exercise their functions, and I hope that on this point the Government will see their way to insert a distinct direction to the Arbitrators to act in accordance with the practice of the Land Clauses Act.

It may not be inappropriate to sketch to the House how the Royal Commission were led to the conclusions they adopted. It is true, as my right hon. friend has said, that we went to that Commission as strangers, with more or less divergent views, but we went seeking for information. We obtained information from the evidence so well put before us both by the London County Council and by the London Water Companies. We came to one conclusion complimentary to the water companies, viz., that nothing, on the whole, could be better managed than the water companies of Lond on had been. Upon that we were quite distinct. But we were actuated, no doubt, to some extent by what certain people may think an erroneous view, viz., that public opinion has something to do with this matter; and public opinion had been expressed so strongly, and had led to such constant wrangles, that we thought, on the whole, it was better that the companies should be purchased by some public authority. That was one, but only one, reason for the recommendation which we made. A much stronger reason was that we were strongly impressed by the growing demands of London with regard to water, and the impossibility of supplying those demands at anything like the rate per million gallons at which it had been supplied previously. We could not help regarding—not merely the Metropolis, but the very much larger London which exists all around—as one whole which ought fairly to bear the burden of the great increase of capital expenditure that would have to be incurred in order to, provide for those stores of water which London must have. Hitherto the policy of Parliament has been to restrict the water companies to taking a certain quantity of water per day out of the rivers and actually discouraging storage. But the river Lea is exhausted, and the Thames does not supply in the summer adequate quantities of water for the increasing needs of London without undue depletion; and, therefore, other measures are absolutely necessary to enable us to store up that water which we need in the summer. Then, again, certain companies have full power to get all the water they want from the river. Other companies have growing demands on them which cannot be satisfied with their present powers. But we thought that London should be considered as one whole, and where there is a common interest it can only be satisfied by a common purse. That was why we suggested that purchase should take place. We were obliged to put the London County Council out of Court simply for the reason that it did not govern the district which was to be supplied with water, but only a portion of it. The answer I have heard to this is that it has been done in other boroughs and cities, but I may point out that what has been done in other places is infinitesimal in size as compared with London with its vast area. Another feature that was very strongly presented to the Commission was that the outside districts would on no account consent to be administered by London. They claimed their share in the administration, and many of them asked that, if anything was done, it should be done either by severance of works or by supply in bulk. Severance or supply in bulk was most clearly and distinctly shown to us to be absolutely impracticable, and this was practically admitted even by Sir Alexander Binnie, the distinguished engineer of the London County Council. You cannot have severance or supply in bulk without an entire reconstruction of works, entailing unjustifiable capital expenditure. I think that is a very strong reason. It is easy to say that Surrey can manage for itself, and so can Middlesex, but when you look at the lines along which the mains are laid and the places where the pumps are erected you will at once see that the thing is impracticable. We looked very carefully into that matter, and I feel thoroughly convinced upon it. Those were the two actuating reasons why we said there must be purchase, and why we said that the body should not be the London County Council. I hope in saying this that I have not shown any disrespect to the London County Council.

What was the other course? The Commission had thereupon to construct a Board, and that is the first point where the scheme of the Commission differs from that of the Government. At that time London did not possess those metropolitan boroughs which exist now. What we might have done if the boroughs had been factors in the case I cannot say, except I am quite certain that we should not have created a Board of sixty-seven. Another distinction between our scheme and that of the Government is that the Commission did not suggest that necessarily the members of the Board should be actually members of the bodies they represented. They thought that those bodies might very well be represented by appointing competent persons, and that they would thus be represented in a much more dignified and effective manner than they would be by sending gentlemen from their own number who might not be suited to the task. I may mention that upon the Thames Conservancy Board my county appoints a representative, and he is a gentleman belonging to my County Council. The adjoining County of Wiltshire is joined with us, and they have the alternate nomination of this representative, and I may say that they have always elected our representative, who is conversant with the subject, but is not similarly qualified in this Court as their representative, when it has been their turn to appoint. What is done there might be done by these London bodies, without any detriment to the representative character of the assembly. If you carry the democratic idea to its fullest extent, viz., that nobody can be represented except by himself, then it will not work, but if you take a reasonable view it will create a more efficient Board than one composed simply of members of these other bodies unless they are competent. I have no doubt that the London County Council can supply such persons, but it does not follow that the Urban and Borough Councils can do so. If they have not got such persons as members, it is better that they should select somebody else outside. I would like to lay consider- able stress on the suggestion of my hon. friend the Member for Chelsea that at all events, the first Chairman and Vice-Chairman should be appointed by the Government. The recommendation of the Commission was that they should always be appointed by the Government, and I think there is sound reason for this. This vast business of the London Water Companies is really a matter of national concern, and why should the Government be dissociated from the responsibility of seeing that the consumers are properly treated with regard to their water supply? I should very much like to see the Government Bill altered in this respect, and I hope that some Amendment may be made to secure this result. With regard to the payment by Water stock, I think that such a provision is both fair and better in the interests of the general public, and not detrimental to the recipients of the Water stock, always supposing that the conundrums propounded by the hon. Member for Haddingtonshire are satisfactorily solved.

Supposing you undertake to pay all the liabilities of the water companies in cash by means of a loan, and clear them out, it would in a sense be a mere transfer of securities from one side to the other, and yet the disturbing effect upon the money market would be such as I think would not be desirable, whereas you avoid all that if you place in the hands of the shareholders a security equal to that which they now hold. Our idea is, a similar income and a similar security. It is a question simply of acting under just rules and solving the question justly between all persons concerned. That is the reason why a Water stock is recommended by the Government, and I strongly support that provision. As to the appointed day, I cannot help thinking that that is an unnecessary complication in the Bill. I should like to get rid of the appointed day altogether, and supposing the provisions of the Lands Clauses Act are properly incorporated in Clause 18 of the Bill, the appointed day will almost naturally drop out, because as the arbitrators settle each case they will also settle on which day that particular part of the property will be entered into. It will be, on the whole, very much better for administration that the new Water Board should take up, piece by piece, the several items of which its whole work is going to consist. On the other hand, in conversations such as occur in this House it has been suggested to me that by this arrangement the Water Board will be in the position, having got hold of one company, to delay going on with the other arbitrations, and then by competition reduce the value of the other undertakings. I think that is a ridiculous idea. I have looked through the Report to see what we say upon this point, and I find that there are only two square miles in London in which competition exists. Therefore I am inclined to think that that is a bogus objection which may altogether be disposed of. I urge that the appointed day as now raised should be got rid of, and that piece by piece the Water Board should be allowed to take up its work as the result of each separate arbitration. With good temper and good will, the thing will go through quite smoothly, and at the end of a reasonable period—I will not say one year—we shall find that the whole of the water companies have passed into the hands of a public authority, without injury to any person and to the general satisfaction of the community.

(9.42.) Mr. LOUGH (Islington, W.)

The right hon. Gentleman who has just sat down has said that he was not inclined to disapprove of the proposed appropriation of the water stock which we are discussing. Complete disapproval has not been expressed from this side of the House. There is a general concurrence of opinion that, if the Bill more clearly defined for what purpose this water stock is to be used, it might be a very useful provision. The difficulty we are in is that the Bill does not state exactly to what purpose the stock is to be applied. This question of price was so fully discussed by the hon. Member for Poplar that I only need to remind the House of what he said.

