HC Deb 08 June 1920 vol 130 cc350-61

Postponed Proceeding resumed on consideration of Order for Second Reading.


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


On a point of Order. I wish to point out to you, Mr. Deputy-Speaker, that we are now interposing another Order in the order of our Debate to-day.

Mr. DEPUTY-SPEAKER (Sir E. Cornwall)

The hon. Member, I presume, will resume his speech.


This point was raised before in the Debate.


May I point out that these things are done by arrangement, and the arrangement between the official sides of the House was that if the Edinburgh Boundaries Bill did not take from 8.15 to 11 o'clock we were to continue the Debate on the Agriculture Bill. That arrangement was made this afternoon, and we were to continue the discussion tomorrow on the Agriculture Bill, and not go on with the Gas Regulation Bill. Many hon. Members interested in the latter Bill do not know that it is being taken now, and they are away on the ground that we are only taking private business. I submit that unless there is some substantial reason for interposing a new Bill now this measure ought not to be proceeded with.


The Agriculture Bill is not even on the Order Paper, and therefore it does not arise.


I would like to refer to what the hon. Member for East Edinburgh has said.


I think it would be better not to, because it is not on the Order Paper.


This Bill, the Second Reading of which I am now moving, is being taken in accordance with an arrangement made last night, an account of which is printed in the OFFICIAL REPORT. It is a measure introduced in response to a great many appeals from gas companies and in accordance with the promise made by the late President of the Board of Trade (Sir Auckland Geddes) that he would carry out the recommendations of the Fuel Research Board with regard to economy of coal in so far as gas is concerned.

The Report of the Fuel Research Board concerning gas may be summarised as follows:—

That the standard for charge should be by thermal units instead of cubic feet. The unit of charge to be a therm, that is, 100,000 thermal units. A thermal unit is the amount of heat required to raise 1 lb. of water 1 degree Fahrenheit.

That there should be a test by standardised machinery recognised by the Board of Trade. At present these are only made after due notice has been given to the undertakers.

That the gas should contain no sulphuretted hydrogen and that there should be a limit to inert or incombustible constituents.

That the undertakers must declare the calorific value they undertake to supply and give notice of any change in calorific value in a manner which will allow the consumers an opportunity of stating their objections, and in the event of such change the undertakers must provide for the replacement or adjustment of appliances.

Lastly that the pressure shall be two inches on any main.

Those are the recommendations of the Fuel Research Board and every one of them is being carried out in one or other section of this Bill. It refers to gas undertakings carried on both by local authorities and statutory companies. There are 831 of these undertakings, of which 312 are carried on by local authority, and there is £140,000,000 of capital concerned. These companies are subject to certain restrictions and they have to fulfil certain obligations. The cost of fulfilling those obligations has, owing to the increase in the cost of coal and the increase in wages and general expenses, enormously increased since the period before the War, and although there was during the War a Bill carried allowing increased charges (50 per cent. in the case of local authorities), it was only a temporary measure for two years. I think everybody will agree that the conditions now are entirely different from those prevailing at the time when the companies were set up. The same obligations still rest upon them, but the cost of carrying them out is doubled, and it was manifestly unjust that they should be subject to the same restrictions, although their obligations have so enormously increased. It is also necessary that confidence should be restored in order that they may get the capital required to carry out their duty. It is necessary that some kind of permanence should exist. This Bill gives the Board of Trade power not only to alter the standard from one of cubic feet to one of calorific value, but also to enable the authorities to increase their charges proportionately to what the increase of expense has been since the beginning of the War. The effect will be that they will have the same profit-earning capacity as they had before the War, and those who worked under a sliding scale will still work under that scale, which regulates the amount of dividend they pay above the standard by the cheapness of the gas they sell, a most excellent system if it existed for the benefit of the consumer in a great many other industries there could be no profiteering. Another provision is that three Gas Referees shall be appointed by the Board of Trade and one Chief Gas Examiner. Local gas examiners will be appointed by local authorities. They will have decisions to take, and if their deci- sions are appealed against the appeal will be heard by the Chief Gas Examiner.

