STATUTORY UNDERTAKINGS (TEMPORARY INCREASE OF CHARGES) BILL.

HC Deb 08 July 1918 vol 108 cc87-131

Order for Second Reading read.

The PARLIAMENTARY SECRETARY of the BOARD of TRADE (Mr. Wardle)

I beg to move, "That the Bill be now read a second time."

This Bill has been framed to give effect to recommendations which have been made by Select Committees of this House appointed to consider the case of gas and tramway undertakings whose financial position has been adversely affected by circumstances arising out of the War. The Bill embodies these recommendations. It also applies the same provision to water and electricity undertakings, as the conditions are very similar in the case of these public utilities. All this class of undertaking is limited by Statute in the prices chargeable either under a sliding scale arrangement or a limitation of the maximum dividend payable to the shareholder or by maximum rates and charges fixed by Statute, and many have been very hardly hit as a consequence of the War. Wages have risen from 60 to 100 per cent. Materials have advanced in cost from 100 to 200 per cent. Various restrictions, especially in the case of gas, electricity, and tramways, have recently been rendered necessary, as have been explained to the House on several occasions. These are the main causes which have led to the present position and to the appointment of the Committees referred to. The Select Committee which dealt with the case of gas undertakings recommended that some provision should be made by public Bill for the temporary modification of statutory requirements with regard to price and dividend in the case of undertakings where the financial position is so seriously affected as to call for intervention. This intervention is not to take place until (1) the dividend of the ordinary stock or shares of the company have been reduced to one-half of the standard or maximum rate, or (2) to one-half of its average dividend calculated on the three years before the War, which ever be the smaller. Whenever these conditions prevail, then the sliding scale or maximum charge may be suspended and the company entitled to charge such price as may be held by the Board of Trade to be sufficient for the cost of manufacture, distribution or working, and for a dividend at the rate of one-half the standard dividend or one-half the pre-war dividend, which ever may be the smaller.

In the case of municipal authorities prices may only be allowed so as to secure the authority against loss, and no excess price over the statutory limit may exceed 50 per cent. The Tramway Committee made a somewhat similar report, and accordingly the Bill has been made applicable to all undertakings of this kind. It is proposed that the Bill shall have effect until the expiration of two years after the War. This is in accordance with the recommendations of the Committee on tramway undertakings, and differs from the Gas Commission's Report, which recommended one year and such further period as the Board of Trade may, by Provisional Order, determine. It seemed to the Board of Trade not unreasonable to take the longer period but to make it a fixed one. Some complaint has been made by undertakings concerned that the relief proposed in this Bill is inadequate. I would, however, remind hon. Members that the Bill is based on the recommendations of the Select Committees to which I have referred, and the Board of Trade are of opinion that any alteration must depend upon the will of this House. We are prepared to consider the question of Amendments when the Bill reaches the Committee stage, but at the present moment they feel themselves bound by the recommendations made by the Select Committees appointed by the House of Commons. I would like to add that we do not propose to hurry the Committee stage.

Sir DANIEL GODDARD

I do not rise for the purpose of moving the rejection of this Bill, but I think it is an occasion upon which a very strong protest should be made against the provisions of the Bill. The hon. Gentleman who introduced the Bill has said that he has heard of complaints that the Bill has not been considered adequate. I think it would be much more true to have said that they consider the relief proposed in this Bill is scarcely any relief at all, it is so little. Inadequate is not exactly the word to describe it. I noticed that the hon. Gentleman threw himself back on the Report of the Committee, as, of course, he was quite right to do. There is no doubt that the Bill is founded on the recommendations of the Committee. I have no word to say about the Committee. I know they gave long attention to the subject, and no one can charge them with hastiness or with not going into the matter thoroughly. But the Report they have issued is a curious one. It is clear beyond doubt that they carne to the conclusion that some relief was necessary. One clause in the Report says: Your Committee, however, are satisfied, from the evidence placed before them, that some temporary modification of statutory requirements is expedient, in some oases, but the varying conditions of the different gas undertakings render it extremely difficult (if not impossible) to lay down one general rule affecting price and dividends which would be equitable to all companies alike. That shows the Committee, having weighed the evidence put before them, thought that in some cases relief was necessary, although they laid it down that, owing to the conditions varying so much, one form of relief would not be appropriate or adequate. Yet this Bill is founded on the plan that they must all be treated in exactly the same way. While the Committee came to the conclusion that some relief was required, their recommendations for that relief fall very far short of the relief that is required or looked for, or was even forecasted by the first part of the Committee's Report. The fact of the matter is that there is not a single one of the twenty-four gas undertakings whose Bills came before the House, which were the cause of the Committee being set up, who, under this Bill, will get any present relief at all. However hard their cases are, the recommendations do not give them any relief. It has been said that the question has arisen on account of the principle of the sliding scale. I suppose that the sliding scale should be properly understood by everyone at this time, but it is an extraordinary thing that you can come across people who do not understand in the least what the sliding scale is. Judging from the reports in the papers, there is an extraordinary number of people who think the undertakings who have asked for relief have got that relief, which the undertakings themselves do not consider they have got at all. Perhaps I may be allowed to say what the sliding scale really means, because it is the basis of the whole thing. The sliding scale is a bargain—there is no doubt about that—between the local authorities and the undertakings. In the Bills which were agreed under that bargain a standard price for gas was fixed, and at the same time a standard rate of dividends was also fixed. It was said to be an incentive to good management. Perhaps in this connection I might quote the words of the Chairman of the Select Committee of this House, the Right Hon. W. E. Forster, because they put the matter stronger than I can. He said it was a fine if they charge a high price, and a reward if they charge a low one. It was really to be an incentive to good management. If, by good management and proper economy, they reduced the price of gas to their consumers, they were to be at liberty to increase the dividend above the standard rate. Of course, the opposite effect occurred if the price went above the standard price of gas. Then the dividend fell in the same ratio to what it was before. Under normal conditions of work, for many years this principle has produced very good results. No doubt the public have had the advantage of much cheaper gas, and investors in this kind of stock have received better dividends. But the circumstances of the War have completely changed all the conditions and upset all the calculations. As everybody knows, everything has gone up, and the result has been that gas has had to go up too. If the increased price of gas had been due in any sense whatever to the bad management of these undertakings, nothing could be said, because they must bear the results of their own faults. But that is not the case. These are circumstances over which the undertakings have no control, which have occurred simply on account of the War, and which have put them into a very difficult position indeed. Take, for instance, coal. In the first instance, the price of coal was raised at the pit's mouth by 4s. a ton—it may have been quite right, and I do not find fault with it—to meet the increased charges. The undertakings were very badly used, however, because about the middle of last October an announcement was made by the Coal Controller that the price of coal would go up 2s. 6d. a ton, which was to take effect as from 17th September. Everybody will see that, on the face of it, that was a most unfair arrangement. All the coal delivered between 17th September and October had to pay the extra 2s. 6d. per ton, although, perhaps, much of it had been used. It is clear that if anyone selling coal had the slightest idea that this rise would take place he would have delayed delivering coal in order to get the higher price for his article. Only on 24th June last another 2s. 6d. per ton was added to the price of coal, and just recently another 1s. 6d. per ton has been added. No warning was given of these increases, and you could not make allowance for them.

The House ought to understand the very difficult position in which these companies are put. The gas companies cannot increase their price until the next quarter, because the present quarter has already begun and will not expire until 30th September. Therefore, they must go on paying this extra price for coal without any possibility of raising the price of gas, for the time of giving notice has gone by. Then there is the question of freights. A great deal of the coal is brought to the Metropolis and certain Southern ports by ship, and freights have gone up enormously. The pre-war freight from the Tyne to London was about 3s. It has been as high as 20s., but it is now about 17s. From 3s. to 17s. is an enormous increase. It will be seen at once that there was no possibility of controlling that. We know the reason of it, and the reason is a good one. I am not finding fault with it, but simply pointing out that the effect is rather serious. Further, there is the question of labour. No doubt the cost of living has risen very largely, and it is right that workmen should be paid higher wages in consequence, but it has been a serious blow to the industry, because these wages have gone up enormously. As a result of the recent inquiry, 20s. was added above the pre-war rate of wages, and in addition to that there was the 12½ per cent., of which we have heard something in this House. That was a considerable charge. The prices of all the materials, as the hon. Gentleman said, have gone up enormously—in some cases 200 per cent. and in others 300 per cent. There are some of the charges which these undertakings have had to pay. It cannot be said that it is a question of new undertakings, because all these undertakings must provide for repairs and maintenance and must have materials for that purpose. In the case of oil, which is used largely by gas undertakings, the pre-war price was about 2½d. a gallon. The oil is now regulated by the Government and the present price—it has been higher—stands at 1s. 4d. a gallon. That is a considerable charge. All these things, taken together, have caused an enormous increase in the cost of producing gas.

