§ Considered in Committee. [Progress, 4th June.]
§ [Sir EDWIN CORNWALL in the Chair.]
§
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to amend the Law with respect to the supply of electricity, it is expedient—
§ Amendment proposed: "To leave out the word 'twenty' and to insert instead thereof the word 'five.'"—[Colonel Gretton.]
§ Question again proposed, "That the word 'twenty' stand part of the question."
§ Mr. G. BALFOURI have studied the proposal which has been submitted by the Under-Secretary for the Home Department and the Amendment proposed by the hon. and gallant Member for Burton (Colonel Gretton), and I think the proposal of the Government, even as proposed to be amended by the hon. and gallant Member, is quite unjustifiable. We have no evidence which entitles us to authorise that expenditure, and I think that we have been given a lesson and a warning against extravagance very recently; in fact, I think on the very day when this matter was last under Debate. On that same day the Chancellor of the Exchequer gave us all a warning against extravagance. He said:
On each occasion when expenditure comes before us we ask, not whether we like this, not whether it is a particular thing to be done if we were prosperous and the Exchequer overflowing, but is it a thing so urgently necessary that even in a situation as difficult as at present, and whilst we are as heavily burdened as we are we must nevertheless spend money upon it. If we deal with expenditure in that spirit, the danger which my hon. Friends fear will pass away, our stability will be increased, our debt will be gradually reduced, our trade will be encouraged, and our prosperity will return. But these results can only be obtained if throughout the whole field we exercise wise economy and put away the spendthrift habits which necessarily overtake us in time of war."—[OFFICIAL REPORT, 4th June, 1919, col. 2162, Vol. 116.]That is the advice given to us by the Chancellor of the Exchequer. When the Under-Secretary for the Home Department advanced reasons for this expenditure on the last occasion, he referred to a Memorandum which was in print, but which was not available for the Members of the House. I have taken the opportunity of studying that Memorandum to see if it contains any information which would entitle us, as Members of this House, to support the Resolution submitted by the Government. I find nothing which tells us upon what this money is to be expended. It tells us, indeed, that in 1920 we shall expend, I think, £1,000,000 of the total of £20,000,000, and that in 1921 we shall expend £3,000,000, and so on, until the sum of £20,000,000 is spent; but I can find no word in this Memorandum 461 which states that this money is required for any specific purpose, unless, indeed, the Government hang on to one or two words where they refer to generating stations. They do not tell us where those generating stations are to be built, whether it is in the Upper Hebrides or in. the South of England. They do not say a word which justifies the building of any generating station. I can find no reference here to any part of the country where there is a great demand for electricity unfulfilled; in fact, I think it is true that, since the Armistice, all the available electric lighting plant in the country has a surplus ready and available for the purposes of manufactures.I am not overstating my case when I say that; in this Memorandum, which is presented to hon. Members to encourage them to agree to an expenditure of £20,000,000 with subsequent expenditure, surely it is not too much to expect that we should have something which would entitle us to say that this money shall be authorised because we understand it is to be spent on objects which are really required in the public interest. I find absolutely nothing of the kind in this Memorandum. I have said that I feel that the amount even proposed by the hon. and gallant Member for Burton is too much, and I should like to propose an Amendment to that Amendment if it is in order. If I am not in order now in moving it, I should like to propose at a later stage to move an Amendment to this Amendment I should like your ruling on that point, Sir Edwin. The Amendment I propose is that the word "five" in the Amendment be omitted and the word "one" inserted.
§ The DEPUTY-CHAIRMAN (Sir E. Cornwall)The course the hon. Member should take is to vote against the word "five" and against the word "twenty," and in the event of the Committee agreeing with him it would be possible by a subsequent Amendment to move to insert the word "one." That would be in order.
§ Mr. BALFOURThen I will leave that to a subsequent stage. All I need say at the present moment is that, searching all the information which the Government have submitted to our consideration, up to the present moment I cannot find a single word which justifies the expenditure of a penny on the electricity supply of this country. I am driven to the one 462 conclusion that this is nothing more or less than part of the general scheme of nationalisation that is upsetting the country at the present time.
§ Mr. JOYNSON-HICKSThis Resolution partakes of the nature of an insult Here we have the Government on the one hand preaching economy and appealing to the people to subscribe to the Victory Loan. The people outside are asked to be as economical as possible, and every individual person is to sacrifice their luxuries and pleasures—I quite agree with this—in order to support the Government Victory Loan; while on the other hand the Government themselves come down to the House day after day, with no idea of economy, and simply fling £20,000,000 about here and there as if the pocket of the public was absolutely inexhaustible. The Government cannot expect to get their Loan properly supported unless they themselves show some slight sense of economy. What is the Memorandum? It tells of a proposal to spend £20,000,000 for the construction of works in connection with electricity. What is the object of the Memorandum? That the House of Commons may know what they are going to do before they vote the money. It is not right that we should be asked to vote money blindfold to the Government. This is what the Memorandum says: This £20,000,000 is to be spent over the next five years, and this Estimate is based "on the known urgent requirements for new generating stations and plant and is spread over the time necessary to cover the constructional period." If the requirements are known, let the Government tell us what those requirements are. It is we who ought to be the judges, not Ministers. They say here in this Memorandum, which is signed by my right hon. Friend the Home Secretary, that it is known what these urgent requirements are. My right hon. Friend near me has just told us. He is a great expert on electricity. He tells us that he does not know of any urgent requirements that require the establishment of new generating stations, and that at present the electrical requirements of the country are being amply met. It may be that the Home Secretary has better information. He says that he has. Let him tell us. Do not let him ask us to vote blindfold, or to give him a blank cheque for £20,000,000, because there is no particular reason for it so far as we 463 know. The curious thing is that when the Under-Secretary (Sir H. Greenwood) spoke on this matter on behalf of the Government on the 4th of June he seemed to have got quite a different view. In specifically answering a question he seemed to be woefully ignorant of this particular Memorandum, for he said:
There is in the Vote Office a detailed memorandum setting out the principal expenditure for the coming year and it has nothing to do with £45,000,000 or £25,000,000 or £20,000,000. It sets out very clearly that the probable expenditure for the financial year ending 1st of April, 1920, under the head of ' construction' will be £1,000,000, and that the expenditure for staff will probably not exceed £35,000."—[OFFICIAL REPORT, 4th June, 1919, col. 2131, Vol. 116.]This latter amount is a subsequent part of the Resolution, and will be subject to a different Amendment, and, therefore, I will not deal with it now. But doubtless this Memorandum, to which I have just referred, does go a good deal further than the £1,000,000 mentioned for the financial year. It does deal quite specifically and definitely with the Vote for £20,000,000. If my right hon. Friend is content to take his Vote for £1,000,000 for new construction for the year 1920, I, for one, will be perfectly willing to accept the Under-Secretary's figure, and let it pass. Let him—or whoever is to be the new Minister for Electricity—I do not know whether it is to be the overburdened Titan staggering under the burden of Ways and Communications, or whether it is to be the President of the Board of Trade, that equally capable brother who carries the burdens of office a little more lightly—but whoever it is let him make up his mind, after the first million is expended, and when he knows what the requirements are likely to be and let him come to the House of Commons and say, "We want so much money for such and such specific purpose or purposes," and I venture to say Sir Edwin, that if the money is really needed, that it will be a paying investment, that it will not be wasted or thrown into the gutter like a great deal of the expenditure of the Government—that this House of Commons will not object to the Vote. I ask the Committee, before passing this large Vote for £20,000,000, to insist that they should have more detailed information from the Government. Unless the Government can satisfy us that the money is really to be spent, I hope the Committee will limit the amount as suggested by my hon. Friend.
§ Sir A. WILLIAMSONWith regard to the observations from hon. Members who have already spoken, I would just say that it is not possible, in considering a great electrical scheme like the present, exactly to estimate the amount of money to be required in each particular year. Therefore the Government have done wisely, I think, in looking to the necessity of the whole in putting the matter before Parliament, at the same time telling us that this money will not be all expended in any one year, but must be spread over a number of years in the ordinary course of the requirements and development of the scheme. I should have thought that the hon. Member who last spoke, with his large experience, would have realised that this must be so, and especially so in connection with an electrical undertaking. These undertakings are of enormous size. There is the ordering of machinery, the devising of the plant, the construction of machinery, the erection of works, and so on, which means a very considerable period of time. It is, therefore, quite impossible for the Government, just as it is impossible for any private individual, to enter upon a scheme embracing a sum of £20,000,000, without knowing that Parliament or the Government is behind them, sanctioning the scheme as a whole. Therefore the Government have acted wisely in putting before the House the total estimate and at the same time telling the House that the expenditure will be spread over a number of years.
