ELECTRICITY (SUPPLY) BILL [Lords].

HC Deb 25 July 1922 vol 157 cc261-347

As amended (in the Standing Committee), considered.

NEW CLAUSE.—(Special provisions as to power companies.)

(1) The Electricity Commissioners may by the Order establishing a joint electricity authority, or after the establishment of a joint electricity authority by an Order made on the application of that authority, exclude from the area of supply of any power company, subject to such terms, conditions, and reservations as the Electricity Commisisoners may think fit—

1. (a) any part of that area in which any right of the power company to supply electricity is subject. to the absolute veto of some other authorised undertaker, and where the Order provides for or is made conditional on the transfer to the joint electricity authority of the generating station from which a supply of electricity is given to the part of the area in question;
2. (b) any part of that area which at the time of the local inquiry on the scheme to which the Order establishing the joint electricity authority gives effect, or, as the case may he, at the time of the application for the Order, is not being supplied by the power company, and which it appears to the Electricity Commissioners could be better served by the joint electricity authority themselves or by that authority acting through any authorised undertakers; and
3. (c) with the consent of the power company any other part of the area of supply of the power company;

and in any such case the Order may confer on the power company, subject to such conditions as the Electricity Commissioners may prescribe, power to supply electricity for all purposes in any other part of their area of supply which does not at the time form part of the area of supply of any authorised distributors.

Provided that where on the application of a joint electricity authority it is proposed to make such an Order (not being an Order made under Section seven of the principal Act), and the power company, or any county council, local authority, or authorised undertakers which appear to the Electricity Commissioners to be interested object -to the proposed Order, effect shall not be given to the proposals except by a Special Order under Section twenty-six of the principal Act. (2) Where in pursuance of this Section any part of the area of supply of a power company is by Order excluded from such area of supply—

1. (a) the exclusion shall not affect any rights of the power company existing immediately before the making of the Order to lay mains through the part so excluded, but any such rights may continue to be exercised by the power company notwithstanding such exclusion;
2. (b) the exclusion shall not prevent the power company from giving a supply of electricity at any point in their remaining area for the purpose of haulage or traction on any railway, tramway, or canal, and for the purpose of lighting vehicles and vessels used on any such railway tramway, or canal which they could have supplied if the part of the area excluded under this Section had remained part of their area of supply.

(3) Section fourteen of the principal Act is repealed.—[Mr. Neal.]

Brought up, and read the First time.

The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Mr. Neal)

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

It is necessary that I should explain to the House why this new Clause has been put upon the Paper. It is essential to remember that the present Bill is a Bill to amend the Act which was passed by Parliament in 1919, and that it is to be read in connection with that Act. As hon. Members will recall, the Bill as it left this House in 1919, and went to another place, was twofold in character. It had a voluntary aspect, but beyond that there was a compulsory aspect, under which it was possible for the authorities that were to be set up to purchase an undertaking without the consent of the undertaker. Therefore, there were provisions in that Bill which were appropriate to that set of circumstances, but which required reconsideration in view of the fact that the Act, as it took final form, had had eliminated from it the compulsory element, so that there was left only the element of voluntary sale or purchase of the station and mains. In the Act of 1919 there was a Section, Section 12, which is amended by Clause 15 of the present Bill, to which it will be necessary for me to invite the House to give some consideration.

By Section 12 the powers of the joint electricity authority were defined. They were authorised to supply electricity within their district subject to the exceptions mentioned in the Section, and one of the exceptions was that they were not to supply in the area of supply of a power company. An exception was, however, grafted upon that exception, whereby they might so supply, in the area of the power company, to the owner of a station which had been purchased. That was absolutely essential in dealing with compulsory purchase. It was quite impossible that there should have been, in the Act of 1919, a right to buy a station against the consent of the owner, and then to say that the joint electricity authority which had purchased that station might not supply to the owner of that station—that, in other words, the station so purchased should be put out of action altogether. That was the state of things when the Bill of 1919 left this House. It was quite different when it received the Royal Assent. When the present Bill was introduced in another place by my Noble Friend Lord Peel, the power companies thought it necessary to put upon the Order Paper a very large number of Amendments to protect their statutory rights. May I just remind the House in a few sentences what those rights were?