Two of the speeches to which we have listened seem to me to be of the greatest importance. The speech of the right hon. Gentleman the President of the Local Government Board was a very short one, in which he interrupted my hon. friend the Member for Poplar. That speech conveyed to the House an intimation which we ought not to disregard. What did the right hon. Gentleman say? My hon. friend suggested that the London County Council was the proper authority to take over the water supply. The right hon. Gentleman said—"Oh, no! there is no analogy for giving such a work to the London County Council. You might as well suggest to give the water supply of Liverpool to the Lancashire County Council as to give the duty of administering the water supply of London to the London County Council." [Hear, hear.] That remark is cheered on the other side. There could not be in a single sentence such a revelation of the wrong principle on which the Government have acted in this matter. Obviously, what the right hon. Gentleman was thinking of was the creation in 1888 of the County Councils for the rural districts in England. But the right hon. Gentleman forgot that "special" duties were conferred by the Act of 1888 on the London County Council. He forgot that there is a clause in the Act by which the London County Council is authorised to take over the works carried on by the Metropolitan Board of Works for the previous forty years. What was the Metropolitan Board of Works? It was the municipal authority for central London, and it took the same position in the metropolis that the municipalities do in the other great cities. It had the control of the Fire Brigade and the Parks, main drainage, the river, the bridges, and other great municipal functions. Therefore I say that the right hon. Gentleman showed that he had entirely misunderstood the position of the London County Council. It is not to be compared with what you may call the Rural Councils of the rest of England. It is a municipal authority that has set an example to the other municipal authorities in the country by the way it has discharged its duties.

My hon. friend the Member for East Marylebone delivered a long and interesting speech, and his sole point was that the Bill did not treat the water companies fairly. I take an opposite view, and I propose for a moment in reply to the remarks ho has made to examine the position of his own company. He said the water companies were not liberally treated by the Government. My objection is that the water companies are a great deal too liberally treated under the Bill. [An HON MEMBER: How do you know?] I am asked how I know, and am going to deal with that point from the standpoint of the hon. Member for Marylebone's own company. He told us that it is a prosperous company. It has paid ten per cent. and has given a rebate of five or ten per cent. to the consumers. I do not say that it has not treated the consumers well. He claims that the district his company serves is as well served as any in the Metropolis. It has accumulated a good reserve fund. He went on as good as to say "This Bill will ruin us." What has been the effect of the announcement of this Bill on the stock of the hon. Member's own company? In July last this ten per cent. stock was worth per £100 of capital £265. In other words, it could have been capitalised at twenty-six years purchase. If the ordinary stock of the company had been capitalised in that way, a calculation has been made to show that the value would be £3,080,000 at the end of last session. The stock went up twenty points to £285 during the autumn. [AN HON. MEMBER: No.] The Bill was introduced in this House on 31st January, and since it was read a first time the hon. Member's own stock has grown in value to £305. If we capitalise the ordinary stock of the hon. Member's own company at this figure, the value is £3,850,000. In other words the company's ordinary stock has appreciated £770,000 by the mere introduction of the Bill. I think that is a most extraordinary circumstance. I do not say that we can apply that to the whole of the Metropolitan water companies, but the facts show that, so far from the companies being treated unfairly, the Bill will throw an extraordinary burden on the ratepayers which has not at all been realised by the ratepayers of London. I agree with the principle laid down by the hon. Member for Chelsea and the hop. Member for the Tewkesbury Division that we ought not to damage the position of the companies as they stood before the Bill was discussed. I have shown that in the case of the West Middlesex Company the appreciation in the value of the ordinary stock since the Bill was announced would put £770,000 into the pockets of the owners of that property. This is the general tendency of the Bill, and if it is passed in its present form the effect will be to throw £5,000,000 or £6,000,000 on the ratepayers of London.

Turning from the speech of the hon. Member, I shall endeavour to observe the rule laid down by my right hon. friend who leads this side of the House—that we should not repeat ourselves more than possible. It seems to me that one of the great defects in this Bill is that it busies itself too much with immediate difficulties and that it does not look to those difficulties which everyone who has examined this water question of London can see in the near future. You would think from reading the title of the Bill that there was nothing to be done except to acquire the properties of these companies, to manage the properties, and to continue to distribute water for the benefit of the people of London. But that has not been the experience when great water properties have been acquired in other cities, and it will not be the experience in London. Wherever a purchase of water authorities has taken place, we have found that in a few years the new authority had to spend as much money in improving the supply as it spent at first in completing the purchase. We have not heard a word of new expenditure which the authority created in London will have to undertake in a few years if the Metropolis is to be properly supplied with water. The Royal Commission calculated that within thirty years there would have been an expenditure of £34,000,000 in addition to anything paid to the companies as the initial expenditure under the Bill. If we look at the Bill from this standpoint we will see it is full of defects, and that what is proposed is not the sort of authority that should be created if it is to be charged with those duties in the near future.

Let us see what provision is made for meeting the difficulties that will arise. In the first place, we find that everything is novel under the Bill. A great new area is to be added to the many areas we have in London at the present time. I do not think the House has sufficiently realized the great evil and the great infliction that will be flung on the longsuffering people of London if this new area is created. We have got a county area, a cab radius, a police area, and a postal area. To these areas is to be added a great new area which does not exist for any purpose, and which is to be called Water London. The right. hon. Gentleman, when he introduced the Bill, gave us some figures with regard to this area, but they were not instructive, because he did not compare them with any other figures, or give the House an opportunity of considering whether there was anything in the figures submitted to justify the creation of this new area. We had the population of the outer area given to us, but it is no use to give us that by itself. What we have to do is to look at the proportion of population in the outer area and compare it with the population in other outer areas, as near as we can get, which this House has created for water purposes before. In the few cases to which I will refer I will compare Bradford, Birmingham, Liverpool and Manchester, in order that the House may have some light thrown on the question. The population of the outer water area in London is only 22 per cent.; in Bradford, 33 per cent.; Birmingham, 32 per cent.; Liverpool, 32 per cent.; and Manchester, 40 per cent; so that in the case of all these great water authorities there is a far larger proportion of the population in the outer areas than there is in the outer area of London. The ratable value of the outer area in London is 11 per cent.; Bradford, 34 per cent.; Birmingham, 30 per cent.; and Manchester, 35 per cent. of the whole area; so that we find as regards rating value this outer area compares moderately with the others mentioned. The extent in London is 65 per cent. of the whole; Bradford, 70 per cent.; Manchester, 78 per cent.; Birmingham, 84 per cent.; Liverpool, 89 per cent.; so that whether you look at it as regards population, ratable value, or area; there is no particular difficulty created by this outer area in London.

I have ventured to trouble the House with these figures because I quite disagree with the hon. Members who have suggested that the outer area in London has a claim to be represented on the water authority. According to all the precedents we have had in this House, there is nothing that gives this outer area the slightest claim to be represented on the water authority. I quite agree that all the legitimate claims of the outside area should be protected, but the proper time for that is when the Bill is passing through Committee. There are provisions in the Bill that the outer area must get a supply of water on proper terms, and no good claim has been made for depriving the citizens of London of full authority. The outer area which has been created will be a terror to the city of London. [An HON. MEMBER: It exists.] Well, it exists, but purely on paper. It has no local authority, but you are going to create a local authority for it. Nobody knows anything about it; it is a sort of ghost. I believe the citizens of London will not thank you for creating this new authority. Every speaker who has spoken in the debate has criticised the new Water Board. No one has said a good word for it. Let us examine it. This authority will have sixty-nine members, and will represent no fewer than seventy-eight local authorities. Now, that very statement ought to warn the House that it is going on very thin ice, and exposing itself to very great dangers. If any one looks at the fourth schedule of the Bill, he will be appalled. There, eight authorities are constituted one in a most complicated way, and charged only with the single duty of electing one representative to this extraordinary Board. Whom will this individual represent when he gets on to the Board? He is to be selected from the membership of one of these eight local authorities. It will be difficult, even with the best intentions in the world, to make any selection that will be of the slightest use.