I should like to ask the Government one question about the £20,000,000. How far have they already gone in the initiation and the authorisation of the acquirement of new plant and new schemes? I do not know whether I am right or not in suggesting that a large scheme is in contemplation, if it is not already commenced—or perhaps to a certain extent completed—in the North Midlands. This scheme, I understand, has been contemplated in view of legislation possible—that is the legislation that is now before the House. In view of that a scheme has to some extent been sanctioned, as I understand, by the Ministry of Munitions. Some understanding probably exists that this is to be taken over as a whole by the Government.
§ Mr. JOYNSON-HICKSMy hon. Friend will forgive me, but does he suggest that a national electrical undertaking in the North Midlands has been sanctioned without the authority of Parliament?
§ Sir A. WILLIAMSONI am unable to answer the question of the hon. and learned Member, but I do know that there was a great need during the War for electrical power, and that all sorts of schemes had to be adopted in order to provide for oar national needs. It was pointed out by some undertakers in the North of England that they could not supply what was required unless they got Government assistance. Therefore they got, I believe, loans to enable them to put down these undertakings, with is some understanding probably—I do not know—that that would form part of the great national scheme when it is completed. So much for the £20,000,000 which is to be expended by the Government before the electrical commissioners and district boards can come into existence and take charge of the districts over which they will have charge. Really, this is a transitory provision intended to fill the gap until a time when the new construction, which, I hope, will be a national scheme, will cover the country and take charge of the chief industrial areas of our country. It is obvious to those who have read the Reports of the Committees which have inquired into this matter that it will be some considerable time before the district boards, if they are to cover the whole country, can come into being and acquire the existing generating stations and initiate and devise new stations. It would be a lamentable thing if we were to sit down with folded hands and say that we could do nothing. This £20,000,000 is intended to provide for the interval.
With regard to the subject generally, I think the matter has become one of increasing urgency, and this has been brought home to us not less than that it was some time ago by the condition of the supply of coal. It seems clear that the difficulty in that regard makes the matter more urgent, and anything that is likely to shorten the time when we can have a cheap electric supply for our industries is a matter which I think the House ought to support. There has been a great deal of talk as to whether we shall have a national system or some other, but the last two Committees, including the one which I have the honour to preside over—
§ The DEPUTY-CHAIRMANThe right hon. Gentleman must remember that we are only now considering the Financial Resolution, and it is not in order to go into the merits of the question.
§ Sir A. WILLIAMSONThe point before us is how this matter is to be financed, and 466 whether it is to be financed locally or nationally. The Government propose in this Resolution to have power to loan money to local authorities and also to district boards, and there is in the Memorandum conditions as to the terms on which the money may be lent, and it states, "Where it cannnot be raised otherwise on reasonable terms." The national aspect of it has been emphasised by the Committee over which I had the honour to preside, and a subsequent Committee which was appointed by the Government. Perhaps that aspect of the financial matter is a little overshadowed at present by other matters which have been considered in the direction of nationalisation. I want the Committee to remember that the question of the electric supply is entirely different from the position of industrial undertakings such as the coal mines and the nationalisation of coal. It is important to realise, in deciding whether we are to finance these matters by means of local undertakings, that the two things are entirely different. I ask those hon. Members who have not read it to read the Report of the Committee of the Chairman of the Ministry of Reconstruction upon the Report of the Committee over which I had the honour to preside. This subject has been reported upon so often That the House should be acquainted with the last Report to which they are to pay attention. In the Report of the Committee over which I presided we certainly thought national financing should be authorised. When you come to the authorising of this £25,000,000 you have to consider what they are going to do with it.
§ Mr. JOYNSON-HICKSThis £25,000,000 comes under paragraph (b), and is not touched by the Amendment before the Committee about £20,000,000. I am quite prepared to let the Debate run on general lines if the Chairman is, but in that case we should have made general speeches. I think the question is whether £20,000,000 or £5,000,000 should be included.
§ The DEPUTY-CHAIRMANThe hon. Member is quite correct. The original Vote is £20,000,000 and the Amendment is £5,000,000.
§ Sir A. WILLIAMSONIt is my mistake, and, therefore, the remarks I was about to make about the £25,000,000 are out of order. I should like to say that all the evidence before the Committee over which I presided was in favour of this money being spent as far as it was required. 467 What we are doing is giving authority to the Government to spend what is required until such time as the new body can take over the undertakings.
§ Mr. SHORTTI only wish to answer the question put by my hon. Friend. The Ministry of Munitions during the course of the War, did a considerable amount of work in this respect, but that has nothing whatever to do with the proposals in respect of which this money is being asked for. So far as these proposals are concerned, of course those connected with the Department are working out their plans and considering details, but there are no financial commitments of any sort or description being entered into by this Department.
Mr. T. THOMSONWe are asked by this Resolution to authorise the expenditure of £20,000,000, which, according to the Bill, may be used to acquire undertakings which are at present under popular control. As the Bill stands it is possible to hand over those undertakings to private companies to work for their own interest and profit. Since the Bill was introduced the Government have been approached by various authorities, and I hope they may be able to give some assurance that the very wide powers of the Bill taking over authorities at present democratically controlled and handing over their plant to private companies will not be pursued. If an assurance can be given that that which has been managed locally by popular elected bodies will be retained under popular control, then I think that would remove, so far as many of us are concerned, one of the chief objections to this Bill.
By Clause 7 you transfer various authorities concerned, and when you look at the amount of capital involved the great bulk of the electric supply of this country is in the hands of local authorities and managed by popularly elected bodies, and this money and these undertakings under this Bill are passed over to the district boards. Under Clause 16 the district boards having acquired this property can hand it over to be worked by private companies. I submit that the House should have some assurance from the Government, which is supposed to be democratic, that they are not going to use this £20,000,000 to take control out of the hands of popularly elected authorities, and place it in boards on which there may or 468 may not be a majority of popularly elected members. This is an important principle, and we have a right to ask what is being done to protect the public interest, and unless we have that assurance, I, for one, shall vote against a blank cheque being given to the Government to do what they like with under a Bill which provides no restrictions in regard to this vast transfer of public control to privately controlled interests.
§ Mr. NEALI listened with great interest to the speeches made by the hon. Member for Hampstead (Mr. G. Balfour), and the hon. Member for Twickenham (Mr. Joynson-Hicks), and they did not in the smallest degree conceal the fact that they were using this money resolution as another opportunity of showing their dislike to the whole subject matter of the Bill. The House on Second Reading, however, accepted the subject matter of the Bill. The point made by my hon. Friend who has just sat down (Mr. F. Thomson) is one of great interest that can be dealt with in Committee. We are here to endeavour to help the Government in immediate schemes of reconstruction, and an immediate scheme of reconstruction involves an immediate pledging of the national credit. Unless we are prepared reasonably and firmly to give our confidence to the Government, and we are here by the votes of the electors for the express purpose of giving the Government our confidence—my hon. Friend the Member for Twickenham laughs at the idea of giving the Government his confidence—
§ Mr. JOYNSON-HICKSI was not returned by my Constituents to give the Government confidence to the extent of spending £20,000,000 on this measure. I was returned with regard to the War and the conclusion of Peace.
§ Mr. JOYNSON-HICKSBut not extravagance.
§ Mr. NEALThere is nothing about extravagance in this Resolution or Amendment, and there was nothing in the observations of the hon. Gentleman germane to the question of extravagance. The question is whether we arc going to support the Government financially.
§ Mr. JOYNSON-HICKSBlindly.