The expense of carrying out these examinations and tests, and of keeping accounts, will be borne from a fund to be raised by a levy on the greater undertakings. Under the Bill no concern which does not produce over one hundred million cubic feet of gas in a year will be subject to the levy. I am informed that that covers practically 90 per cent. of the gas that is used in this country. They will be subject to such a levy as is necessary for the carrying out of this work. There is to be an advance by the Treasury, but it will not be an ultimate charge on the Treasury; it is only an advance to pay expenses until the levy is raised and until arrangements have been made to make the system self-supporting. The rest of the Bill contains Clauses as to penalties and enabling certain things to be done by special order which were previously done by Provisional Order. There are also general provisions as to fees, as to the standardisation of tests, the standardisation of the machinery by which the tests are to be carried out, and as to accounts and rules. It is not necessary for me to say more about the details of the Bill. In the correspondence I have received, it seems to be generally admitted that this is a fair Measure. The criticisms have been aimed not at the main provisions of the Bill, but at details which can be discussed in Committee. The Government are perfectly prepared to listen with impartiality to any criticisms that may be made in Committee. I believe the general opinion of the House is strongly in favour of the Bill having a Second Reading, and I hope it will get it to-night. The situation in the gas industry is a very uncomfortable one at the present moment. A strike is threatened in the industry, and the only possible way of being able to pay higher wages will be by some such Measure as this. Unless the companies are enabled to get a reasonable economic price for what they produce they cannot meet the demand for higher wages now being made upon them. I hope that the Bill will be read a Second time to-night, and that in Committee we shall meet with the same kindly criticism which has reached me in the correspondence I have had on the subject.

10.0 P.M.


I desire to take this opportunity of supporting the Second Reading, while reserving my criticisms as to details for the Committee stage. This is an industry which is, I suppose, in a quite unique position as compared with any other important national industry in this country. Those early statutory provisions which reduced the dividends as the prices charged increased and increased dividends as the charges to the consumer fell, were no doubt most excellent provisions for the period when they were made, and had they not existed during the War it might have been necessary to have a fixed maximum price. But I must candidly say that I know of no industry that has been so handicapped by reason of those very statutes as the gas industry. We have had constant increases in the cost of coal, with corresponding reductions in the value of the by-products. That has now reached a point when dividends are at a low minimum, and development, so far as the companies are concerned, is out of the question, because they cannot attract new investors. There is another and perhaps equally serious side to the picture, which I want particularly to mention in supporting the Bill. The hon. Gentleman said that the gas industry is at the moment in a very serious condition because of a threatened dispute. Recently the Press have been asking why it is that Government Departments allow a long period to elapse before they intervene. During the past three or four months these negotiations have been going on, and they say, "Let the public know really whether these wage demands are reasonable. If they are, they should be met. Can the undertakings afford to pay? If they cannot, let us know why." There is truth in both those statements. The gas worker, the by-product man, the man engaged in distribution, have at the moment actually anything from 6s. to 10s. less of war-time advances than the lowest of the national awards yet conceded. Their conditions generally as regards week-end overtime—they are seven-shifts-a-week men; they work right through the seven days—are worse by far than in almost any other industry. When we appeal for equal treatment nationally for these men with that under the Engineering and Shipbuilding National Awards during the period of the War and up to the present moment, we are told by the companies that, if this is forced, it means cracking up the companies altogether, because they cannot pay without going into the Bankruptcy Court. On the other hand, there is the point of view of the men who are called upon to face the heat of the retort-house, with regard to which I heard a well-known reformer say that he would as lief take a brief passage through a much warmer place which is frequently mentioned, as remain for eight hours in a retort-house. They have to face this excessive heat, great strain, and also all the increases in the cost of living. The men say, "Why should we be called upon to pay these extra charges, and yet be restricted as far as our wage returns are concerned, because the companies work under Acts of Parliament, and cannot charge for that which they produce a sufficient economic rate to enable them to give reasonable wages to those whom they employ and a fair profit to themselves. Whilst giving this Bill a Second Reading cannot prevent notices going in on Saturday, or on Monday at the latest, I do hope that special facilities will be given to it, that it will have a quick passage through Committee, will come down again for Third reading, and finally pass into law, so that some arrangement may be made before the 26th June to prevent, firstly, a national stoppage in an important industry upon which manufacture mainly depends in many areas, and also the possibility of that spreading into the twin industry of electricity, and so causing serious trouble, because of the hardships inflicted both upon the employés and upon the companies by these restrictive Acts of Parliament, which have retarded progress in this very important national industry.