But I want to take the other side of the selection of the new Water Board—I mean the action which will take place within the limits of the metropolis. I deny that the slightest power will be given to any one of the boroughs in the metropolis by the permission to elect a member to the new Water Board. Take the case of my own Borough of Islington. It has a population of 340,000, and is entitled under the Bill to select two members. Six of the Councils select two members, and the remaining twenty-four select one member each. Who are they to select? There is a provision in the Bill that they have to select a member of their own body. If they select an alderman he would represent nobody; but if they select a councillor he would be a councillor returned to that body by some ward in the parish. The wards on an average contain 1,000 voters, and the representative of these 1,000 voters selected for the Water Board would only represent these 1,000 voters, so that the thirty-six members sent to the Water Board by the Borough Councils will only represent 40,000 or 50,000 voters out of a total of 650,000 in the Metropolitan area. That is most anomalous. Again, supposing the election is made, what power or dignity will it confer on the new members of the Borough Councils? The Councils will have no right to discuss the doings of the Water Board, and have no power to call the Water Board to account. They can only once in three years elect one of their members to serve on the Board. A friend of mine discussing this point said you might just as well give him a season ticket to the Westminster Aquarium. In setting up this complicated authority, a new Metropolitan Board of Works will only be established, and the people of London will have no control over their water supply.

I think the supporters of the Government ought to address themselves to the argument that no precedent has been cited for the establishment of such a Board. There are in England 131 municipal water authorities, and only thirteen out of the whole number are special authorities. The Government are bound to show some reason for adopting this extraordinary course. The Government say it is done because the people of London have been clamouring for the control of the water supply; but they have not got that control, because the Board will not represent the citizens of London. The people of London for twenty years past have been asking for bread in this matter, and now the Government is going to give them a stone.

I think, Sir, we shall get to the centre of the matter if we ask ourselves this simple question — what are the duties we want this new Board to discharge? These are three. First, to acquire the properties of the Companies; secondly, to provide for any fresh source of supply which may be required. Both these duties will be quickly dealt with, especially the acquisition of the properties of the Company. But, thirdly, the permanent duty of the Board will be to satisfy the people of London for all time. When you come to look at the constitution of the Board you will see it is a most risky experiment you are making, Instead of allowing the people of London direct and immediate control over that great necessity of life—water—for which they have been clamouring for twenty years, the Government are going out of their way to set up a barrier to shut them out for ever from that control. I am for the London County Council absolutely. If the London County Council chooses to give any representation on the Water Committee to the outside areas, although there is no analogy or precedent for it, well and good. I say that all these outside areas would be infinitely better treated if they relied on the public conscience of the London County Council rather than on the Water Companies. What interest would the London County Council have to treat them badly? The London County Council for ten years has done a world of work in connection with this water qnestion. It has got a most able staff, and I believe that if the right hon. Gentleman who is in charge of this Bill, or any member of the Government, would just read the extremely able and moderate papers issued by the London County Council—I am glad to see that the Chancellor of the Exchequer is taking an interest in the argument, for this is greatly a matter of finance—they would see that this Metropolis is blessed with a body as well qualified to take over this water supply of London as any body in the Empire. Contrast with it the body which the Government are going to bring into existence. The Board is to consist of sixty-seven members, together with a chairman and vice-chairman. Where will they meet? What staff will they have? On what advice will they carry on their work? They will have to rely on the servants of the Companies, and they will be at a complete loss in regard to the most rudimentary duties which they will have to undertake.

I have noticed of late that a more temperate spirit prevails amongst hon. Gentlemen opposite in regard to the London County Council than seemed to prevail formerly. I am glad to see this improvement in tone. The Members for the Metropolitan area on the opposite side of the House are fifty-two; we are only eight. Their numbers are sufficient in division lobbies, but our arguments are good in the House. I suggest that hon. Members opposite will incur a fearful responsibility if they take a step which the citizens of London will blame them for hereafter. There is only one other remark I want to make. I have already referred to the fourth schedule. It has not been referred to at all up to the present, but if any one will look at the fourth schedule he will see there a curious provision, which I should have been glad to have seen made a little stricter. He will see in the third sub-section of the fourth schedule a description of a person who shall be disqualified from sitting on the Board. The sub-section says— A person shall be disqualified …." who is "concerned in any bargain or contract entered into with the Water Board. And it further says— That no person should be so disqualified …. by reason of being interested …. in any bargain or contract with the Board as a shareholder in any company. This is a most extraordinary provision. I believe after reading it carefully that there is nothing to prevent directors or shareholders of a Water company from becoming members of this Water Board. Is not this a great scandal, having regard to the fact that the Board is elected for four years, and that one of its chief duties is to proceed to buy out these companies? We might have expected in this schedule a plain provision to the effect that no director or shareholder of a water company should be a member of the first Board. [A Voice: Why not?] For the simple reason that the ratepayers of London had a right to hope that they would be protected as far as possible against any undue influence being exercised by the companies in this matter. At the present moment there are no less than thirteen directors of these water companies in this House and in the House of Lords. I have in my possession a circular issued a year ago by one of the Water Companies in which they appealed to every shareholder to bring what pressure he could to bear upon every Member of Parliament to vote against the Bill introduced by the County Council a year ago; and a similar circular has been issued this morning, and as these water companies have not hesitated to bring all this pressure upon Parliament, it is extremely likely they will bring all the pressure they can to bear upon the new Water Board. What power is there on the other side on behalf of the ratepayers to resist that pressure? The ratepayers have a committee which is already considering the constitution of the first Board, and they find that for four years that Board will have all power.

Allusion has been made to arbitration; there may be no arbitration at all. I should have been very glad if the right hon. Gentleman in charge of the Bill had been here to give us a further assurance on that matter, because when the hon. Member for Camberwell asked that it should be made compulsory the right hon. Gentleman nodded his head, and everybody thought by so doing he assented to that proposition. The right hon. Gentleman the Chancellor of the Exchequer shakes his head now; that is ominous, but I hope arbitration will be made compulsory, because it would be a dreadful thing for this new and inexperienced body to have power to come to an agreement with these companies. For this reason also I think it is a great pity that the London County Council was not utilised for this purpose, as the ratepayers have had experience of the care and ability with which it protects their interests.

The right hon. Gentleman in charge of the Bill said, when introducing it, that on leaving this House it might be sent to a Joint Committee of Lords and Commons. Now, I certainly hope that the Government will not suggest any such thing. I hope that the Committee stage of this Bill will be discussed in this House.

THE CHANCELLOR OF THE EXCHEQUER (Sir M. HICKS BEACH, Bristol, W.)

This Bill will have to go to a Select Committee, and also be discussed in a Committee of the whole House.

*MR. LOUGH

Does the right hon. Gentleman mean that there is to be a Select Committee as well as the Joint Committee?

SIR M. HICKS BEACH

No, the Select Committee is to be a Joint Committee of Lords and Commons.

*MR. LOUGH

Yes, that is the point, that is exactly the point. I object to that, Mr. Speaker, because—

*MR. SPEAKER

Order, order! I think the House will not be in order in discussing that matter.

*MR. LOUGH

I quite admit, Mr. Speaker, that I should have been out of order in discussing it, but I was rather led away by the remarks of the right hon. Gentleman. I can only say I hope he will not persist in sending this Bill to a Joint Committee of Lords and Commons. If he does, it adds another to the great dangers to which this Water Bill exposes the ratepayers of the metropolis.

(10.25.) SIR W. HART DYKE (Kent, Dartford)

If this House is not weary of water it must be weary of the lamentations of water directors. This question involves a matter of vast magnitude, and I venture to urge that no question has ever come before the House during the time I have had a seat in it of equal value and importance so far as the future ratepayers of the metropolis are concerned; it is so complex in its character that it deserves very anxious consideration on our part. I am a director of a company, connected with my own county, which has been in existence from the year 1809, and which during the first fifty years of its existence paid an average dividend of 2 per cent. So far as my personal interest in this matter is concerned, it is scarcely worth while to consider that. If the directors are to be disestablished and disendowed that is a very small matter as compared to the interest of the shareholders, and when I know that 80 per cent. of the holdings in the company of which I am a director are small holdings—less than £500—I feel it is not only my right but my duty to do battle for these unfortunate shareholders of mine.

