§ Order for Second Reading read.
§ The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Shortt)
I beg to moveThat the Bill be now read a second time.This is a Bill to amend the law with respect to the supply of electricity. The main object of the Bill is to reorganise the supply for industrial purposes. I suppose that it is familiar to the House that, comparatively speaking, electricity is a young industry and is probably not more than some forty years old. The first Act of Parliament with which the House need concern itself is the Act of 1882 and it is rather significant that until this century practically the whole of the legislation which dealt with the question of electricity was legislation which was passed at a time when the real use of electricity was unknown. The best methods of use and the best methods of production were practically unknown, and no one, so far as I know, had appreciated then all the valuable powers there were in electricity. The Acts of 1882 and 1888 were, of course, totally ineffective and totally insufficient for the present development of the electrical industry. The position therefore we have to face is one which is the product of the fact that, while electricity has really passed from the experimental stage, the legislation with regard to it is legislation of necessity passed by men who did not and could not understand the subject, and legislation passed at a time when experiment had not discovered all that has been discovered since. One of the first results of that has been that electricity is managed within an area which is substantially the area of the local municipality—that is, small areas, numerous areas, and all of them developed in their own way, and all of them starting their work and their method of production and distribution in their own way. The result is to-day that we are faced with a state of things in which we have a very large number of small electrical concerns, each of them feeding a small area, and an area not chosen because of its peculiar adaptability, or because it was a convenient area necessarily, but chosen solely and simply because of its boundaries for local gov- 1626 ernment. It must be clear that that in itself condemns the present existing state of things.
We have to-day in existence, I think, some 600 different electrical works in this country. We have, I think, in London alone, seventy sets of works and seventy distributing agencies, many of them of a totally different description and not capable of being co-ordinated or of co-operating. We have, for example, in London ten different systems of frequency and twenty-one different systems of voltages and any number of transport systems, and those concerns have three different systems of generating and distributing their electricity. Thus, even in a place like London, you have a very large number of different companies supplying the area, and they are so distinct and their frequencies are so distinct, and their voltages are so distinct, that you cannot combine them, and in the case of a breakdown of one, unless it is within reach of another of the same frequency and the same voltage, they cannot come to each other's rescue or co-ordinate for the purpose of economy. Altogether, the system is one which is about as bad as could possibly be conceived, either from the point of view of sufficiency or efficiency. That being the case, one has to consider what is the best thing to be done. If I may, let me instance the case of the railways as somewhat analogous to the present existing state, of electrical production and distribution. Some sixty years ago, there were something like about a thousand railway companies in this country, and, of course, it is plain to everyone, where you have a thousand different railway companies serving a country the size of ours, with their different directors and staffs and other expenses connected with each individual company, that economy is practically impossible and co-ordination is impossible, and that any general thought out policy is impossible. Equally, if you add to that the fact that the gauges of railways are different, inter-working becomes impossible and you have to handle goods and traffic on the determination of each different company. The House, therefore, will readily appreciate the state of chaos into which the railways of this country might have come, but, fortunately, the matter was taken in hand and combinations took place, and now I think I am right in saying there are about 120 companies in this country to-day.
§ 4.0 P.M.
§ That has produced a comparative state of efficiency, not yet as complete as it ought to be or as it might be, in the railways. We are at present, with regard to electricity, in the same position as the railways were. We have got these large numbers of different companies, with their own expenses, no co-ordination and no co-operation, and we have, in addition, a diversified number of systems of generation and distribution, all of which go to put our electrical system into a state of chaos, from which we hope to rescue it.
§ It had become very clear, even before the War, what great value electrical power might be. Big consumers all over the country were calling out for cheap power and for efficient power, and, moreover, for a secure supply of power, because, if the great manufacturer with an immense amount of capital is at the mercy of one system, and if in that system there should be a breakdown, then his works would stop. That consumer is not going to rely on electricity alone, and you want a secure supply in addition to efficient and cheap supply. These are things only to be got by co-ordination. If you co-ordinate, you get cheapness of supply, a relatively less capital outlay than if you have ten different concerns to supply an area divided into ten, each supplied in parts. Then you have your spare and reserve and other plant, and when you face the fact that each of these concerns has to erect considerably more plant than it will actually use, it becomes apparent that if you combine them into one and erect one great station, with a number of units in it, your reserve and spare plant is less in every way, and the capital outlay is relatively less. In addition, if you have the large concentrated plant, you are able to generate your electricity with a great saving of coal. I believe to-day that, over the manufactures of the country, it is reckoned that about 7 lbs. to 8 lbs. of coal are required for each hour of a single-horse-power unit. With a properly erected station, sufficiently large and concentrated, you could deliver to that manufacturer the same equivalent amount of power for less than 2 lbs. of coal. So that if you have proper organisation of your generating station, if it is of the proper size, you could get, by more efficient working, for 2 lbs. of coal, the one-horse power hour which, under present circumstances, on the average, costs the 1628 manufacturer between 7 lbs. and 8 lbs. of coal. It will be apparent at once that that means an enormous saving of coal for the whole industry of this country.
§ In addition to that, where you have all the generating plants of an area concentrated into one place you can secure a so much higher load factor. The load factor is the main consideration for the purpose of economical working. If you have expensive machinery that is running on the average all the twenty-four hours only up to 25 per cent. of its capacity, clearly it is not being run at the best possible advantage; but if you can so arrange that from the same station you deliver your electricity to the trams, the railways, for lighting purposes, for machinery, for heating, cooking, and for every other purpose, you then secure a very much better load factor, and you have your machinery working, instead of at about 25 per cent. of its capacity, perhaps on the average up to 75 or 80 per cent. of its capacity. That means an enormously greater profit or an enormous reduction in the cost of electricity per unit, and therefore an equivalent saving to the consumer. Still more important, as we have found latterly—it was not known until a few years ago—you are able to choose your site so much more advantageously if the whole of the generation is collected into one area. We have appreciated of late years much more than we did the immense importance of having your generating station close to a large supply of water for the purpose of condensation. It is of immense importance, even of more importance that a big generating station should be near a river or a canal than that it should be close to a railway or coalfield, but where you have only to choose, say, a third of the number of generator sites, or even a quarter or a fifth of the number of sites, it is plain that it is much easier to secure that every generating station shall be constructed upon an advantageous site, and you will get your water, and if you get your water and your coal, you are then able to save a very large amount of expense in the generating of the electricity, which, of course, corresponds to the production of the raw material. It became perfectly clear, even before the War, what an immense part electrical power might play in the industries of this country and in all the amenities and all the necessities of life as well. People interested in transport were calling for electrical power, manufacturers in the tex- 1629 tiles, engineering, and other trades were calling for electrical power. It was clear that something would have to be done to co-ordinate our system, to create some kind of general policy, and to secure as far as possible greater efficiency and greater economy, and for that purpose three Committees were set up. The first was a Sub-committee dealing with the conservation of coal, the second was a Board of Trade Committee dealing with electrical trades, and the third was the Electric Power Supply Committee. That was a very powerful Committee. It was representative of practically every industry interested in electricity. It was representative of the undertakers of electric concerns, of the consumers, the local authorities—of everybody, in fact, who was concerned with electricity; and this Bill is based upon the Report of that Committee, and substantially carries out its recommendations.
§ Commander BELLAIRS
Was Clause 44, to put it under the Ministry of Ways and Means, one of their recommendations?
§ Mr. SHORTT
I shall come to that presently, but I am surprised that my hon. and gallant Friend knows so little about this Committee. The Ministry of Ways and Means was not even thought of when this Committee reported. That Committee considered the whole question very carefully, dealt with difficulties which had faced electricity in the past, the experimental stages through which the industry had gone, and the necessary ignorance which existed in regard to electrical power, and they pointed out what were the conditions which governed a cheap and efficient supply of electricity. The first thing was "combined generation in single areas." That means collecting into one area all the units of supply which are at present scattered about in different generating stations. "Well-situated stations, having regard to condensing water, fuel, and distance from consumers. Modern and large units of generating plant." Well, of course, that really applies to almost every form of industry. "Uniform standards of system, frequency, and pressure, so far as is practicable." As I pointed out, we have in London alone a large number of different systems of frequency, and where you have different frequency you cannot combine, any more than you can work two cog-wheels whose cogs do not fit. "Greater freedom for overhead 1630 wires and wayleaves." That, again, is a detail which I did not mention when I was speaking on the general subject, but which is dealt with in the Bill.
In the past, probably rightly, Parliament has imposed restrictions on the electrical industry rather than given it any encouragement. It was quite natural. There was a certain unknown danger in electricity, and therefore restrictions for the safety of the public were imposed, and one of the restrictions was the practical prohibition of overhead wires for the transmission of power. Way leaves, of course, is a matter which is common to electricity and every other industry which involves distribution of any sort. "Good technical and business management and adequate and cheap capital." These, again, are common almost to every industry. The Committee then recommended that there should be a general central body, that the country should be divided into suitable areas, that each area should have its own suitable body to conduct the affairs of that area, and that the general policy—namely, one central body for the whole country and the subordinate areas, each with its own district body—should be the general policy upon which the electrical industry of the country should be carried on. This Bill, therefore, provides, first of all, that there shall be set up a body called the Electrical Commissioners. They will be five in number; they will be appointed pointed by the Board of Trade. They will, for all practical purposes, have the conduct of the whole of the policy dealing with the electrical industry in this country.
It will be their business to make experiments where experiments should be made, to stimulate, to encourage, and to guide, and for that purpose they will have power to set up advisory committees for their assistance. Under them, and subject to their rules and regulations and directions, there will be the local area bodies, and through these local area bodies the Commissioners will have the controlling power over the whole of our electrical policy. They will, of course, be subject in many respects to the Board of Trade and, through it, to Parliament. They are appointed by the Board of Trade, unless, of course, what has been already mentioned in Section 44 takes place, but I will deal with that subsequently. I am discussing this at present purely from the point of view as if the Board of Trade remained the authority.
§ Mr. JOYNSON-HICKS
Would it not be better for the House to discuss it as if it was the Ministry of Transport?
§ Mr. SHORTT
I am more than gratified to hear that the Ministry of Transport Bill is so safe and secure as to justify a discussion on that basis. I accept that position with pleasure, but I think it is probably preferable that I should proceed in the way I am doing. The Board of Trade would appoint them, and the Board of Trade would therefore practically have control over them, but for practical purposes these Commissioners would control the electrical policy of the country. They will then, by means of local inquiries, obtain the necessary information to enable them to divide the country into a certain number of areas, and those areas will be chosen and defined, having regard to the questions of generation and distribution of electricity, and also in many cases, where the use of electricity is as yet undeveloped, they will be chosen from the point of view of development and supply when they are developed. Take, for example, the industry of agriculture. There is no doubt about it that electricity may very well play a very much larger part in agriculture than it hitherto has done. In dealing with agricultural areas, they will be put into the district areas where they are most likely to be more easily developed, more readily developed, and more efficiently supplied. For each area there will be set up a Board. Each area will have its own Board, with its own chairman, and its own distinct authority, and its own distinct powers. The Boards will consist of representatives of those who are at present undertakers of electricity industries. Whether they are local authorities, or whether they are companies, they will be represented upon these Boards. The consumers equally will be represented upon these Boards, and labour will be represented, and if there is any local authority within the district, either a county council or a borough council or any other local authority, and that local authority chooses to subscribe or contribute to the expenses of the management of the area, they also will be represented; and provision is made for the choice of some known and trusted local gentleman of wide business experience for the office of chairman. So that you will have in each district a body set up fully understanding that area, representative of all the interests concerned 1632 with electricity and electrical power, and whose duty it will be to see to it that that area is properly and efficiently supplied with electrical power.
The financial arrangements are first of all that primâ facie each district finds its own finance, and what one might call the supplemental finance, the additional and assistance finance, will come from the National Exchequer. In the Report of the Committee on Electrical Supply their recommendation was that primâ facie the expense should be borne by the National Exchequer, and that any assistance or supplemental Grants should be upon the local people, but after full consideration, having regard to the general financial position of the country, we have thought it wiser and better that each district should be responsible for its own finance, that the responsibility for the finance should be, in the first place, local and that, in the second place, the assistance should come from the National Exchequer. That is one of the details in which we have not followed exactly the full recommendation, of the Committee.
Sir HOWELL DAVIES
What do you mean by the local authorities first providing the finance, and secondly, the National Exchequer? We should like to know to what extent the local authorities have to provide finance, and to what extent the Government will do so.
§ Mr. SHORTT
I was coming to that. The district boards will have power to borrow for the cost of construction of any stations they erect, for their working capital for the first three years, and for the payment of interest until their works become remunerative. Their duty is to form a fund into which all their receipts go, and so far as possible their duty will be so to regulate their charges that their receipts will cover their expenditure, and any margin over and above that will be at the discretion of the Central Electrical Commissioners, The Electrical Commissioners will decide, if there is a margin, if the receipts are greater than the expenditure and there is no loss, what margin the local district boards are to be entitled to keep and what part of the surplus profits is to go for the benefit of the consumers.
§ Mr. SHORTT
It is in the amending proposals. I think my right hon. Friend will find it there. In the first place, there is 1633 power for the central authority to advance money to the extent of some £25,000,000, and there is further power for the central body to expend something like £20,000,000 during the transitory period while the district boards are being set up.
§ Mr. SHORTT
Yes. The £20,000,000 would be repaid as and when the boards take over from the central body the work they have done during the transitory period. When the district boards are created they will take over within their area every generating station and all the main transmission lines will be taken over and will vest in the district boards. The intention of the Government has been, as far as it is possible to avoid it, not to interfere with the existing undertakings. Local authorities who have existing undertakings, who have their business clientèle, their goodwill, so to speak, will be as far as possible left, and all that will be taken over by the district boards will be the generating stations and those things which are really part of the generating stations and are not essential to distribution. Anything which is really a part of distribution will remain within the existing undertakings.