I can quite understand that the hon. Gentleman desires to get the Second Reading to-night, but I am sure he does not deprecate entirely any discussion whatever upon the Second Reading. It appears to me that it is rather an extraordinary thing for a measure of this importance, and it is one of vast importance, should be expected to pass through the House without any hon. Member being permitted to say a word upon it. It is one of a whole series of measures to which the House has been giving its sanction, measures dealing with all the great undertakings in the country which are under statutory limitations, and measures dealing with tramways, ports, docks and harbours, and now we come to one dealing with gas undertakings, and I have no doubt before long we shall have one dealing with water undertakings. Everyone in the House, whether he sits on this or that side of the House, recognises that all undertakings which are under statutory limitations are at present passing through a period of very great difficulty. They are restricted in their charges. They are not restricted in the increased costs to which they are subjected and they are all in a very critical financial condition, and that leads to very great difficulty in dealing with the authorities who are running the undertakings and the workmen who are employed, and I am sure every hon. Member is willing that these undertakings shall be extricated from that position. I have not risen to speak in any degree in opposition to such a proceeding, but I am entitled to point out that in this Bill the Government is proceeding to treat these gas undertakings differently from the way in which it has been treating other undertakings. I think the Bill is an improvement upon some of the Bills we have had submitted to us. In the first place there is no distinction drawn between undertakings which belong to local authorities and those which do not. That distinction has been drawn in connection with tramway Bills and in regard to the Electricity Bill, and hon. Members on this side of the House have protested against the distinction. We thought all such undertakings, whether they belonged to local authorities or not, should be treated in the same manner and I am exceedingly glad to see that the Government has recognised that principle, and this is an indication, in a small measure perhaps, of what we have seen in very much larger matters and in more important directions, that principles advocated in this quarter of the House have eventually been adopted by the Government. I cannot imagine that they desire to treat one class of undertaking differently from another and we may therefore reasonably expect that this Bill indicates their intention to put all such undertakings, not only gas but tramway undertakings, belonging to local authorities on the same footing as those which do not. Then we have been told by the Minister in charge of the Bill that the intention is not to depart from the very admirable sliding scale arrangement which was instituted by Parliament in the past for the protection of the consumer of gas That sliding scale arrangement means that every increase in dividend must be accompanied by a reduction in the price of gas, and, as the hon. Gentleman (Mr. Bridgeman) pointed out, if a provision of that kind had been applied in a great many other directions, we should not have heard so much of profiteering as we have done. Every hon. Member will be glad to know that it is not the interest of the Government to depart from that. I do not know whether the House realises that this Bill purposes to do what in a great many other directions the House has resented and disapproved of, and that is to take the Parliamentary powers which it has exercised in the past and invest them in the President of the Board of Trade. I should like to ask why there has been a difference instituted in this Bill in that direction. All the other measures which have been put before us have been merely temporary measures in connection with tramways and docks and harbours, vesting in the responsible Minister for the time the power to make modifications in charges, and leaving it open at the end of a period of two years or more for these undertakings to come before Parliament in the ordinary way to present their Bills in order to make their charges permanent. In other words, power was taken from this House, and bestowed on the Minister simply for the period of emergency through which we were passing. Under this Bill all the powers which have been exercised through Parliamentary Committees in the past and through Provisional Orders confirmed by this House are removed from it and bestowed on the President of the Board of Trade, and a special order by the Board of Trade takes the place of Provisional Orders made and confirmed by this House. That appears to me to effect a policy which we may hope to see altered in Committee.

There is one other matter which is perhaps of greater importance. This Bill is in two parts. The first part deals with the modification of charges, and when it comes into operation it will relieve the gas companies and their employees from the very difficult situation in which they find themselves. Very little has been said about the second part of the Bill, which may prove to be the most important part of the Bill, and that is that a restriction is to be put upon the manufacture of gas, which may have very serious effects. It is a very technical matter, but it is an exceedingly important question. Up to the present time the manufacture of gas has been under certain restrictions. It was bound not to contain sulphurated hydrogen and there are other restrictions. On the whole it has been fairly satisfactory, but now there is a provision placed in the Bill that, in addition to these things, gas cannot be manufactured or sold which contains more than a certain proportion of inert matter, or in-combustibles. That may carry very little information and may make very little impression upon the layman, but those hon. Members who have received a pamphlet which has been circulated will, if they have given it any attention, have seen that, in the opinion of some very competent gas engineers, the effect of this restriction is going to be exceedingly serious. The effect of the contention in the pamphlet is that the restriction will prevent cheap gas being made. The argument that if this restriction is not inserted in the Bill it would be possible for the manufacture of gas to be continued in a way that would allow its sale to be made at one-third the cost that will be necessary under the conditions laid down in this Bill. That is a serious matter at the present time. The use of gas is a factor in the cost of living, and it is becoming an increasing factor. There is not a home in the country in which it is not used, and this House cannot regard with unconcern any proposal which any competent authority says will raise that cost by three times the amount.