There has not only been the increase in the cost, but, in addition, the Government has controlled the price of residuals. Although the price of coal has been increased, there has been no opportunity of recovering any part of it by an increased charge for residuals. I am told that if the residuals of gas companies had a free market and were sold at whatever they could fetch, it would make a difference of 5d. per 1,000 cubic feet of gas at the present time—that is to say, the price would be 5d. less than at present. All these things have meant a rise in the cost of gas, and, consequently, a serious falling off in the rate of dividend. On the top of all these things, we come to a Rationing Order. I am not going to discuss the Rationing Order, because I do not suppose it would be in order for me to go into it in detail, but I may say that the Rationing Order is designed to restrict and reduce the sale of gas. We are told that the use of gas must be restricted, which means that these undertakings are to produce a less quantity of the material on which they are able to make their profit. All the while their establishment charges cannot be reduced a single penny. They have to keep up the same staff and the same offices, and they have to make out the accounts whether they are all reduced or not. Neither can capital charges be reduced. They remain just as they were before. The Rationing Order therefore cuts against these undertakings. There is another quotation from the Report of this Committee to which I should like to draw the attention of the House. The words are worth attention. It says: With the view of maintaining in the public interest the stability of gas undertakings, some provision should be made for the temporary modification of statutory requirements with regard to price and dividend in the case of gas undertakings whose financial circumstances have been injuriously affected by causes arising out of the War. The Parliamentary Secretary said that the Government have had to follow what the Committee have laid down. They have not followed that paragraph very much, neither do they follow very closely the recommendations of the Committee. I am very glad they did not in regard to the extension of time for one year. If they have broken away from the Report in one case, they have some right to break away in other cases. How can the financial stability of these gas undertakings be maintained? They are maintained under this Bill by giving no relief until the dividends comes down to half the standard dividend set forth in the various Acts. That is a very serious thing. It means that the dividends of these undertakings will have to go down to 2 per cent., and in some cases to 1¾ per cent., before they can get the slightest relief. In the case of the Gas Light and Coke Company the standard rate of dividend is 4 per cent., and now the price of gas has risen and the dividend has fallen, until at present it is only £2 2s. 8d. per cent. The gas companies will get no relief at all until they can get down to 2 per cent., and in some cases as low as 1¾ per cent. Can anyone pretend that such a return on capital will maintain the stability of the undertakings? These undertakings have to be maintained. There is a good deal of money which must be kept floating for the purpose of maintaining them, and in many cases that floating balance has been depleted and they have had to go to their bankers for large overdrafts. Does that help the financial stability of these concerns? What will the investors in these things do in the future? What will they say about undertakings which only bring in a profit of 2 per cent. or 1¾ per cent.? It must be perfectly clear that it has a very bad effect upon the company. You may say, "Do not raise any capital now." But the banker to whom you owe a large sum of money says, "I must put a stop to this. You must issue some kind of mortgage debentures and pay off some of this overdraft." That has been done in some cases, and the result is that these debentures, which are terminable perhaps in a period of ten years, have to be issued at 6 per cent. interest. That is not keeping up the financial stability of these undertakings, if the debentures which are fully secured have to pay 6 per cent. I do not think anyone under these conditions would be willing to invest in these undertakings.

I should like to put it in another way which will be quite convincing. We will say a gas undertaking has had its dividends reduced to 2 per cent.—that is to say, it will not get any relief. If capital were issued which had to pay 2 per cent., what would the investor give for that kind of stock? If you can only issue debentures at 6 per cent. he would certainly want as much as that as a return for his money, and the price in order to reach 6 per cent. would have to be 33 or 34. You have only to give £33 for £100 worth of stock. Carry this illustration a little further. When better times come after the War we hope things will improve, that coal, freights, and expenses will not be so high, and that gas companies may be able to lower the price of their gas, and so improve their dividends. Supposing this company, which has issued stock at 33 in order to enable the investor to get 6 per cent., is able in better times to get up to its normal statutory dividend of 4 per cent.—not a very large return—it means that it has to pay 12 per cent. on all that money which was issued at 33 or 34. Is that in the interests of the consumer of gas? Is it in the interest of the financial stability of these undertakings? It seems to me it is laying a charge for all time upon the consumer, and that it would be far wiser in the interest of the consumers themselves if a little extra dividend was allowed now, which would not cost much, but would avoid borrowing money, which would be a drag on the undertakings for all time.

All who are interested in the industry are very dissatisfied with the Report and with the Bill which is founded upon it, and we really think these undertakings have deserved rather better treatment from the Government than they have got. Perhaps the House does not realise, certainly the public does not, what an important part the gas industry has played in the War. I should like to read a sentence from a speech by Lord Moulton, who, as Chairman of the Explosives Committee, has had immense opportunities of judging these things. He said: Your industry, typically peaceful in character and aims, has furnished material for purely war purposes without which it would have been impossible to maintain the fight. These are no light words. They are very serious words. He goes on to say: I have thus learnt as well the flexibility and resourcefulness of the industry, as the importance to the nation that all its varied capacities should have free scope. Not only have the benzol, toluol and ammonia produced by it furnished the materials for our high explosives, but in the direction of other needs, of very different nature, it has given promise of similar usefulness. Your future will depend on how serviceable you are to the public. My view of the gas industry is that its value to the country is incalculable. This is recognised at the present time. Having done all that, we might have expected rather more generous treatment in these dark and bad times. Some hold that these are companies of large capitalists and that what is proposed is simply to put larger profits into the hands of those who have money invested in them. That is a mistake. Of all the industries in the nation I should think there is scarcely another which has so many comparatively small investors. It was given in evidence before the Committee which investigated this matter that out of fewer than 30,000 holders of stock in the Gas Light and Coke Company, 11,500 held £100 or less of stock. Therefore this is not really a matter of the large capitalists. Many a small man, many a trade union, and many an industrial insurance company, have put their savings into this industry. Taking all the circumstances into account, and remembering what services the industry has performed and how it has been crippled by the action of the Government, I cannot understand why it should have received less generous treatment than the railways. The railways have been taken under the care of the Government and have received their proper dividend—their guaranteed dividend. I am not making a complaint, but I want to know why that should be so with the railways and not with other industries. You may say, "We cannot do without the railways." I think, using the words of Lord Moulton, you cannot do without the gas industry at present, for if it were stopped all the supplies of explosives and material for the War would be at an end. It is a matter of national concern that these undertakings should not be hampered and that some fairer treatment should be meted out to them, and I hope when we get into Committee some Amendments may be accepted which will give real relief in place of what we consider is merely sham relief.

Sir FORTESCUE FLANNERY

I am extremely glad my right hon. Friend has contributed so comprehensive and so powerful a speech, because it would be a great pity if a Bill so important and far-reaching as this should be sent to a Committee without very adequate debate. The general idea amongst hon. Members, and many of the public, is that the gas industry is an industry of capitalists who are exploiting the gas consumer for their own financial benefit. But there is no industry which at present more closely affects industrial progress, as well as national defence, and there is no industry in which the welfare of the workers is more thoroughly wrapped up. I should like to call attention to the remarkable way in which capital and labour have been welded together by the managers of the gas industry and to show the Government that the relief which they are having by the Bill is entirely inadequate, either from the point of view of the public generally or of the interests of labour. One word upon the basis of the Bill—what is known as the sliding scale. In 1876 the sliding scale was introduced, upon the principle that the lower the price of gas the greater the dividend which the gas companies could pay, provided they could earn it. It was not in any way a subsidy. It was simply permissive. They were restricted in the amount of dividends they could pay unless they had previously sold their gas cheap. I think no one will deny that that system was right in the interests of all concerned. A further provision was made in the interests of the workmen. It was the system of co-partnership. The workmen was to become a shareholder and his shares were purchased with the money which he earned in addition to the ordinary standard rate of wages. At the end of the year he receives a bonus proportionate to the prosperity of the whole industry, and he is expected, though not compelled, to reinvest it as a shareholder in the company for which he works. That is not all. The workman who is a shareholder is eligible for a seat on the board of directors, not by the election of the shareholders as a body but by the election of the other workmen in the same employment.

Mr. GILBERT

In every company?

6.0 P.M.

Sir F. FLANNERY

In practically every gas company—in the great majority of these twenty-four. I was never more proud to say anything than I am to say that for a dozen years I have sat upon the Board of a gas company along with two of the workmen, who leave their work an hour or so before the meeting, come to the meeting and take part in the deliberations, not merely on behalf of the workmen, but on behalf of the whole undertaking, and take part in it with immense intelligence, without prejudice and with fairness to all concerned. That is the industry with which the House is dealing. One company has issued stock to 8,000 small investors, whose average holding is £135 each. It has also issued stock to 5,700 of its own workpeople, who, on an average, hold £75 of stock each. That is the class of stockholder with whom my hon. Friend (Sir W. Middlebrook) and his Committee have been dealing, and dealing, I think, without full appreciation of the character of the investments with which they were dealing, as well as the general public utility of the gas industry. Another gas Company I have in mind has one single shareholder owning £250,000 worth of stock. Here is a great capitalist, somebody about whom those who are concerned with the welfare of the working man may be deeply interested. He happens to be the secretary of an industrial insurance society which has several hundred thousand working men and women members. These are only instances I am giving, and they might be multiplied. Through the co-partnership system in the gas trade there are more working men and working women financially interested in the prosperity of the gas trade, as well as workers as investors, than in any other trade in this country that could possibly be investigated. My right hon. Friend (Sir D. Goddard) has spoken of the services given by the gas companies to national defence. Lord Moulton is not the only public man who has made confession of the fact that but for the special services—the secret services as they were at that time—of the gas trade in finding material for explosives the War would have been brought to a premature conclusion. There is no harm in saying that now, because it is so long ago. It is a mere statement of the naked truth.