§ Mr. SHORTT
Yes. In Section 7, my hon. Friend will see that all generating stations other than private generating stations and such main transmission lines as may be specified in the Order shall vest in the district boards, and if he will look at the definition of "main transmission lines" he will see that it meansall extra-high-tension cables and overhead lines transmitting electricity from a generating station to a sub-station which do not form an essential part of an authorised undertaker's distribution system,so that what is taken over—
§ Mr. SHORTT
If a man has got in his own works a generating station for his own supply, that is not taken over unless he wishes. If a company is supplying other people, and it is a public supply generating station, it is taken over. Therefore what is intended is, and what I think this Bill does, is to leave with the 1634 present undertakers the whole of the distribution, and the proposal is that you should by the activities of these district boards cheapen the production at the generating stations, supply these what I might call retailers, the distributors, with what is really for them their raw material, namely, power in bulk, and enable them to supply to the individual consumer at, we hope, a very much lower price. Therefore, all that the boards will have to purchase when they take over are the generating stations and the main transmission lines, and all the plant and all the machinery necessary merely for distribution, as apart from generation, will remain with the owners who own them at present. Another provision is that where an undertaker is taking from the district board in bulk, an undertaker whose generating station has been taken from him by this Act, the board are bound to supply him at as cheap a cost as he could have supplied himself if he had still been in possession of the generating station. So that where an undertaker can show that he contemplated carrying out improvements which would have enabled him to supply himself, as distributor, say, at ½d. or two-thirds of 1d. per unit, he would then be entitled to receive his power from the district board at as cheap a rate as he could have supplied himself.
§ Mr. SHORTT
I am not quite sure, but I think it is in perpetuity. I was going on to say that there must be circumstances which will be taken into account. The principle of mutatis mutandis will be confirmed. The undertakings will be taken at a standard price, which is fixed. With regard to local authorities, the standard price is annuities, which practically substantially cover the necessary amount for sinking fund and interest; and, with regard to others, it is the cost of construction and the cost of the site, less something for depreciation. No doubt there may be some discussion as to whether the standard price fixed by the Bill is a fair price, but that is what the Bill fixes. The intention is that a fair price, having regard to all the circumstances, should be paid. There are many other details in the Bill, but I do not know that there are any which go to the broad principle and broad policy which the Bill is intended to initiate.
§ Mr. SHORTT
I have said already that, supposing there is a surplus, the Electrical Commissioners at the centre decide what margin they can keep for eventualities, and there is no profit, but the rest will go for the benefit of the consumer.
§ Mr. SHORTT
It is in Clause 25, which saysThe prices charged by a district electricity board for electricity shall be fixed by the board subject to the approval of the Electricity Commissioners, and shall be such that their receipts on income account will be sufficient to cover their expenditure on income account (including interest and sinking fund charges), with such margin as the Electricity Commissioners may allow.I think I have now dealt with the main principles upon which this Bill is based. It, as I have said, attempts, and, I think, succeeds, in carrying out in principle, if not in every minute detail, the recommendations of a Committee which, by its very personnel, commands the respect not only of the House, but of the country, and whose recommendations must have the greatest possible weight. Their recommendations differ in no way from the recommendations of other Committees which have gone into this subject. I think I am right in saying that every Committee which has gone into this subject has recommended greater concentration, a more extended policy, greater economy, greater efficiency, and greater security, and we have simply endeavoured, as far as we can, to carry out those recommendations. We have tried, as far as we can, to see that there is no hardship or injustice upon those who have been the pioneers in the past. It is perfectly true that our electrical systems are not all they might be, but that is no blame to those who have been responsible in the past, because, after all, they did their best, and they did well, considering their knowledge, and the existing facilities and all the circumstances under which they worked. They have carried out their work thoroughly and well, but they had not the knowledge, they had not the experience that we possess to-day, and, therefore, we were anxious to avoid as far as possible anything like a reflection upon those who have been the pioneers of electricity, and anything like a hardship upon those to whom really is due the development that has already been made.
1636 I should like here to express our appreciation of the great work which has been done by municipalities and by companies in the past in this direction. They have done great things, but experience has shown that a local government boundary bears no relation of any sort to the boundary of a convenient electrical area, and that where you are considering a matter like electricity, mere geography, artificial as most of our geographical boundaries are, is quite irrelevant, and we must look upon it from a totally different point of view. Moreover, it is impossible to work electricity efficiently if each municipality is to be allowed to be a country to itself, to run its own concern in its own way, with its own frequency, and without regard at all to what may be the needs of its neighbours, which it might be able to supply. Let me just instance, for example, the South of Scotland. There you have a go-ahead, hard-headed race, quite alive to their own best interests, and a people who would do their best if they had no doubt the experience and full knowledge to secure that everything that they do would be of the most efficient character. But what do we see in Scotland to-day? If you take the area of Edinburgh and the Forth, Stirling and all round that district, they have a frequency of 50. Glasgow and the area all round Glasgow, which is well within reach, for transmission purposes, of the Forth area, which, if they only could weld them together, might have been of the greatest assistance, have a transmission of 25, which is practically unworkable with the Forth transmission system of 50. But even in the Glasgow area you have Paisley one area of its own and Greenock another area of its own, each of them 50, and neither of them able either to come to the aid of their neighbours in Glasgow with their 25 or to call upon them for assistance if they have a breakdown. If, on the contrary, you had a general policy, and you had the whole of that area 50, you could have ensured absolute security, far greater concentration, and, therefore, greater economy and greater efficiency. And when you come just across the Border to the North-East Coast of England, there is a frequency of forty. There, perhaps, you have a collection of as keen, intelligent business men as you can have anywhere—men who are trained, as, in other parts of our country, all the best business men are trained, to take active part in their local affairs, and men who, 1637 if they had known better, would have ensured that in the setting-up of these various undertakings they were so constructed as to work together. That is not so. What we have to do is to try to remedy that and put it on a different footing. I think this Bill does that.
The framers of this Bill had the very good fortune to have excellent guidance. We knew that there was, all over the country, a keen call for greater efficiency and greater economy in the supply of electricity. We knew the importance of it, and, indeed, everyone must appreciate the importance of it. It is one of those essentials to which we must devote attention if we are to carry out anything like our programme for post-war reconstruction. Transport is essential if we are going to improve the housing in this country. For housing we must have transport. For transport we must have better motive power. Electricity we require for agriculture and every industry, and, indeed, it is only by cheaper, more efficient and more secure power that we shall be able to attain to that amount of production which is essential if we are to keep up wages and conditions of all classes of the community. Motive power is as essential as a cure for low wages as motive power is a cure for bad housing. It is essential for the industries and well-being of this country. It is with those objects in view that this Bill is framed—the objects of providing the motive power, with all that it means; providing it in those ways, doing no avoidable hardship to any of the pioneers, to whom we are so indebted, but sparing no interest which interferes with the general interest of the community; doing what is fair, we hope, to all, doing what will produce a workable, an efficient and a thorough system in this country, and one which will enable us to make use of the great opportunities of motive power which we possess—our coal, our water, and all our great facilities—so that we can produce in this country the goods that are necessary, the commercial prosperity which is necessary, and thereby conduce to the general prosperity and well-being of the individual, without whose prosperity, of course, the country is a failure from beginning to end. Those are the objects which we have in this Bill, and it is with those objects in view that I ask the House to give a Second Reading to it, for we have no time to lose. So soon as the House is satisfied that the general 1638 principle of the Bill is good, I will ask it to give us the Second Reading, so that we may at once, without undue delay, get into Committee, and begin to thrash out the details, so that the Bill may be as free from blemish as this House can possibly make it. Then let us get to work to put it into operation, and work all those improvements we so much desire.
§ Sir DONALD MACLEAN
The right hon. Gentleman has introduced this Bill in a speech which has shown knowledge of the subject, combined with capacity, and with a lucidity which I certainly envied him. He has stated that the Government has been fortunate in the Report of the Committee upon which this Bill is founded. I should like to emphasise what he has said in regard to that. The chairman of that Committee is my right hon. Friend (Sir A. Williamson), and he was supported by an exceptional body of men, thoroughly well qualified in their various walks of life to investigate and report on the subject. Further, they had called before them a class of witness, every one of whom was authoritative in the special aspect of the question which he desired to lay before the Committee. Therefore, in this respect I think the Government have been very fortunate in the basis upon which they have founded their Bill. I also congratulate the Government upon this being the final measure—for this Session at any rate—of the schemes of social and industrial reform which they have adumbrated. I am quite certain the House will be relieved to know that after this we are not likely to see any other fresh Committee immediately set up. We have heard to-day of the great strain which has been placed upon the House in connection with these Committees, and the great difficulty which Members have in giving adequate attention, not only to the Committees upstairs, but also to the necessary work of this House. While it is very necessary that there should be expedition in the passage of this measure—on Second Reading and in Committee—I would just issue this warning: Do not let us imagine that by simply placing ill-considered Acts upon the Statute Book we have solved the problem. It is most important that due care should be taken in Committee, and also in the Second Reading Debate—which is often extremely valuable to those in charge of the Bill—so as not to be in too much of a hurry.
1639 What is happening here is a very desirable thing, no doubt. I see at the moment in the House a large number of interested Members who know what private Bill work is upstairs in Committee. They know the very great attention which has been paid to all the proposals which the local authorities and public corporate bodies have from time to time put forward. I quite agree with what my right hon. Friend has said, that in those coloured maps which adorn the walls of the Committee room it is quite evident there was no geographical sense at all. The idea was that the world, so far as this particular project went, was the area before the Committee. But although the Committees very earnestly strove, so far as they could, to look after the public interest, it was extremely difficult for many of the small public bodies to be adequately represented there. I hope when this Bill gets into Committee Members will see, so far as they can, that there is embodied in this measure such safeguards as will ensure that while we very largely get rid, as we do—the House will quite carry that in their mind—of private Bill legislation upstairs by these measures—that is desirable or undesirable, as may be—in my view if it can be safely and reasonably done it is a very good thing—
§ Sir D. MACLEAN
They will always find something else to do. Especially if we go on passing Bills at this rate, there will be no lack of work for the lawyers. You are going to take away from this House, and the purview of its Committees, and transfer it to a great central authority acting in and through district boards these very important functions. I hope that these boards when constituted will, at any rate, do this—carry with them the same high sense of public duty, and the same complete freedom from any suggestion of corruption or undue influence which has been one of the proudest records of Parliament in connection with private Bill legislation.
As far as the general case is concerned there can be no doubt at all that it has been thoroughly made out. Lack of co-ordination has resulted in the usual overlapping, inefficiency, and high and unnecessary cost. The Bill sets out to remedy that. There is another thing which is implicit in the Bill: that if the further development in the use of elec- 1640 tricity can be thoroughly widespread, especially in crowded urban areas, we shall undoubtedly go a long way to solve some of our most pressing health problems. If I remember rightly the very interesting speech made the other day by the hon. Baronet, the Member for the Scottish Universities on the Public Health Bill, I think he pointed out that while the Housing Bill and sufficient housing was a very potent factor in the matter of good or bad health, the deadweight of the particles of dust which came from the smoke which fell upon the surface of any given area was productive to a very large degree of ill-health. This fact we do not probably adequately realise. If you can get rid of the smoke nuisance you do a very great deal on behalf of the public health.
Passing from the case—which I will not further elaborate—I would just like to say a word or two upon two points—and two only—in connection with the Bill. The real difficulty will arise in connection with the district boards. There will be no trouble at all about setting up the central body, but when you come down to your districts your trouble will necessarily arise. I am rather afraid my right hon. Friend and those who work with him in this matter have not sufficiently taken their courage in their hands. I fear very much that unless the power which is sought is a mandatory power difficulty will arise. Take, first of all, as an example of that, the question which comes up very clearly—the finance of the Bill. Finance is to commence in the local area, instead of, as I should have thought, beginning at the top and coming downwards, with the money to be at the centre. If you have the money at the centre you will have the inducement to the local area to get the work. If you are going to leave it to the local area, already seriously and heavily burdened with many other tasks, you will find very considerable delay and much reluctance to undertake the scheme which is implicit throughout this Bill. Then I must say this in regard to the local bodies which it is proposed to set up. I see from the Report that the suggestion is that private bodies as well as local authorities and public incorporated bodies should be co-ordinated in the local scheme. I hope that proposal will receive very careful attention in Committee.
There is no doubt at all that any great trading corporation in a particular local area, if given these large powers of control- 1641 ling what is going to be the motive power for the future—and in a very large probability the industrial future in that particular area will, we know, depend on it—for human nature is very active in an incorporated body as well as in an individual—the interests of the locality may be subordinated to the trading interest of that great corporation which may have too large powers in its hands under the Bill. Our local authorities have done excellent work, as my right hon. Friend has already said. They should be supported and encouraged to further develop their public and local activities. But as we know, you often find members of the local authorities who are—and it cannot be helped—linked up with great industrial concerns. There will be a real danger that the general public interest may suffer by the monopoly granted to a great industrial concern. I hope the Committee will see that adequate safeguards are set up in the Bill to cover that point.