So far as I can follow it, the real reason for this restriction is that it has direct relation to by-products. If this restriction is inserted the effect will be that it will ensure a considerable supply of coal tar, whereas if it is not inserted, and the process of manufacture of cheap gas is encouraged, the result will be that we shall not have the same amount of coal tar as a bye-product that otherwise we should get. I realise the importance of an adequate supply of coal tar. It forms the basis of the dye industry, and it is required for a great many other purposes, but the coal tar supply should not be secured at the expense of the ordinary gas consumer. We should have some provision by which if the Board of Trade are going to impose this restriction the domestic consumer may be protected. [HON. MEMBERS: "Agreed!"] There may be some Members of this House who are entirely indifferent to the interests of the ordinary consumer, but the point which I am making is one which affects the interests of the great mass of the people of this country. Those who use gas on a large scale in the great industrial works may adopt mechanical dilution and secure for themselves cheaper gas, but that is outside the power of the ordinary domestic consumer. The hon. Gentleman in charge of this Bill has expressed his willingness in Committee to consider and accept Amendments. I hope that the Government will be prepared to accept such Amendments as will permit gas to be manufactured in conditions which will ensure to the working classes of this country an abundant and plentiful supply.


I am sure that the House is glad to hear the hon. and gallant Member (Major Barnes) both on the subject of the taxation of War fortunes and the quality and price of gas. As a director of a gas company for something like 20 years, I endorse on behalf of the gas trade generally the action of the Government in having brought in this Bill. As regards the two points which have been referred to by the hon. and gallant Member, the powers which the Board of Trade will obtain of making Provisional Orders regulating the working of the gas trade are powers no larger than those which the Board of Trade already possess in regard to the mercantile marine. They are purely for testing the gas and seeing that it is of a certain quality, and protecting the consumer, and are confined entirely to certain administrative details of manufacture. The hon. and gallant Member referred to the limitations of air and other gases in the ordinary gas. That is a provision which possibly will have to be modified, but which will be dealt with fully in Committee, so that it need not be discussed at the moment. Broadly speaking, this Bill will substitute for the old-fashioned method of charging by volume the fairer and more honest method of charging by heat-power. The number of heat units in the gas will be the basis of charge. The old system was that, whatever the volume was, the charge was so much per cubic foot, whether the gas was good or bad. The new system will surely be a benefit to the consumer as well as to the manufacturer. As someone has spoken on behalf of the workers in the gas trade and another hon. Member has spoken largely on behalf of the consumer, I thought it my duty, on behalf of the gas trade generally, to say that the Bill is believed to be for the public benefit and that there is no objection to its general principles, subject, of course, to amendment in Committee.


I do not intend to go into the question whether gas should be made with air or air made with gas Those are Committee points. I agree with the hon. and gallant Gentleman opposite that a Bill of this importance, even if it does take 30 or 40 minutes of time, cannot be considered to have occupied an excessive amount of time. I understood, apparently wrongly, that the object of this Bill was to put the shareholders in a better position than they are in now; that owing to the great increase in the expense of making gas it was impossible to carry on the undertaking at a profit unless some measure of this sort was introduced. I understand that there is a dispute, of which I was unaware, between the gas workers and the gas companies, and that it is in order to give these men higher wages that the consumer has to pay more for his gas.


I am sure that my right hon. Friend does not wish to misrepresent me. I did say it was in order to give the companies the same profit-making opportunities that they had before the War. I said that the state of the gas industry was such that there was a strike threatened at the moment, and that it would be quite impossible—whether it was desirable or not I did not say—to raise wages if restrictions which may have been just before the War were retained.


The last thing I wish to do is to misrepresent my hon. Friend. I did hear the concluding remarks of his speech, and he did say that there was the threat of a strike, and that unless this Bill was passed there would be a strike.


No, I did not say that.


I understood that that was so. [HON. MEMBERS: "Agreed, agreed!"] I do not know why hon. Members are in such a hurry. If they want to go to bed let them go home. This is a proposal apparently to enable higher prices to be charged in order that some people may get higher wages, but that is a process which will have to come to an end some day. There is also under this Bill the proposed appointment of more officials. Why on earth cannot the Government bring in a Bill which does not appoint more officials? An hon. Member says they are not to be paid by the Government, but they have to be paid by somebody, and the fewer officials we have the better. There is always somebody to be appointed to interfere with somebody else's business, and I strongly object to that.

Bill accordingly read a Second time, and committed to a Standing Committee.