This industry has been the victim of circumstances arising out of the War which have crippled the industry because of its statutory obligations and the sliding scale which I have endeavoured to describe, and it now asks for relief, not ad misericordiam, not as a matter of pity or consideration, but because it is in the public interests that we should have the relief that was recommended by the Committee and which is inadequately fulfilled by the conclusion at which the Committee arrived at and inadequately fulfilled by the provisions of the Bill. Everything that the companies require for the purpose of making gas, explosives, and by-products, which are used for fructifying the land, and which are used in the dye trade, in medicine, and in a hundred other industries, has increased enormously in price. Labour has gone up from 50 to 80 per cent. Coal has gone up 80 or 90 per cent. Freight—because coal is brought nearly always by sea to the big companies in the South of England—600 per cent. and over, and oil has increased something like 700 per cent. Whilst all these expenditures have been increasing to the extent—I have not overstated one of them—we are the victims of a suggestion which is equal to no relief until the dividend has fallen to something like 2 per cent. That, if I may say so without offence, is an absurd suggestion. The companies cannot stop trading because they are statutory companies. They must continue to trade by Act of Parliament. They must supply the demand. They must supply the gas, and they must supply the by-products that are so useful in almost every industry. Before the War, the average dividend distributed by the gas companies was 5 per cent. or thereabouts—some less; very few more. Now the dividend has fallen so that the stocks are just about half the value that they were before the War. These thousands of small investors of whom I have spoken can now only realise about £50, or in some cases very little more, for each £100 they have put in. It is in their interest, it is in the interests of the workers generally, and it is in the interests of the trade and of the public service which the gas trade are rendering, that this Bill has been brought in, and I sincerely hope that the Government will see their way in Committee to increase the measure of relief which is proposed, not out of pity, not merely as an act of justice, but as an act of prudence and wisdom to save this trade from falling away, to give the trade the necessary amount of new plant, and new opportunities for developing scientific improvements which are absolutely necessary, not only for the success of the trade, but also for the advantage of the community at large.

Sir W. MIDDLEBROOK

I happen to be chairman of the Committee which has inquired into the question whether any relief should be given to the gas companies under exceptional circumstances. With the statements that have been made by those who are supporting the claims of the gas undertakings I have no very serious objection to take upon the general aspect, though I differ in detail. I differ from the last speaker in regard to co-partnership being in any way general in the gas companies. It only applies at the most to three or four companies, according to the evidence given.

Sir F. FLANNERY

I can give my hon. Friend the names of at least a dozen gas companies which have co-partnership.

Sir W. MIDDLEBROOK

I am speaking of the evidence given before the Committee where this point was dealt with, and it was put definitely by the gas authorities that co-partnership related to a very few companies. I cannot remember the exact number. Those who are supporting the claims of the gas undertakings have failed in any way to touch upon the question of what relief they are entitled to or from what quarter that relief is to come. That is a most serious point, and it justifies, in my view, the attitude taken by the Committee. I would call the attention of the House to the reference to the Committee: Whether it is expedient that some provision should be made for the temporary modification of Statutory Regulations, with regard to price and dividend, in the case of gas undertakings whose financial circumstances have been injuriously affected by causes arising out of the War. The Committee was appointed consisting of ten members, nine of whom were in constant attendance throughout the whole of the inquiry. Every section of the gas industry in every respect had full opportunity of representation and of placing their case before the Committee. Eight full days were given to the hearing, and subsequently the Committee met on five different occasions to consider the evidence that had been given, and the course they should take. The points that impressed the Committee mainly were that conditions had arisen which had prejudicially affected the gas companies, and that those conditions, taking them as a whole, were outside the scope of the most careful and judicious management. Therefore, for those conditions the gas undertakings were not entitled to blame or to carry responsibility. The evidence also showed that up to the middle of last year the effect of these changed conditions was not seriously felt by the gas undertakings. They had been able to continue, and had been able to maintain substantially the dividends which they had been paying before; but they pointed out very strongly to the Committee that from the autumn of last year the effect Would be felt in an increasing degree, and that, whilst it had lessened the dividends of some undertakings, the probability was that that result would continue until, in the opinion of some of the gas authorities, the dividends would diminish very seriously and probably in many cases would be extinguished. The Committee, therefore, came to the conclusion that the undertakings had justified a claim requiring a measure of relief; but they had to bear in mind that the scope of their inquiry was limited to relief that would be secured solely by an increased price to the consumer, and they felt unanimously that it was not reasonable to maintain the dividends of the gas companies at their pre-war standard entirely at the expense of the consumer.

Neither of the speakers on behalf of the gas undertakings to-day has dealt specifically with that point. Rather they have justified what amounts to a claim against the Government, because they have pointed out that these conditions were very largely due to the necessary intervention—I will not call it interference, because I do not want to convey a wrong impression—of the Government in the interests of the nation as a whole, and still they urge that relief ought to come in the only way that this Committee could give it, and that was by an increase in the price. So in their deliberations the Committee considered how the matter was to be adjusted, and whether the gas undertakings should be relieved entirely from the additional cost thrown upon them by war conditions, with the result that the cost should be placed upon the shoulders of the consumers as a whole. They realised that this was no question of seeking to maintain the interests of the larger capitalists. It was found that the capital of gas companies is very widely spread and that the greater part of it is in sums of £300 or below that amount. But the question was—and this was the crux of the whole matter—Are the gas undertakings to suffer themselves to some extent or be relieved entirely at the expense of the consumer, or are the gas companies and the consumers between them to bear the burden? The Committee, representing every section of this House, after the fullest consideration and after hearing the whole of the evidence, came unanimously to the conclusion that there should be a distribution of that burden as between the gas undertakings and the consumers. The Committee in their Report emphasise the fact that part of the hardship that has arisen was due to the intervention of the Government, but they were advised that it was entirely outside their province to deal with that aspect of the question, and they could not make recommendations on that point. They contented themselves, therefore, by calling attention to the matter. In considering the question how the burden should be borne between the two parties, the Committee came to their conclusions. I frankly admit that there is room for some measure of difference of opinion among reasonable men as to the degree to which the gas companies should be helped, but I cannot see room for any difference of opinion as to the principle upon which it was decided that an unusual burden thrown upon an undertaking of this sort should be borne partially by those who produce and partially by those who consume, because they are in effect, by virtue of the sliding scale, co-partners in the undertaking, and it would not be reasonable to put the whole burden on the one shoulder or the other.

Then the charge is made against the Committee that we have given a relief which is no relief at all. From that charge I absolutely dissent. Those who speak in favour of the gas undertakings have taken, as we are all apt to do, the strongest illustrations, for their own purposes, of the 4 per cent., of which only 2 or 1¾ per cent. is received. To my mind these speakers are looking through the wrong end of the telescope. I do not deny that gas undertakings will lose to a certain extent, but they will not be affected to more than a certain extent, where that extent is fair and satisfactory. I speak in no attitude of hostility to gas undertakings, but solely in defence of the Committee over which I had the honour to preside. The gas undertakings secure, by the Committee's recommendation, that they will be certain at least of interest on their debenture capital and of the full dividend on all preference capital, and the decision will also give them the certainty of half the standard pre-war dividend on an average of three years on their ordinary capital, and, looking at it from that point of view, those who say that they get no relief at all are using the hardest cases as an illustration and are not taking a general view. The Committee felt, first, that they should ascertain if there was hardship which would justify any relief at all. They came to an affirmative conclusion on that point. Then they took the second point as to how the relief was to be obtained, as between price and dividend, and they came unanimously to the conclusion, seeing they had no power to go outside the two parties interested, that the recommendation winch I have detailed to the House was a substantial relief, especially in view of the evidence, upon which such great stress was laid by the gas undertakings, that the dividends were decreasing and would go on decreasing to the point of disappearing, and the Committee felt that they were giving them the full extent that in jusice to the whole community they were entitled to.

Mr. GILBERT

I agree with what the Chairman of the Select Committee has said on this matter. We in London are particularly interested in this matter, and a committee of the county council reported on the subject to the council, who agreed with their report. We are quite willing to accept the recommendations of the Special Committee to which the Government is now endeavouring to give effect. I would emphasise the point made by the hon. Member for Leeds that the gas company advocates are making a case for Government help and not for power to charge the consumers. The case which they quote of railway companies and other companies being assisted by the Government is a case for help in war conditions, but there is no case for putting the whole of the extra charge on the gas consumer, especially in London, where we have a great number of small gas consumers, particularly people who use penny-in-the-slot meters, who pay a very high price for their gas. The Chairman of the Special Committee was quite right when he said that this was a case in which the gas companies ought to make a claim upon the Government, and that they ought not to try to throw the whole of the charge upon the gas consumers. The sliding scale was a bargain made by the gas companies as far back as 1876. At that time the limit of the gas companies dividend was 10 per cent. As a result of the bargain the 10 per cent. limit applied no longer, and, as a result of the sliding scale, since 1876 the five London companies have distributed in extra dividends the sum of £6,500,000. If the gas companies have done so well since 1876, practically up to last year, out of the sliding scale, a bargain which was made between the consumers and themselves, I do not think that, because of war circumstances having gone against them, they should now want to throw the whole of the extra cost on the gas consumers. I hope that the House will accept the Bill which the Government has brought in, and that the Government will not accept the Amendments, which are going to benefit the large gas companies, particularly in London. I speak purely as a London Member and in reference to London companies, because I think that circumstances possibly are different in the case of the London companies from what they are in the case of some of the country companies. Some of the country companies which have not a sliding scale may have a different case, but, on behalf of the London consumers, I strongly urge the Government to carry out the decision of the Committee, which is embodied in a unanimous Report, arrived at after a long and patient hearing and after hearing expert evidence upon both sides. I hope that the Government will stand firmly, on this Bill, and will not allow any Amendments in the interest of the companies.