With regard to the general question of finance which, after all, is the most vital part of the Bill, I am not very clear myself as to the line upon which it may run. I endeavoured to follow carefully what my right hon. and learned Friend said, but I think the general finance of the Bill will require very careful consideration. The real usefulness of these new boards which it is proposed to set up—the central authority working in and through district boards—will depend on whether you can get your power cheap enough. If not, it will not be used. If the undertaking is overloaded at the start by great capital charges, it will take a very long time—for it is the private consumer upon whom now you must depend—to make your concern a profitable business and an economic venture. Let us not forget that in all these measures we are passing—and I get tired of emphasising it—that sooner or later we shall find that they must be based on business lines. The impact of the taxes will settle this question at no very distant date. Although many seem to think that the State can find the money and satisfy all our needs in connection with these matters, it comes down in the end to the individual taxpayer. It is, therefore, our duty, while passing these measures through Parliament, to see, as far as we can, that every safeguard is provided, that there is no unnecesary extravagance, and that the capital charges are not high. I myself hope that the Debate will run, as it certainly will, in view of the hon. Mem- 1642 bers I now see in the House, on practical lines, and that there will not be any undue pressure to get this matter through without full and adequate discussion. It is worth while doing. We are laying down the lines for the next generation of a great, wide, necessary measure of national reform. Let us bend our energies to the task, but do not let us press them too hard.
§ 5.0 P.M.
§ Mr. GEORGE BALFOUR
I have listened to what the right hon. Gentleman the Member for Peebles (Sir D. Maclean) has said as regards the case put by the right hon. and learned Gentleman who moved the Second Reading. A case has apparently been made out to the satisfaction of the right hon. Gentleman. In my view the fact is rather to the contrary. I hope before I sit down to give some indication to hon. Members as to why this matter will require a very considerable amount of attention and revision before the Bill is put on the Statute Book unless it is to do a great injustice and hinder, instead of promoting, the trade and commerce of this country. I wish at this moment to register a protest—a protest which, I think, is felt by nearly all hon. Members. Hon. Members received a print of this Bill for the first time on Saturday morning, and some of us on Monday afternoon, and I do feel that a measure of this magnitude should have been in our hands a much longer time so that it might receive more mature consideration before coming on for the Second Reading. The right hon. Gentleman who moved the Second Reading, gave us an historical survey ofthe Electric Lighting Acts, and electricity development in this country, and then he passed on immediately to technical details. To follow the right hon. Gentleman in all those technical details which he placed before the House would occupy several hours if I take them up point by point in order to show a great many fallacies in his statements. I will refer to one technical item, and that is his reference to the load factor. If I heard correctly, he stated if in one case you have a load factor of 25 per cent. and if you bring a large number of these together and combine them in one great generating station, you get a load factor of 75 per cent. Now this is not so, for instance, if you have in a factory district factories running from six in the morning until six at night, the load factor is from 16 per cent. to 20 per cent. and in 1643 the big generating station it will remain from 16 per cent. to 20 per cent. It may improve 1 or 2 per cent., but this is due to diversity factor. I am afraid I should weary the House if I followed on with such technical matters, but in my opinion it is typical of the unsoundness of the argument which the right hon. Gentleman has placed before the House, and I appreciate that it is quite impossible for hon. Members to fully understand these questions unless they happen to be technical experts.
The right hon. Gentleman referred to the Board of Trade Reports, and he pointed out that they had issued three Reports and they all supported this measure almost in the identical form in which it is presented to the House. The right hon. Gentleman no doubt remembers standing at that dispatch box, moving the First Reading of the Ways and Communications Bill, and there was no word then about any Reports, although there are in existence some very excellent Reports coming right down to December, 1918, which are directly in opposition to the proposals to the Ways and Communications Bill. We heard of nothing but Reports in regard to this Electricity Supply Bill. Why should we have such Reports made the basis of this Bill, and why should they have been ignored in the case of the Ways and Communications Bill? I should like the right hon. Gentleman to say if there is any sound reason why, on this occasion he should found his Bill on Reports, and in another case he should go directly contrary to every recommendation made in Report on the subject of transport.
The right hon. Gentleman made the statement that the electricity supply undertakings of companies and municipalities were in a state of chaos and that this Bill would rescue them. I shall touch upon this point later on when I shall say a word or two in connection with the district boards, but if this Bill is to rescue these companies and municipalities from a state of chaos it is quite simple because there is no chaos from which to rescue them and if there was chaos, it could never be remedied by the district boards under this Bill. The right hon. Gentleman further stated that only by a cheaper and sufficient supply of power can we keep up production and keep up wages. I will give one or two illustrations as to the bearing of the cost of electric power upon the cost of manufacturing in this country. We 1644 have to look at this question from a national point of view, and I emphasise the word "national" because I think that is the only point of view from which any of us in this House are interested. We are concerned only with the principle of this Bill, and the machinery which it is proposed to set up in order to give effect to that principle. I think the principle of this measure can only be justified on one ground at this crisis of our history, and that if the right hon. Gentleman had been able to make out a clear case that this was going to re-establish trade quickly, so that the country can again get into its stride and become prosperous, and have all its manufactories going as before the War. The right hon. Gentleman has shown us nothing of the kind, and he has not attempted to show that by passing this Bill you may make trade quickly prosperous, which is the only justification for the Bill.
Before dealing with the principle of the Bill, I think it is necessary that we should see—and this is a highly technical matter—exactly what part the cost of electricity plays in the industries of this country, and what is the relation between the cost of electricity and the wholesale price of the articles manufactured by electricity, or other motive power. I have taken the trouble to get out some facts which I think will be of assistance to the House. I will give the case of a canvas manufacturer, fairly far north in Scotland. His turnover is £350,000. The factory is wholly driven by electricity, and the total cost of his electricity is £l,500. Would any modification of such an Electricity Bill in that factory make much difference so far as production is concerned, or any difference in the wages? Obviously, not at all. I will give other cases, and I have purposely taken them in England, Scotland, and Wales, and I have made my inquiries at random without any chance of knowing what the replies would be like. Another instance is that of a small colliery in Scotland. It has a sale amounting to £67,551, and the total cost of electricity is £1,725. I will not labour the point, because the fact speaks for itself.
I now come to the jute mills. A jute mill has a turnover of £178,812, and the total cost of electricity is £2,850. Is it not absurd to suggest that by the State doing something with the electricity supply they are going to revolutionise the industry and increase its capacity for trade. Now take 1645 a tweed manufacturer, who has a turnover of tweed cloth, value £250,000, and his electricity bill is £2,300. In the case of boot manufacturers, I have several illustrations, but I will only give two which are fairly representative. In one case the power bill totals £100, and the output is between £20,000 and £10,000, and, taking the mean figure at £15,000, the total cost of driving this factory is £100. Another boot manufacturer, whose total turnover was £18,000, had an electricity bill of £146 17s. 10d., less a discount of 2 per cent.
As to the hosiery trade. In one case there is a total turnover of nearly £100,000 and the electricity bill is £200. Is it not absurd to suggest that even if the electricity was given free it would make any substantial difference on the total running cost when the amount is only £200? Another hosiery factory has a total turnover of £350,000, and the power bill is £929 9s. 10d., less a discount of 2 per cent. Another hosiery factory would not give the figures, but they said that the cost of electric power was so trivial that it was not worth while taking into account in making up the cost. In the case of a needle manufacturer, the total turnover was £24,000, and the cost of electricity £266 10s. In a steel foundry the turnover was £300,000, and the cost of electricity a little under £5,000. If anybody takes the trouble to take out the percentages they will see how absurd it is to say that this country depends upon such proposals as are contained in the Bill for the improvement of our trade and capturing foreign trade in competition with other countries.
I will now give some Welsh illustrations. They decline to give the figures, but they gave the percentages. Take the case of a tinplate rolling mills, and the total cost of power is 2 per cent. In the case of a tinplate stamping and enamelling manufacturer, the total cost of power was 485 per cent., or something like 9s. 6d. per £100. I have chosen another instance in order to get a different type of trade altogether. I now take the case of a paper mill, which I think is about the worst case I could quote for my own purpose, because a paper mill starts running in the early hours of Monday morning and runs right through to Saturday afternoon without a stop, and it has the highest load factor of any class of factory in the country. This paper mill has a turnover of £592,387, and the total cost of power is £10,348.
1646 I have faithfully tried to give to the House a fair review of the trades of this country. There are many I have not touched upon, because time has not permitted a closer investigation since the Bill was presented to get all the trades, but I think I have given a fair representative view of the cost of electricity in relation to the total value of manufactured articles, and I think hon. Members will agree that this is not a matter of urgent and pressing national importance at the moment, if it is put forward from the point of view of capturing trade and setting our industries going because the War is coming to an end. I do suggest that we should not mislead the people in the country as we have been doing. We require to revise and amend the electric lighting law, but do not let us tell the people of the country that we are going to get a great increase in production, and that we are going to increase wages because we are going to pass this Electricity Bill. It is unfair. The people who listen to these statements take them as the truth. They assume them to be correct because they emanate from this House, and they are entitled to assume that they are correct because they emanate from this House. Let us try and go straightforward with our proposals and say that we want to amend the electric lighting law. If you like, go as far as you go in this Bill and say that we wish to bring this matter a stage nearer to nationalisation, but tell the people that in plain blunt language, and do not bring it in under the tempting guise of the possibility of higher wages, because that is grossly unfair.
The principle of the Bill, as the right hon. Gentleman has rightly said, depends upon two or three simple features. I interpret it as meaning a promise of a cheap and abundant supply of electricity. I have dealt fairly exhaustively with the question of cheapness, and, as to abundance, that is entirely dependent upon getting further transmission lines and further plants in operation. I should like to call the attention of the House to the position of electricity supply in this country before the outbreak of war. The right hon. Gentleman must be aware that at the outbreak of war the electrical enterprises of this country, and particularly the electricity supply business, both municipal and company, were going ahead at a very rapid rate indeed, and, if they had had the benefit of five 1647 years development, it would have put us in a position in which there would have been no question of introducing such a Bill as this. I suggest that it is very unfair never to say a word about the position of electricity supply at the outbreak of War, and the position in which it would have been to-day with normal development. Let the electricity companies and the municipalities draw together freely, have your Electricity Commissioners established under this Bill, and let it be known that this policy of unification is desirable for the country, and you will find, as indeed the right hon. Gentleman indicated in connection with the railways, that unification will come about quickly. Unification is in the interests of the electricity supply companies and of municipal electricity authorities, and they themselves will bring it about without having imposed upon them district boards and State Regulations. The right hon. Gentleman himself stated that one thousand railway companies by unification have been reduced to a total of only one hundred and twenty. The same thing exactly will take place in connection with the electricity supply if only the Government will give the companies and the authorities a fair chance to bring it about.
I would like to draw the attention of the House to the fact that all the principal associations in the country, and all the principal technical experts outside those immediately associated with the Government, are absolutely opposed to setting up district boards. This Bill is apparently entirely supported by reports. I can refer to reports. There is a report by the Federation of British Industries and another by the Institution of Electrical Engineers. The Institution of Electrical Engineers, in drafting their report received reports from the following: The British Electrical and Allied Manufacturers' Association—not an association likely to oppose district boards unless in principle they were unsound—the Association of Consulting Engineers, the Federation of British Industries, the Cable Makers' Association, the Incorporated Association of Electric Power Companies, the Provincial Electric Supply Committee of the United Kingdom, the Tramways and Light Railways Association, the British Electrical Federation, Limited, Edmund- 1648 sons' Electrical Corporation, Limited, the Iron and Steel Institute, the Conference of Directors of the London Electric Supply Companies, and the Electrical Contractors' Association. What is the summary of this Report? They say:The Committee are strongly convinced that, owing to the complexity of the technical, administrative and financial problems involved in a comprehensive scheme of electric supply reform, it will be found altogether impracticable to deal directly with the task of reconstruction by means of general legislation covering all the points at issue. They accordingly urge that immediate action should be confined to the creation of the Board of Electricity Commissioners, who should have powers and functions as outlined in the following paragraphs. There should be a gradual development in the establishing of the administrative machinery as the necessity is felt; otherwise, the industry may be hampered in the future by successive organisation to the same extent as it has been in the past by the conditions referred to.That gives the House generally the Report of the Institution of Electrical Engineers which was forwarded to the President of the Board of Trade commenting upon the Reports to which the Home Secretary has referred. We have heard no mention of this Report, which brings together most of the best technical and commercial advice that can be obtained on this matter. A Report was also made up by the Federation of British Industries. The committee framing that Report were entirely consumers, and their interest was to see that they got electricity in the cheapest and most expeditious manner, if they were not already being supplied—The Federation of British Industries are of opinion that if a strong impartial body of Electricity Commissioners is set up no further step should be taken until the Commissioners have all the facts relating to electric power supply before them and are able to judge as to the advisability or otherwise of additional executive machinery. The Electricity Commissioners in making their survey must have powers to obtain what evidence is necessary. It should be clearly stated in their appointment that they are in no sense committed to the lines of action or development indicated in the Reports of the Government Committees on Coal Conservation and Electric Power Supply.That expresses the views of the consumers of electricity who are members of the Federation of British Industries, which, I might say, represents the largest and smallest industries in this country. In my view, this Bill could be made a good workable Bill to do a great service to the consumers of electricity in this country, if the right hon. Gentleman, when it gets into Committee, would only limit it to the appoinment of Electricity Commissioners, taking certain powers, if necessary, to 1649 establish district boards for those areas where a supply of electricity is not given, or where it is refused by the authority which to-day has the right, by Act of Parliament or otherwise, of supply. I am quite certain that no harm will come to anybody in this country, and that there will be no retardation of industry, if in the first instance we set up the Electricity Commissioners. We can follow with the district boards in twelve months' time, if they are seen to be necessary, and no harm will be done by the delay. I wish to conclude by reminding the House that the Coalition Manifesto, which was signed by the Prime Minister and by the Leader of the House, contained this statement:Industry will rightly claim to be liberated at the earliest possible moment from Government control.We are just getting out of the turmoil of the Defence of the Realm Regulations which have disgusted everybody. Are we going now to deliberately plant "D.O.R.A." broadcast over the first Electricity Supply Bill introduced? It would be the greatest offence that could be committed against any citizen of this country to insult him by establishing district boards, and by saying, "We will take advantage of the tameness and loyalty of the people during the War, and, before they recover from the shock of the War, plant 'D.O.R.A' in perpetuity upon the supply of electricity."