§ Mr. NEALMy hon. Friend may use adjectives for himself; please let me use 469 my own. Are we going to support the Government financially? Without financial help it is hopeless to expect any reconstruction policy in this country, and that we need it every one of us knows. The White Paper that has been circulated gives us a prospective expenditure by the Government over a period of five years, and an expenditure of 1,000,000 in the first year. Supposing the Government had taken the line indicated by my hon. Friend and they had said "Give us permission to spend a million in the first financial year and then we will come next year and ask for more, but in the first year we shall have to pledge the credit of this country for £20,000,000," what would have been their observation? They would have said that it was fraudulent on the part of the Government to involve the country in an expenditure of not less than £20,000,000 under the pretence that they were only incurring an expenditure of £1,000,000 I thank the Government for having brought before the House a prospective outline of the capital expenditure which they think they are likely to ask us to vote for the next five years. There is one point on which I should like a little further enlightenment. The White Paper says that this £20,000,000 is by way of loan to the district electricity boards, and that ultimately it will not be a charge upon the State. Surely, whether any of it will become a charge upon public funds, depends upon what will be the financial success of the district electricity boards, and at this moment no one can guarantee them financial success. I can conceive circumstances under which it would be sound national policy to develop schemes which would not show a financial success though in the national balance-sheet they might well have that result.
Suppose the Government carry out the idea which was elaborated upon Second Reading and open up agricultural districts by taking cheap electricity to the farm and by establishing transport by electrical methods in rural districts so that the produce may be brought to the great centres of population for consumption. It may very well be that an undertaking like that cannot in the nature of things show a financial success as an isolated undertaking, but it may equally well be that it is essential to the prosperity of the country, and that in the end the gain nationally would be real. I do not see anything in the Bill which indicates the 470 financial backing of the district boards. Supposing a district electricity board shows a loss in the first year or the second year or any subsequent year—it is more likely in the early years than in the later years, and almost certainly it cannot be a commercial success in the early years during the development of the undertaking—upon whom is it the intention of the Government to place the financial responsibility? The district board, as the Bill stands, will be the creature of the Government. It will not necessarily have popular representation upon it, but, supposing effection be given to the desire of my hon. Friend who last spoke, and the district board became a popular representative body, at least as to the majority, it would be representative of the local authorities and not of the national authority. Is it intended then that the rates of the local authorities should be called in aid of the district board? Who is to make good any loss which there may be, and which I take it there must be in the initial stages of these great undertakings? I think it will be found that ultimately it must be a charge upon the Treasury, and to that extent the White Paper is not complete and accurate. But the loss upon the working of an undertaking year by year is not a capital charge in the true sense, and this is not a case in which extravagance is the appropriate-word under any circumstances whatever.
When a business man enlarges his business and puts in more capital he is not liable to the charge that he is extravagant unless he is careless in the expenditure of his money and not sufficiently careful to see that the money is expended in a way which will be productive of profit hereafter. The persons-who will have the spending of this money will be in the first place the Electricity Commission, acting through the district boards, and the time for a charge of extravagant expenditure will arise if and when it is found that their schemes are unsound commercially and that they are not buying their plant in the best markets and to the greatest advantage. Then it might be possible to make such a charge. But that will not be yet. You can only make the charge of extravagance against these boards if they do not properly place their contracts or properly supervise them. When you are talking about asking for money for capital purposes no one-dreams of saying it is extravagant to do 471 so. Would the hon. Gentleman in settling the prospectus of a company think it was a germane criticism to make when he was asking for extra capital that it was extravagant? If we are satisfied it is essential we should have cheap electricity through this land in order to assist commerce to bring schemes into effect which will find employment for the people, then in that ease I say the word "extravagant" is misapplied. We have either to trust the Government or to confess that we do not trust them. I am here believing that in these times it is our duty to drop all suspicion, that it is the duty of each one of us to help and not to hinder, and not to make this question of finance a stalking-horse to hamper the prosperity of the nation.
§ Mr. REMERThe hon. Member who last spoke seems to think it is the duty of every Coalition Member to support any measure the Government may bring in. Perhaps he will consult his Liberal colleagues and ask them whether they have been always quite so loyal in their attitude. I do not think we all necessarily agree as to what is the meaning of the words "policy of reconstruction." For myself, I do not think it is the duty of a Coalition Member of Parliament to -agree to any extravagant proposal of the Government—to any proposal of nationalisation of any kind, or to any proposal for State trading. Does the hon. Member suggest that all such proposals as these should be supported by us I So far as I am concerned personally, I, as a Coalition Member of Parliament, have stated deliberately that I am opposed to any kind of nationalisation. I should like to refer to a speech we heard just now, in which the hon. Member stated that the manufacturers might be careless in the way they spent their money. He does not seem to think that the State on several notable occasions has also been exceedingly careless of the way in which it has spent money, but one has only to refer to the Post Office telegraphs and telephones to become aware that State trading almost always is a failure. We were told just now that there were only two alternatives, and that was trade either by the State or by local authorities. I think there is a third alternative, and that is private enterprise. The strongest check should, of course, be put on the Government. They should be kept well 472 within their limits as far as their spending powers are concerned. I intend to support the Amendment.
§ Mr. WILSON-FOXI entirely approve, as do all who have studied the question, in the development of electricity on a very large scale, a scale such as we have never seen before in this country, because it will result in our being able to produce far more cheaply than we have ever done in the past. But that is an entirely different thing to saying that we should give a blank cheque to the Government for the expenditure of these vast sums of money. My hon. Friend opposite (Mr. Neal) laid down an extraordinary doctrine as to the duty of Members of Parliament. If he had had the experience that I had in the last Parliament he could not possibly have given that advice. I am one of those Members who in the last Parliament was privileged to see almost every one of the white elephants of the War in their stable. I took part in the inquiry into the expenditure connected with Slough, Rich borough, Loch Doune, and Chepstow. I visited all those places, and nothing impressed me more than this, that no Government can be trusted to spend large sums of money safely except on proper estimates, so that the House may know exactly what is going to be done before it gives its sanction to the expenditure. For that reason, when the Government do not know what they are going to do with the money, I do not think the House is justified in saying that "you may spend money up to £20,000,000 on capital account." That is why I support the reduction which has been moved in the amount of money to be voted. My sole object in speaking in this Debate was to press that point. My hon. Friend said there could be no extravagance provided the money was spent on capital account. I do not agree with him.
§ Mr. WILSON-FOXI think if the House gives this wide authority without a knowledge of what the money is going to be spent upon it will be tempting the Government to extravagant expenditure, and you must not be surprised if such extravagance does occur. I do not think we are justified in putting the Government in that position. Every time that expenditure has been incurred, to a large extent, except upon proper estimates, extravagance and 473 waste have resulted, and it is entirely our own fault if we place the Government in a position to incur such extravagant expenditure. A man in business would not dream of incurring very large expenditure without having detailed estimates from competing engineers placed before him. He would not dream of saying, "You want to spend up to four or five millions; go ahead, and I will pay" He would say, rather, "Tell me what you want it for, what is the result you expect, and what it is going to cost," and when he has gone closely into all those things he may then sanction the expenditure, but not before. I maintain it is our duty to the country to keep at least as good a check upon the Government expenditure as the ordinary man of business applies to his concerns, whether he conducts them on his own behalf or on behalf of others, in the commercial world. For that reason I strongly support the Amendment.
§ Mr. GEORGE THORNEThe expression "extravagance" has been used very freely to-night, and strong urgency has been made on behalf of economy. Personally, I am strongly in favour of economy, but I am in favour of economy in some directions where some of my Friends who urge economy seem to be in favour of extravagance. I want to put every possible check upon waste and upon expenditure in the direction of destruction, but when we come to constructive matters I take an entirely different view, and I am under pledge, while I am opposed to waste and destruction, to support the Government so far as my judgment accords with them in their constructive proposals. What I am anxious to make sure of is this, and this only—that the Government, through their responsible Minister here to night, should make it clear to us that in this great proposal, which has received the support of the House on its Second Heading, they cannot carry it through in any practical way unless they get the authority for which they are asking now.
§ Mr. BALFOURCan the hon. Gentleman tell me what the proposal is?
§ Mr. THORNEWe have a responsible member of the Government here who will be able to answer what hon. Members are asking I do not want to put the slightest hindrance in the way of the Government carrying through these great constructive proposals. So far as I can, I want to help them in doing it. At the same time 474 we want to do it on practical lines. So far as it is practicable, I should like to have the estimates referred to by one hon. Member laid before the House. I want to be quite sure that, in asking for that, we are not preventing the Government doing what they desire to do, and what I for one desire to help them to do. What I invite the right hon. Gentleman to do when he replies is to make it absolutely clear to the Committee that the Government cannot get on with their proposals unless we assent now to the particular thing for which they are asking. I do not like giving up the control of this House in regard to this large expenditure of money. Therefore, the responsibility must be upon the Government of stating, through their representative, that they cannot do what the House desires them to do unless they have this money. Upon them is the responsibility of saying they cannot carry through this constructive proposal without the Resolution for which they are asking.