The power companies had come into existence, after a Report of the Committee presided over by Lord Cross, for the purpose of very substantially enlarging what. I may call the wholesale supply of electricity, as contradistinguished from the more limited right which had been given under the earlier Lighting Act; and those power companies, not very numerous, have invested in them at the present time, I think, something like £20,000,000. Of course, Parliament is bound to give proper consideration to the rights of these power companies who had come into being as statutory companies with certain rights, upon the strength 3f which they had invested their shareholders' money. The power companies in another place, therefore, put down a large number of Amendments, and I have little doubt that they would have succeeded in very seriously hampering, if not defeating, the Bill in another place. It was because of that that my Noble Friend Lord Peel, who was then Minister of Transport., consented to the introduction in the present Bill of Clause 15. That Clause is an Amendment of Section 12 of the principal Act, to which I have already referred, and the one point of amendment there to which I need specifically call the attention of the House is that it repealed that part of Section 12 which enabled a joint electricity authority to supply electricity to the owner of a power station which had been sold and transferred to the joint electricity authority.

Clause 15, therefore, is a Clause by which the Government must stand. It is quite impossible for the Government to meet its opponents in one House, dispose of opposition in that House, and then, in the second House, when other opposition develops, to seek to abandon the provision by which it obtains support in another place. In Committee on this Bill Amendments waste put down, and they re-appear on the Paper to-day, to strike Clause 15 out of the present. Bill, but, for the reasons which I have explained, they could not be entertained by the Government. It was said on behalf of local authorities, mainly on behalf of municipal corporations, "See what yon are doing. When the station has been sold to the joint electricity authority, the joint electricity authority that, has bought. it may no longer use that station for the purpose of supplying the corporation from whom they have bought. it." My reply to that, on behalf of the Government, was that that was not the intention of the Clause, nor was it a result which the Commissioners feared, because the Commissioners had, under Section 14 of the Act of 1919, certain powers of adjusting districts which would prevent that from happening: and, speaking with the full authority of the Electricity Commissioners, who had carefully studied the matter, I said that in practice it was not believed these difficulties Mould arise. Notwithstanding that, and I make no complaint, I was very strongly pressed that the Clause as it stood was sensible of an interpretation which might make the transfer of these stations to the joint electricity authority impossible. I pointed out that they could only be transferred by consent, and that no one would consent to transfer a station if the result was that that station was to be put out of action for the purpose of supplying the district in respect of which it had been built. I promised the Committee, however, that I would approach the Power Companies' Association, and would ask them to meet me in a reasonable spirit and to consider whether it was not possible to find words which might be agreeable, in the form of a new Clause, which would remove the fear of the local authorities.

I invited the Power Companies' Association to see me. They met me in exactly the spirit in which I thought and hoped they would, and they did consent to a modification of the position, which is embodied in the Clause, the Second Reading of which I now move. Following upon that, I had the advantage of several discussions with representatives of the Association of Municipal Corporations, and the Clause as it now stands on the Paper has been agreed by the Government with the Power Companies' Association and with the Association of Municipal Corporations as being a reasonable way in which to meet the difficulties which had been foreshadowed. I ought to say that I think I am in perfect agreement about the wording with both associations, but that, since the Clause was first put on the Paper, the Parliamentary draftsman has suggested some very slight verbal alterations, not altering the sense, but conforming better to his views as to drafting; and I think I am entitled, therefore, to say that this Clause is one which meets with the approval of the parties who were in antagonism before the Committee.

The Clause provides that the Electricity Commissioners may, when they are establishing a joint electricity authority, or after the establishment of a joint electricity authority, by an order made on the application of that authority, exclude from the area of supply of any power company, subject to such terms, conditions and reservations as they may think fit, three separate matters. The first is any part of that area in which the right of the power company to supply electricity is subject to the absolute veto of some other authorised undertaker, where the station is being transferred; that is to say, where a municipality has erected its own station, and by its statute has a right to say to the power company, "You shall not sell in our district except with our consent," and that right is absolute, then the Electricity Commissioners may exclude that municipal area from the area of the power company, making such terms and conditions as they think fit. Subsection (1, b) is really part of the old Section 14 of the Act of 1919. It says that the Commissioners may exclude from the area of the power company any part of that area which at the time of the local inquiry, or at some later time, is not being supplied by the power company, and which it appears to the Commissioners could be better served by the joint electricity authority themselves or by that authority acting through any authorised undertakers. I hope that that is clear. The Commissioners, considering the matter, say: "Here is an area which is within the limits of the power company, but which in point of fact can be much better served by some other station belonging to the joint electricity authority. Therefore, we will exclude that from the area of the power company."