§ Sir A. WILLIAMSON
I rise with a certain amount of diffidence to speak on this very technical subject which occupied the attention of a Committee over which I had the honour to preside for a period of no less than ten months. I may say that every opportunity was given by that Committee for every possible point of view to be laid before it, and included among those who came before the Committee representatives of this very Federation of British Industries to which the hon. Member who has just sat down has referred. I gather that while they agree that there should be, as indeed was recommended by the Committee and as is incorporated in this Bill, a body of Commissioners, the view of the Federation of British Industries is that those Commissioners should have time to inquire before district boards are set up. We spent two or three days per week inquiring, for ten months, and before us came the representatives of every possible point of view in the country. The consensus of opinion on the Committee, after hearing the evidence— 1650 not from their own knowledge, because personally I knew nothing whatever about electricity before I presided over this Committee—was that not only should Commissioners be set up, but that district boards should be set up to attend to the supply of electricity in suitable areas. The hon. Member for Hampstead, I gather, would rather leave things as they are. But the evidence before the Committee was such that they were driven to the unanimous conclusion that the present condition of things is unsatisfactory.
§ Sir A. WILLIAMSON
I hope not. Had I thought it would, I should not have signed the Report. With regard to the examples given to the House as to the percentage of money required for power, and the percentage of output, I suggest that they were most misleading. If the hon. Member had taken the steel now produced in electric furnaces, what would have been the percentage of electricity required to produce that steel output? One might also ask what percentage would be required to produce nitrogen from the air. The difference in each case would be very great. The hon. Member might have said; "Here is the industry of diamond cutting. We produced £250,000 worth, and the cost of the total power we required was 30s.!" That is the sort of argument to which we have been treated; it ought to carry no weight. If the House wants to know what is the cost of power in this country, the figures can be readily supplied, but the cost of motor power in this country is a highly important matter which would greatly conduce to the future benefit of British industry and British enterprise. The Committee, I admit, were faced with a task which, when they began it, they regarded as more or less appalling. It was a body consisting of sixteen members, and I think it has been correctly stated by the Home Secretary that it was a very representative body. Indeed it was composed very largely of experts, and when I consented to take the chair I had grave doubts whether it would be possible to get a unanimous Report from gentlemen holding such diverse views and representing such diverse interests. But after considering very fully, as I believe every member did, the national interests before his own personal predilections, we 1651 came to a unanimous Report of very great importance with regard to the cheapening of power in this country.
It is true that past legislation has hindered development. That development has been cramped by restrictive and conflicting legislation. It is true also that the development of the use of electric power in this country has been to some extent retarded by that particular individuality which I think is a characteristic of our race. There is no doubt that many manufacturers have said that they would rather produce their own power, and have control of the production of it than buy from somebody else, even although it could be shown that they could buy it more cheaply than they could produce it. I think that spirit has to some extent interfered with the development of electricity. But it is passing away. The same thing has occurred in connection with the railways. When they began to use electricity in large quantities they felt they would rather produce their own power than combine with other large companies or corporations in producing it jointly, although it could be done as cheaply as they could produce it themselves, and, as experts think, even more cheaply. Manufacturers now are much more willing to co-operate and take power from bodies of a public nature than they were at first. The evidence which came before us also showed that the railways themselves were recognising the great advantage it would be to the nation if they and all the other consumers in the country were united in this matter.
The effect of cheapening the production of power in this country would be immense in a great many directions. With regard to housing it is undoubtedly the case that the provision of cheap power and cheap light would do a, great deal to solve the housing question. If cheap power were available in rural districts, there would no longer be any reason why manufactories should be put up in crowded centres, and if we can have those manufactories in rural districts there will be more space, more light, more air and more sunshine for the people who work in them. Then again the saving to the country from the point of view of cleanliness would be surprisingly large. Indeed if it were possible to estimate what the country would save by 1652 using electric power instead of consuming coal to produce steam, they would find that the saving would be very remarkable. Further, there is the question of the pollution of the air by smoke, and the deterioration which takes place in consequence of the prevalence of smoke in our large cities. Figures with regard to large cities like London and Manchester show that deterioration costs millions every year—the deterioration of the ironwork of railways and of chimney-pots, and everything of that sort—and, consequently, one can look forward to the time when, if the smoke is reduced, that great deterioration will also disappear. Then, again, with regard to the increased production referred to by the Home Secretary, the evidence the Committee had before it undoubtedly proved that by substituting electric power for steam power men would be able to work shorter hours and to produce more, gaining proportionately higher wages. Therefore, if you can substitute cheap electric power, it would be greatly to the benefit of the worker.
With regard to agricultural development, we had evidence that we are on the eve of great changes, and if cheap power were available there is no saying how far development might go in rural as well as in urban districts. People rather shake their heads at that, but the evidence we had before us distinctly declared that the development of cheaper electricity in agricultural districts would prove to be a very important factor. I should like to say one word about the electrification of the railways. The evidence before us was that electricity was the cheapest motive power for local or suburban traffic. We were also informed it was the cheapest form of power for shunting in goods yards. A statement was made with regard to long-distance trains, to the effect that the application of electricity as motor power was not yet in sight, but that it was coming rapidly over the horizon. I understand there is undoubtedly a move in that direction, and that from the local and suburban trains we shall gradually come to electrify the other lines over greater distances. Another point made was that it is important, as land is very valuable in towns, and as it is exceedingly difficult to widen a railway, that electricity should be applied to such trains as run in and out of the big railway centres which are more or less congested. Undoubtedly, if electricity could be applied to such lines, it would be possible to run more trains 1653 over the same number of lines, and thus deal with a greater amount of traffic than by any other means. To double or treble many of these lines is in many cases an almost absolutely impossible proposition. I think I have said enough to show that there are enormous possibilities before us if we can change from the production of power by steam to electrical supply.
We are talking a great deal nowadays about the development of our industries. That development means new factories. For them land is required, and the cost of building and machinery has to be taken into consideration. One of the largest sources of cost in a new factory is motor power. You have to spend a very large proportion of your capital on boilers and engines, but if you can purchase motor power or electric power at low rates, not so much capital will be necessary for building and equipping a new factory, and, in addition to that, lighter construction could be used, as it would be possible to have a motor on each floor to supply all the power necessary. The advantages, indeed, are so innumerable that I should weary the House if I endeavoured to enumerate them. Something was said by the Home Secretary about the work of power companies and municipalities. It is true that some municipalities have been exceedingly go-ahead. They have on various occasions laid down plant in anticipation, and, of course, that is a very necessary and proper thing to do, but others have shown themselves much more backward, and it would be idle to disguise the fact that while many have done their duty well, and with great enterprise, others have failed in giving satisfaction in the service they provide.
The question of fuel has also been touched upon in this Debate, and in the Report it has been pointed out what an enormous saving could be effected in this direction. We surely have had brought home to us, with fuel at its present high prices at which it is likely to remain, how necessary it is to move in any direction which seems to promise cheap power and a smaller consumption of coal. Britain's position with regard to this matter may be contrasted with that of other countries. There were very interesting and enlightening Reports issued by the Board of Trade to other Government Departments which the Committee had the advantage of perusing and which contained extracts from the Press in Germany, both daily 1654 technical. It was very interesting to observe that during the time this Committee was sitting the German Government and the German people were taking stock of the situation with regard to electric power in Germany, and schemes were being elaborated to improve Germany's position in respect of the provision of cheap electric power, because in Germany they had suffered to a large extent, as we had, from having a number of parochial areas providing electricity at different voltages, and the effect of the legislation in Germany was, if possible, to sweep all that away, and have a unified system—a more national system.
It may be asked, How can we compete in regard to electric power derived from coal with countries like the United States and Italy and the south of France, where they have available very large water power for the generation of electricity? I am bound to say that at first sight it does seem impossible to compete in the manufacture of power from coal with that produced from water power. But the circumstances in this country do help us. We all know the concentration of our industries. We know that the coalfields are not very far away from our manufacturing industries, and it was given in evidence that we could compete in this country, owing to the concentration of our industries, in the delivery at the works of electric power as cheaply as it can be delivered in the United States and Italy, where the water power may be hundreds of miles away. The loss in the transmission of electric power is high, and that will enable this country to compete with those countries where electricity is derived from water power. There cannot be a more important fact for us to bear in mind, because it will put us in this country upon a level which will enable us to compete with others where nature has given them a water power which we in this country do not possess. It is no good disguising the fact that while the water powers in this country should be availed of as far as they exist, there are no water powers in this country comparable with the water powers that exist in the south of France, Italy or the United States. Even in Ireland, where it is thought that water power exists in enormous quantities, it is the case that, owing to the small fall, the amount of power 1655 available there is much less than one would suppose from the large area of lakes which that country possesses.
I should like to say one or two words about the Bill itself. In doing so I do not wish to appear as a critic or too strong a critic, shall I say, of what the Government propose, because my object and intention is to support the Government in passing the Second Reading of this Bill, and I am prepared to give them every assistance in my power with the Bill throughout its passage. But there are points in this Bill in which it differs, not perhaps in principle, but in execution, from the ideas which the Committee had in reporting to the Government. I will go through it by Clauses. Clause 1 sets up Electricity Commissioners. It was felt very strongly by the Committee that these Electricity Commissioners should be paid adequate salaries and should be men of the highest possible standing. It would be a great mistake—let the House bear this in mind—to regard the position of an Electricity Commissioner as a suitable dumping ground for any Ministerial figures, because it is far too important a matter. The provision of power for this nation is so important that I doubt whether we have had anything before us in this House for a number of years in the way of constructive legislation so important as this Bill. In order that it may be carried out to the best advantage for the country, it is important that these Commissioners should be men of the very highest ability. I see it is contemplated that all these Commissioners are to be paid. Personally I think it is a pity, perhaps, that they should all be paid. It might, have been well if the two Commissioners whose term of office is to be fixed by the Board of Trade had been unpaid. My reason for suggesting that is that, being unpaid, men might be got who could not give the whole of their time, but whose services would be very valuable to the nation. The fact that they are to be paid implies that they are to be whole-time men. Therefore men who can give only part time, or if you like, three-fourth of their time, would be ineligible for these positions. It is desirable that words should be inserted, where necessary, to make it possible—I will not go further than that—to appoint a man who is not necessarily paid, and who need not give up perhaps some directorships or some such position from which he might otherwise be debarred.
1656 Clause 5 is a really important matter, because the Report of the Committee was that as soon as possible after their appointment the Commissioners should proceed to delimit suitable electricity districts, that the number of the districts should be left to the judgment of the Commissioners, and that the district should be large and should cover ultimately the whole of Great Britain and Ireland. The change I note in Clause 5 is that instead of a mandatory provision that the country shall be divided into districts, the provision is that they may divide it into districts. That makes a great deal of difference, especially when that provision is read in conjunction with Clause 7, Sub-section (6), and with Clause 20, in both of which provision is made for existing concerns to continue. If the formation of district boards is to be optional to the Commissioners, then there is always at any rate the fear that they may not set up these district boards in all parts of the country, and that existing arrangements, or some such new arrangements as may be made, might be set up, and you would have what would be a very great blot upon the system—namely, one part of the country divided into districts with district boards, and another part of the country where there is no district board. That is a very grave matter, and I hope that in Committee it will be fully considered. The formation of these boards is dealt with in Clause 5. May I say in passing that I hope the Government will not keep in view too large a number on these boards? If these district electricity boards are large you will not get done the work that is necessary. Any man who is a member of a district electricity board will have a great deal of work to do. It is a very important position. I, for one, look forward to the establishment of a district which shall comprise, say, the whole of Lancashire, or even more. I hope you will get the very best men in the district to come forward by nomination or election to serve on the board, who would have in view the whole of the interests of that district which would be committed to their charge, and that you would get to serve on such a board men—such as those who serve on the Mersey Docks and Harbour Board or the Port of London Authority—who have no personal interests in many cases, but who will have a public sense of duty, and come forward to work to provide the cheapest power for the district in which they live. It is essential, if this work is to be well 1657 done, that it should be a small body. If you have a body of sixty or seventy, or eighty constituting a district board, you will not get good work. It should be much more like five or six than the numbers I have mentioned.
With regard to the areas which the district boards are to cover, it has been assumed by certain persons that because Lord Haldane's Report mentioned sixteen districts as the number into which the country might be divided, that therefore sixteen was the approved figure, and that in each of these sixteen districts there was to be one great central power station. Nothing could be further from the real facts of the case than that. As regards the number of districts, the Committee felt that that should be left to the Electricity Commissioners to decide after fully considering the matter. But whether it be sixteen, eighteen, or twenty, we were of opinion that the districts should be large and not small districts, and that, for example, a little borough or even a large town should not be regarded as an electricity district, but that you should take in a large sweep of country. We also considered that even districts should be formed where there is little or no industrial activity at present. There is no reason why even the North of Scotland, as well as the Firth of Clyde, should not be formed into one district. Although there is little industrial activity in the North of Scotland, it is well that an electricity board should watch developments and encourage the supply of electric power where it is needed. Take the shores of the Moray Firth. You have there a number of little towns, each of which individually thinks of its own interests and is very jealous of them. There is no one undertaking at the moment which supplies them all and which provides cheap power or even water. Certainly the whole, country should be divided into districts. On Clause 7 I should like to call the attention of the Government to the great difficulty they will have in ascertaining whatmight reasonably have been expected to accrue from any improvement of the generating station and plant.That is a most difficult provision, and it is not one which the Committee over which I presided recommended. It has been adopted since the Report was made, either in the draftsman's room or in the consultation room where Ministers and officials meet. They will have great difficulty with these words, and I suggest that the Govern- 1658 ment should give them further consideration. With regard to Clause 16, it is provided there that a district electricity board, after being set up, may, when it has acquired the generating stations in its area, lease them. That is a very debate able point. The Committee recommended it unanimously, and I am prepared to support that to which I put my name. At the same time I am bound to say there are two points of view about leasing. I would suggest to the Government that, if they decide to give an option to the district authority to lease the generating station to a company, which may or may not now exist, to be worked by it, they should at any rate fix a term of years so that the Commissioners and the district board might revise their position after that term of years has expired. At present there is no limit, therefore it might be possible to lease in perpetuity that which is to supply a public need. That is a very dangerous thing. Clause 19, Sub-section (4) provides that the prices are to be fixed by the Board of Trade for electricity supplied by works put up by them within two years, and that these prices are to be suchthat their receipts there from will be sufficient to cover their expenditure on income account…with such margin as the Board may think fit.