§ Mr. BIGLANDI desire to ask one question before the Government reply. I am informed, if this large sum of money is granted to the Government to produce electricity, that in the rural districts, the supply of electricity being small, the cost: per unit would be so great that we taxpayers will be asked to pay a considerable sum, because the price charged to the small consumer in the rural districts, will be totally inadequate to pay the actual cost of production. I should like to ask whether it is suggested by the Government that any portion of this £20,000,000 or any deficit or loss will be charged to the taxpayers through the Exchequer?
§ 9.0 P.M.
§ The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Colonel Sir Hamar Greenwood)May I respectfully ask the Committee to remember that, these sums of money were incorporated and are incorporated in the Bill which: has already passed the House without a Division on its Second Reading? Therefore the principle of giving the Government control of these sums of. money has already been accepted by the House. This Financial Resolution is a Resolution according to our constitution to empower the Government to expend it as they can only expend it—that is, under the Bill as it is amended in Committee. By the Rules of the House we cannot deal with the 475 Financial Clauses of the Bill in Committee, which means, in fact, that the Bill cannot go to Committee for consideration at all until we get this Financial Resolution. The principle of the Bill and this expenditure have been agreed to. Let me say here that the first paragraph of the Resolution, to which the Amendment of the hon. Member for Twickenham (Mr. Joynson-Hicks) refers, says that the Treasury shall have power
to advance out of the Consolidated Fund such sums not exceeding in the aggregate twenty million pounds.That is a capital expenditure. Every shilling of that capital expenditure, every shilling of that money advanced by the Treasury in any shape or form, is to be repaid by these district boards. May I remind the Committee that this proposal, as the hon. Member for Wolverhampton (Mr. G. Thorne) has emphasised, is a constructive proposal? We are taking over going concerns that are already paying revenues. We are not taking over derelict concerns.
§ Mr. BIGLANDAre you going to start new ones?
§ Sir H. GREENWOODCertainly. Under the Bill to which the House has agreed we have power to undertake vast undertakings, but with the object of centralising the production of electricity.
§ Mr. BIGLANDThere is no revenue from those new ones.
§ Sir H. GREENWOODUndoubtedly there will be revenues from them.
§ Mr. BIGLANDThere is no assured revenue.
§ Sir G. GREENWOODIt is impossible to prophesy what will happen in the future, but we have every reason to believe, on the best advice we can get, that they will be reproductive. May I remind my hon. Friend that the great object of the Bill is to so centralise the production of electricity that we can cheapen its supply to the individual or individuals, including those in rural areas, if it is at all possible and is not prohibitive as to its cost.
§ Mr. BIGLANDIf there is a loss, what will happen?
§ Sir H. GREENWOODI do not think it is possible to have a loss, taking the whole.
§ Mr. JOYNSON-HICKSWhat about Chepstow?
§ Sir H. GREENWOODI do not think it is possible to have a loss, and only those suggest a loss who are opposed to the principle of the Bill altogether. The experts who have advised us in reference to this matter assure me, and I repeat the assurance having studied the question, that we are taking over going concerns, and by the system we are adopting under the Bill we hope to cheapen electricity. We certainly do think that the centralisation of this great source of energy means not greater but less cost. We ask the Committee to give us power to make a capital expenditure over a period of five years of £20,000,000. The White Paper, which I trust that every Member has read, sets out how the expenditure is estimated.
§ Mr. BALFOURIt does not say how it is estimated, but only the period of its expenditure.
§ Sir H. GREENWOODThat is so, only the period. The hon. Member will have an opportunity, when we get to the Committee stage of the Bill, of himself insisting on his views being put in an Amendment, if that is necessary.
§ Mr. BALFOURIt is equally so with £5,000,000 as with £20,000,000.
§ Sir H. GREENWOODNot so. I will tell the Committee why we ask for the £20,000,000 under the Resolution which the House has granted in principle in passing the Second Reading. If you are going to have a great scheme of electrical supply covering the whole of the country you cannot restrict your planning for that supply to one year. Therefore we plan for a period of five years.
§ Mr. JOYNSON-HICKSWhat are the plans?
§ Sir H. GREENWOODI am sorry I cannot give particulars and details at the moment, but nothing I can say will persuade some hon. Members. At any rate, the principle is agreed to, and you cannot restrict your planning for a vast scheme of this kind to one year. We choose a five-year period, and we ask the Committee to pass this Resolution estimating the expenditure for each year of that five-year period. The hon. Member (Mr. Joynson-Hicks) has talked about flinging millions about. I am sorry to think anyone should 477 talk in that way in dealing with a Bill of this kind, which gives power to advance money to take over going concerns.
§ Mr. JOYNSON-HICKSThis £20,000,000 is not to take over going concerns, but to build new works.
§ Sir H. GREENWOODIt is £20,000,000;for the transition period. Every penny of it is returnable and will be repaid. Why talk about extravagance when you are making an advance the certainty of the return of which with interest is assured? There can be no extravagance in that kind of capital expenditure unless the suggestion is that it is going to be lost absolutely as soon as it is advanced. I protest against the suggestion that the Government is pledged to a policy of flinging millions about. I think the Government is showing a desire to bring forward a policy of construction and remuneration which I hope will characterise every Bill that is introduced by any Government. To accept the Amendment means that you defeat the purpose of the Bill. You cannot carry out a vast scheme—and it is a vast scheme—under the Electrical Bill if you restrict your financial engagements to £5,000,000. The House has made up its mind by giving the Bill a Second Reading. I hope the Committee will give the Government this power to spend £20,000,000 not in one year, but over a period of five years, and without that power neither this nor any other Government can plan a great and comprehensive scheme which will make the production of electricity what we want it to be and cheapen it to industrial and private consumers. I hope the Committee will remember, in going to a Division, that the fate of the Bill itself depends upon accepting the amount set out in these financial Resolutions.
§ Mr. JOYNSON-HICKSThe passing of the Second Reading simply means that the House approves the general principle of the Bill. It is then not only the privilege, but the absolute duty of the Committee to discuss the financial details. That is why we have this Committee stage. If the mere passing of the Second Reading is sufficient to give the Government authority to spend all the money it likes, why go through the form of Committee at all? The wisdom of our predecessors has provided this Committee stage in order that we should do our duty toy looking after the financial aspect of 478 the particular Clauses, which naturally could not be discussed in detail on the Second Reading. It is our duty to ask the Government what they propose to do with this £20,000,000. The method of moving to reduce the amount is in order to find out what they are going to do with it, and that is the object of the Amendment. The hon. Gentleman has not given us one word of information as to what the Government is going to do with it. He told us in a burst of eloquence that he was going to take over going concerns. He is not going to take over going concerns with this £20,000,000. I interrupted him and he fled from the point at. once. The £20,000,000 is for new construction. He says his experts tell him this new construction is going to bring in profits to the Government. What a wonderful company promoter he would make! How he would go down with the public. "Trust me. I have experts behind me. Give me £20,000,000. We shall make a glorious profit, and you will get good dividends. But I will not tell you how I am going to spend the £20,000,000." I wonder what money he would get out of the public with a prospectus of that kind. We are in this respect the public, but we are not merely the public who put our own money into the venture: we are responsible for the money of the taxpayers. We put other people's money into it, and it is more necessary that we should protect the interest of the taxpayers. If he is not going to give us any more information than that, he is asking us for the blankest of blank cheques. If he will tell us what his plans are, we will consider them. He then said that my hon. Friend (Mr. Balfour) could worry this out in Committee upstairs. That is not the proper place to deal with financial Resolutions. This is the proper place in which you ought to lay your plans before the Committee and ask the Committee for power to carry out these schemes. I said we will give him his million even without the plans before us. The hon. Member for Yorkshire thinks it is necessary that we should vote £20,000,000 merely because the Coalition Government asks for it. Would he have voted £50,000,000, would he have voted £100,000,000, in the same trusting spirit, merely because a Member of the Coalition Government asked for it? That is not my idea of the duty of a Member of the House of Commons, and as long as I am 479 a Member of the House of Commons I shall exercise my rights in Committee of Ways and Means to find out whether Government proposals, from the financial point of view, are sound or not. The hon. Gentleman has given us no information at all on the point, and under the circumstances I shall certainly press this to a Division.