I am not going to weary the House by reciting the long chain of circumstances that has led up to the present situation. I could show that some of these water companies have had scant justice in past years at the hands of this House, but so far as I am concerned I look at various other circumstances outside the interests of the water companies. I look at the huge growth of the population of the Metropolis and its vast net work of suburbs, and so far as I personally am concerned I accept the position as it is presented to us in Parliament today, that there is a strong and solid majority in favour of the principle of purchase, and I accept the situation freely and frankly; but when I come to deal with the precise attitude of the Government on this question I am filled with bewilderment. I cannot understand the policy of the Government. Year after year they have opposed the Bills brought in by the London County Council for the purchase of these Companies, and some years ago they appointed a Royal Commission, and they asserted on public platforms and in this House over and over again that that Royal Commission was appointed not to delay this matter but to investigate it thoroughly, and get to the root of this puzzling problem. Now what have the Government done? They have introduced a measure which, not only in one most important matter bearing upon the interests of this question, totally ignores the chief provisions laid down in the Report of that Commission, but they have introduced a Bill containtaining most of the provisions of the London County Council's Bills, which they have again and again opposed. This is a matter which we who sit on these Benches, supporting the Unionist Government, having regard to the circumstances to which I have alluded, ought to seriously consider. This is the first occasion on which the Government have dealt with a question of this kind, establishing so important a precedent. It is the first time they have essayed to turn out and cast adrift those who have been guiding the destinies of their companies for so many years, and place their undertakings in the hands of another authority.

That this should be proposed by a Unionist Government, whose first desire, aim, and object should be to secure the property of those who are subjected to an experiment of so novel a character, is so startling that when I pass on to the Arbitration Clause of the Bill I may be pardoned for referring to the arguments brought forward by so many Members of this House. I object first of all to this form of treating these companies. I say it is experimental in character. It seems to me we have no guarantee whatever for the security of those we represent in this House. I hope before long we shall be able to hear from my right hon. friend how it is and why it is that the Government have totally neglected and cast aside the strong recommendations of the Royal Commission in this regard, and abandoned the procedure of the Lands Clauses Act. Tonight we had some remarks from the hon. and learned Gentleman the Member for Dumfries Burghs. He passed some criticism with regard to arbitration under the Land Clauses Act, and he ended by saying, having commended the clause as a good clause, that he thought the arbitrators might be depended on to do justice under proper guidance. These very words, "under proper guidance," to my mind, govern the whole situation, and the difficulty under which we now labour is that there is absolutely no guidance whatever, and in considering the vested interests I represent I venture to urge that unless some words are inserted in this arbitration clause directing on what lines the arbitrators should proceed very grave injustice and confiscation may take place. This clause is vague and indefinite in its character. It is so wide that if an hon. Member opposite complains that his views are not to be carried out, it can be easily pointed out that the terms of the clause are so wide that his aims and ambitions may be realised; and when on this side or the other strictures are made on the vague terms of the clause we will be told that it may contain everything we desire. We want a little more than these vague terms. What I would press upon the Government is, that if this Bill is not amended in the direction so many hon. Members have urged, at all events the joint Committee upstairs may have free Scope of action in regard to amending this clause when they come to its consideration.

I do not propose to detain the House on the intricate financial points which have been raised. I have never pretended to be a financial authority, and I have never intervened in a Budget debate in my life. But so far as the results of this Bill are concerned, and so far as I am concerned in regard to it, the issue before me is a very simple one. It is this. During the very few years in which I have had the conduct of the company with which I am connected, a large number of my constituents and others, partly on my good nameand that of others, have invested their small fortunes and their small savings in this company, and all I demand for these shareholders is fair play. I say if Parliament on account of a great public necessity, which we all admit, and concerning which we are all agreed, swoops down on the property of these individuals and transfers it, all we claim is simple justice for them, and that after that transfer they should receive precisely the same income, neither more nor less. That is a fair and just issue. I am not now going into intricate questions of finance. That may be possible in the Committee; but may I suggest the alternative policy suggested by the Royal Commission. The Commission suggested that the purchase might take place for payment in cash. I will not detain the House by reading the sentence, but the Royal Commission laid down a possible scheme of purchase, and they reported that the shareholders ought to receive such a sum as would purchase at all events an equally good security producing the same income, and they said that if calculated accurately and fairly, that might be done without causing any loss to the purchaser. I know it has been urged in many quarters that after the transfer has taken place and the new stock set up, the holders of the stock may be in a better position, because they will have the rates of London behind them. All I demand for the small holders of stock whom I represent is simple justice.

With regard to this proposal there is one other suspicious thing in connection with it, and that is the hearty reception it has met with from one or two hon. Members opposite. I think I noticed particularly from the speech of the hon. Member for North Camberwell that he seemed to be particularly enamoured of this Arbitration Clause. That makes me rather suspect it. I am not one of those who have used strong language with reference to the County Council or have condemned their action of policy. So far as that body is concerned, I owe them personally a deep debt of gratitude for their splendid work in the interests of secondary education, and I have not forgotten the services they have rendered in that direction. But of course when we come to the question of the water companies my feeling with regard to them is changed. I have received a vast number of documents from the London County Council with regard to this question of purchase, and the view they take up with regard to it is perfectly natural. They are appealing, and naturally, on behalf of the ratepayers of the Metropolis. In a remarkable document issued by Mr. M'Kinnon Wood criticising the Government Bill, he says with regard to the new Board that it was unsuited to carry through the purchase, and that the first business of the new body would be to purchase by agreement or lay the ratepayers case before the arbitration tribunal. That sentence explains very fully the policy of the County Council in regard to this matter. The ratepayers are to be considered even if the interests of the companies go to the wall. I refuse to regard this question altogether as one to he settled on a kind of balancing arrangement between the interests of the London ratepayers and the interests of the companies. I have studied it for some years, and I have read again and again a great portion of the Report of the Royal Commission, and I believe that this Bill will be an unfortunate one as regards the London ratepayers of the future. I venture to say these are matters which go to the root of all questions of purchase, and should be kept in view.

I will not detain the House much longer. I can only repeat what has been urged with regard to the hardship of vesting this property in the hands of the purchasers before any arbitration has taken place, or any decision been arrived at. I believe there is no precedent for taking away the books, accounts, offices, and everything connected with the Companies before entering upon the arbitration. It is almost an insulting position in which to place the Companies, that they should be compelled to come in forma pauperis and beg a public Department to allow them to look at certain accounts to help them conduct their ease in arbitration. I hope the universal condemnation with which this proposal has been met will induce the Government to consider whether it will not be fairer to the Companies, instead of asking them to enter into an arbitration under such grossly unfair terms, to fix some definite date once for all in the Bill, instead of leaving it in the hands of a public Department, and then let arbitration be carried on fairly and justly to all parties concerned. If the Bill goes to a Joint Committee of the two Houses, I hope that Committee will have a free hand in dealing with these important matters, so long as the principle of the Bill is conserved, and especially as regards the number of the Board. With regard to the Board of Arbitration—though I will not for one moment impute the possibility of unfairness or partiality to any of the three gentlemen named—I say the proceeding is entirely novel. This is the first occasion on which the property of any man has been placed at the absolute caprice of one or two men without the slightest indication as to the lines on which that property shall be dealt with, and it causes some astonishment to many on this side of the House that a proposal so reckless as this should have proceeded from a Unionist Government. There is no precedent for such a course, and I hope the Government will amend that clause. At all events I can assure the Government of this, that should the Bill result in any disaster or confiscation, the effect of it will be lasting so far as the interests of our Party are concerned, and I would press upon the Government the importance of considering the arguments which have been addressed to them.