§ 6.0 P.M.
§ In my judgment that is perfectly impracticable. It is something which is going to supply the great future need for power in the district. Say you decide to spend £300,000 or more in putting down plant which is to supply not only to-day's needs, but the needs of to-morrow, of next year, of ton years or of twenty years hence. When you have built this great station, you cannot expect at once to derive an income which will pay interest upon the cost and cover all the outgoings. I say deliberately to the Government that you must be prepared to make a loss to begin with. You will not be business men if you do not. You have to anticipate the future. That is the only way to run a business successfully. You have to look ahead. You cannot therefore put down in a Bill that the charge for electricity is to be such as will cover the interest and cost on expenditure. There must be some give and take about that. I should like to call the attention of the House to Clause 27, which is a very important Clause. Hitherto, when any local authority or company has wished to do anything in connection with the development of electricity, it has had to come to the House of Commons and get a Bill or a Provisional Order. That has 1659 meant delay and expense. It has been a serious blot on our procedure and has greatly hindered the development of industry in this country. In Clause 27 we have a suggestion for a shorter way. I would congratulate the Government on the endeavour they have made here to provide for the needs of the country in a shorter way, so that what is required can be done by what is called a Special Order. The Special Order is described in Clause 27, as governed also by Clause 40.
§ The financial provisions of the Bill are very essential provisions. We considered this matter very carefully. We first of all put down, as the means by which this great provision of power of the county should be financed, that the money should be supplied through the Commissioners, in other words, that it should be supplied by the nation and not by the localities. As an alternative, in order to ensure unanimity, provision was made that in certain cases where a local authority or others were willing to finance the district boards commercially it should be within the power of the commissioners, to allow that local financing. But that is a very different proposition from a provision which says, "You shall finance locally and it is only when you cannot finance locally that you may come to the Government." I am afraid it cuts at the root very largely of the future success of this great scheme. If money is not available under the proper safeguards of the district board, the district commissioners, the Board of Trade, and the Treasury—you have all these various interests safeguarding the money so that it shall not be frittered away—if you are not prepared to give public money I am afraid you will not get what I hoped you would get, a great electrical scheme covering the industrial part of our country. There are many drawbacks to putting the burden of finance on the localities. Some people say local authorities can raise money cheaper than the Government. There may be such exceptional cases, but as a rule no one can raise money as cheaply as the Government. If, for instance, a local body wants £300,000 they will not spend it all at once. It is spread over four years. But they have to issue a loan for £300,000; otherwise it will be very difficult to provide the money as and when it is required, as they could do if they got it from the Government. Furthermore, they come into the 1660 stock market and compete and raise the rate against one another. You will have half a dozen district boards, or possibly undertakers who are not district boards, coming into the market and asking for money for electrical concerns in driblets and competing in the market, and, therefore, raising the rate. There is a great drawback from the point of view even of the investor, because people do not like their money in things which are not readily saleable. If you have Government electricity stock it is a thing which will be turned over by hundreds of thousands of pounds at any moment. There is no risk to the country in doing this because they have the works and they have the power to raise the price of the electricity, so that they can always protect themselves.
§ Sir A. WILLIAMSON
The cheapness comes in in the provision of electricity in larger up-to-date stations, without any private profit in a large number of cases. I think the Minister of Industries and Commerce is the proper person to operate the Bill. I do not know whether it is well justified or not—probably it is not—but there is a certain trepidation in committing to a Ministry which is going to have control of the railways of the country the control also of the power which is going to be used by the railways only as to one-sixth or so and as to five-sixths by the industries and private persons. If a Ministry of Industries and Commerce is to be created, as I understand it is, who is more fitted to take charge of the provision of power for industry than the Minister of Industry and Commerce? I hope the Government will reconsider their attitude, and that when the time comes we may hear that they are willing to listen to arguments on the other side. Otherwise I support the Bill most cordially.
§ Mr. WADDINGTON
I think the Bill will be found to be generally acceptable to the country and a great advance in electrical progress. But it requires considerable amendment in Committee. The great work which has been done by the local authorities already has been referred to, but the Bill provides that the policy of the Electricity Commissioners, as to taking over an undertaking, shall be entirely within the discretion of those Commissioners. If the various local authorities, where they are small undertakers, are 1661 put in the position that they do not know whether the undertaking is to be acquired by the Commissioners or not, they are left entirely in suspense. They can make no extensions. The supply which they have been giving can be taken away from them and they are left with their capital charges. I think such a proposal ought to be déleted. What is a small undertaking? What is a small unit of power? You will have throughout the country electricity undertakings which vary from 100 kilowatts to many thousands. If you have a station which has a total kilowatt power of 500 and you have another which has five times that amount, what is a small station? Is 2,500 kilowatts or 500 kilowatts a small station? In the big stations, which they say they will take over, they have units of power which are obsolete and power which is useless to that large station. But under the Government proposal they are going to relieve the authorities of the amount of the indebtedness for that obsolete power. But when you deal with the smaller undertakings, they say, No, it is useless to us, and we decline to take it over. A most important point, and, as I think, one upon which there will be considerable disputation, is that of the district electricity boards. How have they been constituted? It is the understanding in Lancashire, at all events, that we are not going to have nationalisation of the electric supply. We are going to have these five Electricity Commissioners appointed in order that they may co-ordinate the voltage throughout the country generally, and have a body to which appeals can be made on questions affecting the technical side of the industry. I do not think in Lancashire there is the slightest idea that our electricity undertakings are going to be controlled from London. We have made great progress in Lancashire. Almost the whole of the power which we supply—and it is millions and millions of units per year—is supplied by local authorities, and during the last two or three years various conferences have taken place. The county has been divided into groups, each of which was considered to be a suitable area for a district board, and it was intended not that they should simply have to receive instructions from someone in London as to what price they were to charge and what undertakings we had to take over, but it was intended that we should have those responsibilities solely confined to Lancashire and that within the area of the particular district board the board should 1662 alone be responsible and should have the chance of any slight profit which might be made, and should also be responsible for any loss to the undertaking incurred. The Bill provides in these financial Clauses for borrowing. What we want is a Bill which will give us power to extend our areas—we agree that parochial areas are unsatisfactory—but we do not want to have the borrowing done by London. We can borrow on the strength of our own undertakings. We can manage our affairs and we will take the responsibility, through our properly elected authorities, of financing it. We do not ask for Government subsidies to keep us going, or to make up a deficit under any circumstances.
What is going to happen with the cheap supply of electricity which is spoken about? It is a great fallacy to tell the country that you are going to make electricity ridiculously cheap. It is a fallacy in the Coal Conservation Report to say that the industries of Lancashire or the West Riding of Yorkshire are using anything approaching 7 or 8 lbs. of coal for each indicated horse-power which they produce. If you go to a Lancashire industrialist and suggest to him that he is using 7 lbs. of coal you will be laughed absolutey out of the place. The average provision in a Lancashire mill is 2, 2½, or at the most 3 lbs. of coal per horse-power, and if you consider that Lancashire and the West Riding is a great coal using centre for industrial purposes, you will realise how much of the fallacy is knocked away, how much, at all events, of the argument in the Coal Conservation Report is knocked away, when they estimate a saving of millions on the reduction to industrial counties of coal from 7 lbs to 2 lbs., when as a matter of fact they are producing horse-power at the same cost at which they can produce it under electrical conditions.
A possible deficit is not provided for in the Bill. If we are to take it that it is the intention of the State to make up deficits throughout the country, and to make a price operative which will cover a national deficit on electricity, you will not get the Lancashire industrialists to take your power. You cannot pretend to sell to the Lancashire manufacturers electric current, which they can make at ¾d. per unit. Before the War, they would not have looked at ½d. per unit. They can produce it themselves cheaper. If you 1663 are going to spread over industrial centres the losses you make in the agricultural areas, if electricity to be supplied to the agricultural areas will cost 4d., 5d., or 6d. per unit, as the actual cost of supplying it to those areas, and you are going to charge to the consumer in that area l½d. per unit, and spread the remaining 4½d. over the industrial area, you will at once rob your scheme of any prospect of success, and possibly do away with any chance of cheapness in the production.
It is sometimes argued that a superpower station is the station which will give the greatest value. It has never been proved that an immense power station can supply electricity cheaper than a moderate-sized power station. There are power stations in this country to-day which have not a capacity exceeding 1,000 or 2,000 kilowatts which are producing electricity as cheap, and are distributing it to the community as cheap, as power stations with a 25,000-unit of power. Therefore, I hope that the House will not be mislead by the claim so frequently repeated that the larger your power station the more centralisedit is, and the cheaper will be your current. Losses in transmission are considerable, and losses in organisation are considerable. You have to consider the distribution costs. In the Reports which have been given us by the Coal Conservation Committee they consider naturally the cost of generation by the State, but they have given us no particulars of the cost of delivery to the consumers. What is the good of putting a Report before the country and, on the basis of that Report, making speeches in this House that you can generate electricity at a certain cost and deliver it to the consumer? They have not put in the Report anything about the cost of transmission and the cost of delivery to the consumer. While I hope this Bill will go to a Committee, and while I hope in some form it will be passed into law, I dissent most strongly from the fallacious estimates which were made as to the cheapness of electricity, and the putting of a paradise before us which we shall not realise, and which those who know anything about the circumstances know cannot possibly be realised. I thank hon. Members for so kindly listening to me on my first intervention in Debate.
I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the wordsthis House declines to proceed further with a measure which proposes to take from popularly-elected local authorities the powers entrusted to them by Parliament, and to transfer these powers to boards created by other methods than that of popular election, and so, while it establishes a great public utility service, places it beyond public control.I think if the Government wanted to prove the bona fides of the character of the Coalition, it would never fail to point to the fact that they can always find amongst their suppporters someone to move the rejection of any measure that they may bring forward. I think the standard of revolt was raised by the hon. Member for Twickenham (Mr. Joynson-Hicks) who was followed by the right hon. Member for Duncairn (Sir E. Carson). I feel that I am in excellent company, and perhaps on this occasion it may have some effect on the Government. After what has taken place on the former revolts, the right hon. Gentleman probably feels no anxiety as to what will take place on this occasion. I quite realise that there is a three to one chance against me. Still, one never knows one's luck. When twelve years ago, I had the honour and the pleasure as one of the constituents of the right hon. Gentleman who introduced this Bill, of playing a very small part in securing his return to this House, in which he now occupies so distinguished a position, I never realised that I should one day be found opposing a measure he has brought forward; but I take some comfort in the fact that while the voice we have listened to this afternoon, has been the voice of the right hon. Member for Newcastle, the hand that we have felt has been the hand of the right hon. Member for Cambridge (Sir E. Geddes).
I should not have ventured to have obtruded at this stage my personal opinions, but I have the honour to represent the views of the whole of the municipalities, with the possible exception of one, on the North-East coast. My hon. Friend the Member for Middlesboro' (Mr. Trevelyan Thomson), whose name is also attached to this Motion, represents a constituency on the extreme end, and I represent a constituency on the other. Almost throughout that region the feelings of the local authorities are in support of the Amendment which I have the honour to move. This is an extremely important 1665 measure. There are three great public utility services, which at the present time and for some time past have been canvassed as to whether they should be under private ownership, or public ownership. One is coal-getting, the other is the generation of power, and the other transport. With regard to transport, the right hon. Gentleman (Sir E. Geddes) is meditating on the subject, and he will do so for the next two years, when he will be able to tell us whether the railways are to be nationalised or not. On 20th June we may hope to hear from the Coal Commission as to whether the mines are to be nationalised. It is very interesting to find that the Government, or at least, the Minister-designate of Ways and Communications has made up his mind on the question of the generation of power. That is to be nationalised and we get it in this Bill. I must confess that I am rather surprised, and I think he must be rather disappointed that the passionate interest of the Labour party in nationalisation is not shown by crowded benches. One would have thought that this first instalment would have been received by them with a little more interest than they have given to it to-day.
We are committed to national ownership in this measure. Interest in this measure is that it discloses only what may take place, not only in regard to the railways as to ownership, but it discloses something as to what is in the mind of the Government in regard to the administration of the great public utility services when they come into national ownership. We have in this measure an intimation of what may take place in regard to the larger question of railways, and I submit that it is of supreme importance that on this measure we are considering proposals that are made in respect of local administration. My opposition to this Bill is not in any way with regard to the principle of nationalisation which has been introduced. I quite believe all that has been said with regard to the advantages that will come through co-ordination, the improved supply and the cheapened supply that will come through making the area of the unit of supply very much larger than at the present time. My opposition to this Bill is directed to the fact with the local administration of this great public utility service which is now to come under national ownership, is not to be of a popular character. What we are getting here is national ownership and private control.