§ Lieut.-Commander KENWORTHYThis is a case where we have something constructive. Yesterday, or the day before, £185,000,000 were voted for munitions, which will never bring in any money. There is a chance of bringing something back here, and I think a very good chance.
§ Mr. JOYNSON-HICKSHow do you know?
§ Lieut.-Commander KENWORTHYI say I think there is a chance. Later tonight we shall be asked to vote £50,000,000 for munitions of war. We are certain never to get anything back from that, and we may do a great deal of damage with that money. Here is a chance of making something. I mean to support this, and I hope all who have the interests of the country, from a constructive point of view, at heart will also support it.
§ Question put, "That the word 'twenty' stand part of the Question."
§ The Committee divided: Ayes, 136; Noes, 26.
481| Division No. 47.] | AYES. | [9.15 p.m. |
| Ainsworth, Capt. C. | Gardiner, J. (Perth) | Perring, William George |
| Baird, John Lawrence | Geddes, Rt. Hon. Sir A. C. (Basingstoke) | Pratt, John William |
| Barnes, Major H. (Newcastle, E.) | Gibbs, Colonel George Abraham | Prescott, Major W. H. |
| Barnett, Captain Richard W. | Gilmour, Lieut.-Colonel John | Purchase, H. G. |
| Barnston, Major Harry | Green, J. F. (Leicester) | Rae, H. Norman |
| Beckett, Hon. Gervase | Greenwood, Col. Sir Hamar | Raper, A, Baldwin |
| Bellairs, Com. Carlyon W. | Griggs, Sir Peter | Ratcliffe, Henry Butler |
| Birchall, Major J. D. | Hailwood, A. | Raw, Lieutenant-Colonel Dr. N. |
| Blades, Sir George R. | Hambro, Angus Valdemar | Richardson, R. (Houghton) |
| Blane, T. A. | Hancock, John George | Roberts, Sir S. (Sheffield, Ecclesall) |
| Boles, Lieut.-Col. D. F. | Hayward, Major Evan | Robinson, T. (Stretford, Lancs.) |
| Bowerman, Rt. Hon. C. W. | Henderson, Major V. L. | Roundell, Lieutenant-Colonel R. F. |
| Bowles, Col. H. F. | Hoare, Lt.-Col, Sir Samuel J. G. | Samuels, Rt. Hon. A. W. (Dublin Univ.) |
| Breese, Major C. E. | Hood, Joseph | Shaw, Hon. A. (Kilmarnock) |
| Briant, F. | Hope, James Fitzalan (Sheffield) | Shaw, Captain W. T. (Forfar) |
| Bridgeman, William Clive | Hopkins, J. W. W. | Shortt, Rt. Hon. E. (N'castle-on-T., W.) |
| Brittain, Sir Harry E. | Hume-Williams, Sir Wm. Ellis | Simm, Col. M. T. |
| Broad, Thomas Tucker | Jephcott, A. R. | Smith, Capt. A. (Nelson and Colne) |
| Bromfield, W. | Jesson, C. | Smith, Harold (Warrington) |
| Buchanan, Lieut.-Col. A. L. H. | Jodrell, N. P. | Sprot, Col. Sir Alexander |
| Burn, Colonel C. R. (Torquay) | Johnson, L. S. | Stanley, Colonel Hon. G. F. (Preston) |
| Cairns, John | Jones, G. W. H. (Stoke Newington) | Steel, Major S. Strang |
| Carew, Charles R. S. (Tiverton) | Jones, J. Towyn (Carmarthen) | Stephenson, Colonel H. K. |
| Carter, R. A. D. (Manchester) | Kellaway, Frederick George | Strauss, Edward Anthony |
| Casey, T. W. | Kenworthy, Lieut.-Commander | Sturrock, J. Leng- |
| Chamberlain, N. (Birm., Ladywood) | Kenyon, Barnet | Talbot, G. A. (Hemel Hempstead) |
| Coats, Sir Stuart | King, Com. Douglas | Taylor, J. (Dumbarton) |
| Cohen, Major J. B. B. | Lewis, T. A. (Pontypridd, Glam.) | Thomas, Brig.-Gen. Sir O. (Anglesey) |
| Coote, Colin R. (Isle of Ely) | Lyle, C. E. Leonard (Stratford) | Thomas, Sir R. (Wrexham, Denb.) |
| Cowan, D. M. (Scottish Univ.) | M'Curdy, Charles Albert | Thomas-Stanford. Charles |
| Davidson, Major-Gen. Sir John H. | M'Laren, R. (Lanark, N.) | Thorns, G. R. (Wolverhampton, E.) |
| Davies, Alfred (Clitheroe) | Macquisten, F. A. | Vickers, D. |
| Davies, Sir D. S. (Denbigh) | MacVeagh, Jeremiah | Walker, Col. William Hall |
| Davies, Sir Joseph (Crewe) | Malone, Col. C. L. (Leyton, E.) | Ward, Col. L. (Kingston-upon-Hull) |
| Davies. T. (Cirencester) | Malone, Major P. (Tottenham, S.) | Ward, W. Dudley (Southampton) |
| Dawes, J. A. | Mason, Robert | Wardle, George J. |
| Dewhurst, Lieut.-Com. H. | Mitchell, William Lane- | Wheler, Col. Granville C. H. |
| Dockrell, Sir M. | Moore, Maj.-Gen. Sir Newton J. | White, Charles F. (Derby, W.) |
| Edge, Captain William | Mosley, Oswald | Wild, Sir Ernest Edward |
| Edwards, Major J. (Aberavon) | Murray, Major C. D. (Edinburgh, S.) | Williamson, Rt. Hon. Sir Archibald |
| Elliot, Capt. W. E. (Lanark) | Murray, William (Dumfries) | Wills, Lt.-Col. Sir Gilbert Alan H. |
| Entwistle, Major C. F. | Neal, Arthur | Wilson. Col- Leslie (Reading) |
| Eyres-Monsell, Commander | Newman, Sir R. H. S. D. (Exeter) | Worsfold, T. Cato |
| Falcon, Captain M. | Oman, C. W. C. | |
| Fell, Sir Arthur | Parker, James | TELLERS FOR THE AYES.—Capt. |
| Foxcroft, Captain C. | Parry, Major Thomas Henry | Guest and Colonel Sanders. |
| Galbraith, Samuel | ||
| NOES. | ||
| Banbury, Rt. Hon. Sir F. G. | Clough, R. | Gretton, Col. John |
| Bell, Lieut.-Col. W. C. H. (Devizes) | Conway, Sir W. Martin | Gritten, W. G. Howard |
| Bennett, T. J. | Courthope Major George Loyd | Hopkinson, Austin (Mossley) |
| Bigland, Alfred | Craig, Capt. C. (Antrim) | Hurst, Major G. B. |
| Campbell, J. G. D. | Davision, Sir W. H (Kensington) | Joynson-Hicks, William |
| Lonsdale, James R. | Raeburn, Sir William | Wilson-Fox, Henry |
| Lowther, Major C. (Cumberland, N.) | Samuel, A. M. (Farnham, Surrey) | |
| Marriott, John Arthur R. | Stevens, Marshall | TELLERS FOR THE NOES.—Mr. |
| Moreing, Captain Algernon H. | Thomson, T. (Middlesbrough, W.) | Remer and Mr. G. Balfour. |
| Nall, Major Joseph | Waddington, R. |
§ Mr. JOYNSON-HICKSI beg to move, in paragraph (b), to leave out the word "twenty-five," and to insert instead thereof the word "five."
I move this Amendment, although it is clear that there are only twenty-six economists in the House, and a large number of followers of my hon. Friend (Mr. Neal) who apparently vote for the Government because it is the Coalition Government. This part of the Resolution authorises the Treasury to guarantee the interest on stock issued by the Electricity Commissioners up to £25,000,000. Can the Under-Secretary give us any information about the issue of this £25,000,000 of stock which the Government is going to guarantee? On the White Paper I find about as much information as we have already had. The first statement of the Government is that it is impossible to say in what cases, if any, it wll be necessary to call on this guarantee. The whole scheme is based on the anticipation that the scheme will be self supporting, and will not involve the Treasury in any payment, and on this statement the House of Commons is asked to guarantee £25,000,000. My hon. Friend is an excellent company promoter, but I do not know what his opinion would be of a banker who asked someone to sign a guarantee for £25,000,000 and said, "Of course, I do not expect that you will ever be called upon to pay anything on that guarantee." Most people would hesitate to sign such a guarantee on that statement. This is not a proper way of doing business. The Government must tell us what they are going to do. Having made my protest I do not know that there is any use going on dividing the House on Amendment after Amendment. But unless the House of Commons is going to abrogate its functions as a custodian of the finances of the country, it will insist upon the Government giving further information as to their proposals.