Mr. ALDEN

I desire to say a few words on behalf of the community as a whole. I desire to pay a tribute to the Report of the Committee. The Chairman, in speaking of that Report, has given a very fair account of what took place at the Committee. He has the reputation of being a very just man, and we are always glad to hear him in this House. We want cheap gas for many reasons, but we cannot get cheap gas unless we can get cheap coal and economic management of gas companies. The Government have placed the gas undertakings in a particularly difficult position. The price of coal has increased by something like 10s. 6d. per ton during the War, and that price is imposed upon gas companies. They are between two fires, and I am sorry for them. They have to pay more for their coal and materials and labour, and at the same time the Government pomes to them and says, "We want all your residual products, and we want them at a definite fixed price. We will not allow you to go into the open market, but will compel you to sell to us at so much." If the right hon. Gentleman the Member for Ipswich is right when he said that if he had been allowed to sell the residual products in the open market he would have been able to lower the price of gas by 5d. a thousand feet, then it does seem to me that the gas companies are in a particularly unfortunate and unhappy position, and to that extent they do deserve some relief. The community could get cheap gas if the Government takes over the companies and says, "We will run these companies ourselves as we run the railway companies. We will fix the price for gas, and we will bear the loss if necessary. We will sell gas at so much a thousand feet." In the interests of the consumers and the community as a whole, if the Government would say, "We will take over all the companies throughout the length and breadth of the country and sell gas at so much, and if there is any loss it shall fall upon the State"—that is an intelligible position. It does not seem to me that there is any alternative between that position, which is quite intelligible and quite possible, and seeing to it that the gas companies do get a fair profit.

Otherwise, what is going to happen? I do not like to prophesy, but I think I can foretell what will happen, unless the Government intervenes in some way or other. The price of gas must inevitably go up. If you are going to so depreciate gas undertakings that nobody will put their money into them, the consumer is bound to suffer. Almost in the interests of the consumer, the value of the stocks should be kept up. If the stock is largely depreciated the consumer will be really compelled to pay more, unless the Government assume control of the whole business, as they have done in the case of the railway companies, by fixing a fair dividend and a fair rate of interest. But that is another matter altogether, though I am not sure that the Government will not have to do that in the end. If the Government will not do that, then I submit that the suggestion contained in the Report upon which this Bill is based should be accepted with such modifications as will give the gas companies a slightly larger return than they are likely to get at present. I submit that in the interests of the whole community and in the interests of the consumer. I do not represent the gas companies. I am not a director nor a shareholder. I have never received a penny, either directly or indirectly, from any gas company, so that I can speak with a clear conscience on this matter. Of course I represent shareholders in the gas companies; that is obvious, as some of them are my Constituents, and I have in my possession an illustration of what this proposal means to a comparatively small investor, if there is no further relief granted. This is a case of a, gas company in my own Constituency, where the price is now 3s. 4d. per 1,000, as against 2s. per 1,000 before the War. The dividend now is about 4 per cent., and the stock has depreciated from £116 before the War to £63. In other words, £100 of stock provided £112 worth of working capital, and now it only provides £63 worth of working capital. The result is that the consumer must inevitably suffer an increase of price, not only now but after the War. It is not a question of gas companies; it is not a question of big shareholders, but it is a question of the consumer and of the community as a whole. If you can prove to me that the consumer is going to benefit by this Bill, then I am satisfied; but, as I read the Bill, and as I understand the Report, the benefit to the consumer is likely to be absolutely negligible, and it looks to me as if the stock will be so seriously depreciated that either gas must become dearer or the Government must in some way intervene. I am not at all sure whether the Government had not better take the bull by the horns and deal with the gas companies in the same way that they have dealt with the railways. But it may be said, "That is a big order." I do point out to the Government, however, that the gas companies are not trading on their own account wholly; they are not free agents, and it is not a question of buying and selling a product, because they are controlled by the Government to a very large extent, and, under these conditions, I think that a slight modification on this Bill, founded on the Report, should be made, unless the Government themselves are prepared to do something far more drastic.

Commander BELLAIRS

Like the hon. Member who has just sat down, I approach this question as one who has no personal interest in the matter, except I represent a few shareholders in my Constituency. The hon. Member for Islington invites us to treat as something sacred the sliding scale of forty-two years ago. I beg to differ from him, and I submit that the real force competing with the sliding scale is the supply of electricity. That is the real cause. Two very significant statements fell from the Chairman of the Committee who made this Report. One was that the terms of the reference were limited, and the second that there was room for concession on the part of the Government. I wish to plead with the Government to make concessions, not on the basis of generous terms, but on the basis of fair terms to the companies, so that they may be able to raise capital from the public in the future. I object altogether to treating the subject of a sliding scale as something sacred. We are in days of war, and, as Lord Salisbury said, in war the conditions are those of the "stricken field," which, to a great extent, makes an end of all things as they existed before the War. I think it would be quite right and proper, therefore, if the Government reconsidered the position from the point of view that we are in the midst of a great war. The Parliamentary Secretary to the Board of Trade invites us to treat the Report of the Parliamentary Committee as something the Government were bound to accept; but I do not quite agree with him. I am quite sure the President of the Board of Trade must have an opinion as to what is fair to the gas companies. After all, this is only a one-Clause Bill, and I believe that both the hon. Members who spoke first, and so ably put the case for the gas companies, do not intend to oppose the Bill or divide against it; indeed, they want the measure but they do want a discussion on Clause 1, in order that the Government may make some concession which would be fair to the gas companies and to all companies concerned.

Mr. HOHLER

Like the two preceding speakers, I also have no interest, direct or indirect, in the companies enumerated in this Bill, but I do consider that the relief given to the gas companies is not adequate. It is undoubtedly the case that if there were an open market for their residual products the gas companies would obtain afar higher figure for them than they do under the existing arrangement. I understand, indeed, that these residual products are a source of loss to the companies instead of profit. As I understand the sliding scale, if it goes up about 3d., the dividend comes down, and if it falls below that point, then the dividend goes up. With regard to the proposal now before the House, it seems to me that the terms of it are inadequate, having regard to the admitted increase in the price of coal. It has been stated that the price has gone up by 10s. 6d., but there are instances where the increase is nearly. £1, particularly in the case of gas companies on the East Coast, who have great difficulty in obtaining seaborne coal In view of this fact, I think the proposal is wholly inadequate. The hon. Gentleman, the Chairman of the Committee, has given great attention to the subject, and he made an admirable and well-considered speech; but it struck me that the Committee have not given full consideration in what they are proposing the case of the local authorities. These authorities, it is true, have to make such a charge as will enable them to carry on without loss, which means that they have to provide for interest, not only in borrowed money, but also the interest on the sinking fund.

Sir W. MIDDLEBROOK

The recommendations of the Committee cover both.

Mr. HOHLER

All that the gas companies may do is to increase their charge, but in the case of the local authorities, who have to pay on borrowed money, they have to charge a much higher price than private companies. I do trust that the President of the Board of Trade or the Parliamentary Secretary, will see his way to deal more liberally with these private undertakings, who have these public burdens imposed upon them, though, as has been shown, if they had been free agents, they could have disposed of their residual products at higher prices and have actually been able to reduce the price of gas. I understand that the present position in which the gas companies find themselves is almost, if not entirely, due to the increased cost of coal. I think some consideration should be given to the gas companies in view of that circumstance. I think that increased price should fall on the consumer to some extent, and that the consumers should share the burden with the gas companies. After all, there is no particular reason that the person who lives in the town should have cheap gas for cooking or lighting, while the consumer who lives in the country has to pay a very high price for his coal. I hope there will be some Amendment of the Bill.

Mr. NEVILLE

I am chairman of one of the gas companies in the neighbourhood of London, which serves an area of 90 odd square miles, with a population about the same as that of Birmingham, and I desire to associate myself with what has been said by the right hon. Member for Ipswich (Sir D. Goddard) and other speakers. I should like to say one word with regard to what fell from the Chairman of the Select Committee. He told us that we had received very great benefits from the suggestions which his Committee had made. He frankly admitted that the industry deserved consideration, and he said that his Committee had provided for that by the provision which they had made with regard to no interference with our debenture capital or our preference capital. That question was not before that Committee, and has never been the subject of a sliding scale, and is unaffected by it, and under the Acts of Parliament which regulate all public undertakings, if we were, to fail to pay our debenture interest, we should find ourselves with a receiver at once. Therefore, the remarks which fell from the hon. and learned Member for South Leeds (Sir W. Middlebrook) were really beside the point in regard to debenture and preference capital. I have before me figures on nearly every one of the points which have been raised in the course of the Debate, figures which refer to my own company, and which I think are very significant. Before I leave the question with regard to capital, I should like to say that in my company the preference and debenture capital is about a third, and that therefore the sliding scale only relates to about two-thirds of the capital, and the average interest which has been obtained on the whole of the company's capital has been about 8 per cent. An hon. Member drew attention to the fact that the companies had paid a large sum in excess of their standard dividends, and no doubt it would prejudice a great many Members of this House to hear that over a period of forty-two years or more £6,500,000 have been paid in excess of the standard dividend. But it must be remembered that at the time when the sliding scale was introduced, Parliament considered that 10 per cent. was a fair price to be earned by industrial capital which was embarked in these undertakings.

It was not the practice until about 1856 that gas companies paid any dividend worth looking at. In the year 1859 there was unlimited competition between the various gas companies in this country, and one of the objections which is continually taken to gas undertakings is that they possess in some shape or other a monopoly. That is a common prejudice which is continually trotted forth, if I may use an unparliamentary expression, for the purpose of prejudicing an industry to which this country owes a great deal more than people think, and when I allude to the fact that it was the institution of gas in This country which really made police supervision of our towns efficient, and has saved ratepayers an enormous amount of money and of time, I think, perhaps, some of that prejudice may wear off. Up till about the year 1856 the gas industry was about as poor an earning proposition as you could get, owing to the unrestricted competition among the gas companies themselves. Gas companies only possess one monopoly, which is not really a monopoly, but it is a right to use the public streets for the purpose of laying their mains, and unless they had that right they could not, of course, supply. There was a period up till 1859 when there was unrestricted competition, but this House then put its foot down and said, "We will not allow this competition between the gas companies." And I believe the reason was that, owing to the competition between the gas companies in London, Piccadilly, the Haymarket, Pall Mall, and the other main streets were pulled up six or seven times in one year, and it became such an intolerable nuisance that the Government of the day said they would not allow any other company to compete within an area. The monopoly is not a real monopoly, because there is every sort of competition—with mineral oil, with electricity, with candles, with acetylene, and with other illuminants and with heating and fuel producers—so that when people talk about monopoly they are merely blinded by prejudice.