The Commissioners may also exclude, with the consent of the power company, any other part of the area of supply of the power company; but at the same time they may enlarge the powers of the power company by giving it the right to be a distributor for all purposes of electrical energy in its area; that is to say, they may map out separate districts and say, "This district will be best served from the station of the joint electricity authority; that district will be better served by the power company." Then there are certain provisos with which I need not trouble the House for more than a moment. The exclusion of an area from that of a supply company is not to prevent them from laying their through mains for the purpose of connecting up their districts, and it is not. to prevent them from selling their electricity for purposes of haulage or traction on any railway, tramway or canal, and for the purpose of lighting vehicles and vessels used on such railway, tramway or canal. The last part of the new Clause repeals, because it has been enacted in better words, Section 14 of the Act of 1919. In moving the Second Reading of the Clause, I desire to acknowledge my indebtedness both to the power companies and to the municipal corporations for the way in which they have endeavoured to meet the Government and to find something which would be satisfactory to all parties.

Mr. GEORGE BALFOUR

I listened, as I always do, with very close care and attention to the explanation which my hon. Friend has given of his Clause. I think he has hardly done justice to the facts of the case. While he has generally sketched the programme which led up to Clause 15 of the present Bill, he has in some particulars omitted to lay before the House clearly all the information of which it should be fully seized if it is to understand the full import of this Clause and how it comes to be proposed. May I explain it, without offence to my hon. Friend, as I understand it? It is to give power to the Electricity Commissioners to exclude part of a power company's area. I take no exception at all to the proposed provisions regarding the supply given on generating stations being transferred. On that point, I am more or less in general agreement with him. I am confining most of my remarks to the operation of the Clause as it is given effect to in Sub-section (1), paragraph (b). Paragraph (b) states that any part of that area which at the time of the local inqury on the scheme to which the Order establishing the joint electricity authority gives effect, may be excluded from the area. I will leave paragraph (b) for the moment, because I should like to direct attention to the declaration made by the Parliamentary Secretary in Committee, which he has lightly touched upon this afternoon. He said: When this Bill was introduced it met with a great deal of opposition and a very large number of Amendments were tabled for the protection of the existing statutory rights of power companies, and there was grave danger—I say this quite advisedly— that the Bill would not have had a favourable reception in another place but for some such Clause as Clause 16,"— which is now Clause 15— being inserted and it was therefore accepted by Lord Peel. On the strength of that acceptance of the Clause many Amendments disappeared from the Order Paner and the passage of the Bill was facilitated. Subsequently, in the same speech, my hon. Friend made a few other observations in the same sense. He said: The power companies were seeking to protect their position in the other House and this Clause—I must state it quite frankly on behalf of the Government—was given to them as a measure of protection, and from the main object and intention of the Clause it is quite impassible for me, speaking on behalf of the Government, and as my Noble Friend said in another place, to depart. That was the position so far as Clause 15 was concerned. I have only read what my hon. Friend said in Committee because I think the House should be fully acquainted with his words there. Am I right in saying plainly that those statements made by my hon. Friend were definite, binding, irrevocable pledges of His Majesty's Government? I think I am. I do not think my hon. Friend will challenge that they were binding, definite, irrevocable pledges.

We now turn back to Clause 14 of the principal Act. My hon. Friend states that this Clause now proposed only gives effect to certain provisions of Section 14 of the principal Act. But it was because Section 14 was in the principal Act that the power companies originally were anxious to obtain this new Clause in the Bill of this year, so as to have subsequent legislation, making it perfectly clear that you had no right, if a power company was able and willing to supply in a given area, to excise a portion of that area.