§ Sir F. BANBURYI am surprised that the Government have not considered it advisable to give a reply to the speech of my hon. Friend. I wish to draw attention to what appears to be a very extraordinary provision on the White Paper. In Clause 23 the Treasury are enabled to guarantee the interest on such terms as they think fit on stock not exceeding 482 £25,000,000, to be issued by the Electricity Commisioners for the purpose of loans to district electricity boards, or authorised undertakings, where it appears that the money necessary for the undertaking can not be otherwise raised on reasonable terms. Undertakings which are perfectly sound will have the power of going into the open market and asking the investing public to lend them money. But now the Government say that where the undertaking is so bad and the prospects are so poor that no reasonable person will lend it any money, then the unfortunate taxpayer is to come forward and authorise the interest on a sum not exceeding £25,000,000. That is the meaning of those words, and that is why the Government have not thought fit to reply to the speech of my hon. Friend We have already authorised an advance out of the Consolidated Fund of a sum not exceeding £20,000,000. Surely that is enough to go on with, at any rate for a time. Why on earth at the present moment, when we ought to be economising in every possible direction, having given that power to the Government, are we to give the Government the additional power to guarantee interest on £25,000,000 for certain undertakings, where it is evident that no sane person will lend the money on those undertakings? I earnestly hope that the Committee will pause 'before encouraging such a wanton, wasteful proceeding. We do not know at all that these undertakings are going to be successful. In the ordinary course of events, people would consider whether the undertakings were going to be successful before they lent their money. We do not know whether they are or not. We do know that where the Government have interfered "With and attempted to manage commercial undertakings they have made an egregious mess of it, not only wasting money but carrying on the undertakings badly. The Committee may remember that it is their duty to support the Government, but they should also remember that an even more important thing is to save the taxpayer from burdens additional to those which are already very heavy. In those circumstances, I implore the Committee to pause before giving the Government power to advance money to 483 undertakings to which nobody else in the country will advance any money. My hon. Friend has said that he would not think of dividing the Committee, but unless we get a reasonable answer it is our bounden duty to divide the Committee. Otherwise it is very difficult for Members who are new to the House to find out that they will never receive proper consideration from the Government unless they are prepared to divide the House or the Committee when they are not treated properly, and my hon. Friend has not been treated properly because his speech has received no answer.
§ Sir H. GREENWOODI am sure that the Committee will acquit me of any intentional disrespect in not rising at once to reply to the hon. Member (Mr. Joynson-Hicks). I only wish that it were within my power to make a reply on this or any other main policy of the Government that would convert the hon. Member and the right hon. Member (Sir F. Banbury) to that wholehearted support of the Government which he now extends to the opposition of it. I quite appreciate the importance of what he says to this extent, that it is the duty of every Member of Parliament to deal not only drastically but, if necessary, harshly with the Government on financial and other questions. I spent years of my own life in trying to carry out that policy, and I agree that the Government, if not harshly criticised and fearlessly criticised, is apt, perhaps, to get too great a conceit of itself and not have that healthy regard for His Majesty's faithful Commons as I certainly have and always will have. May I ask the Committee to allow me to read to them Clause 33 of the Bill, Sub-section (1). which gives in greater detail the power of the Electricity Commissioners to lend money to district boards? In the paragraph in the Financial Resolution the Committee realise that we arc asking for power for the Treasury to guarantee, if necessary, interest on a maximum amount of £25,000,000.
§ Sir F. BANBURYWhen nobody else will do it.
§ Sir H. GREENWOODThat is not what it says. The guarantee may not be called for, but if at a given time a district board has a great undertaking for which it wants money, I submit that it would be real economy to have the Treasury guarantee interest, to get the money at 5 per 484 cent. rather than that the district board, knowing the bad state of the market, should be compelled to borrow at 7 percent.
§ Mr. JOYNSON-HICKSBecause of bad securities.
§ Sir F. BANBURYI am not quite certain, but I believe it was the Duke of Wellington who was responsible for the expression "high interest and bad security."
§ Sir H. GREENWOODI am afraid the authority for high interest goes much further back that the Duke of Wellington I will read Clause 33:
The Electricity Commissioners may lend, on such, terms and conditions as, subject to the approval of the Treasury, they think fit to a District Electricity Board or any authorised undertakers, any money, not exceeding in the aggregate £25,000,000, which the Board or undertakers are authorised to borrow, if the Commissioners are satisfied that the Hoard or undertakers cannot otherwise raise the money on reasonable terms.The necessity for the guarantee only arises when the market is so bad or the lenders are so unreasonable, or when for any other reason the yare called upon to pay high interest. I submit that for all these reasons it may be the beet economy to guarantee the interest on a given loan in order to expedite the development of this scheme of electrical power. If you adopt the principle of this Bill, and want to help to make it a success, this guarantee of interest is an important factor. The cheaper you can get the money it ought to follow the cheaper the electricity supply. I admit that I cannot tell the Committee how this £25,000,000 will be spent. I do not think it is possible to tell; I do not think the Committee will expect me to tell them. It will be used to carry out the Bill as ultimately it finds its way on the Statute Book. I have done my best to-make clear the Government view on this question, and I would like to conclude by expressing the hope that no Member of the House would suggest that I was discourteous in not making the explanation before.
§ Sir A. WILLIAMSONI think the Under-Secretary for the Home Department made a slip when he said that this money would be spent only by district boards. It may be spent by other authorised undertakers. With regard to the purpose for which the money is required, the right hon. Baronet (Sir F. Banbury) spoke of this money as if it were an addition to the 485 £20,000,000, and for the same purpose. I would point out that this money is only in part required and used for the same purpose as the £20,000,000.
§ Sir F. BANBURYI did not mean to say it would be used for the same purpose, in addition to the £20,000,000.
§ Sir A. WILLIAMSONI am sorry if I misunderstood the right hon. Baronet. The main purpose of this £25,000,000 is to pay for the existing generating stations and main transmission lines which will be taken over presumably by the district boards. Where a district board is created generating stations must be taken over by the board, and necessarily the board must pay for them. In order to do that they have to get money, and they must either raise it, under the proposals of the Bill, locally, or borrow it from the Treasury. For my own part, and I believe a good many people agree with my view, I think it will be very much better if the whole of the finance were done on one uniform basis. Personally I do not think the Government are wise in this option matter. It is true that this option was in the Report of the Committee over which I presided, but the options were put in as 1, 2, and 3, and No. I was that the whole scheme should be nationally financed. I think that is a very much wiser plan. Some of the £25,000,000 may be used also for now works, because when these boards are established they acquire existing generating stations, and a simultaneous duty will be to consider what new works are required They require money in order to construct those new works. I think it is a great pity that it is not one national system of loans—£25,000,000 will not cover it. In order to acquire all the generating stations and to provide what new generating stations are required, we shall see in course of time a larger figure. There is another point which is perhaps interesting, and that is that this £25,000,000 is a sum which will be spread over a considerable period. The generating stations cannot be taken over all at once; it will be a matter of considerable time. Therefore the £25,000,000, if wanted at all, will be wanted only over a number of years.
I hope that the whole of the financing will be done through the one system, and that we shall not have this competition of the different district boards in the market for money, offering different rates according to the goodness or badness or supposed goodness or badness of the under- 486 takings. It would be very much better to have one uniform system of finance. Something has been said as to money being necessarily provided to meet losses. I do not disguise from the Committee, and I should be wrong if I did so, having spent ten months in inquiring into this matter, that there will undoubtedly be losses in taking over obsolete plant and also probably in the great new stations which are to be created, because if you do business properly you must anticipate the demand which does not exist in full measure to-day. When putting up stations you cannot possibly expect that they will pay for a number of years until the demand around them has grown to a certain volume. Therefore the Government will be wise if in considering these financial proposals now and in the future they take into account, and it is only good business to do so, that it is absolutely essential, if they are to supply a proper system of cheap electric power, to look ahead. It has been said that this will prove to be a sound investment, but that is only true if you take the long view. You must be prepared to experience losses for some time, and then, if you have taken the long view, you will reap a great reward from this new cheap power to be provided in all the industrial districts and perhaps in the agricultural districts as well.