One hon. Member said he thought the price of coal had risen 10s. 6d. I will show you what the figures are in the case of my own company. The pre-war price of coal was, I think, 15s. 1d. Owing to the very favourable contracts which, with great foresight on the part of my professional advisers, we were able to make, my company was the only company in London, I think, which did not raise the price of gas for nearly two years after the War began, and we should not have raised it now to the present extent if it had not been for the action of the Government in preventing us from getting the supplies for which we had contracted. It was not until the Government came down on our supplies and said we could not have them—although we had contracted for them at prices which were reasonable and moderate—until other gas companies had been supplied, that we charged 1d. more for the price of gas, but when we found ourselves reduced to a heap of coal which might last for six or seven weeks and saw ourselves faced with the possibility of the works closing down in about a fortnight, we had to rush into the market, and the price of coal is now 37s. 10d. The increase in cost in my company, the capital of which is about £2,000,000, is £270,000 in coal alone. Oil is a very important matter in regard to the working of gas companies, and it is the only way in which most companies can fight with their most deadly enemy, namely, a great and prolonged fog. The gas companies must therefore have oil, and we had a very large purchase of oil. Before the War oil cost us 2¼d. per gallon, and it now costs us 1s. 4¼d. It has gone up 1s. 2d., or 615 per cent. I am dealing with figures that cover over £100,000 in regard to oil. We have an area of 90 square miles, reaching from Kensington to Windsor and Eton, and, of course, we have an enormous mileage of mains and an enormous amount of repairs to do. Our fireclay has gone up 118 per cent., our steel has gone up 80 per cent., and the increase in these three amounts, of coal, oil, and goods, comes to £480,000 per annum.

7.0 P.M.

In the meantime, since the War began, owing to the fact that in this district served by our company munition, aeroplane, and other such works have been set up by the Government, 33 per cent. has been the amount of our increase in output. In 1914, when we were before this House, we proved conclusively, and it has been the fact ever since, that we had not then got more than about 5 per cent. stand-by or surplus plant, and yet during the last four years we have had to make that plant carry on a business almost to bursting conditions, amounting to 33 per cent. Hon. Members will see, placed as we are at the present moment, with a necessary expansion and extension which must run to something like £220,000 or £300,000, why this little Bill, which is really a little gift-horse—it may or may not have teeth in the mouth, but I think possibly there are teeth—is a damper which will prevent us, or largely prevent us, from raising any capital to speak of, except at ruinous terms, from the public. That is how it affects not only the shareholders, but the consumers. The gas companies at the beginning of the War were approached by the Government to give them every possible help, and I do not think there is anybody who knows anything at all about it who will not say that the gas industry, from the shareholders to the humblest working man and woman, has not done its very best to help the Government in every way. The ways in which the gas companies were asked to help the Government were various. One of the most important of them was that of washing their gas in order to produce a substance without which the War could not be carried on, for if you have not got toluol you cannot make high explosives, and without high explosives you cannot carry on a war like the present one. We had to erect enormously extended plant that runs into a large number of figures, and in the case of my company it amounted to £40,000. The result of procuring toluol is that you take something out of the gas, about 2,000 cubic feet per ton, and the result is that we send out 12,000 cubic feet instead of 14,000 cubic feet as we did before the War. Then the Government said they had got an enormous demand for aeroplanes, motor lorries, and so forth, that they must have spirit, and that the gas companies must therefore find them benzol. Again the gas companies were only too glad, and they did their best and arranged their gas, at great inconvenience, so as to provide the benzol. The result, of course, has been that more has been taken out of the gas. We have had our industry completely altered from every point of view. In addition to that, we have had our coal supply rationed. We are not able to say to a prospective consumer. "You shall not have any gas." The Act of Parliament under which we supply gas has laid it down that anybody within 300 yards of our mains has a statutory right to a supply of gas. We are, therefore, not in a position to say, "We cannot supply you." The man consequently gets the gas on his premises, and he may burn as much as he chooses. We cannot stop him; we are bound to supply him; we cannot check him in any way. We are practically controlled in everything we do with regard to coal. Not only are we restricted as to the quantity of coal we get, but we are more or less restricted as to how and where we shall get it, and in what quantities we take it. That naturally affects the economic working of the undertaking. There is a still more important point. You are not only controlling the means of transport and everything of that kind, but you are actually controlling us in regard to the quality of the coal, which is the most important factor in the manufacture of gas. Nobody in their senses who knows anything about gas manufacturing would, if they could get any other, select coal of the kind which the Government forces us to take to-day. We have to take the coal from whatever sources the Government direct, and the article we are now receiving produces from 20 per cent. to 25 per cent. of utterly useless ash; yet we have to take that coal such as it is.

Suppose, when the Government bad come to us and demanded that we should supply them with toluol, benzol, sulphate of ammonia, tar products, and dyes for the National Dye Company, with saccharine (because of the shortness of the sugar supply), and creosote, and other things, suppose we had replied, "You are interfering with the whole of our industry; you are turning it upside down. We cannot carry on our business, and we must ask you to take it over." What would the position then have been? I think any Member of this House, if such a question were put to him, would have replied that it was the duty of the Government to take over the business. We are now controlled in everything. We are controlled in what we get, in the sort of stuff we get, in what we pay for it, what we send out, to whom we sell it, and everything else. There is nothing left uncontrolled except the poor shareholder's dividend, which is left to the tender mercies of hon. Members who come here and talk about the producer getting 6,500,000 and the consumer 29,000,000. The Chairman of the Select Committee said, most rightly and properly, that there is a partnership between the consumer and the shareholder. It is believed that the partnership consists of this: that of every penny reduction in the price of gas the consumer's share is seven-eighths and the shareholder's share one-eighth. Suppose, for instance, the price is 3s. and it goes down to 2s. 11d., seven-eighths of the difference in price is obtained by the consumer, while the company gets the remaining eighth, but only if it earns it, and the difficulty is to earn that money; hardly any company ever does it, at any rate for the first year or two. That is a very different position to the one that is generally suggested. An hon. Member reminds me that when the hon. Member for West Newington talked about this 6,500,000 which the producer gets he forgot, possibly inadvertently, to state that the consumer gets the 29,500,000 benefit due to the reduction of price. That is an omission which the House should bear in mind, but let me go back to my figures.

The suggestion has been made, not I am glad to say by the representative of the Board of Trade, that the companies can recoup themselves out of the residual products. I have some figures as to that here. It will be remembered that just now I gave the extra cost of three items as £480,000 a year. Let us look at the other side of the account. The coke realised an extra £80,000, tar £18,000 more, and ammonia £12,000 more, making a total of £111,000 more than was obtained during the pre-war period, and the difference between the extra cost of the gas, coal, and other goods I have mentioned and the extra amount we got for our residual products amounts to £369,000, or more than £1,000 per day. Therefore, there is not much benefit in that way to the company. The right hon. Gentleman the Member for Ipswich spoke about labour. It has been working exceptionally well in the gas world; it has worked under very great difficulties and with inferior strength. In fact, the best men have been combed out, and from my own company 700 men have gone to the front and have done gallant work there. Our labour bills have gone up enormously. The increase in our company has amounted to £129,000. The question is, What are the companies asking for? They have to face an enormous and stupendous increase in the cost of everything, and all they are asking for is consideration which will put them on some sort of a commercial level. They ask for nothing greater than that. What do the Government pay for money? With the finest security in the world, with the security of the United Kingdom taxpayers at their back, they pay 5¼ per cent. on War Loans and 5 per cent. on National War Bonds. But we who supply sulphate of ammonia, toluol, benzol, and the other things which they need for carrying on the War, are to be content with £1 17s. 6d. per cent. or 2 per cent. I do not think, when the House understands that it will agree that the situation is a proper one. The suggestion was made, I think, by the Chairman of the Select Committee in all sincerity, that it was unfair to take into consideration only the hardest cases. But I do not want to do anything of the kind. I do not know what was in his mind and whether he was referring to the companies which pay a maximum of 10 per cent. I do not understand the working of this 10 per cent. In my own company we have two sorts of securities; one is the 4 per cent. security and the other is the 3¼ per cent. security, and the shareholders are going to get this magnificent relief for which they must consider themselves beholden to the generosity of Parliament—they are to be permitted to retain £1 17s. 6d. per cent. for their investments in such a stupid thing as gas stock, although the gas industry has been doing its best for the country ever since the War started. £1 17s. 6d. per cent. is good enough for the gas companies, but it is not good enough for the Government, which knows that when it wants to get money that it must pay a much higher price for it!