(10.45.) MR. GRANT LAWSON

We have heard tonight, from many quarters and of different kinds, a great deal of criticism of this Bill. I do not deprecate that criticism; on the contrary, I welcome it, for, on the main principles of the Bill, the efforts of the critics have been mutually destructive. In all the speeches this evening there is to be found some word of praise for the Bill ill one particular or another—except in the case of my hon. friend the Member for East Marylebone. Indeed, I do not think there is a single item which has been rejected as harmful by everyone who has spoken, whether he has put himself forward as the representative of the ratepayers, or whether he has spoken on this occasion as representing the water shareholders. From this mutually destructive criticism I would ask the House to make this deduction, that the Bill contains the elements of a fair compromise between the interests of those who are about to buy and the interests of those who are about to sell. The whole essence of a fair compromise is surely this, that neither of the parties to the compromise shall be able to say they have had things all their own way. If we had had unqualified praise of the Bill either from the hon. Member for Poplar, or from the hon. Member for East Marylebone, either from gent'emen representing the extreme view of the rights of purchasers—that is the London County Council view—or from those representing the corresponding view of time rights of sellers, I should have begun to be a little anxious, and to think that we had not suggested so fair a compromise as I had hoped. As it is, I am fairly satisfied with the discussion that has taken place. Undoubtedly many details of the Bill have been vigorously criticised, but they are matters which, in a Bill of this kind, have to be fought out before a Joint Committee upstairs, where they will be argued by able lawyers, and the facts verified by expert witnesses, and then the matters will come to be finally settled by this House.

Now as regards the main principles of the Bill, with which we are more properly engaged tonight. There has been so much attack and defence on the one side and the other, that I might almost adopt the attitude of saying, "This is a very pretty quarrel as it stands; I need not interfere in it." But I desire to put aside that attitude, and to thank not only those who have spoken in favour of the Bill, but also those who have spoken against it for some passages of their speeches. It is possibly quite true that the passages of condemnation have been expressed in more vigorous language than the passages of commendation. That is human nature, and it is always so. For my part, I desire to thank everybody for the laudatory passages of their speeches, and to offer some consideration which may possibly modify the condemnatory passages.

The main principles of the Bill I take to be these. First, that a Water Board should be created representative of the whole area of supply; secondly, that that Board should be empowered and required J to purchase the undertakings of the water companies; and, thirdly, that the terms of purchase, in default of agreement, should be settled by three Arbitrators named in the Bill acting under the special terms of reference laid down by the Bill. There is one other point which has been much discussed, with which perhaps I had better deal at once, viz., the transfer of the undertakings from the Companies to the Water Board at a fixed date. There appears to be some misunderstanding as to that clause. It has been mentioned several times that the appointed day is to be January 1st, 1903. That is not so. By the words of the ill it may be that or any other day not later than twelve months after. So that when my hon. friend the Member for Holborn rejoices to hear that the appointed day might be January 1st, 1904, he is not giving effect to the actual words of the Bill as introduced.

*MR. REMNANT

I understood the hon. Gentleman to say that the date had been put back from January 1st, 1903, to January 1st, 1904.

MR. GRANT LAWSON

Oh, no. The date can be put back by the Local Government Board, but I think my hon. friend may give the Local Government Board credit for this, that they will take a reasonable view of the matter, and if the Companies can show that they would suffer serious damage by the transfer of their undertakings at one particular date I have no doubt the Local Government Board will take into serious consideration such representations, and, if necessary, fix the date for the transfer of the undertaking at amore appropriate time than January 1st, 1903. We have had a terrible wail from the hon. Member for East Marylebone. Turned into the streets penniless! No books, no offices, no staff, nothing whatever. It was a terrible picture, and I should be sorry to see so horrible a fate befall the hon. Member. Bat I think he has not very carefully read Section 30 of the Bill. That clause provides— For the purposes of enabling them to prepare and conduct their cases for arbitration under this Act, and to enter into agreements with the Water Board, and to discharge their liabilities, and generally to carry on the business of the companies. (1) Any such company may, after the appointed day, temporarily retain for their own use such money, offices, books, accounts and documents, and the services of such officers and servants as may, before the appointed day, be agreed upon between the Water Board and the company, or failing agreement, be determined by the Local Government Board. I should not have thought the hon. Member would have charged the Local Government Board with desiring to turn the companies into the street penniless, to leave them without offices and so on, when there is a provision under the Bill reserving their rights in that direction.

MR. BOULNOIS

I was quite aware of that provision. I complained that we were turned out from our offices and positions, and that we could only go to our books, see our officers, and obtain some portion of our money, by consent of the Local Government Board, who are the purchasers.

MR. GRANT LAWSON

Yes, but the Local Government Board—who are not the purchasers, I am glad to say—must consider the rights of both parties under this compromise. What was highly convenient to the Water Companies might be extremely inconvenient to the Water Board. If they could not get possession of any offices or books when the undertakings were transferred to them, their position would indeed be one of great difficulty. The reason of the suggestion of an appointed day in the Bill is that there should be some sort of definite date when this transfer is to be brought to a conclusion. It is impossible, in the interests of the water supply of London, that this state of things should be allowed to run on for an indefinite period. The state of affairs during the interregnum would be exceedingly hard on the consumer of water in London. We agriculturists know what it is when a tenant is "farming to leave," and if t he Water Companies were farming to leave, I think the state of the water supply of London during the interval would be extremely improper and unfair.

Now I come to the central principle of the Bill—that is to say, the purchase by one public authority, as opposed either to the state of things which now exists, or to control, without purchase, by some central public body. We have not heard much tonight of control without purchase, but I should like to remind hon. Members connected with the Water Companies of what was said before the Royal Commission. Mr. Dickinson, a gentleman who has been quoted several times tonight with approval by hon. Gentlemen opposite, said he thought there might be effective control if representatives of the London County Council were placed on every Water Board in a majority.

MR. JOHN BURNS

Hear, hear.

MR. GRANT LAWSON

That was the sort of control that was considered adequate by the spokesman of the London County Council, and is now endorsed by one of the members of that body in this House. I think I may put the alter native of control without purchase on one side, and come to the question of whether we should continue the present state of things or whether we should purchase. Since the Duke of Richmond's Commission reported thirty-three years ago, every Commission and Committee have been unanimous on this point. Every body which has gone into this question, taken evidence and heard counsel, has advised that the water supply of London should be in the hands of one body, and that a public body, but not a trading body. The hon. and gallant Member for the Epping Division said that to hand over the water supply to a public body was the elder brother of municipal trading. I am not a strong advocate of municipal trading, but I appreciate the fact that there is so close a connection between public health and the water supply, there is so much interference with the roads necessary in connection with the water supply, that water is perhaps one of the commodities most appropriate to be supplied by municipal enterprise. I am therefore not surprised at the decisions of these Commissions and Committees. If we look at the present state of things, we see that there are artificial barriers set up in London to the flow of water—I mean by the boundaries of the areas of the various companies, which prevent the natural flow of water. I will give one illustration. Water is brought from the Thames through South London, across the river, and into East London. On the other hand, water is at the same moment being taken from the Lea, and carried from East to West, to supply the western districts of the New River Company. Does that sound economical or natural? Then I will take this point. At present, a comparatively small need for making provision for a future supply may be pressing on each Company, but it is not sufficiently powerful in itself to move the Company to take measures involving large capital expenditure. But if this Board is established, controlling all the areas of the present companies, then the cumulative force of all those small needs will compel them to move with precision and promptness, and the concentration of power will enable the Board to move economically and effectively.

I do not think Parliament will take upon itself again the responsibility of refusing to deal with and handle this question of the water supply of London. It will not take upon itself the responsibility of refusing that concentration which has been unanimously recommended by all bodies to whom the matter has been referred. Parliament has itself recognised that purchase must come. It has so recognised it in what I may call the sterilization clauses and the various sinking fund clauses put into all the companies Bills since 1886. This matter has been maturing for thirty-three years, and I think it is now fully ripe to be handled. The question is really one between the present state of things and some form of purchase. This is my answer to those who think there are advantages in the present state of things. The present state of things cannot continue. The only question is whether the Government shall shape the future or whether the shape of it shall come from some other body.

