LONDON ELECTRIC SUPPLY BILL. (Hansard, 7 August 1907)

§ * MR. F. LEVERTON HARRIS (Tower Hamlets, Stepney)
said he wanted to explain why the promoters of this Bill desired to withdraw it. It was not because the promoters felt that there was in it any inherent defects or that the provisions would not go far to solve the difficulty which was at present hanging over London in connection with the electric lighting supply. But they felt that at this time of the session it would be absolutely impossible to hope to pass their Bill, it being contentious, as this Bill undoubtedly was, through all its stages. The delay which had occurred in bringing the Second Reading before the House had not been in consequence of any action on the part of the promoters. He thought that the President of the Board of Trade would admit that those who were responsible for the Bill had done all they could to meet the desires of the Department with regard to it. They had agreed, at the request of the Board of Trade, that the Bill should be deferred until the London County Council Bill had been considered in Committee; and that Bill was not discharged from Committee until 26th June; and, in spite of the constantly expressed desire of the promoters, this Bill had not been on the Order Paper for consideration until that evening. What was the origin of the Bill? It originated in the Report of a Committee which was appointed to consider last year the Bill promoted by the London County Council to deal with the bulk supply of electricity to London. The Report of that Committee recommended that in the present session various alternative schemes should be put before a Committee of that House for consideration so that they might pronounce some definite opinion on the merits of those schemes and decide which of them was to be accepted. The London Electric Company, he thought very properly, considered that this was a direct invitation that they should formulate some scheme 183 for dealing with the electric lighting industry of London. And they were in the hope that if they presented a Bill it would be permitted to go to Committee on its own merits, so that evidence might be adduced and arguments put forward in order that this highly debatable question which was hanging over London at the present time, and the solution of which was most important to all the citizens of London, to the consumer, the ratepayer, and the electric light undertaker, might once and for all be decided. This consideration before the Committee had been frustrated, he regretted to say, largely in consequence of the action of the Board of Trade, who had consistently opposed the principle of the Bill. It was quite true that they put on the Notice Paper a reference to the Committee that the Bill should be taken in conjunction with the London County Council Bill, but that measure, as the House was aware, was rejected by the Committee, and the promoters of this Bill had been in the position that they were unable to obtain a hearing of the arguments they had to put forward until that evening. Any one who had studied the question of electric lighting in London must be convinced that the electric enterprise of this great city was in a position which was intolerable not only to those who were undertakers for the supply of electricity, but to those who were the great consumers of electrical energy, and the problem which overhung them at the present time was one of immeasurable importance, and one which every section of the community believed should be settled in some definite way, so that the restrictions which at present obtained could be removed. It was too late in the night to go into the history of electric lighting in London, but he might perhaps remind the House that they stood at the present time in this position: By the Electric Lighting Acts of 1882 and 1899 certain principles had been laid down. The first principle was that those who supplied electricity to the consumers of London were under the obligation at the end of forty-two years to sell their undertakings to the authorities of the districts in which their works were situated, and to which they 184 applied electricity. The second consideration was that when those forty-two years had expired the arrangements which had been made for the purchase of those undertakings were founded upon a compromise which had produced a feeling of uncertainty, crippled industry, and was most prejudicial to the consumer of electrical energy. Under the Bill of 1889 certain principles were laid down and afterwards confirmed by the Provisional Orders issued under the sanction of the Board of Trade after consultation with such local authorities as the London County Council. Those Orders laid down the principle that each area should be supplied by two or more competing generators of electrical current. The result of that had been that they had instituted in London not only a system of duplication of machinery and management, but a system entailing an enormous expenditure of capital upon which had to be paid interest and dividends which had ultimately to come out of the consumer's pocket. There existed in the metropolis twenty-nine different electrical undertakings, sixteen of them managed by borough councils, and thirteen by private companies. Those undertakings had involved the expenditure of some £20,000,000 of capital, and if a better arrangement had been provided in the initial stages of electric lighting in London at least one-third of the capital which had been spent in the metropolis might have been saved as well as the interest upon it. The principle of dividing London into small areas for the purposes of electrical supply had been a very disastrous one for the consumer, and this had only been remedied by enormous expenditure and bringing before the House many separate Bills in order to enable those companies to establish outside the area of the metropolis itself great generating stations to supply the different areas with current and power. The purchase clause inserted in previous legislation dealing with the electrical supply of London told against the consumer of electricity in the metropolis. At the end of forty-two years the present electrical undertakings would pass into the hands of the local authorities, but no definite principle had been laid down 185 as to the exact price at which the undertakings were to pass under the control of the local authorities. This uncertainty affected the raising of capital in the future, the question of dividends, and the reduction of the charge to the consumer. The present position was the exact opposite to what a reasonable system ought to be. Small stations were working instead of large stations able to supply power in large quantities. There was duplication in almost every area where mains had been laid down and generating machinery erected, and the management expenses overlapped, so that the cost of the generation to the amount of capital had been enormously increased, to the detriment of the consumer. The present Bill sought to remedy this state of things and proposed that the various stations should be linked up so as to be able to help each other in case any station belonging to the companies happened to break down. The Bill proposed to form a joint committee so that the most economically worked stations should be those worked in summer when there was the least load. It also proposed to organise a scheme for the supply of electricity in bulk to London at a lower price than that which had been proposed by any other authority which was seeking powers to supply electricity to London. He respectfully suggested to the President of the Board of Trade that this was a matter which really deserved more attention than it was receiving that night. What was wanted was a scheme which would once for all definitely lay down some principles which could be adopted, and satisfy not only the consumer and the ratepayer, but also such authorities as the London County Council and the various local authorities, and the electric light companies. He ventured to believe that if the right hon. Gentleman would only constitute some authoritative Committee to go into the matter of the electrical supply of London, he would obtain from the companies interested in the present Bill every desire to meet him with regard to any proposals he had to make, so as to place this very important industry on a more permanent basis, to the benefit of the consumer and the ratepayer, and ultimately of the local authorities. Under these circum- 186 stances he moved that the Order for the Second Reading of the Bill be read and discharged, and the Bill withdrawn.