The position is a very curious one indeed. The gas companies have to borrow money. My own company have had to get advances; we had to get a Bill in 1914 for the purpose of raising money, and we were able to raise some money, but it was nearly all absorbed in four or five months, as we had to meet a bank overdraft. Can the Chairman of the Select Committee or can anyone tell me where it is possible, in these days, to raise money at £1 17s. 6d. per cent.? If so, I am his man; or if it can be done at £2 per cent., or £2 5s., let him tell me. I am willing to give any fair price if I can only be informed where the money can be got. I am sure there are many Members of this House who would be only too glad to learn where to raise money at £1 17s. 6d. per cent. In view of all these facts, I think the House will agree that scant justice is being done to the companies in this matter. This reference to £6,500,000 which we are told has gone to the producer does not deal with the prejudicial work which the companies have been called upon to perform. The gas companies constitute the only industry in the whole of England which is limited by Statute in a way which lays it down that the more they charge the less they pay in interest. They are the only companies subject to a statutory prevention of profiteering. Nobody can accuse the gas companies of profiteering; it is an absolute impossibility in their case. [An HON. MEMBER: "Mutual agreement!"] Quite so, and a very proper thing, and the public have had the benefit of it. Gas companies are under a second disability—that is, the auction clause. There was a time when gas companies and water companies became very prosperous. Water companies had only to sit and allow their assessment to increase naturally, as their arrangements for charging for water depend on the assessment of houses. Therefore water companies sit and do nothing, and their income goes up. Under the auction clause the position is this. They said it was a scandal—and it was a scandal—that companies should be enabled to issue stock at par to their shareholders when it was standing at very much more in the market—that is to say, that they should be enabled to hand over to the shareholders for £100 stock which they could rush into the market at £120 or £140. So long as we had a sliding scale for the benefit of the public we had the auction clause, and the auction clause is that no gas company under it can issue any stock to its shareholders except by tender at a price approved by the Board of Trade, or, if they do not like that, they must put it up to public auction.

What is the result of the auction clause? My own company came under the auction clause and sliding scale in 1881. I have not the figures from the very beginning, but I have the figures for the last twenty-five years, which, I think, is long enough. We raised during that period £150,000 of capital liable to the sliding scale, and we paid in addition premiums to the extent of £136,000. When people talk about the inflated position of the gas companies paying 14, 12, 10, or whatever per cent. it may be, think what the shareholders paid for it! They did not pay £100, but in the case of my company they paid £191 on an average over this period for that stock, because the auction clause said you must not issue at £100, but must put the stock up to auction, with the result that £191 was received for every £100 worth of stock. The capital of the company, therefore, has been raised at a very low rate, and, as one of the speakers, who evidently knows about the business and is a thoroughly commercial man—I think it was the hon. Member for Tottenham (Mr. Alden)—pointed out, capital is the very life-blood of economy.

It is a question of what is your capital. With regard to my company, it works out at 6s. 4d. per 1,000 cubic feet. No other company comes within shillings of it, some being 12s. and 14s. The result is—it is hot my fault, because I was not chairman, but my predecessors, good men of business, arranged matters—that our capital being 6s. 4d. per 1,000 cubic feet we can send out 3,000 cubic feet, where other people send out about 1,500, and sometimes less, at the same price. That is the chief reason why we can make our price of gas cheap. Now you are going to say to us, "You are going to get immense relief, £1 17s. 6d. is the splendid sum which you will be allowed to pay for your B stock, and the still more magnificent figure of £2 is going to attract the whole world in raising your capital." What is the result? People are not going to deal with our industry. No one who has lent to the Government at 5 per cent. is going to lend to a downtrodden gas company, which has made bloated profits in the past, at 2 per cent., and have it whittled away during the War, which may last five, six or seven years—I hope not, but it may last for an indefinite period, and even if it does not last long, the conditions with regard to coal and various other things will certainly last one, two or more years after the War.

That is the position and this is the Bill. The very authors of it admit that they will accept Amendments which are reasonable and proper. I am, perhaps, putting it too strongly. They will consider Amendments with a care as to some slight soupçon of justice to the industry attacked in this way, and I have no doubt that when the House thoroughly understands how this matter—it is a complicated and intricate matter—affects an enormous number of people—because you must remember that gas is not the light of the high and mighty, is not the light of the men of means, but in my district, where we have from 70 to 80 per cent. of working men, and have gas in nine houses out of every ten, which I believe is a record for any gas company—that is to say, 90 per cent. in my district are supplied with my gas, and 70 per cent. at least are poor people whose cooking, whose comfort—you may say almost their houses depend upon it—the House will realise it is a serious matter when you are dealing with a large population. We who are trustees—for we are trustees as much for the public as for the shareholders—are bound to do our best to see that we get fair conditions of capital for our work, and, in order to be able to carry out a great public work which the whole country wants, I do think there are considerations in this matter which, when once they have been understood by the House, will lead to a much more equitable arrangement than at present, and also to the removal of that kind of prejudice brought in this House, particularly against my company, without one word being said by me, so that they do not know my case. I do hope the House will take into consideration the position, and deal with us in a fair and equitable manner, as I am sure it will.

Mr. BURNS

In his interesting, and, if I may say, diverting speech, the hon. and learned Member who has just sat down has communicated to the House a number of statements that cannot appropriately be challenged on the floor of the House. These were the subject of minute and close investigation by learned counsel, heard by Government officials and by all the parties interested for and against the gas companies for a considerable number of days upstairs, and, prepared as I am to disagree with some of the points put forward by the hon. and learned Member who has just sat down, I am not disposed to follow him, because up till his speech, both on the occasion when this Bill was discussed before and by other speakers who have spoken this afternoon, there was, in my judgment, no prejudice shown against the gas companies. On the contrary, the Committee upstairs, the Board of Trade by their treatment of this subject, and the decision the Committee, in my judgment, has wisely come to, show that beyond a doubt, taking all the circumstances into consideration, the gas companies have received fair, sympathetic, just, and equitable treatment by the only tribunal capable of discussing a technical matter like this, namely, the Select Committee, to whom the President of the Board of Trade wisely remitted the consideration of this problem.

But there is one point of the hon. and learned Member's speech that one must in justice to the consumer deal with. My hon. and learned Friend spoke about the difference between the treatment meted out to the War Loan holders who receive 5 per cent. and the poor gas companies who receive £1 17s. 6d. and £2 per cent., and he might have quoted those—which he did not—that receive more. But he asked for privilege and preferential treatment as compared with other trades and industries that, not having the advantage of being statutory undertakings, have no such protection as the gas companies and the railway companies have received, are receiving, and, in my judgment, will continue to receive. And in that aspect he made out a case, not for unloading on the poor gas consumer all the expenses and the extra charges to which they, like every other trade and industry, have been subjected during the War, but made out a case for shifting from the gas company not to the gas consumer but to the War Office, the Department of Munitions, the Government and the State, and for interference with their manufacture, the diminution in the price of the residuals, and that controllership of their industry for which the gas consumer is in no sense responsible, and for which the Government Departments alone ought to be blamed. It is to them that the hon. and learned Member as a gas director and chairman of a large gas company should go, and not to the poor consumer, for that sympathetic consideration, as I consider it would be markedly unjust to unload on the consumers only, which the gas companies in their Bill suggest.

I did not hear any suggestion that the gas companies had not done their duty In the War. Not being a Government official and a Government Department, it stands to reason that they did very well during the War, and I am convinced that no one who knows, as I know, the wonderful qualities of the men engaged in the gas industry, not only in War but in their ordinary avocation, can say anything against either the capacity of the gas companies during the War, the ability of their staffs and the extraordinary courage and endurance on the battlefield of men who have enlisted in enormous numbers, and whose bravery in face of the foe is equal to their endurance and laborious qualities in face of the gas works and gas retorts in which these enduring, gallant fellows carry on their work. It is interesting to tell the House that in one gas works alone 1,000 men—equal to a battalion of the Foot Guards—have either been killed, wounded, missing or taken prisoner in the course of this War.

My hon. Friend will pardon me if I tell him I have not heard a word against the gas companies on the managerial side, and no complaint has been made about the way in which they have carried on their business. Considering the difficulties under which they have laboured, the public are indebted to them and to their men for their contribution in carrying on a great and indispensable industry under very difficult circumstances during the last four years.

The next point I wish to deal with is a point which, in my judgment, disposes of the speeches that have been made on behalf of gas companies by directors, engineers, and chairmen, who, according to their lights, properly represent the rather narrow commercial interests of the gas companies whose case they have admirably served to-day. The speech which should dispose of all their claims was, if I may say so, the calm, public-spirited, and fair statement of the capable chairman of the Committee, who deserves the thanks of the House, as do also the members of this Committee, for the long, patient, and scientific hearing which the Committee has given to this important yet technical question. What did he say? In my judgment, the chairman of the Committee disposed of nearly all the gas companies' claims, nearly all their fears, while facts will dispose of most of the lugubrious predictions of these commercial Jeremiahs who are under the impression that when the War is over they are going to be faced financially, industrially, and prospectively with a condition of things that means that the brokers will be put in and the gas companies subjected to bankruptcy! What did the chairman say which has influenced the Members of the House? The decision of the Committee does not interfere with the dividends on the debentures, it does not interfere with the preference dividends. What the Committee decided in regard to the ordinary shares, which, of course, are the majority of the stock of the companies, is that they would be guaranteed that the dividend would not fall to less than a half of the normal pre-war figure. I would ask my hon. Friend to remember that, in the judgment of people who are not gas directors, that that is very reasonable treatment. The preference dividend is not to be interfered with, neither are the debentures; but for the rest of the War not less than half the normal pre-war dividend shall be paid.