What is the scheme of the Government as to the shape of the future supply? The scheme would give to the London County Council ten members—five times more representation than any other body represented on the Board—and also representatives to the many other rating and health authorities within the area supplied. There are twenty-eight Metropolitan Boroughs, one County Borough Council, two Borough Councils, and thirty-eight Urban District Councils, all exercising rating authority within the area of Water London. Representation is also given to the Conservancy Boards, who are intimately connected with the water supply of London. What is the alternative proposal? The alternative proposal is that the London County Council may appoint a Committee to whom it may delegate any powers with reference to the management of the water supply. The Member for West Islington frankly told the House that, if any representation at all was given to the outside bodies under the scheme of the London County Council, it would be as out of courtesy and as matter of grace. Does anybody wonder that the Government have adopted a wider scheme of representation? To my mind it is impossible and ridiculous to attempt to satisfy the majority of the County Council in this matter on the question of representation; and the Government can only satisfy them by acting on the principle of the Scottish miser—" Take everything from everybody and give it all to me." These are the only conditions which will satisfy the London County Council. The people of London will have forty-six out of the sixty-seven appointed Members, and if they also have the Chairman and Vice-Chairman, they will then have forty-eight out of the sixty-nine Members. The Government have no quarrel with the people of London in this matter; if they have one at all, it is with the majority of the Council.

If we assert in the Bill that the London County Council represents all the other authorities inside and outside of London, what a slight it will he to pass over those authorities outside the London area. I think that slight would be a very serious one. The authorities of the area outside London represent between one-fourth and one-fifth of the population affected. That population is growing very much faster than the population represented by the London County Council. These outside authorities have an especial interest in the matter, because the greater part of the water is drawn from the districts they represent and control. These outside districts gravely distrust the London County Council. I state that as a fact, and I think it is very hard to blame the Government for this. We have heard it mentioned tonight that certain right hon. Gentlemen have said beautiful things on appropriate occasions about the London County Council. They have said that the members of the London County Council-were able, active, and honest, and I have no doubt that these things were said with all sincerity in the firm belief that the Council possesses these qualities, and is entitled to be proud of them. But what the London County Council are not entitled to do is to claim a monopoly of those virtues and declare that they have all the honesty, all the activity and ability, in London, and that none is left for the Metropolitan Borough Councils.

It is said that the reasons I am giving why we could not pass over the outside authorities within the water area are to some extent sentimental. There are very many practical reasons why we cannot pass the outside authorities over. There are administrative reasons, and there are financial reasons. As a matter of administration, it would certainly not have tended to peace if they had given no representation on this controlling body to the authorities outside London. These are the road authorities, and this Water Board would have to interfere with their roads, and therefore it is only natural that they should be represented on the Water Board. But the financial difficulty is very much more serious. Supposing there is a loss in any one year that has to be made good by a rate; if the representation on this Board is confined to the County of London, what will happen? Either the Government must give to the London County Council rating power outside its own jurisdiction—and it will then have had to face the cry of the outside authorities that there ought, with proper manage- ment, to be no rate—or else they will have to allow the ratepayers of London to take the chance of any loss that may be incurred. The latter would at once ask why they should pay, and urge that all this loss came from supplying unremunerative outside districts. The Government, in forming this Board, have gone on a very sound principle, a very old principle, which I think was once a principle of the Party opposite—that taxation and representation should go together. The hon. Member for Poplar, by this Amendment, invites the House to declare that to create such a body is repugnant to the general principles of municipal government. [AN HON. MEMBER: Hear, hear.] Then the principle that taxation and representation should go together is no longer a principle of the hon. Gentleman!

Then it is said that this authority is unworkable, but is it meant that it is unworkable in numbers? I will give the House one or two figures. The London County Council have 137 members, the London School Board fifty-five members, the Metropolitan Asylums Board seventy-three members, and some of the Metropolitan Boroughs have seventy members. And yet we have been told several times tonight that if we have sixty-nine members on this new Water Board the thing will become unworkable and will become a mere debating society. I will not argue the point of the London County Council or the London School Board being mere debating societies. Is this new authority supposed to be unworkable because it is a joint Board? We happen to know something about joint Boards in connection with the Local Government Board, for we have power to establish such Boards for certain sanitary purposes, including the supply of water. There are, at this moment, in working order in England seventeen joint authorities for water purposes, fifty-five for other purposes, and twenty-eight to support sanitary authorities. There are also twenty joint sewage Boards and thirty-six joint Boards for hospital districts. Are all these authorities unworkable because they are joint Boards?

I now return to the Amendment before the House, which declares that our new Water Board is— Unsatisfactory and unworkable, and repugnant to the general principles of municipal government. The first principle of municipal government is that those who have to pay should have a voice in the appointment of those who manage the business. The second principle is that the municipal authority should represent the whole of the area to be governed. This Bill provides for both these principles. Such principles as those may be repugnant to the feelings of the hon. Member who has put this Amendment on the paper, but I defy anybody to prove they are repugnant to the general principle of municipal government. I now turn to the third principle of the Bill, which is the one which has been the most contested and argued tonight. That principle is that the terms of purchase, if not settled by agreement, should be determined by three arbitrators named in the Act, who are to have a very wide discretion. On those grounds I have to defend two proposals—one for a special tribunal and the other for special terms of reference.

I do not think anybody is disposed to contest the point that there ought to be a special tribunal. The occasion is a special and unparalleled one. I do not think it would have been right to leave a matter of this magnitude to the ordinary rules of a Court of Arbitration. We have heard it stated by the hon. and learned Member for Dumfries that in an ordinary arbitration each side appoints not an arbitrator, but an advocate, and then the whole power rests with one man. I think it would have been ridiculous and monstrous to have left so great a matter as this to one man, which would have been the result had it been left to the ordinary sittings of the Arbitration Court. What grounds have we for supposing that the eight water companies would not each have chosen a different man as their arbitrator? In that case there might have been eight different courts to try these different questions. I think myself that there should be one tribunal, to prevent delay and save the duplication of evidence and secure uniformity of procedure, treatment, and decision, and to accomplish this it is necessary that a special tribunal should be set up. The terms left to arbitration are not such as have ever been offered in the proposals for dealing with this question which have come before the House in the Private Bills promoted by the London County Council. They are not, indeed, such terms as might be offered again by the parties I have alluded to.

I want to consider for a minute or two how far the terms we propose are exceptional. My hon. friend said the terms were entirely novel and unheard of. Well, they are taken from an Act of Parliament, and I can claim no originality for them. They are taken word for word out of the County Council Act of 1888, Section 61. They are the same words that conferred discretion on the Commissioners who had to deal with the delicate and difficult matter of adjusting the relation between county and county, and county and county borough. There are two restrictions in the clause in this Bill which are not in the clause I have alluded to, because they do not apply to the work these Commissioners have to do—the provision that there is to be no extra value placed on the undertaking, and the provision that no notice is to be taken of the market value of the stock owing to the introduction of the Bill. I do not think that anybody has insisted that these two limitations are unjust. We have heard frequent appeals to the Lands Clauses Act as a manual of the rules which should guide us in this matter. It has been stated that the Act contains safeguards without which no property can exist in this country. Have hon. Members read the Act? I read the Act last night. There are 153 clauses in it, and it is a fact that there are only two which refer to how you should value. The whole of the rest deal entirely with matters of procedure, how the arbitrator should be appointed, how the declaration should be made, how the witnesses should be summoned, in what form the evidence is to be, and matters of that sort. It is really quite incorrect to suppose that the Lands Clauses Act laid down any principles of valuation whatever. It is said that the Courts have laid down principles by various judgments given under the Lands Clauses Act. My hon. and learned friend has, no doubt, appeared in some of those cases, and he knows that the judgment did not turn on any words in the Lands Clauses Act, but that it was given with reference to the broad principles of common sense which would apply not only to arbitrations under that Act, but to every arbitration in the country. I think common sense is a sound method to apply in any arbitration, and I am sure the distinguished men we have chosen as arbitrators will not depart from that basis. Although it is a main principle of the Bill that there should be special terms of reference to arbitrators, a principle which is justified by the unparalleled magnitude of the transaction, yet the exact terms of that reference are obviously a matter for the Committee stage. We cannot dictate to the Joint Committee upon what point they should or should not hear evidence, but I think it is difficult to believe that such a Committee would refuse to hear counsel on the exact terms of reference. In any case, the decisions and Amendments of that Committee will come under the consideration of the House at a later stage. The Government have put forward the suggestion which appears to them most likely to bring the matter to a final and equitable settlement. Of course the desire of the Government is that the people from whom these properties are taken should be indemnified for any loss they may sustain, and we have used such means in this clause as lead us to suppose that they will be so indemnified. The course the Government have pursued is to select arbitrators who can be trusted, and we desire that they should be trusted with a discretion as wide as possible. That is part of the principle of the Bill, but the actual words in which that discretion should be given are not. That is a fair matter for discussion before the Committee and in this House, and I have no doubt it will be adjusted to the satisfaction of my right hon. friend who spoke just now and other hon. Members who have dealt with the clause.