§ THE PRESIDENT OF THE BOARD OF TRADE (Mr. LLOYD-GEORGE, Carnarvon Boroughs)
said the hon. Gentleman had taken the only possible course under the present circumstances. He did not propose to follow the exhaustive and rather contentious statement of the hon. Member, though he agreed with him that the subject was very urgent and deserved immediate attention. Nobody, however, knew better than himself the character of the controversy that raged round the question. The municipalities of London took one view, the companies another, and the majority of the London Members another. His own opinion was that it would be difficult, if not impossible, to arrive at a solution until the parties came to some common understanding upon general principles. It should not be impossible to do this, for it was a business matter, but the time for that had not yet arrived, not because the matter was not urgent, but because the temper of the parties at present did not conduce to a settlement, though he did not despair of something being done in that direction in the next few mouths.

§ MR. J. WARD (Stoke-on-Trent)
said the hon. Member for Stepney had stated that this Bill met the requirements of the Committee which was appointed to investigate the subject last year. The Committee made three recommendations, and in each ease the County Council was to be supreme. There was not a single recommendation of the Committee which this Bill did not contravene and contradict, and the statement of the hon. Member was a peculiar one to make to those who knew something about the business. As a matter of fact the whole contention of the Bill was contained in Clause 24. At present these companies which proposed to amalgamate could be purchased, under Section 2 of 187 the Act of 1888, by the local authorities at what the companies called "scrap iron prices." Now the companies proposed to amalgamate and to escape from this purchase clause so that they could only be bought out after an agreement had been made with the local authorities. The whole question of electric light supply might then get into greater confusion than it was in at the present time. He asked the House to witness what had happened in Marylebone as an example of what might occur. He was of opinion that the House should decide on the Bill. He did not think that the companies should be allowed to scuttle out of it by withdrawing the Bill. Why was it that the companies always insisted on repealing Section 2 of the Act of 1888? It was very easily understood. An expert who was examined before the Committee was asked: "You give it as your experience in these undertakings that the position of finance largely depends on how far ultimately the promoters are able to exploit the general public?" and he replied "To a very considerable extent it depends upon that." That was the answer of the experts before the Committee. The maximum charges and the financial success of the undertaking did not depend on that at all. The hon. Gentleman knew that if they only could manage to pass this Bill with such terms of purchase at the expiration of the period granted by Parliament, they would get the whole of their outlays out of the pockets of the ratepayers in addition to large profits. As the Bill involved a very great principle indeed as to the method of ultimately acquiring these properties, and as the companies were suggesting practically the repeal of the Act of 1888, he would have preferred that the Board of Trade had refused to allow the Bill to be withdrawn. The Board of Trade should have informed the company that any clause like Clause 24 could never be accepted by the House of Commons, whose business it was to protect the interest of the public.

§ LORD R. CECIL (Marylebone, E.)
said he could not allow to pass the speech of the hon. Member who sat for no constituency interested in or covered by the Bill.

§ MR. J. WARD
said he had lived in London for twenty-five years, he had been a ratepayer in the locality where he lived for fifteen years, he had served on a London local authority, and he considered that he was perfectly entitled to speak on the Bill.

§ LORD R. CECIL
said he would be the last person in the world to question the right of the hon. Gentleman to express an opinion about any Bill which might come before the House. He only mean that it would be unfortunate if no reply were attempted to be given to the re marks of the hon. Member. He would not go into the question as to what terms should be imposed on any company for the supply of electrical power over the whole of London. He would remind the House of one single fact, and that was that certain terms of purchase imposed in the Act of 1882 had thrown this country back for years in electrical enterprise. He would not discuss the position of affairs in the borough which he represented; it was enough for him to point out that as a matter of fact the electrical enterprise in Marylebone was now in a fair way to success. He desired to impress on the House and the Government the enormous importance of this question to London, and to express the anxious hope that the President of the Board of Trade would endeavour to bring about a consultation between the parties concerned, which he said was eminently desirable, and make it a success. It was really a scandal to our system of government that a cheap supply of electrical power in London should have become the battle-ground of municipal parties, and was threatened with delay and the possibility of defeat, because the matter was not now considered, as it ought to be considered, as the President of the Board of Trade had said, as a business proposition, but as a political question. He hoped that before many months were passed they would have in London the cheap supply of electrical power they ought to have had long ago, and that the matter would be removed from all political considerations.