My hon. Friend, I thought, rather lightly—and I have never held an optimistic view of this War, as the House may gather—my hon. Friend suggests that the War may go on for six or seven years. If that were even partially true, it is a reason why, as compared with other interests, the gas companies should not have preferential and generous treatment. According to the suggestion of the hon. Gentleman, a long while before the War is over, the treatment to be guaranteed to them is one that no other industry can hope to claim if the War goes on even for half the time he indicates. One of the strong points which has emerged from this Debate is that the Committee were unanimous in their decision. The Committee had before them expert witnesses like the comptroller to the county council; they had chemists, and engineers, and learned counsel to put their case. It, therefore, seems to me that in a country such as we are living in—and where I have never noticed any violent disposition on the part either of Parliament or of Committees of Parliament to interfere very seriously in matters of property—that all the suggestions that the companies have not been generously treated are disposed of by the facts and by considering how hitherto, in cases like this, Parliamentary Committees have acted fairly by the various interests that have appeared before them. To listen to one or two of the gas directors or engineers, one would have thought that the gas companies had been doing very badly during the War. I want, if I may, not with a view to imparting prejudice and, above all, heat into this Debate, for a moment, to give the other side. One would have thought that the gas was as good in quality as before the War. The short answer to that is that the incombustibles in gas—which means impurities—I am not saying that the gas companies can help it!—have increased from 10 per cent. to 22 per cent. during the War. The consumer did not ask for that. It has been to the interest of the gas companies that that should be done. It may have been put upon them by force of circumstances. But there is the fact! When we are told, as we were told by evidence given up-stairs and elsewhere, that whilst impurities in gas have increased from 10 per cent. to 22 per cent. since the beginning of the War, the price of gas over 1913 has gone up from 50 per cent. to 65 per cent., and the companies' proposals would add another £400,000 to the burden of consumers—the public. Here, I say, are two evidences that the companies have not been so badly treated either by the public, by the Board of Trade, or by the Committee upstairs.

What is the threat—for it almost amounted to a threat—at all events, there was a suggestion made by the hon. Gentleman which was also to some extent endorsed by the hon. Gentleman who has just sat down, that the future of the companies was rather doubtful unless they were generously treated. Anyone who knows the way in which gas has gone—for, notwithstanding the introduction of electricity, anyone who knows anything of the matter knows that in London alone the gas companies have received during the War £4,500,000 more in total income than they did five years ago—knows that there is proof positive that under the most depressing circumstances there is a very profitable present for gas, and, in my judgment, a future, which will be probably more assured to the gas industry than to any other industry I know. There is a reason for that. During the War new methods have been considered, old methods have more or less been discredited. Old things will have been scrapped and new ideas will gain force. If there is one industry more than another that will gain by the changes which the War has produced, and which will have emerged from the discussion of industrial, chemical, and other questions, it is the gas industry, which will probably have a greater future during the next quarter of a century than any other industry. It is not fair to suggest that it should be tenderly considered because it is in competition with electricity. Any engineer, any public man, any man municipally engaged, or any electrician who knows the facts of gas and electricity development during the last twenty years, knows that in that period, apart from the War period, gas has improved in purity and has been reduced in price, and electricity has enormously increased in use, and has diminished in price per unit. As a matter of fact, electricity and gas mutually react, improve, and stimulate each other to the advantage of both, and, incidentally, not to the detriment of the community. I believe that gas will be increasingly used for heating purposes and for small industrial and mechanical purposes, and will go hand in hand with electricity in taking the place of steam and water, and, above all, of the ordinary production of lighting and heating in the future at a disproportionately rapid rate as compared with what it has done during the last fifteen or twenty years.

I do not intend to discuss the intricacies, the witcheries, the mysteries, and the history of the sliding scale. There are three things in my lifetime as a public man of which I have never tried to probe the mystery. One of them is bimetallism, the second is the sliding scale in gas, and the third is perpetual motion. Any man who wastes his time and the time of the House of Commons in trying only to partially understand any of these things is wasting not only his own time but that of the public. My hon. Friend the Member for West Ham has interjected that it is not necessary to discuss it here. It has been tried for forty years, and has worked on the whole extraordinarily well, particularly for the gas companies. It is true that they have got £6,500,000 in money. I should like the President of the Board of Trade to give heed to this point. It is true the gas companies have got £6,500,000 more since it was introduced above the standard price than they probably would have got without the sliding scale. It is also true—I will accept the figure of the hon. Gentleman—hat the public have gained £29,000,000 in the reduced price of gas, while the companies have got as their share £6,500,000 of benefit under the sliding scale. That is one of the facts of the sliding scale. It was introduced to help the public without damnifying the gas companies. It has given the gas companies a permanent incentive to improve their methods, to have larger concerns, to do away with smaller and old-fashioned and more or less obsolete methods, both of production and distribution, and on the whole it has helped the community, both the companies and the gas consumers, extraordinarily well.

My last point is this: I would appeal to the President of the Board of Trade not to listen too much to the gas companies, but to be as fair and equitable as the Committee has been upstairs. It is not the fault of the consumer, who numbers probably 1,500,000 in London of small penny-in-the-slot gas meter users, that coal is dear, that oil has increased in price, and that everything connected with the manufacture of gas has increased from 40 per cent. to 200 per cent. War is a disturbing element. It is a deteriorating influence. It is a depreciating factor. That being so, every section of the community, in proportion to their means, their life, their property, and their stake in the affairs of the community, must bear its own burdens without asking for privilege or preferential or exceptional treatment in a war which is not the act of the consumers but is a State affair, and a Governmental concern. If we are to give preferential consideration to gas companies because they are statutory undertakings, what about our soldiers who have given the only capital they have—namely, their lives. What about the wives who have lost their husbands? Above all, what about those who feel it particularly hard commercially, the one-man businesses, with no preferential treatment? The man, if killed, gives his life; if wounded, his limbs. His present has gone, and his prospect is very dark. If you are to begin compensating people for the disproportionate and unequal damage that the War inflicts upon the community, in my judgment the last you ought to choose for beginning with in the way of preferential treatment is either statutory companies, or preferential, or debenture shareholders. There are millions before those who have a stronger claim for the consideration of a Government Department or by the State. I have been in this House seven and twenty years, and in connection with the subject that has brought us here this afternoon I have this to say: I have never known a community or an industrial population who have behaved any better than the industrial community has behaved during the last four years. I have never known men who, speaking broadly and generally, have contributed their business, their capital, their money, their lives, their present and their future in such a magnanimous, disinterested, and public-spirited way as have the great bulk of the working classes to the stress, trouble, and burden of this War. If there is any money to spare, if generosity is to display itself in exceptional terms towards anybody or any section of the community, we must remember that this War is not yet over and its burdens cannot be accurately foretold. Without sharing any pessimistic view as to the length of years that will elapse before the War will be concluded, I say that, rich though we are, capable as I believe we are, and probably will be, of spending from £12,000,000,000 to £14,000,000,000 upon this War without financial disaster upon that great tragedy which afflicts mankind, we shall not have money to go round to help all the claims if, before the War is over, the preferential shareholder is to get during the War all he has had before the War, and if the debenture shareholder is not to be touched and the ordinary shareholder is to be guaranteed not less than his normal dividend. If you give this generous treatment there will be millions of people with stronger claims who will ask for similar treatment to that which the gas companies are demanding, and if you do give those demands it will grow in the shape of pensions, soldiers' pay, more help for all the industries and undertakings not statutory which have not the advantage of a privilege plea for the exceptional treatment that is given under this Bill. This the country cannot bear.

It is as an economist that I believe you have no right to stimulate incentives for further claims of this magnitude from every section of the community, but if you yield similar claims to others the result will be that financial, local and municipal and social burdens will grow to such an extent that you will be confronted with an extraordinarily grave difficulty that might affect ultimately the final issues of the War. I ask gas companies, railway companies, tramway companies, and statutory undertakings to take their example of public-spirited devotion and disinterested service for the community from the humbler members of that community, and I ask the Board of Trade, in the interests of common sense, and most of all in the interests of an equitable treatment of other interests, to brush aside this claim for preferential treatment on the part of gas companies, and give them no more than the Committee yielded to them. If you grant this demand it will be used as a precedent, and an incentive for interest after interest and trade after trade to knock at the door of Government Departments and to press you with claims for generous treatment on the scale that the gas companies are demanding. Therefore the gas companies have no right to ask for what you cannot give to every other section of the community. It is because I think the Committee have met the case very fairly under all the circumstances that I ask the House to give a Second Reading to this Bill, which I hope will not be divided against or challenged, and in Committee we must see that the Committee stage carries out in detail the principle and theory of the Bill. For these reasons I ask the House to give a Second Reading to this measure.

Sir R. BARRAN

If I were to judge by the peroration of the right hon. Gentleman, it is quite obvious that this Bill is not wanted at all. If, on the other hand, you are going to take the view that this is a commercial and a financial matter, and not to be dealt with by sentiment, then we must come back again to the sound argument as to whether it is in the interests of the whole community that this House should carry out the views of the Select Committee, or whether they should take a wider view and carry out the plan which is commercially and financially sound, and is in the interests not only of the manufacturer, but also in the interests of the consumer. The Committee has taken the view according to the reference that was given to them, but the Government had to do more than that. The Government had to consider, in addition to the general financial questions, how they have dealt with similar commercial and financial problems which have been before the House. There are two bodies dealt with under this Bill—he local authorities and the statutory companies. Now I want the House to look at the different way in which those two bodies are being treated, and then I want hon. Members to consider how, during the War, we have treated other financial interests that are similar. The gas interest, which is dealt with under the local authorities in this Bill, will pay interest on all its loans. What does that mean? There are two types of investors—one has invested money in local government stock, the other has invested in gas or other companies. Those who invested money in the loans of local authorities will get the same as they got before the War, excepting that they will have the difference which is represented by a 6s. Income Tax instead of a 1s. Income Tax—that is to say, they will get 75 per cent. of the amount of interest that they got before the War. Those who have invested their money under the statutory companies will get 50 per cent. of what they got before the War under this Bill, less 5s. that is, they will get 37½ per cent. of the interest they received before the War. I want to ask whether that is a proper way to deal with two different interests under this Bill. One gets 75 per cent. and the other gets 37½ per cent., and the two classes of investors are very similar.