*MR. LOUGH

Will the arbitration be compulsory?

MR. GRANT LAWSON

Does the hon. Member mean that where a water company are quite willing to enter into a friendly agreement with the new authority, and save all the cost and worry of an arbitration, we are to say that they are not to do it? No, Sir, the Government will not agree to that. I think I have gone through all the main principles of the Bill, on which, of course, the Second Reading has to be decided. I suppose those who believe things should remain as they are will vote against the Second Reading of the Bill, but I fancy they will be a very small body, and they will find in their lobby some very strange companions. The opponents of this Bill include the leave-things-alone-at-any-price party, and the party who are determined that things shall not be left alone, and who desire that the companies shall be purchased by the London County Council instead of by a widely representative body. These strange associates will be our opponents. I think we have a right to ask the assistance of all those who believe that the time is fully ripe for the concentration and control of the water undertakings in the hands of a public body, and who further think that the formation of that body and the shaping of that concentration should be in the hands of a responsible Government, and not in the hands of the majority of one particular County Council. The Government also have a right to ask for the votes of those who believe that this Bill, whoever suggested it, and from whatever quarter it comes, is, at any rate, a fair and honest effort to arrive at an equitable compromise on what is an extremely difficult question.

(11.25.) MR. McKENNA (Monmouthshire, N.)

I have just arrived back in the House, and I am sorry that I have not had the advantage of hearing the speech of the hon. Gentleman who has just spoken. I have listened to the whole of the previous debate, and I can, therefore, venture to intervene now, and refer to what has been said earlier by other hon. Members. The remarkable thing about this debate has been that while hon. Members on this side of the House have attacked the Bill mainly on the ground raised in the Amendment that the composition of the Water Board is not satisfactory, hon. Members on that side of the House have attacked the Bill from every conceivable point of view. Some hon. Members have objected to the Bill altogether. Other hon. Members have urged, as we have on this side of the House, that the composition of the Water Board is unsatisfactory, but there have been still other hon. Members, and these entirely on the other side, who have objected to the terms of reference to the Court of Arbitration, and to the lines laid down upon which they are to decide as to the price given. I could not help thinking when I listened to the speech of the hon. Member for East Marylebone that he was conducting really a sham fight. He complained that the terms which the waters company would probably receive from the arbitration would be unsatisfactory to the water companies. My hon. friend the Member for West Islington has pointed out that his own particular water company has risen something like forty points in value on the Stock Exhange. I have been through the prices quoted on the Stock Exchange of the water companies, and I find that the whole of them have risen no less than 10 per cent. on the price at which they stood before the Government proposal was known at all last July. [An HON. MEMBER: No.] The hon. Member makes some observation upon that, but the fact stands that these water companies were perfectly steady investments, fluctuating very little, or only fluctuating as other sterling securities do. [An HON. MEMBER: All investments have risen since last July.] Nothing like these.

MR. BOULNOIS

May I say that during the last fortnight or so the water companies' stock has fallen?

*MR. McKENNA

Yes, that I can fully understand, and I think I can give the House the reason why. We should go back again to what they were before the Bill was introduced. At any rate the market experts on the first introduction of this Bill did anticipate that the terms of reference to the Arbitration Court were such as would prove advantageous to the shareholders. Generally, I should back the market experts to be right, but I am bound to say that on this occasion I think they are wrong I do not think it has been quite brought to the minds of the experts speculating in the water companies' shares what is the true meaning of Clause 9 of the Bill. This is very important. Sub-section 2 of Clause 9 says:— The amount of water stock to be so issued to a holder of debenture stock shall be such an amount as is sufficient to produce the same sum by way of income as the debenture stock in substitution for which it is issued. It is therefore accepted as the principle upon which this Bill proceeds that income shall be the guide for payment in the case of debenture stock, and the Court of Arbitration would not dream of treating ordinary stock and debenture stock on the same footing.

I, for one, express myself as perfectly satisfied with the constitution of and the terms of reference to the Court of Arbitration. My objection to the Bill is in regard to an entirely different matter, viz., the composition of the Water Board. The Water Board was recommended to the House by the president of the Local Government Board at the First Reading of the Bill, simply and solely on the ground that it was a representative authority. Now, how far is it a representative authority? It is true that the members constituting the Water Board will come from districts which are included in the water area. It is also true that the members will, in the main, be elected members. But elected to what? Not to the Water Board, but to other bodies elected for a totally different purpose. To call such an authority a representative body is a mere juggling with words. To say that it is a representative Board is merely doing lip service to the great representative principle which this Bill denies and flouts in practice. How is the control by the electors over this supposed representative Board to be exercised? There are twenty-eight City and Borough Councils which will nominate thirty-four members who were all elected for other purposes than the provision and control of the water supply. Now, what are the ratepayers or consumers of water to do if they are dissatisfied with this supposed representative body? I will take the average number of members of a Borough Council at sixty. One of these will be nominated as a member of this representative Board and suppose that his action on the Water Board dissatisfies the remaining fifty - nine members of the Borough Council, how are they to call to account this one black sheep? It may be said that the nominated member represents the Borough Council, and it would become the duty of the fifty-nine members to turn out the black sheep. But here comes in the very folly and absurdity of the Bill. The Borough Councils are elected for three years, and before that one member nominated to the Water Board can be called to account at the end of his term of office, the Borough Council will itself have gone out of office. The consequence will be that the Council which appointed him will never have an opportunity of calling their representative on the Water Board to account for his mistakes. Again, the electors who send the Borough Councils into office have no concern with the Water Boards; they do not elect their representative on the water question; and therefore, from the very composition of the Water Board, it is the greatest absurdity to speak of its members as representative, in any sense, of the ratepayers and consumers, or of the Borough Councils themselves. But when I get to the other authorities out of London, we have indirect representation reduced to an even greater absurdity. We find in one case no fewer than eight local authorities uniting to elect one member to the Water Board. What is the result? The electors who elect the eight local authorities cannot possibly have any control whatever over the single nominated representative. Under these circumstances representation on this Board is a mere farce; and I say that if the Government refuse to give the control of the water supply to the London County Council, which only wishes for efficiency, let them abandon this system of sham representation altogether, and appoint a body which will be a guarantee to the public of being an efficient body. Lord Llandaff's Commission recommended that the maximum number of members for a proper Board was thirty; Lord Cross's Bill only suggested twenty-one. All have recognised that any such body as is here proposed, consisting of sixty - nine members, is perfectly useless for efficient control of the water supply of this great area. As has been said, such a body would be inexperienced, ill-informed, and ill-equipped. There would be no cohesion in it. We have even had it claimed tonight that this Board should embrace members of the water companies, not in the interest of the ratepayers, but in their own, who would recommend the extreme limit of price to be paid for their undertakings.