1666 What was the problem before the Government? They had to make up their minds, seeing that they were going to set up a local body to administer this service, what sort of body it should be; whether it should be a selected body or an elected body. Whether it should be a body constituted in the way in which this House is constituted by the popular vote or whether it should be a body whose members were to arrive at their position through being selected by a Minister or being selected by persons of private interests. They have chosen to adopt the latter method. I submit that that is a very grave decision, and I think this Bill is a sad model for the future, if in any extension of national ownership that is to take place we should have that ownership at the centre popular and at the circumference of a private character. I think that is a future to which a good many of us will look forward with misgiving and foreboding. The whole question of the place of local government in the administration of this country in the future is raised in this Bill. There are two methods of local government which have been adopted. One is the Prussian and the other the British. The Germans are noted for efficiency in a great many ways. They are noted for military efficiency, and they are noted for the efficiency of their civil administration, but there is this difference and always has been between their methods of administration and the natural method that has grown up in this country, and that is that in Germany the local authorities have been subordinate either to individuals or to smaller bodies appointed by the Central Executive. In this country in the past there has been no one between the local authority and Parliament.
Under this Bill you have a great extension of the administrative powers of the country. What has to be decided in considering it is whether you are going to place that extension in the hands of popular elected authorities or whether you are going to place that extension of power in the hands of a more or less private body. I want to make a plea for the local authorities. They are the child of this House. They have been created by all parties in this House. The whole system of local government, which has become the pride of this country, has originated through the action of all parties. No one party can claim to have done more than another. One party have given 1667 parish councils, another the county councils. One and all, these authorities have come from this House. They are the child of this House. They have derived their power and what authority they have from the same source that we derive it here. They are elected by the people, and we need to consider very carefully and very seriously in any action we take as to what the effect will be upon these bodies that we have created, and to which we have delegated some of our powers. Are we going to extend these powers, or are we going to substitute in place of these local authorities some other bodies which will not have the same claim to the consideration of the responsible people of this country that these bodies have.
That is the great problem raised by this Bill. I would suggest to hon. Members who are interested in the question of devolution that the action which we are taking here has a bearing upon that. How can we expect local authorities to gather weight in the country and attract the interest of representative people if we are going to restrict them in their powers? The trend of measures introduced into this House recently has been in the direction of diminishing the authority and restricting the action of local authorities. No measure is going to do more in that respect than the present Bill. A Bill has been brought forward with regard to Ireland in which on occasion the whole local authority may be superseded and its powers withdrawn. In the English measures that have been brought in—the Housing Bill and the Land Settlement Bill—power is taken to withdraw part of the functions of the local authorities. Under this Bill we propose not to lessen them, but actually to take them away. Here you have local bodies which had certain powers granted and which entered upon certain works and constructed certain undertakings, and now we propose to take those powers from them and transfer them to another body, not composed as they are composed, not resting upon the popular franchise, but a body composed in the first place by the selection of individual nominees by the Minister, then by individuals who are to represent private interests, and then by local authorities who, so far as we know, are not to have a predominant place in the constitution of these bodies. This is a very serious policy for the Government to take up.
1668 We have heard a great deal of the discredit that is falling upon representative institutions. Over and over again in this House it has been said that one of the greatest dangers that we have to face in this country in the future is the discredit that is becoming attached to representative government, and the desire to take action in other forms and in other ways. I submit that the Government by its proposal in this Bill is lending itself to that movement. You are proposing to set up as traders these district electricity bodies alone, and to take away from the local authorities the undertakings which they now possess. The Government is lending itself to a movement which must tend to discredit representative government. As an indication of what can take place under this Bill I may refer to the particular area in which my Constituency is situated. On the North-East Coast you have a large number of towns which have set up electrical undertakings that have been carried on with a great deal of skill and energy. These undertakings have been administered in the municipality by men of public spirit who receive no remuneration such as it is suggested is to be paid to the members of the district boards. They created every one of these concerns, and guided them solely out of their regard for their civic duties. Under this Bill an electricity board, if it is set up on the North-East Coast, because the owner of all these municipal undertakings, and under this Bill it has power to transfer these undertakings from the local authorities to a supply company which is operating in that area. We have operating on the North-East Coast a great electric supply company which has been carrying on operations for a great many years in competition with the municipal undertakings. I suggest that under this Bill it would be possible for the electricity board which is set up there to take the whole of the undertakings of the local authorities which become vested in them and to lease them to the supply companies which are operating in that area. If I am wrong, and that that is not possible under this Bill, I hope that my right hon. Friend will correct me. It is admitted that that is the case.
§ Mr. SHORTT dissented.
Then I understand that it is not the case, and my right hon. friend will make clear in his reply that it is not within the power of a board set up 1669 in the North-East Coast area, if it cares to do so, to transfer undertakings at present owned by local authorities over to the supply company operating in that area?
§ Mr. SHORTT
The generating stations alone will vest in the local district board. They have no control over anything else, unless the local authorities so fail in the supply that the district board are bound to step in in the interest of the consumers and supply it themselves. But failing that, the local district board will have no concern with the district supply. They will simply take the generating stations.
I quite understand the distinction that was made between distribution and generation. My point is that under Clause 5 the board is appointed. Under Clause 7 all the generating stations in the area, those belonging to local authorities as well as other authorised undertakings, become vested in the board, and under Clause 16 those generating stations which are vested in the board might be, and could be, if the board thought fit, leased to the supply company. That is so?
I submit that when that position is known in the area from which I come, and from which the hon. Member for Middlesbrough (Mr. T. Thomson) comes, it will be resented very strongly, and in the present temper of the time it will be very dangerous for the people of this country to realise that, under machinery which is proposed in this House, it is possible for a public undertaking now under public control to be taken out of the hands of public authorities and put into the hands of private companies. I do not know whether this is part of the principle of the Bill or whether it is a matter that can be put right in Committee. I hope that it is not part of the principle of the Bill. If the principle of the Bill is national ownership, I, for one, am not going to oppose it; but, if the principle of the Bill announced here as a policy which may be applied in the future is that this country is going to buy up public undertakings and works and then lease them back to private undertakings, I hope that that principle will be upset in this House. What we want is not a diminution, but an extension of public control. We want to make it perfectly clear to the Government that their policy should be 1670 that where they take over a public utility service they should keep it under public control.
Mr. T. TOMPSON
I rise to second the Amendment.
Like the hon. Member who has just spoken, I am not opposed in any way to most of the Bill, but to the method by which it is sought to carry it out. I agree entirely with what the Home Secretary has said in introducing this Bill as to the urgent need of co-ordination and unification of the various electrical services and that this matter must not be approached in a narrow or a parochial spirit, but it is obvious that local authorities have themselves been hampered by Acts of Parliament because of the limited character of their areas, and it is desirable that these restrictions should be removed. Just in the same way as we have had unification and co-ordination of health services by the Ministry of Health Bill, and as we have co-ordination attempted by the Ways and Communications Bill, so this is the natural corollary so far as electrical services are concerned. We are willing to have unity and co-ordination even on a large scale. The point I wish to put to the Government is that, in order to achieve this very desirable aim, is it necessary to scrap entirely our preconceived ideas of public control, where public money is spent, and for the oversight to be handed over to private enterprise and private companies? A valuable tradition of public policy in this country is that where public money is spent it should be directly and definitely under public control. I hope that we are not in these days going to depart from that recognised policy with regard to electrical services. Judging from what has been said and from the Bill itself, one would think that municipal services were almost a negligible quantity with regard to electrical power and supply, yet we find in the Report of the Electrical Supply Committee that, out of the 600 electrical enterprises which there are in this country, only 230 belong to private companies and 327 belong to local authorities of one kind or another; while in the matter of capital the figures are £36,000,000 private companies and £55,000,000 under public authorities and municipal control.
I submit that, notwithstanding what has occurred in the reports of municipal control, local authorities have provided under 1671 equal conditions as efficient and economical a service as the private companies. I know that reference has been made to a ½d. per unit supply in certain cases by private companies and the larger fee charged by municipal undertakings, but I submit that the conditions are not altogether comparable. If you take a ½d. per unit for a high-tension load delivered in bulk to big consumers and compare that with a low-tension load delivered in retail as it were to small consumers, the comparison is not fair. I would further point out with regard to municipal services that you have that service provided as a public convenience. A municipality cannot pick and choose as to what persons and what area it shall serve, whereas the private company which is out for profit, as is perfectly natural and right, cater for the area where they will have the biggest power supply and the biggest load and get the greatest return, and therefore if you compare on equal conditions the services rendered by the municipalities and the private power companies you will find that the public services are as good, as efficient and as economical as that of the power companies, and seeing that this is so and that the large bulk of the capital is represented by the public bodies, why do you ignore them and scrap them in favour of the private enterprise to which only the smaller portion of the electrical enterprises of the country belong?
This matter I know is difficult to follow because of many technical points in reference to tension, voltage and various other matters which only skilled engineers and electricians can follow; but when you compare municipal tramway services with which we are all acquainted and which we can all understand with private tramways, then you will find that the municipal authorities can compare more than favourably with private enterprise. If the public authority can do the work in the one matter they can do it in the other. This Bill wipes out municipal control, and by arbitrary machinery transfers to irresponsible bureaucratic bodies these enterprises which have been built up by the local authorities. The War has taught us many lessons, but I do not think that it has taught us to regard too favourably the placing of unrestrained powers for trading or otherwise in the hands of Departments under bureaucratic control. I think we ought to try to increase the powers of 1672 public control in every possible way and not hand back to private enterprise that which at present is in the hands of the local authorities. The Government have brought in a big Housing Bill, and they have such confidence in the local authorities that they have entrusted them with tremendous powers for the spending of millions of money in the putting up of houses. Is that because there is no profit to be made in that matter? When we come to the question of electric supply they take away the powers which the municipal authorities have.
§ Sir A. WILLIAMSON
Does the hon. Gentleman suggest that the private companies generating stations are not also to be taken over as well as those of the local authorities?
Certainly; but they are to be managed by this bureaucratic body, which is not popularly controlled.
§ Sir A. WILLIAMSON
If he reads the Report of the Committee he will find it is not bureaucratic at all.
I have read the Bill, which is more important, and I find there is absolutely no provision for popular control or popular representation. Thus, in the case of housing you give big powers to the municipal authorities, and in the case of electric supply you take the power away from them, and give it eventually, possibly, to private companies. Therefore I say that the House should guard very jealously and watch what are the real proposals of the Bill. On the Ministry of Ways and Communications Bill when it was before the House, considerable criticism was offered against procedure for carrying out what was to be done by Order in Council, and the House objected very strongly. I submit that in this Bill the position is even worse. Not only have you the procedure of Order in Council, but you have large powers left in the hands of the Board of Trade which they can carry out by Order without coming to the House in any shape or form. Why should not the House itself say how much these Commissioners should be paid and what length of service they should have, and also arrange for their appointment. Not only have we no control over the Commissioners, but the electricity districts are to be set up arbitrarily by the Board of Trade. I submit that we have evidence in the archives of the Board of Trade and by public inquiries whereby that can be done under 1673 the control of the House itself. Legislation to-day is apparently to be all by Departments and taken out of the control of popular assemblies, and of this House as well. What is true in regard to the Commissioners is even worse with regard to district boards. We are not allowed to have any say whatever as to the detailed constitution of those boards. Parliament apparently can settle the constitution of parish councils, or even of an Imperial Legislature, but is incompetent or unable to deal with the district boards under this Bill. It is true we are told in the Bill that the district Commissioners shall represent local authorities and companies and consumers, and labour. But why in this Bill should we not say how many there are to be and who should elect them, and provide for the whole machinery of those district boards? Not only that, but it appears as if, frightened of a popular electoral element, although it may not be so, they take power whereby these district boards may delegate their powers to subcommittees which will have full power under the Bill. I submit that over this hybrid body Parliament has no control whatever. To this hybrid body of irresponsible bureaucrats you are handing over municipal generating and supply stations, which are the bigger proportion of the electric energy in this country. Therefore I say that the House should watch very carefully where this Bill leads them, because it will take out of the hands of the municipalities the whole of the generating stations, and, as has been pointed out, the generating stations in a municipality and the distributing power are so interwoven that, as a matter of practical politics, it would be impossible to divide one from the other, and if you take the generating stations from the municipality you must also take the means of distribution as well. You hand those over to a bureaucratic body over which Parliament has no direct control. It is obvious, as the Home Secretary admitted, that they could transfer later on to a private company the working of that which has been a public municipal enterprise.
Therefore I say this is a most reactionary and undesirable measure, and this heavy weighting of the dice against the municipal authorities appears right throughout the Bill. Let me give some illustrations. Take the purchase that is to be paid for these concerns. We will assume that a municipality has spent £100,000 in estab- 1674 lishing a generating station and transmission mains, and that for a period of years it has paid off £50,000 and kept the works in a state of good condition and provided for depreciation, and that there remains a debt outstanding of £50,000. By the terms of this Bill £50,000 is paid to the municipality. What happens, as I read the Bill, and if I am wrong I hope I will be corrected, with regard to a company? They may have spent £100,000 and likewise kept the plant in a similar condition of efficiency and provided for depreciation. But instead of paying off capital charges they have distributed in dividends to their shareholders large sums of money. They may have only paid off capital charges to the extent of £10,000 or £20,000, and there remains a sum of £80,000, and the power company is to be paid the £80,000 for their station, which is the amount of capital they have spent upon it. You have thus two similar stations, one of which is paid £50,000, that is the municipal one, and the other of the power station £80,000, although it is more than likely that the one for which the £80,000 is paid is not in as good a condition or as efficient as the muncipal station, for which £50,000 is paid. Let me give another illustration of the differential treatment against public authorities under the Bill. After the Bill is passed no municipal public authority can establish a generating station, but a private company can on the one condition that they sell surplus power and electric energy at such price as the Commissioners may determine. A third instance of unequal treatment is that the district boards who will be the suppliers of power and energy may go into an area where the municipality has the right to supply the power, and without its consent, or even against its opposition, supply electric power to tramways and for lighting, and to railways, whereas they may not go into a district served by a power company if they object, and they can appeal to the Electric Commissioners. Therefore I say quite truly that the Bill is heavily weighted against municipalities and public authorities. I agree with the last speaker that we are not against nationalisation, but do let us have one thing or the other, and not this hybrid mixture of nationalisation at State expense, and the handing over of these matters to the control of irresponsible bodies, or even of private companies, as is provided under Clause 16 of this Bill.