The statutory companies are, as near as may be, under the same conditions as those who invest their money under the municipal authorities. In both cases the investors are in a very similar position. I do not think any attempt has been made to put forward a sound reason why they should be put at so much greater advantage. The House is bound to take into consideration, in dealing with the interest that the shareholders of the statutory companies get, that the Government are directly responsible for the curtailment of their profits. In ordinary business life the Government does not control profits. In ordinary commerce, while it fixes the purchase price of raw materials, it does not as a rule fix the selling price; therefore companies outside the statutory companies are at liberty to increase their prices in order to keep up their dividends. The same will apply after the War. The statutory company is unable to do so.

There is another comparison I want to make, and that is how has the Government treated other concerns where they have put them under the same disadvantages or the same control as they have these statutory companies. Let us take the controlled companies of engineering firms. The whole of their works are taken over, the prices of raw materials are fixed, and to a large extent the prices at which they sell their goods. In those cases the companies are given and are allowed the privilege of making the full profit that they were making before the War, and they are allowed to make a profit even beyond that, provided only 20 per cent. of it is retained. Therefore you have had during the four years of this War a similar control in regard to a large number of the companies of this country, a control similar to that which is now affecting the statutory companies, and yet you have allowed them to pay their full dividend and something beyond.

8.0 P.M.

What is the reason why you are going to treat the gas and electric and other companies in a different manner than you have been treating during the War the whole of the controlled establishments in this country? Take the case of the railway companies. Their position is very much the same as I have referred to in the case of those who have placed their money in the loans of the local authorities. Those who have money in the shares of the railway companies still get 75 per cent. in almost every case, and sometimes more, of the interest that they have received before the War. What reason is there that the gas companies and other statutory companies should only receive 75 per cent. of the interest that they received before the War? There is not any body of commercial men or companies whose income is absolutely controlled whose purchases and whose sales and the management of whose business is so completely controlled as these statutory companies—there is not a single instance in this country where they have been dealt with so hardly as it is proposed in this Bill to deal with these companies, and it lies with the Government to show why, at any rate, they should not be allowed to make their pre-war profit—that is, their average pre-war profit—less, of course, the Income Tax, which is applicable to us all. I want the Minister in charge of the Bill carefully to consider the influence on the commercial life of this country if you pick out one set of industries and treat them differently and adversely in comparison with all the other commercial interests with which you have dealt during the four years of the War. A great many hon. Members have spoken on behalf of gas companies or other undertakings. Some have spoken either as engineers, directors, or chairmen of gas companies. I have not the remotest interest in any company or any class of company that is touched by this Bill. I am speaking solely in the interests of commercial soundness, and, not only do I urge that it is to the credit of this House and to the interest of the community that we should treat these companies on the same level and on the same lines that we have dealt with other commercial interests during the War, but I ask the Government to consider very carefully those problems that have been put by hon. Members as to what is likely to be the influence after the War upon these companies and upon the price of gas if they take this thoroughly unsound financial course. It is not in the public interest that these companies should be dealt with in a way that is going to relieve the consumer temporarily. An hon. Member, after taking the same view as I take upon this Bill, said that eventually it would not be in the interest of the consumer of gas. He said that if it were in his interest he might take a different view. I was sorry that he spoiled an excellent speech by such an unsound suggestion. It it were in the interest of the consumer, I hold that it would be unwise, because it would still be unsound. The hon. Member, however, very effectively brought out the point that eventually it would not be in the interest of the consumer, and I would impress upon the Minister in charge of the Bill that it is a very short-sighted policy to try and help the consumer to-day at the cost of the consumer for the next twenty years. If we depart from the sound principles of finance, from the principle of dealing with the man who has put his money in one investment the same as we deal with the man who has put his money in another investment, and from the principle of meting out the same treatment to one set of controlled establishments as we do to-another set of controlled establishments, we shall be doing a very much greater injury to the industries of this country than we shall benefit the consumers of gas during the next year or two.

Mr. CURRIE

I do not wish to continue the Debate upon the figures, which has been carried as far as it usefully can be carried, but I want to draw the attention of the Board of Trade to a practical point which touches us in Scotland to which the Bill applies. We notice that the Committee recommend that special provisions should be made for regulating the price to be charged by municipalities which sell gas. In Scotland where a great deal of the gas trade has come under the control of the ratepayers we work under a special act, the Burgh Gas Supply Act, 1876. In that Act, unlike the Act regulating electrical enterprises, you give power to the ratepayers' representatives to levy a rate and to pledge the rates, but you limit the power in a rather curious way. You give power to pledge the rates for the payment of the interest, but you withhold their power for the purposes of a sinking fund or for the repayment of the capital. Before the War, when any properly-conducted municipal enterprise could raise money on terms which were not unreasonable, the difficulty, although it was there, did not operate hardly; but I have had a circular from the clerk of the Convention of Royal Burghs in Scotland, pointing out how desirable it is, if you allow ratepayers' concerns of this kind to borrow money, you should at least place them in the most favourable position to borrow money on the best terms that they can in the market. That appears to me to be very reasonable, and I think the suggestion of the Convention of Royal Burghs might usefully be adopted by the Government. I would, therefore, ask the Board of Trade to consider the suggestion favourably and, perhaps, to accept it.

Mr. PETO

Almost the whole of this Debate has been conducted from the point of view of gas undertakings. I wish to point out to the representative of the Board of Trade that this Bill includes other statutory companies, and particularly to put the objection to the Bill from the point of view of the water companies. I am Chairman of the Provincial Water Companies Association, and they ask me to point out, not so much their objection to the dividend on the ordinary stock being reduced to half the pre-war amount, although they are by no means satisfied with regard to that, as their objection that under Clause 1, Sub-section (1), paragraphs (a) and (b), they are not treated equitably in comparison with municipal water undertakings. Municipal waterworks, in view of the great increase in the cost of the production of water, are allowed to increase their charges at once by no more than 50 per cent. on their statutory maximum charge, whereas a statutory company, which in many cases is a near neighbour of municipal waterworks, is not allowed to make any increase in the charge for the water supplied to the consumer unless the dividend on the ordinary stock in the undertaking has fallen to half the standard or maximum rate. It does not seem to me that these companies are treated fairly as compared with municipal water undertakings. The hon. Member for North Leeds (Sir Rowland Barran) has pointed out how unreasonable it is that small shareholders in local government stock and other shareholders of exactly the same class in these statutory companies should be treated differently, the one receiving the full rate of dividend paid on their holdings before the War and the other receiving only half. I would like to ask the Government whether, apart from the question of the shareholders, although I think that they have a very strong case, it is fair as between one set of the community and another.

Almost every hon. Member who has spoken has done so as if the consumer, particularly the penny-in-the-slot consumer, were a poor consumer. The right hon. Gentleman the Member for Battersea (Mr. Burns) said that it was not reasonable to try and put it on to the consumer. The Government ought to bear the burden. There is also the poor shareholder. I suppose most Members have had letters from shareholders who are their constituents. I received one only just before coming to the House. It is the case of a widow. Most of her extremely small means are invested in one of these statutory undertakings. Surely it is a very great hardship that you should say that her dividends are to be reduced to half the pre-war scale before any relief is to be given under this Bill. I would ask the Government to remember this fact: The principal cause of the increased cost during the War is the increased cost of coal, and the principal factor in the increased cost of coal is the increase in wages. I do not think it is fair that you should be constantly raising the wages of those who produce the coal, and that the moment the coal is transferred into gas you should say that the small investor in the stock of these statutory companies should only receive half the dividends that they received before. While you give to the collier twice the wages which he received before, you reduce the dividend of the shareholder, a person of similar means with very little possibility of increasing his income, by half. The water companies ask that they should be allowed to pay 5 per cent. on their ordinary stock or the pre-war rate, whichever is the least. If that were the proposal of the Bill or if it were substituted for the one proposed it would offer a reasonable solution of the question. I would ask the Government not to listen entirely to those appeals that have been made to them to think of the poor consumer but to consider also the case of the small investor, and particularly to remember that there are other statutory companies than gas companies and to treat the provincial water companies on at least as fair and equitable lines as municipal water undertakings of which, in many cases, they are neighbours and competitors. With regard to the future effect of this Bill upon the issue of capital, the water companies view it with positive alarm. If the dividend that they are allowed to pay is to be reduced to half it is difficult to see how they will be able to issue any fresh capital at all or to maintain the supply of water which they are obliged by Statute to maintain. If the Bill is not modified materially in Committee, it really means that many of these comparatively small provincial waterworks are practically finished. You are playing into the hands of municipal undertakings, saying that they shall be the only suppliers of water in the future, because you are practically making it impossible for the companies to raise any fresh capital. I therefore hope that the Government will see that the Bill requires amendment, before it is either equitable or fair as between the consumer and the shareholder and as between the Statutory company and the municipal undertaking.

Colonel YATE

I have before me two representations from chairmen of gas companies as far apart as Torquay and Harrogate. One points out that the gas industries will be ruined before the time for the prescribed remedy, and the other says that if the recommendations of the Select Committee are adopted a real hardship will be inflicted upon statutory companies. On behalf of these two companies and others similarly interested, I do hope when we get into Committee that the President of the Board of Trade will agree to some modification of the Bill as at present drafted.

Question put, and agreed to.

Bill accordingly read a second time, and committed to a Committee of the Whole House for Thursday.—[Mr. Towyn Jones.]