To go back to the point at which I broke off in paragraph (b). What must the Electricity Commissioners do now, if this Clause is adopted, if they wish to cut out a portion of a power company's area? The first thing they could do would be to institute a large number of inquiries, and the moment those inquiries are instituted it is automatically in the power of the Commissioners, when they make an Order setting up a joint electricity authority, to omit from the area of the power company any portion where it so happens that a supply is not given at that particular moment. What is the effect of that? There are several power companies in the country at present where in fact supplies are not being given, but, where, in fact, supplies will be given the moment any consumer wishes a supply, and where, in fact, arrangements are tentatively being made, no doubt, for supplies at present, and money has been spent in anticipation of putting supplies into those areas. If this Bill became an Act, it would be within the power and within the jurisdiction of the Commissioners, after inquiry in certain areas, to exclude large portions of areas where in fact there may have been money spent in anticipation of putting supplies into those areas. I am sure my hon. Friend must have omitted that consideration. I am not anxious to prolong discussion or to delay the proceedings. I think my hon. Friend will admit that in Committee I did everything to facilitate the passage of the Bill, but I cannot possibly allow this Clause to pass as it stands without some strong opposition, unless I have some undertaking that, he is prepared to insert simple words which will reinstate the position and will give effect to the definite, binding pledge given upstairs. The second and third Amendments in my name do no more than give effect to the pledge my hon. Friend gave on behalf of the Government. If he says he will not accept those words, I shall have a good deal more to say. He remains silent. He referred in his speech to an undertaking given in Committee to discuss the matter with the Power Companies' Association.

Sir J. REMNANT

Might we have an answer to the question. It would save a lot of trouble.

Mr. NEAL

I am entirely in the hands of the House whether I make an answer now or later. My point is that I have fully redeemed the pledges which I gave. I said I would consult the Power Companies Association, which represents all the power companies. I have done that. The Clause on the Paper is put there with their full consent, and so far as I know, my hon. Friend is the only person who dissents from that view.

Mr. BALFOUR

My hon. Friend, I am sure, would not willingly or knowingly use words here which are contrary to the words he used in Committee. But I challenge him directly. Members who are on the Committee will know whether I am correct. He never used the words "confer with the Power Companies Association," and quite rightly so. He never referred to meeting the Municipal Associations when we were discussing it in Committee, and quite rightly. I think it was his business and his duty to confer with the Members of the Committee who were making Parliamentary representations upstairs, and not, immediately the Committee broke up, to hobnob with various associations and put a Clause on the Paper without discussing it with those Members of Parliament who were serving on the Committee. What happened? I was called away on urgent business. I heard that this Clause was down, and I made inquiries. It is true my hon. Friend had a meeting with the Power Companies Association. Why did he not acquaint me with the fact? Why did he not take the trouble to ask me to he present? I suggest that it was because I should have challenged some of the statements which were made to that association which induced them to agree to this Clause. I think my hon. Friend said to the members of that association that, if some such such Clause was not agreed to, there would be grave danger of imperilling Clause 15, which had been given as a binding pledge by the Government. Why did he discuss it in private with the members of the Power Companies Association when no Member of Parliament was there to challenge his presentation of the case, and why did he warn them that there would be serious and grave danger of the Government breaking a pledge?

Mr. NEAL

I never said anything of the kind.

Mr. BALFOUR

I think I am not overstating the case. It has been put to me by LI member of the association whose veracity I have no reason to doubt.

Mr. NEAL

I certainly have never said, either in Committee or in private or here, that the Government will withdraw from Clause 15 at all. What I said—and let there be no misunderstanding about lt—was that there was a great agitation growing against. Clause 15, and that the House might defeat it. But the position of the Government has always been perfectly clear. We stand by the pledge we gave to the House of Lords in Clause 15.