1675 What is the reason for this Bill. The Coal Conservation Commission suggested that wonderful economies might be provided by means of the development of electric supply by means of super-stations and in other ways. It is desirable that we should have every possible economy as suggested by the Home Secretary, but I submit that when he was drawing the picture of the wonderful reduction in costs he forgot to tell us the other side of the story, namely, that you have already established throughout the country a number of generating plants and transmission services which have cost a considerable amount of money, and even if you scrap them you would still have that debt and interest charges and reduction of the amount against the great economies you are going to get from your super-station. I would like to refer also to the wonderful figure of £100,000,000 which the Coal Conservation Commission suggest would be saved if their proposals were carried out. I would remark that they give no details as to how that £100,000,000 is to be arrived at. They did suggest a greatly increased use of electric supply in the lighting of artisans' dwellings and in the supply of heating, which could be used for ironing and other purposes, and the cooking of the Sunday dinner, and the provision of baths, and it was pointed out that there would be a wonderful economy in the consumption of coal. We had this Report before a local committee in my district, where we have the spirit of co-ordination because we have a joint committee dealing with the gas and electricity supply. Our gas manager and electric engineer, together with the chairman, who is an expert on these matters, produced a report which has not been controverted, but I think rather confirmed. They pointed out that for every ton of coal used in the ordinary small artisan's house for heating or by gas fires, you would have to carbonise four tons of coal in order to get the equivalent amount of electrical energy for domestic heating and domestic cooking. We give that as a rock-bottom figure, and if the other figures in the estimate are no more reliable than that I have referred to, possibly some of the advice we are receiving from experts is not altogether to be depended upon. I notice that in the "Edinburgh Review" for January a writer arrived at a similar decision in a different way. He pointed out that for every 100 units expended in 1676 the production of electricity you only get an efficiency of 13 per cent., and for every 100 units used for gas fires, which is the most economical method of heating, you get an efficiency of 50 per cent., thus showing a difference of four times greater efficiency and economy in the consumption of coal by direct heating rather than by electric heating and cooking. We can check some of these things, but we cannot check all the wonderful details of the technical points which are put before us. We do know the soundness of the position of having democratic control where public money is spent, and why should we scrap all our preconceived theories and principles which have worked so well, and give over control to these district boards which are not to be popularly elected, and over which this House will have no direct control, and over which no public authority will have any direct influence. May I ask the Government whether they have taken provisions against the exploitation of the money of the taxpayers in the case of private companies who may want to unload a certain amount of capital stock in plant which has become obsolete? I do not say that this is so for one moment, but I do say that under the provisions of the Bill, by taking the price on the basis of the capital amount that has been spent on generating plant and paying that to the private company, you may find, owing to those wonderful developments in electricity to which the Home Secretary referred, that what was a modern plant ten years ago is not so today, and that you may be unloading on to the Treasury and the taxpayer plant which is obsolete and no good for the modern production of electrical energy.
§ 7.0 P.M.
§ I know we shall be told that we shall have the Electricity Commissioners to guide us. But who are these Commissioners going to be, and who is it that is behind all this? Who has been at the back of these Reports—the Coal Conservation Report and the Electric Supply Committee Report? Who is pulling the strings, and who is making the Government dance to the tune? We want to be very careful lest we find that these power companies which, as the hon. Member who spoke last knows full well, we on the North-East Coast have been up against over and over again, are behind this, striving to get the best they can, and rightly, for their shareholders and investors; and we, in the interests of public and of national economy, must see that we 1677 are not loaded with many plants which are of no use, and which are palmed off on the Government, because they have followed too closely the wonderful expert advice which these electrical engineers have given. I submit that we have reason to be suspicious when we find that the means of direct public control are taken away from this House, and I hope, whatever may be done to-day, that at any rate, in Committee, the Government will see that safeguards are inserted whereby we shall go back to the sound principles of democratic control, under which public money is spent and national service is rendered in the interests of the community and not of the private owner.
§ Mr. SHORTT
As I understand this Amendment, it is based upon a suggestion that this Bill proposes to take away from local authorities the local powers which they possess in their own localities, and which they were popularly elected to carry out, and transfer those powers to some body which is not only not elected, but is under no form of control, democratic or otherwise, direct or otherwise, and that therefore, on this ground, this is a reactionary measure. I propose to deal with the Amendment, pure and simple, and I am quite sure that my hon. Friend who seconded it will not think me at all discourteous if I do not deal with the large number of what I might call Committee details which he very properly dealt with, but which were not quite pertinent to this Amendment. Let me, first of all, attempt to remove a misapprehension, under which both the Mover and Seconder of the Amendment seem to labour, namely, that there is any difference between an authorised undertaker which happens to be a private company and an authorised undertaker which happens to be a local authority. They are identically on the same footing and are treated identically in the same way, and for this very proper and right reason, that although the local authority, which happens to be an electrical undertaker, is an undertaker, and is popularly elected, and comes into existence with a different personnel from time to time, it is none the less a trader in its undertaking, just as much as a private company. It generates electricity in order to sell it. A private company generates its electricity in order to sell it. The profits are derived, not from the generation of the electricity, but from the distribution and sale of it. The profits come from the sale, 1678 and, so far as the profits are concerned, and so far as the control of the supply to the consumer is concerned, they will remain with the local authorities; the electors will have it. They are not concerned so much with the generating station as with the distribution of the power they wish to use, whether for lighting, heating, cooking, or whatever it may be. What they are concerned about is getting the power to their own places. The mere generating stations does not affect the power of the local authorities either to control the price, the security, or the efficiency of the supply, or any of those things. With regard to leasing a generating station to a power company, if you have a particularly efficient local authority, there is the same power to lease it to-day as to a private company; there is not the slightest difference.
Do I understand the right hon. Gentleman that in the area I was speaking of it would be possible under the Bill to take the generating undertaking of the supply company and to lease it to the local authority?
§ Mr. SHORTT
It would be perfectly possible if the local authority or any local authority had the power to take a lease. Of course, it might be ultra vires for a local authority to take a lease at all, but so far as this Bill is concerned, assuming that the local authority had the power to take a lease, it could be leased to them as well as any other body.
§ Sir E. CARSON
Who would be responsible in the case of these local authorities if there were inefficient or deficient electric light?
§ Mr. SHORTT
Does my right hon. and learned Friend mean by the local authorities the district boards?
§ Sir E. CARSON
No, I mean where there is a corporation in a large town supplying the light. As I understand it, from your statement, the generation of the light itself, the manufacture of it in fact, would remain with these district boards which you are setting up, and the distribution would remain with the corporation. If the light is inefficient or deficient, who would be responsible?
§ Mr. SHORTT
Take the corporation in which my right hon. and learned Friend is most interested. Suppose the district board which included Belfast in its area supplied Belfast Corporation in bulk. If the failure of the electric light were due 1679 to something in the bulk, the district board would be responsible, but if it were, due to failure in dealing with the bulk then it would be the corporation. That is the position which exists in many places to-day. There are many local authorities which have the power to supply electric light and electric power which have given up generating their own supply and purchase in bulk from others. Every one of them has the power to do that. There is nothing new in that; it is a well recognised system.
§ Sir E. CARSON
I do not think my right hon. and learned Friend quite understands my point. What I would like to ask him is what control would the constituents of the corporation have in such a. case as I have put?
§ Mr. SHORTT
If the fault were the fault of the Belfast Corporation that control would be at the next election.
§ Mr. SHORTT
But in the case of the other they would have to go and take their complaint to the headquarters and deal with the district board. Eventually they would get to the Board of Trade, and after the Board of Trade to Parliament. The democratic control which my hon. Friends who moved and seconded this Amendment say is absent, is not absent at all. These district boards are under the direct control of the Electricity Commissioners, who are under the control of the Board of Trade, which is under the control of Parliament. You have the same power of dealing with them as you have of dealing with any people who are under the control of a Government Department. That is the position as far as control is concerned. If you have a district which has to rely for its light or its heating upon a private company you have no local control. If anything goes wrong you can only complain; there is no control, over private companies, of an electoral character at all.
§ Mr. G. BALFOUR
Is it not the case that under the Electric Lighting Acts there are very stringent regulations for the control of private supply companies?
§ Mr. SHORTT
That is not Parliamentary control, but the control of the Law Courts. You have the control of the Law Courts everywhere. If a man contracts to supply you with proper stuff and he does 1680 not do it, you have always got that control, but there is no Parliamentary control.
§ Mr. SHORTT
The municipality? The Newcastle Corporation has no control over the Tyneside Supply Company. Not an iota. They simply have to rely on the Law Courts like anybody else, and if the Tyneside Company contract to sell the Newcastle Corporation a certain quantity of electric power and they do not do it, the corporation has no electoral control over them, but just the power of one ordinary individual over another. The private companies are just as much under control as that. Let us just consider the question of how far it is possible to put these local district boards under any form of locally-elected control, because that is what I understand is required. They want to seize this opportunity of putting the whole of the generating of electricity instead of only half of it under the control of bodies which are locally elected and controlled. That is what it comes to. They are not all so at present, but if they had their way it would mean that the whole of them would be so. Just consider what the position is. I think the House agreed with me when I spoke on the Second Reading and said the geographical areas as we know them for local government purposes are out of the question as areas for the distribution of electricity. There is no single or no combination of local government or Parliamentary electoral areas which are at all possible for the areas of distribution of electricity. You have to have first of all an inquiry by the Electricity Commissioners, who will then fix what are proper and convenient areas, not having regard to the electorate or the constituencies, but having regard to the provision and distribution of electric power. You would, first of all, under this Bill have to find out what your area was going to be, then when you had found that out you would have to bring in a Bill for each area to constitute each into an electoral area and give it power to hold elections for the purpose of electing this body to settle what the constituencies shall be and what the franchise shall be.
You would require an Act of Parliament for every single area unless you dealt with all your areas at once, and if you did not do that you would have to wait till every area in the country was settled before you 1681 could bring in a Bill in order to settle the whole country. Suppose it turned out that an area required revision, or that three areas were to be combined later as more convenient under an arrangement together. Besides, you cannot always insist upon having locally elected bodies dealing with their own local corner of what is really a national thing. You can insist upon a local body, on some detail which is purely local, having their own local control. But take railways, roads, and things of that kind, which are local in a sense, but which are equally in a still greater sense national. Supposing every local authority made up its mind that it must have control of that portion of the great main lines of railway that went through its district. The thing would be absolutely impossible, and it is the same thing with electricity, which is as much a matter of through transport as are the railways and the roads. Electricity is much more national than local. It has its local aspects, and for those purposes you get what possible help you can from local people and you put as far as possible control in the hands of local people, but you must always recollect the national elements in a great subject of this kind, and if what the Amendment suggests ought to be done were done, it would mean that you would just go back to your old conditions. Each local authority would consider itself absolutely free to disregard the great general policy of the country which the Electricity Commissioners and the Board of Trade would lay down, or the Ministry of Ways and Communications if it came into existence. You would have them interfering with the national policy, and that would wreck the whole object of this Bill. I hope my hon. Friends, who, I know, are only anxious to assist to make the Bill a good one, will not press this Amendment, because it is based upon wrong conceptions of what the Bill is and of what is possible under the Bill. The Bill merely takes away from any local undertaking, be they a private company or be they a locally-elected authority, that portion of the undertaking which is absolutely essential to a great national policy. It takes away that portion which must, if it is to be effective, be regulated and controlled from one central headquarters. It leaves undisturbed all that is local, and any local control that the local authorities have to-day over the distribution of electric power they will still possess. Anything which is purely local as that is they will still maintain under the Bill, and all 1682 that they can possibly lose is that which is essential for a great national policy, for a great national industry, and which must, if that national industry is to be successful and efficient, be put under a central body.
§ Mr. NEAL
I, like the two hon. Members who have last addressed the House, may claim somewhat to speak on behalf of local authorities, but I cannot support the Amendment. I realise that it is quite impossible to manage a national scheme by municipalities. The municipalities are not co-terminous, and there are some eighteen hundred local authorities in the land, and it is quite impossible so to split up representation as to make district boards, possibly sixteen or twenty in number, in any way representative of the municipal undertakings. At the same time, I hope that in Committee it may be found possible so to shape Amendments as to give a predominant vote on district boards to those who have no trade interests to further and who are the representatives of local authorities. I want, from the point of view of such authorities, to call attention to what I think is a much more grave matter in this Bill, and that is the method of buying out the undertakings which they have created. The scheme for dealing with that is contained in Section 7 of the Bill, and I congratulate someone, I do not know whom, upon the ingenuity with which they have framed that scheme. The district boards are to have the right to appropriate the undertakings of the local authorities as well as the undertakings of other authorised persons, but the mode of payment is totally different and, I venture to suggest, only needs consideration to be seen as so absolutely unjust that I cannot think it possible to get any Committee of the House to approve of it at all. If hon. Members look at the scheme contained in Clause 7, they will find that the obligation to pay the local authority is ascertained in this way. The Electricity Commissioners are to appoint an auditor. The local authorities will have nothing to say in the appointment of that auditor, who is not to be an arbitrator. There is nothing provided as to how he shall arrive at his result, but in the result he is to give a certificate. It may be an absolutely ex parte certificate, and that certificate is to determine, not the price to be paid for the undertaking, but the amount of an annuity to be paid to the local authority, based upon its obligation in respect of its outstanding loans.