§ Mr. WILSON-FOXThe speech which has just been delivered throws a flood of light and far more than any information from the Government upon the financial situation in which we are about to be placed. We have been asking for facts. The right hon. Baronet (Sir A. Williamson) has, I know, given very close consideration to this question from a business point of view, the remark he has just made makes me more convinced than I was of the necessity of asking the Government to make clear to us their plan in this matter before they expect us to vote these very large sums of money. The House will recollect that the hon. Gentleman in charge of the Bill held out the prospect that at least no money was going to be lost in taking over what we were led to believe—I am sure quite genuinely—were paying existing stations, or, at any rate, that it was good business to take them over. I have had very considerable acquaintance with this style of undertaking, as I was concerned with arrangements in connection with one of the largest power com- 487 panies of the world, which began by taking over a number of small stations in order gradually to replace them by a large generating station. I can tell the Committee that most of those small stations will have to be scrapped, because in small units it is quite impossible to produce electricity as cheaply as it will be produced in this country in the future. I do think we ought to know what the Government propose to do in these matters before we commit ourselves to this expenditure of two large amounts which are to be used, if not entirely for the same purpose, at any rate more or less to cover the same ground, as it does not seem easy to differentiate accurately between those uses. If it is to be carried out in a cheap way, I believe that on purely financial grounds this will have to be financed as one big concern.
We are entitled to ask for information before we vote these large sums of money, and I am not at present convinced that we ought to authorise this expenditure, and I am all the less convinced by the arguments of the Under-Secretary, because, as the right hon. Baronet who has just spoken pointed out, if this is going to be a real scheme it is not going to be a matter of £20,000,000 or £45,000,000, but the whole scheme is going to cost several hundreds of millions. Therefore the Government will have to come to the House again for money, and, that being the case, I see no reason why we should commence by voting these large sums without estimates, and then as they proceed they can prepare further estimates, and ask us to authorise expenditure on the basis of those detailed, or more or less detailed, estimates, instead of coming to us in a very unbusinesslike way and asking us to give them a blank cheque. That is my attitude in connection with all these Financial Resolutions. I would remind the Undersecretary that he has told us the House is entitled to information and yet the Minister-designate of Ways and Communications, who will, I understand, be the Minister who will have the running of this great undertaking when it is in being, absolutely refused on the Ways and Communitions Money Resolution to accept an Amendment which asked that estimates of capital expenditure should be laid before the House before they asked us to authorise that expenditure. On those grounds I do press for a recon- 488 sideration of this matter. I do not think the Government should treat the House in what appears to be a rather contemptuous attitude and spirit, contemptuous I may say of our intelligence and knowledge of business matters. I hope that the House, which is waking up to the necessity for economy and of enforcing economy on the Government, will take the only action which can force that very necessary fact on the Government.
§ Sir F. BANBURYI did not rise when my hon. Friend opposite sat down because I thought the Government would have something to say. If the Under-Secretary will allow me I should like to congratulate him upon his very brilliant statement and the courteous way in which he put the matter to the House. As far as I am concerned, I would be the last person to charge him with any deliberate want of courtesy to the House. I think he made an extremely good defence of an extremely bad case. The right hon. Baronet (Sir A. Williamson) cast a very illuminating light upon what is really in-intended under this Resolution. He told us that a lot more than £25,000,000 would be wanted. What is more, he said that a good deal of it is going to be lost because many of these undertakings on which we are going to guarantee the interest will not pay. That may have been intended as a speech in support of the Government, but I should have thought that to the ordinary observer it would have appeared to be a speech in support of those of us who are asking that at any rate we should hesitate before we advance this money. The right hon. Baronet is a very distinguished member of a very great firm in the City, and I do not think that the firm of which he is an ornament would be in the position which they now occupy if they had been in the habit of advancing money to undertakings which they were aware were going to result in a loss before they lent the money. I happen to occupy a humble position in the City, and I venture to think that if I had gone to the right hon. Baronet and asked him to lend me some money and confided to him that the undertaking for which I required it was going to result in a loss, I do not think I should have left his office with the money in my pocket.
§ Sir A. WILLIAMSONI did not say that these undertakings would result in a loss. I said, on the contrary, that you 489 must take a long view and that in the long run it is a good investment, but that there will be a certain amount of inferior plant to be taken over which will produce dearly, and you must therefore go on improving it. There will be some plant which is not good, but you must take a broad view. There is another loss which occurs in the new plant put up before it has reached its full consumptive power, and it is wise to take that into account. But I did not say that it is a bad investment. On the contrary, I think it is a good investment, taking a long view of it. But in the first years possibly there will be some losses, which will have to be spread over the subsequent years.
§ 10.0 P.M.
§ Sir F. BANBURYI did not intend to misrepresent the right hon. Baronet and do not think that I did so. He says that in the long run there is going to be a profit, but in the meantime there is going to be a loss, and it depends how long the run is going to be. I remember a great many people in the City who took that view and bought more stock than they could pay for under the idea that in the long run it was coming right. But the runs were so long that they could not find the money to pay for the stock they had bought, and they had to sell the stock at such a loss that many of them became bankrupt. In the years to come, perhaps, these things may turn out to be a success, but in the meantime let me point out to the House that we are committing ourselves indefinitely to an enormous expenditure. Every day we are asked to spend or to guarantee money for some object or other. I say that that is all wrong, and that what we ought to do is to proceed cautiously, and, having already for a certain purpose advanced £20,000,000 to the Government. I think they ought to be content with being allowed to guarantee £5,000,000 for these new undertakings. We are told it must take time before these things develop, and that more money will be required. Under these circumstances, why cannot the Government be content to take a moderate sum now, with the understanding that if the project turns out to be more or less successful, or if the run does not appear to be so very long, they will then come down to the House and say, "You see what excellent men of business we are, how well we have been able to manage these undertakings, and how rosy their future prospects are, and therefore, under 490 these circumstances, will you allow us to spend another £20,000,000?" That, I venture to say, would be a businesslike method, and I hope the Committee will show the Government that they are really desirous of beginning to economise. If they are not prepared to show the Government that they mean business, it is no use talking about economy. If you permit the Government to go on spending these vast sums, you will find when it is too late that you ought to have stopped them before it had gone so far.
§ Sir W. DAVISONI would desire that the Committee, before it votes this sum of money to the Government, should bear in mind that we are in the midst of a great Victory Loan campaign throughout the country, and those of us who are concerned with urging the people of the country to invest in this loan, to buy Victory Bonds, or to purchase War Savings Certificates, are again and again held up by the remark, "What is the good of us putting £100 or £1,000 into this loan when night after night and day after day the House of Commons is voting millions without any Estimates being put before them as to what those millions are going to be spent upon?" That is a point which we are up against everywhere, and I think it is more than ever necessary in these times that the Government should be punctilious in giving the fullest possible information as to the purposes for which these millions, of which we are all too short, are to be spent. We all remember that the Chancellor of the Exchequer has on more than one occasion told the House that the House of Commons itself is the greatest sinner in matters of extravagance, but it seems to me as a new Member that whenever the House of Commons has endeavoured to pull itself together and to sift proposals for the expenditure of money it has been held up by the Government saying that the money was required for certain vague purposes, but not giving them the details which would enable the House of Commons to come to a conclusion as to whether or not the money was required. I hope the House will remember this before voting these large sums of money without securing particulars of the purposes for which they are going to be expended.
