HC Deb 26 November 1919 vol 121 cc1847-52

Order for Third Reading read.

Motion made, and Question proposed, "That the Bill be now read the third time."—[Mr. Shortt.]


Before the House gives its assent to the Third Reading I desire to say a few words as one who has taken part in the discussions in this House and in Committee upstairs. As this Bill was introduced it was, in my judgment, and in the judgment of many others far more competent to judge, an exceedingly bad Bill. It was a bad Bill as regards the administrative machinery and as regards the treatment of the existing electricity authorities. I think it is a matter of general agreement and for general congratulation that the Bill has been enormously improved as it has passed through Committee and the Report stage. It has been improved in particular in three ways. In the first place, the district electricity board which, as this Bill left the House on Second Reading, constituted the main backbone of the measure, now remain in the Bill only as the last resort. Many of us think that is a great improvement. In the second place, the joint electricity authorities have now become the normal procedure which will be adopted for the working of the Act. That also seems to many of us a great improvement. In the third place, far more equitable terms have been secured for those who on the direct invitation of Parliament—this is a point on which I have more than once felt myself bound to insist—have invested their money in what were at that time very speculative undertakings. I do not think the House generally has quite appreciated the enormous debt which it owes and which the country owes to those who have been the pioneers in the elec- trical industry. They have invested very large sums of money in what was then a speculative industry, and the whole country is under a very great debt of obligation to them.

As the Bill left this House on Second Reading that debt was very inadequately recognised. Some of us while the Bill has been passing through Committee have fought very assiduously to obtain better terms for those original investors. As regards my own case, I have been actuated throughout solely by considerations of public policy. My own interest in the matter is absolutely negligible. I have always contended that a very important principle was involved in the Compensation Clauses of the Bill, and I rejoice that in that respect very considerable improvement has been effected.

Speaking on behalf of those members of all parties who have taken any part in the discussion, I may say that we tender our very grateful thanks to those members of the Government who have been in charge of the Bill. To the Home Secretary in particular, and to the Parliamentary Secretary to the Board of Trade, we owe a very great debt for the way in which they have met the representations made to them by the Committee and this House. I hope I shall not be out of order if at this point I express our grateful thanks to the hon. Member for the Ecclesall Division (Sir S. Roberts) who presided over the prolonged proceedings in Committee. That the Bill has become a reasonably good Bill Is in no small degree due to the geniality and tact with which the hon. Member for Sheffield presided over the Committee stage.

But though the Bill in its present form represents a very great improvement that is very far from saying that it is perfect. It seems to me to be very much the reverse. In my judgment it would have been very much better if no attempt had been made to set up the very elaborate machinery contained in this Bill. A far simpler Bill would have attained the same end with less friction and more effect. If instead of adopting the elaborate machinery which is contained in this Bill we had simply brought together representatives of the existing authorities: the municipalities, the power companies, and what are known as the Provisional Order companies, and discussed a friendly arrangement in regard to the future supply of electricity in this country I believe that some arrangement could have been arrived at with very little trouble which would have been satisfactory to all parties, and would have attained the end desired by all who have taken part in the discussion of this Bill— the securing for the country of a larger and cheaper supply of electricity. I hope and believe that it will come to this in the end, and that the amended provisions of this Bill will be worked and will have to be worked—and I regard that as a matter of good omen—by friendly and harmonious co-operation between the parties whom I have enumerated. But I should like to know why we only come to this in the end, why we should not on the contrary have started with it, and why we should have spent nineteen laborious days upstairs settling the details of this very elaborate and difficult machinery? No doubt those days were very educative to myself and other Members, but our education might have been Arrived at by other means with less trouble to ourselves and less expenditure of public time. I recognise that the Bill as it now stands is a very great improvement, and I congratulate the House and the Government on the result.


While associating myself with the declarations of the hon. Member opposite as to the attitude of those who were responsible for the piloting of the Bill I am afraid that I must raise a discordant note as to one or two of its provisions. I may be a voice crying in the wilderness, but I make a final appeal to the Government to reconsider two points which many of us feel to be a real blemish in this matter. One is that they have not sought to secure on the district boards the right of popular control. The second is that they have an extraordinary system of arriving at the values of undertakings which are to be taken over, values which are based rather on the question of the persons to whom the undertakings belong than on the character of the undertakings themselves. On the first point I would appeal to the Home Secretary that where you have public money, public interests, and public monopolies at stake, there you should have a basis of popular control. I have always understood that public control and public expenditure went together. It seems to me that this Government of all the talents has come to the conclusion that that point of democratic Government has to be overhrown. You have these district boards set up they acquire from various undertakers electricity generating stations and main transmission lines. The undertakers, whether they be municipalities, or private companies, are paid for the undertaking. Therefore, I submit that, as undertakers, they no longer have a claim to representation on the boards which have acquired their property. The same applies whether to a municipality or a private company. Certainly they have no claim to a majority of representation on the board.