I would again frankly ask the Government to abandon this sham representative authority and give us efficiency. Speaking as a Member for Monmouthshire, a county which, sooner or later, will be affected by this Water Board, I think it would be extremely dangerous if our interests were transferred to the control of such a Body as this. The places which are likely to be drawn upon for the supply of London water have an interest in this question. I feel sure that Wales would prefer to see the establishment of an effective body, capable of managing the water supply, instead of the proposed Board. Is there any practical alternative? In the course of the First Reading of the Bill, the President of the Local Government Board made some general observations upon what is desirable for local government in London. He said— I believe it is only by limiting the number of elections, and by securing that the duties shall be concentrated in the hands of a few individuals, and that their work will be of a responsible character, that you will give that real life to local government in London, and elsewhere, which we all desire to see it possess. In these three principles which the right hon. Gentleman laid down, we have, I think, an exact outline of the claim upon which the London County Council rests to be the proper authority for London. First of all, in limiting the number of elections we should have no new election for the water authority; secondly, the duty would be concentrated in the hands of the London County Council; and, thirdly, the authority would have duties of a responsible character. It cannot be denied that the duties of the water authority must be of a most responsible character. In November 1894, the Prime Minister, Lord Salisbury, used these words— I am told that there are certain subjects which a central body should conduct and control. I quite admit that there are such subjects principally connected with main drainage, and with the management of the river which flows through this city, and if you will, the water supply. There we have the opinion of the Prime Minister that the London County Council is the proper authority for providing and controlling the water supply. I heard with great astonishment the President of the Local Government Board state that the London County Council was no more qualified to deal with the supply of water for London than the Lancashire County Council was qualified to deal with the water supply of Liverpool or Manchester. The right hon. Gentleman surely cannot be ignorant of the fact that the Lancashire County Council has no more to do with Liverpool or Manchester than with Yorkshire. The electors of that County Council are not the citizens of Liverpool or Manchester. These cities are counties by themselves, and are altogether outside the operation of the Lancashire County Council for every purpose. Therefore to attempt to assert that there is any analogy between the Lancashire County Council dealing with other county boroughs in Lancashire, and the London County Council dealing with the Boroughs in London, shows a confusion of mind in regard to local government which I was absolutely astonished to hear from the President of the Local Government Board.

What does the County Council proposal mean to the ratepayers and consumers of water in London? First of all, the proposal of the County Council that they should be the water authority in London gives control to the ratepayers over the action of the water authority; and in the second place the County Council would be responsible to the consumer. The County Council could be judged on their water policy, and if the London ratepayers object to that policy they could turn them out of office, and the Council was the only authority over which they could have that control. It is therefore of the utmost importance, if we are going to follow the principle of representative government at all, to constitute the County Council the water authority of London. It has been said more than once in the course of this debate that outside London the water areas of municipal corporations frequently extend beyond the corporation areas, and in no case has it been objected against the water authority that the water area was beyond the corporation area. I quote the cases of Liverpool, Manchester, Birmingham, Bradford, Nottingham, and Bolton. In every one of these cases the corporation is the water authority, and they deal with areas outside the corporation areas. But it is a very remarkable fact that, with the single exception of Nottingham, in every one of these cases the proportion of population outside the corporation area is greater than would be the proportion of population outside the London area, and it is also remarkable that in the case of London the ratable value inside the area is greater in proportion to the ratable value outside the area than the ratable value inside any of the corporation areas I have named to that outside. Therefore, on the principle of representation, and on the analogy of existing water authorities in our big cities, we are driven to the County Council as the proper water authority, and for my part I have never heard a single reason brought forward against that proposal except the statement of the hon. baronet the Member for the Tewkesbury Civision, who was a member of the Llandaff Commission, that the outside areas would object to the control of the London County Council. That may be true, it may be a difficulty, but 77 per cent. of the population is inside the London area, and only 23 per cent. outside, and 85 per cent. of the ratable value is inside the London area and only 15 per cent. outside. I fully recognise that if the outside authorities object that is a difficulty; but no plan is free from objection, and if they wish to have a representative authority, they must choose the County Council, adding a certain number of members to the Water Committee as their representatives. There is no other way of dealing with the matter. What security have the outside areas got under this proposal? They object to be governed by the London County Council, but London is to have two-thirds of the representation on this body. It is true that the ratepayers of London will not have any control over that two-thirds; neither will the outside areas. The outside areas would be placed absolutely in the hands of the majority of this water authority, as they would be in the hands of the majority of the County Council. But the County Council proposes to co-opt members representing outside areas, and I have no doubt that the County Council would be perfectly willing to accept an equal proportion of co-opedt members on their Committee as is now proposed, so that the outside areas under the County Council scheme would have exactly as much representation and control as under this scheme. Therefore, the only objection which has been raised to the County Council being the water authority, which admittedly is an objection, is not disposed of by this Bill, and even if that were not so, the objection is not of sufficient weight to countervail all the admitted advantages of making the County Council the water authority of London. These reasons are sufficient, I think, to recommend the proposal of the County Council.

I would ask the Government, if they have any doubt on the matter, to appeal to Londoners. You cannot appeal to Londoners through a Parliamentary election, because when Londoners vote at a Parliamentary election they do not vote on London questions only; they vote on Imperial policy, mainly, on the war, and other questions outside London politics. There is only one single election which affects London as a whole, and by which the opinion of London is expressed on London questions only, and that is the County Council election. Even in the Borough elections you have local questions arising which are not of general interest to London; but in the County Council election you have the whole policy of the Government of London brought under review, and there is no more important question than the water supply affecting London policy. If the Government have any doubt as to the opinion of London on the subject, let them make this the issue at the next County Council election, and I for one am perfectly satisfied that the present majority on the Council would in that event be largely increased, and we should get the opinion of London ratepayers and London consumers of water. So far as it has yet been able to express its opinion, London has over and over again expressed itself in favour of the London County Council as the water authority.

That, Sir, is the last word I have to say on the subject, except this—that if the Government, in spite of the criticisms of hon. Members on their own side of the House, go on with this Bill and send it to a Committee, I would ask them, at any rate, to send the London County Council Bill to the Committee at the same time, and leave the Committee free to choose which Bill they would have, or combine the two Bills and produce what in their unfettered judgment they conceive to be the best solution of this question. I would welcome the Government Bill being sent to a Select Committee if the County Council Bill were sent with it, and I would be perfectly confident that any fair minded body examining the two Bills would prefer the County Council scheme. With that hope I do urge the Government not to push this Bill through as a mere Party measure, but to give every chance for the opinion of London to be expressed on the County Council scheme, and, at any rate, to give that scheme a fair hearing.

MR. TOMLINSON (Preston)

moved the adjournment of the debate.

SIR M. HICKS BEACH

In accepting that Motion, may I express a hope that the debate may be brought to a conclusion at a tolerably early hour on Monday. I propose now to postpone the Order of the Day with regard to the Procedure Rules which stand on the Paper for Monday next.

MR. SYDNEY BUXTON

I should just like to say, on behalf of the Leader of the Opposition, that we will give no pledge until we see how many hon. Members desire to speak. I am sure the right hon. Gentleman would not wish to unduly close the debate if there were a sufficient number of Members who desired to take part in it, but, at the same time, we do not wish to unduly prolong the discussion.

*MR. LOUGH

In view of the great interest taken in the debate, may I ask, in the event of the President of the Local Government Board not being well enough to attend on Monday, might it not be possible to take some other business, and take the Water Bill when the right hon. Gentleman can be present to hear the arguments?

SIR M. HICKS BEACH

I have no doubt that my right hon. friend will be able to be present on Monday. He only left the House late this evening.

MR. BANBURY

said he could not see any reason for prolonging the debate, and the Water Bill, as during the last two hours there were not more than six hon. Members on the opposite Benches.

Debate adjourned till Monday next.