§ Mr. R. McLARENIt seems to me that, having passed the Second Reading of this Bill, and this Clause having been enumerated in the Bill, there is nothing left to the House but to assent to the prin- 491 ciple laid down. [An HON. MEMBER: "Why?"] All along I have felt that the Government and the House in particular are expecting far too much from this great scheme which is about to be put on the country, and I was glad to hear the right hon. Member for Moray and Nairn (Sir A. Williamson) express his view, because, after all, he has a great deal of knowledge on the subject, having been chairman of the Committee. I agree with him in thinking that at the outset there must be a loss in connection with this scheme. When we consider that in the country there are a large number of generating stations which have been going on for years, the plant must nearly be obsolete, and the moment the Government take over the undertakings new plant will be required. Those of us who have some Knowledge of this subject, also know that to make electricity pay you must have very large plant, and it is perfectly evident to any practical man that during the initial stage there must be a loss, and that loss will go on for some years. At the same time, it is perfectly true that, after a number of years, the thing will begin to pay, but whether or not it will pay to the satisfaction of the Government I am not so certain. I am not so sanguine as some hon. Members as to the great economies that will be effected by electricity. There is other power equally as cheap. Take, for instance, gas in large towns, where you can have a very much cheaper power than by electricity. It is evident you cannot take gas into the rural districts, and electricity must be brought in there. I think, however, the Government has scarcely been frank with the Committee to-day, because those in charge of the Bill ought
§ to have told us what the right hon. Member for Moray and Nairn told us, namely, that there would be a loss. It was perfectly well known to them at the outset that there would be a loss; and why were they not frank enough to tell the Committee so? The Committee is wise, before sanctioning a vast sum of money, to ask the Government to give more details. While I am not prepared to vote against the Government, I have a great deal of sympathy with the Mover of the Amendment that £5,000,000 should be the sum in the meantime. Being a new Member of the House, I was very much interested to hear old Members tell us that this House should always keep a firm grip on finance. I find that, old and new Members alike, when voting money everyone goes with the Government.
§ Sir F. BANBURYOh, no; you follow me!
§ Mr. MCLARENI have no doubt that if I always followed the right hon. Baronet I should find myself amongst very distinguished company, but it would not always be wise to follow him in connection with some subjects. At the same time, as a new Member, if the Government are not following the principles enunciated at the Election, I shall take an independent attitude, and the time, I am afraid, is not far distant when some of us who were expected to give strong support to the Government will be compelled, unless the Government deal fairer by the House, to record a vote against them.
§ Question put, ''That the word 'twenty-five' stand part of the Question."
§ The Committee divided: Ayes, 125; Noes, 32.
493| Division No. 48.] | AYES. | [10.10 p.m. |
| Baird, John Lawrence | Cowan, D. M. (Scottish Univ.) | Hancock, John George |
| Barnes, Major H. (Newcastle, E.) | Davidson, Major-Gen, Sir John H. | Hayward, Major Evan |
| Barnett, Captain Richard W. | Davies, Alfred (Clitheroe) | Henderson, Major V. L. |
| Barnston, Major Harry | Davies, T. (Cirencester) | Hewart, Rt. Hon. Sir Gordon |
| Bellairs, Com. Carlyon W. | Dawes, J, A | Hoare, Lt.-Col. Sir Samuel J. G. |
| Birchall, Major J. D. | Dewhurst, Lieut.-Com. H. | Hood, Joseph |
| Blades, Sir George R. | Dockrell, Sir M. | Hope, James Fitzalan (Sheffield) |
| Blane, T. A. | Edge, Captain William | Hopkins, J. W. W. |
| Boles, Lieut-Col. D. F. | Edwards, Major J. (Aberavon) | Hughes, Spencer Leigh |
| Bowerman, Rt. Hon. C. W. | Elliot, Capt. W. E. (Lanark) | Hume-Williams, Sir Wm. Ellis |
| Breese, Major C. E. | Entwistle, Major C. F. | Jephcott, A. R. |
| Bridgeman, William Clive | Eyres-Monsell, Commander | Jodrell, N. P. |
| Broad, Thomas Tucker | Falcon, Captain M. | Johnson, L. S. |
| Bromfield, W. | Fell, Sir Arthur | Jones, Sir Evan (Pembroke) |
| Buchanan, Lieut.-Col. A. L. H. | Foxcroft, Captain C. | Jones, G. W. H. (Stoke Newington) |
| Buckley, Lieutenant-Colonel A. | Galbraith, Samuel | Jones, J. Towyn (Carmarthen) |
| Cairns, John | Geddes, Rt. Hon. Sir A. C. (Basingstoke) | Kenworthy, Lieut.-Commander |
| Carew, Charles R. S. (Tiverton) | Gibbs, Colonel George Abraham | Kenyon, Barnet |
| Casey, T. W. | Gilmour, Lieut.-Colonel John | King, Com. Douglas |
| Chamberlain, N. (Birm., Ladywood) | Green, J. F. (Leicester) | Lewis, T. A. (Pontypridd, Glam.) |
| Coats, Sir Stuart | Greenwood, Col. Sir Hamar | Loseby, Captain C. E. |
| Coote, Colin R. (Isle of Ely) | Hailwood, A. | Lyle, C. E. Leonard (Stratford) |
| M'Curdy, Charles Albert | Raper, A. Baldwin | Thomas-Stanford, Charles |
| M'Laren, R. (Lanark, N.) | Raw, Lieutenant-Colonel Dr. N. | Thorne, G. R. (Wolverhampton, E.) |
| Malone, Col. C. L. (Leyton, E.) | Richardson, R. (Houghton) | Townley, Maximillian G. |
| Malone, Major P. (Tottenham, S.) | Roberts, Sir S. (Sheffield, Ecclesall) | Tryon, Major George Clement |
| Mason, Robert | Roundell, Lieutenant-Colonel R. P. | Vickers, D. |
| Mitchell, William Lane- | Samuels, Rt. Hon. A. W. (Dublin Univ.) | Walker, Col. William Hall |
| Moore, Maj.-Gen. Sir Newton J. | Shaw, Hon. A. (Kilmarnock) | Ward, Colonel L. (Kingston-upon-Hull) |
| Mosley, Oswald | Shaw, Captain W. T. (Forfar) | Ward, W. Dudley (Southampton) |
| Murchison, C. K. | Shortt, Rt. Hon. E. (N'castle-on-T., W.) | Wardle, George J. |
| Murray, Major C. D. (Edinburgh, S.) | Simm, Col. M. T. | Wheler, Col. Granville C. H. |
| Murray, Dr. D. (Western Isles) | Smith, Capt. A. (Nelson and Colne) | White, Charles F. (Derby, W.) |
| Murray, William (Dumfries) | Smith, Harold (Warrington) | Wild, Sir Ernest Edward |
| Neal, Arthur | Sprot, Col. Sir Alexander | Williamson, Rt. Hon. Sir Archibald |
| Newman, Sir R. H. S. D. (Exeter) | Stanley, Colonel Hon. G. F. (Preston) | Wills, Lt.-Col. Sir Gilbert Alan H. |
| Parker, James | Steel, Major S. Strang | Wilson. Col. Leslie (Reading) |
| Parry, Major Thomas Henry | Stephenson, Col. H. K. | Woods, Sir Robert |
| Pratt, John William | Strauss, Edward Anthony | Worsfold, T. Cato |
| Prescott, Major W. H. | Sturrock, J. Leng- | |
| Pulley, Charles Thornton | Talbot, G. A. (Hemel Hempstead) | TELLERS FOR THE AYES.—Capt. |
| Purchase, H. G. | Taylor, J. (Dumbarton) | F. Guest and Colonel Sanders. |
| Rae, H. Norman | Thomas, Brig.-Gen. Sir O. (Anglesey) | |
| NOES. | ||
| Balfour, George (Hampstead) | Davison, Sir W. H. (Kensington) | Oman, C. W. C. |
| Bell, Lieut.-Col. W. C. H. (Devizes) | Gretton, Col. John | Raeburn, Sir William |
| Bennett, T. J. | Gretten, W. G. Howard | Reid, D. D. |
| Brittain, Sir Harry E. | Hall, Capt. D. B. (Isle of Wight) | Remer, J. B. |
| Burn, Colonel C. R. (Torquay) | Hambro, Angus Valdemar | Samuel, A. M. (Farnham, Surrey) |
| Burn, T. H. (Belfast) | Hurst, Major G. B. | Stevens, Marshall |
| Campbell, J. G. D. | Law, A. J. (Rochdale) | Wallace, J. |
| Cough, R. | Lonsdale, James R. | Williams, Lt.-Com. C. (Tavistock) |
| Colvin, Brigadier-General R. B. | Marriott, John Arthur R. | |
| Conway, Sir W. Martin | Meysey-Thompson, Lt.-Col. E. C. | TELLERS FOR THE NOES.—Sir F. |
| Courthope, Major George Loyd | Moles, Thomas | Banbury and Mr. Wilson-Fox. |
| Craig, Capt. C. (Antrim) | Nall, Major Joseph |
Motion made, and Question, "That this House do now adjourn"—[Mr. Pratt]—put, and agreed to.
§ Resolution to be reported upon Monday next.