The claim for public representation is not made because the authorised undertakings were in the hands of municipalities, but rather on the broad ground that as the public have monopoly rights and you have a public service those matters ought to be in the hands of a body which has at any rate a majority of popular representatives on it. As to that, the Bill provides no such principle. It provides machinery whereby in certain cases you may have the representatives of popular bodies in the majority. But that is a cardinal principle which ought to have been settled by this House. The majority of these undertakings are at present in the hands of local authorities which are democratically controlled, and it is more than possible when this Bill becomes law —there is no provision in the Bill to prevent it—you may have undertakings which are now in the hands of the local authority and under popular control handed over to boards on which there may not be a majority of popular representatives. That depends on the undertakers, and this is a principle which should not be agreed to.

On the question of compensation, I submit that it is a misfortune to set up two standards of value which vary not according to the work of the undertaking required, but depend upon the authority which happens to own the undertaking. You have the case of a local authority, when a generating station is transferred under the Bill, and the price to be paid for that is the worth, less depreciation. That is a perfectly sound basis, with which I think the majority of the House will agree, but when you come to the case of power companies Clause 12 says that when in addition to having taken the generating station they also require you to take their distributing system, the price to be paid for the generating station is cost without any regard to depreciation whatever. It is unfair to differentiate in this way between undertakings which are in themselves of the same class and to say that because one happens to belong to a power company therefore you ought to pay at a much higher level for it than for that which belongs to a municipality.

It has been said that the power companies, like the distributing companies, have not the protection of the 1888 Act, that they have a freehold, and we have no power to buy it out. I submit that the local authorities are in exactly the same position. They do not come under the 1888 Act. They have the same unrestricted right without any power over them, other than what this House has over power companies, of purchasing them, and they have as much a freehold as the power companies. It seems an extraordinary precedent that compensation is to be paid for an undertaking not on the worth of the undertaking, but on the question of the person to whom it belongs. If it belongs to a municipality and is attempting to give a public service without making profit, you pay one price, and if it belongs to a private company out, and rightly out, for profit, then you pay a higher price. A distinction of that sort gives occasion to unfriendly critics, who say that this is a House where capitalist interests dominate and the public are forgotten. I beg the Government to remove the possibility of such insinuations by making the basis of compensation the same for the municipality as for the power company.

5.0 P.M.


I was surprised to hear my hon. Friend putting the municipalities, with all their great duties and responsibilities, on the same level as a mere profit-making concern like a power company. Municipalities are using public money not for the purpose of making profit, but for providing electricity as cheaply and efficiently as possible for the people in their area. They are relieved of that duty, and they are assured that none of the capital expenditure will be lost, and if one public body buys from another and the second ensures the first against loss, that, surely, is not unfair ! But with regard to a company which has been allowed by Parliament to collect together the capital of private persons for profit making by providing electricity, surely they must be treated in a different way altogether! With regard to the question of public control, I would remind my hon. Friend that there is no public money in this at all. There is the money which is paid by the consumer for the electricity which it consumes, which in no proper sense is public money. Public money is money collected either by-taxes or rates, but the money which the district boards, the joint authority or whatever it may be, receive for the whole of their revenue comes from the sales of electricity. The Electricity Commissioners receive revenue from the contributions of every form of undertaker, whether district board, joint authority, or private undertaking. They are all contributing to the expenses of the Electricity Commissioners. There is no tax and no rate. Therefore, while I quite agree that, where public interests are concerned, public representation is essential, and is provided for in this Bill, and public control is necessary where you expend public money, public money is entirely absent from the provisions of the Bill which is before the House at present. I should, therefore, merely like to ask the House now to pass, the Third Beading of this Bill. I am very grateful for the kind words of the first speaker with regard to those of us who had charge of this Bill, and I may tell the House that, in my view, the work of the Committee on this Bill, at any rate, has shown what good work a Grand Committee can do. No one can admit more frankly than I do that the Bill has been greatly improved by the, whole-hearted assistance of members of the Committee during the nineteen days of our sitting. I do not pretend that it is perfect. It is a sound attempt to ensure for this country a cheap and efficient supply of power. Experience may show in days to come that the Bill requires amending, but at any rate it is now a sound basis for us to begin with. I therefore ask the House to give this Bill a Third Reading,

Bill accordingly read the third time, and passed.