Mr. BALFOUR

Of course, I accept without question what my hon. Friend tells me. It rather confirms the view I have expressed. I never suggested that he raid the Government wished to withdraw Clause 15. But he said there was grave danger—I think those are the very words he used—of losing Clause 15 if some such Amendment were not accepted. May I ask him what happened in Committee? Surely, we are not concerned with the tittle tattle outside. We are not concerned with the notices the technical Press, who boldly state that they would far rather trust for public legislation to the Electricity Commissioners than to Parliament. This discussion arose in Committee on an Amendment put down by the hon. Member for Whitechapel (Mr. Kiley). He moved quite a small Amendment, relating to generating stations, in connection with Clause 15. He made no speech, even, in support of his Amendment. He said he moved it, and he should like to hear the hon. Gentleman's explanation. The Parliamentary Secretary made a long speech. He made a case not only for my hon. Friend's Amendment but he made a case, which I cannot help feeling he wanted to make, to show that Clause 15 required amendment. It did not come from any Member of the Committee. We have had assurance after assurance that no doubt a form of words could he made to meet us. That form of words has never been found. The hon. Gentleman met the Municipal Associations and the Power Companies Association but not those, or some of those, Members who have taken a close interest in the Measure from the beginning, hon. Gentleman has not made out his case. He has absolutely broken faith, and has done it in a very ingenious manner, displaying a skill very similar in type to the skill he displayed when, by an acrobatic feat, he translated himself from the bench where I stand to the seat he now occupies. I demand in the interests of clean Parliamentary life that we should have these discussions carried on between Members of Parliament and not between His Majesty's Ministers and associations. I make no allegation or suggestion against the association in question. I am a member of that association. The members of that association are most estimable and honourable gentlemen, all trying to discharge their duty, but it is not their business, between the Committee stage mid the Report stage to deal with these things, except through Members of the Committee, who served on that Committee. I say, with very great reluctance, that I must hog of my hon. Friend that he should keep faith and not break a definite pledge given by His Majesty's Government, otherwise, we must rely upon another place to deal with the matter.

Sir R. ADKINS

As a Member of the Standing Committee, I regret that my hon. Friend the Member for Hampstead (Mr. G. Balfour) has adopted so high a calorific standard in his comments upon this Bill. It is very easy for Members, equally honest and having equal intelligence, to have differences of opinion on some of the details of the Bill. While I have had my differences with the Parliamentary Secretary in charge of the Bill, and while we are all anxious that our different points of view should be embodied in the Bill in its final stage, I must he allowed to say that the charges made by my hon. Friend come so near charges of wilful deceit that I think they overstate what he really means, and that what has occurred might very easily occur in a Bill of this complexity. Here is a Clause brought in by the Government after hearing Members of the Standing Committee, and after conferring, as they are entitled to confer, with all interested parties, which does not in some of its details meet with the approval of my hon. Friend, for reasons which we shall hear when he moves his Amendment. While I am very much opposed to pieces of Bills being together outside Paeliarment—I am afraid I have worried the House by making that protest frecinently—I submit that where you have had a matter discussed in Standing Committee, it is not quite correct to say more than that it is unfortunate if any prominent Member of that Committee interested in an aspect of the Bill does not happen to have been brought into conference, when other people were brought into conference. Therefore, to that extent I agree with the hon. Member for Hampstead, but I cannot believe that there has been any attempt to arrange this new Clause to the exclusion of the point of view of which my hon. Friend has special knowledge.

Mr. G. BALFOUR

My point is that this Clause was arranged with certain gentlemen outside this House, and with no Member of the Committee present—it is not a personal grievance on my own part—until we have the Report Stage in this House.

Sir R. ADKINS

I perfectly understood that to be my hon. Friend's point. The hon. Member for Central Portsmouth (Sir T. Bramsdon), who was one of the Members interested in local authorities, was present at the conference.

Mr. BALFOUR

That was another conference.

Sir R. ADKINS

My hon. Friend has a full knowledge of the occurrences which take place, and those of us who have not that knowledge may lie allowed merely to say that we are sorry that he was not present, because he would have assisted in the construction of the Clause, and in the passing of the Bill to-day. Am I right in understanding from the Minister that in cases where there is some alleged ground for taking over parts of the area of power companies which at the moment are not being used, although from the moment the local inquiries are held there is power in the Commissioners to take over, that it is only the machinery of a special inquiry or Order which gives an opportunity to Parliament, not to go into the details, but to say whether they will approve or not? If that is the effect of the proviso, although the new Clause is not perfectly inspired, it removes those elements which might cause some sting.