1683 First, I cannot conceive of such a measure being attempted with any business undertaking in this land. What business man would be asked to accept the certificate of some unknown auditor, in whose selection he had had no rights and before whom he had no right of appearance, and as a result to accept payment for his business? But the objection goes deeper than that. He has to accept payment for his outstanding loan, because that is what it comes to, and what does that mean? It means that the business which is old-established and which has already defrayed a good deal of its capital expenditure is to lose that absolutely. The authority which has in the past adopted the method of taking every copper that could be taken out of its undertaking in relief of rates is to be placed preferentially as against the authority which, like the one I have the honour to be a member of in my own Constituency, adopted this policy—and I have had some little responsibility for it—of saying: "We will not take a single copper out of the electric undertaking of the city. We will plough it all in as a fertiliser—to use an agricultural metaphor, and we will secure by conservative finance that we have got an undertaking that is absolutely sound and profitable." It is suggested that you are to buy out at the amount of the outstanding debt. I have a good many clients who would be quite willing to dispose of their business on the terms that somebody should pay their liabilities, but I can imagine that somebody may have a client who, when he is approached for the sale of his business and told, "We will pay you the amount of your outstanding liabilities," says, "I have not got any outstanding liabilities," and the buyer says, "Never mind; we will take over your business then." I cannot conceive that any real consideration has been given to the financial aspect of the matter, and I venture to suggest that there is a grave differentiation between local authorities and private undertakings. I understood the Home Secretary to say there was no differentiation, but if hon. Members will turn to the remainder of Clause 7 they will see that the private undertaker is bought out upon the true value of his undertaking, but the public authority has taken from it all its capital. May I give a direct illustration? In the city of Sheffield we have, according to our last electricity accounts, paid over already towards capital expenditure 1684 over £703,000. We have set aside reserves amounting to well over £100,000 more. That is to say that we have invested in that undertaking over £800,000 to-day, for which we should not get one penny piece from the Government under Clause 7 of this Bill. I suggest that if the Government wish to take over the undertakings of public authorities the least they can do is to take them over at their fair market value, that where the local authority has been prudent in its management, has been economical, has been thrifty, it shall not be penalised by the fact that it is to be taken over.
There are one or two other criticisms I would like to make before I sit down. First, it does not seem to me that the element of cost is by any means the only element to take into account. What the object of the Government, I take it is, is to make electricity universally applicable throughout the length and breadth of the land. Second, there can be no doubt that apart from the question of direct cost it would be a great boon and advantage, particularly to such cities as the one I represent, if we could get rid of the smoke-laden atmosphere, and there would be a great saving in public health in that way. Next, I would like to point out what I think was, if I may say so respectfully, the fallacy underlying the argument of the hon. Member for Hampstead (Mr. G. Balfour) who opened this discussion, that there is any comparison whatever to be drawn between the cost of motive power and the total turnover. It would be a good deal sounder if he had limited his comparison to the cost of the motive power and the cost of production. But even so that does not complete it, because what one would want in order to complete the comparison would be a comparison of relative cost between that motive power and some other motive power, and so I suggest there is not very much in that. The only other point which I desire to make is the question under which Minister this undertaking should be placed. Section 44suggests that the undertaking shall be handed over to the Minister of Ways and Communications. May I remind the House that when the Ways and Communications Bill was introduced, not only did the right hon. Member for Cambridge (Sir E Geddes) make a statement in the nature of a confession, that he had had some doubts at first upon the matter, in fact, that he thought the Board of Trade was appro- 1685 priate, but the Leader of the House came to the same conclusion and that somebody persuaded him otherwise. We had some figures from the right hon. Gentleman the Member for Cambridge, and at the present time, if the matter were in his control, only 10 per cent. of the electricity generated could be used for transport purposes, and the highest possible point he puts it at is 20 per cent., though that figure must be somewhat speculative, because we cannot possibly tell to what extent industry and other sources of use of this great potency will grow in future. But what is suggested is that you shall hand over to the Minister of Ways and Communications the control of the vitalising force of commerce and take it away from the Board of Trade, or the Ministry of Commerce of which we hear. I trust that that matter will receive very careful consideration when this Bill goes into Committee. To conclude, I wish very respectfully to add my congratulations to the Government that in this first Session of the new Parliament they have had the courage and the industry to introduce so many measures of first-rate importance, which I trust may be for the lasting prosperity of the land.
§ Sir F. BANBURY
There have been very many interesting speeches made this afternoon, but I think with one exception—that of the right hon. Member for Moray and Nairn (Sir A. Williamson)—they have all been against the Second Reading of the Bill. It is quite true that a good many who have spoken began, their speeches by saying they were in favour of the principle of the Bill, but when they had gone a little further we found their arguments entirely against the provisions of the Bill, and therefore against the principle. The right hon. Gentleman the Member for Nairn told us that evidence was brought before the Committee over which he presided that the condition of electricity was unsatisfactory. I should not like to contradict the right hon. Gentleman, as he was a member of the Committee and I was not, but what I should like to ask him is this: Supposing the condition of electricity was unsatisfactory at the moment the Committee was sitting, what guarantee have we that it is going to be made better by this Bill? According to the Scriptures, "By their fruits ye shall know them." What are the fruits by which we know Government control and management of undertakings? I think if the right hon. Gentleman had 1686 presided over a Commission on the telephone system prior to the Government taking it over, he might have come to the conclusion that the service was not altogether satisfactory. So far as I can remember, there was strong complaint about that service. But I venture to say that if he were to preside over a Commission now, the evidence would prove that the service was far more unsatisfactory since it was taken over by the Government than before. Then there is the Post Office. From a financial point of view, has that been a very satisfactorily managed undertaking? We heard only a few days ago, I think in answer to a supplementary question, that the Post Office was practically bankrupt. Therefore, as I said before, "By their fruits ye shall know them." Can the right hon. Gentleman point to any undertaking which has been managed by Government officials, during the War, for instance, whch has been successful from an economical standpoint, or which has produced articles cheaply and efficiently? It may be said that this is not going to be entirely managed by the Government, but that it is going to be managed by boards set up by the Government.
Take the London Water Board. Has that been a very successful undertaking from the point of view of cheapness? We know perfectly well that the London Water Board gave a price to the companies which was based upon the dividends which the companies were earning at that time, without any payment for goodwill of the future income. We were told how the Board's directorates would be abolished and the different managers of the company abolished, and this wonderful Board would be concentrated in one office, and there would be a great saving. What has been the result? The same result that will always ensue from Government control—increased expenditure and diminished efficiency. When I ventured to interrupt the right hon. Gentleman as he was speaking, to ask where the cheapness was to come from, he said, "From the abandonment of profit."
§ Sir A. WILLIAMSON
I said that the cheapness would come from co-operation in generation, as well as the absence of profit. I would also point out the great advantages that will come to London from the amalgamation of all the docks.
§ Sir F. BANBURY
The docks, I might point out to the right hon. Gentleman, as 1687 I think he knows perfectly well, raised their charges, and their efficiency has arisen because the private companies were not allowed to raise their, charges. I am obliged to the right hon. Gentleman for the interruption. That is exactly what will happen when these electricity boards are set up. They will find that they will have to raise their charges in order to provide for the more expensive management—I will not call it by any other name—which results from Government control or from control by selected bodies. The Home Secretary suggested that it was impossible to meet the Movers of the Amendment, and, I think, if I may venture to say so, the Home Secretary is right; but I would suggest to him a method by which he could meet the suggestion of those hon. Gentlemen. It is a very simple method, and one which I hope will commend itself to the House as a whole, and that is, by abandoning the Bill. Then the control will remain in the hands of those hon. Gentlemen opposite who have shown by their speeches the great knowledge they have of the subject before the House, and the wonderful way in which the corporation referred to by the hon. Gentleman opposite—I am not quite sure that every corporation has been quite so successful—has reduced the charges upon the generating station. There was a point made by the Home Secretary with which I am thoroughly at one. I cannot say I readily believe in all these wonderful results that are going to happen. I do not believe you are going to have in country cottages the shepherd coming home, tired at night, and turning on his electricity and cooking his dinner, or turning on his electricity and finding a hot bath, and only having to pay his 3d. a year. I do not believe all that. I am not an expert, but I have heard all that sort of thing so often, and it never happens.
But I would ask the Home Secretary this: I understood him to say that profits do not come from the generating station, but they come from the distribution. I do not pretend to be an expert, but, as I understand it, the generating station is the place where the article is manufactured which is afterwards sold to the consumer. Take a homely illustration. A baker's generating station is his shop, where he collects the material which he makes into bread. Would the right hon. Gentleman say that the baker's profit does not come from the generating station— 1688 the baking of the bread in his shop—but that it comes from driving the cart by the boy who delivers the bread to the consumer in the neighbourhood? Because, so far as I understand it, that is the effect of the right hon. Gentleman's argument. It seems to me that, having once got control of the generating station, then the control is in the hands of these boards. There was a very interesting question by an hon. Member, namely, how, if there were a deficiency in the distribution, the consumer could find a remedy? And he was told it would be against the consumer, but that if there were a deficiency in the generating station it would be against the Government or against a particular somebody, or a particular somebody else, and—rather like the house that Jack built—eventually you would get up to the Board of Trade. Having got up to the Board of Trade, I do not see anything in this Bill—I may be wrong, for I read it somewhat hurriedly—providing that the Board of Trade under this Bill can be treated in any kind of way different from any other Government Department. Therefore, as far as I know, you would have to get a petition of right before you could approach the Board of Trade, in the same way as De Keyser's Hotel got a petition of right. Who is going through all these formalities before you get at the Board of Trade?
The right hon. Gentleman talked about the electrification of the railways. There is no doubt that the electrification of the suburban services, especially if they are in tubes and underground, but suburban services where there are a large number of passengers during the greater part of the day, has been successful. But whether or not the electrification of a main line is going to be successful is another pair of shoes altogether. Has the right hon. Gentleman ever thought of the enormous cost which would have to be provided for if the electrification of a main line were to take place? If we were starting a railway afresh it might be a better thing to electrify it, but, as we have not electrified it, and as we have got all the existing plant, to scrap all that plant on a big main line is going to cost a very large sum of money. The right hon. Gentleman did rather raise a note of warning when he said it must not be supposed that all these profits are going to ensue at once. If you want to be successful in business, you must look ahead, he said, and expect a loss for a period. I think the country will find that for a very long period there 1689 will be a loss, and I think it will prove that, having looked ahead, you have looked ahead wrong, and that you will never recover the enormous amount of money you have spent on these undertakings.
§ Sir A. WILLIAMSON
I do not think I said the business as a whole would be involved in loss. I said that when you instituted a new generating station it might cost a large sum of money, and it might be some years before the user could return a profit on that station.
§ Sir F. BANBURY
I do not think that is against what I said, because the electrification of the main lines of a railway would be a new service. Then, of course, the chief advantage of electrifying a railway is that you can run so many more trains in the hour. I do not know whether that will be a very great advantage upon a main line service going long distances. Therefore, the advantages which occur on a short suburban service would not accrue. There is only one other question which I should like to mention, and that is this. I am on the Committee which is dealing with the Ways and Communications Bill. My recollection is that there was a Clause in that Bill dealing with electricity, and giving the Government somewhat similar powers to this Bill. That Clause was dropped out, I presume, because it was thought it would not be possible to give the control of electricity to the Minister who was going to control the Ways and Communications.
§ Mr. SHORTT
I would like to remind the right hon. Baronet that that was the very reason it was not put in.
§ Sir F. BANBURY
Not being an Irishman, I do not think I quite understand that, but doubtless my right hon. and learned Friend learnt a good deal when he was Irish Secretary. However that may be, I do not want to go into the reason. I merely state the fact that there was a Clause in the Ways and Communications Bill which was abandoned. There is another Bill which is being brought in which will have the effect of restoring that Clause to the Ways and Communications Bill. By this Bill the Minister of Ways and Communications will become the Minister under this Bill. I see hon. Members who are on the Committee, and I think they will agree that I am right in saying that that will be the effect of the Bill. Well, I do not think that is the right thing to do. I think the Government ought 1690 to wait. Surely they have quite enough to do at the present time! After all, these are far-reaching schemes, which are going to make a new heaven and a new earth! Let us see how some of them are going to work out. Do not let us be in such a hurry. The right hon. Gentleman (Sir A. Williamson) has been, I understand, very successful in all his business undertakings, and that was possibly because he did not undertake too many things at once. A good business man does not endeavour to do too much at a time, but to work within his scope and powers. I venture to say the Government are going outside the scope of their powers and endeavouring to do a great deal too much, and the House of Commons is beginning to feel it. I would put that point to hon. Members who have been sitting on Committees upstairs, and are somewhat weary. It is supposed that hon. Members are going to alter this Bill in Committee. Who is going to do it? And where is the time to come from? We are much more likely, if we pass the Second Reading of this Bill, after sending it to Committee upstairs, to find that the Members, who cannot be in more than two places at once—though they are expected to do so at the present time—do not attend, and that the Bill is not properly considered. The result will be not only disastrous to the Government—about which I am not so much concerned—but for the country, about which I am concerned. I sincerely trust that the hon. Gentleman who moved the Amendment will press it to a Division.
§ Question put, "That the words proposed to be left out stand part of the Question."
§ The House proceeded to a Division.
§ Lord Edmund Talbot and Mr. Dudley Ward were appointed Tellers for the Ayes, and Sir F. Banbury was appointed Teller for the Noes; but no Member being willing to act as the second Teller for the Noes, Mr. Speaker declared that the "Ayes" had it.
§ Bill read a second time, and committed to a Standing Committee.