Mr. T. THOMSON

Much as I differ from the hon. Member for Hampstead (Mr. G. Balfour) in the point of view from which he approaches this Bill, I find myself in agreement with him as to the way in which this new Clause has found its way on the Paper. It is most unfortunate that a new Clause such as this should be arranged between interested parties, and not by the Committee as a whole. I can say this the more freely because I happen to have had the honour of an invitation to meet the Parliamentary Secretary and those who were to consider the matter from the point of view of the municipal corporations. I was, however, not able to be present. I think the whole principle of the thing is wrong, that, behind the backs of Standing Committees, those who consider they are specially interested should confer together and table a Clause of this kind. The people chiefly interested were not consulted. The people who are chiefly interested are the consumers, the public: at large. The Parliamentary Secretary met privately members of the power companies, and he also met those representing authorised distributors through the municipal authorities, who look at the matter from their particular point of view, but there were no representatives there who specially represented the public at large, so that the interest of the consumers could be put forward. Therefore I agree with the protest made by the lion. Member for Hampstead, much as if differ with him on the general question.

The Parliamentary Secretary referred to this Clause as being a bargain I know that it is unfortunate for anyone to seek to disagree with a bargain that may have been made between people who are supposed to be specially concerned; but in regard to this particular bargain I must enter my protest, and take what steps I can later, although they may be very ineffectual, in voicing the protests which I raised in Committee in regard to Clause 15. Clause 15 is not now before the House, and, therefore, I shall be out of order in discussing it, but in so far as this new Clause is supposed to remove any objections which I voiced in Committee against Clause 15, I must dissent from accepting the Clause as giving in any way an adequate safeguard in regard to the objections that some of us felt, and still feel, respecting Clause 15. As the Clause stands by itself, it is possibly an improvement on what was in the Bill originally, and possibly an improvement on Clause 14 in the original Act. Therefore, taking the Clause by itself, I think it is one to be welcomed, but I must reserve my right to protest against Clause 15, and to say now that I do not consider that this agreed Clause as between interested parties in any way meets the objections which some of us still feel to Clause 15.

Mr. KILEY

On behalf of 40 local authorities in and around London owning electricity undertakings who were profoundly dissatisfied with the Clause inserted in another place, I was requested to put certain Amendments on the Paper for the Committee stage. When the Committee came to deal with one of these important Amendments I thought it best, in the interests of the Committee, not to take up any great amount of time, as the Parliamentary Secretary was aware of the disstisfaction, and the material placed in my hands amounted to 20 or 30 folios. I was anxious to know what course the Parliamentary Secretary was going to take. He went very fully into the reasons why the Clause was inserted in another place. He knew that that Clause did not give satisfaction to the municipal authorities, but he requested that I should withdraw the Amendment, and said he would take an -opportunity of having a conference with the parties concerned to sec whether or not a compromise satisfactory to all parties could be arrived at. That conference, I understand, has taken place, -but satisfaction has not come out of the conference for any party. I understand that the power companies are not satisfied, and the local authorities are not satisfied. Whether or not that means wrecking the Bill is a matter which the House will have to consider. The authorities which I represent are not at all satisfied with the position in which they find themselves.

Mr. NEAL

I am very sorry that the hon. Member for Hampstead (Mr. G. Balfour) has made a protest against me personally. The last thing I would wish to do would be to treat either him or any other hon. Member with disrespect. I cannot admire the complacency with which he made his complaint. My hon. Friend many times spoke in Committee, but not, as representing the power companies. We had that iterated and reiterated many times. He assured us that he was only taking part in our discussions as the hon. Member for Hampstead. A position of very great difficulty arose, which jeopardised Clause 15. The municipal corporations were using all their influence with hon. Members and many hon. Members well knew it; and associations were also using their influence to defeat Clause 15. By Clause 15 the Government must stand. It was given to the power companies, and they are entitled to it. Upon that, what was the position I took up? I was put into a position of difficulty by the course that was taken by the hon. Member for Whitechapel (Mr. Kiley), who formally moved the first of a series of Amendments to wine out Clause 15.

Hon. Members who served on the Committee will bear me out that I stated perfectly impartially to the Committee the case for both sides, and then I said that it was possible to get concessions. Concessions from whom? From the hon. Member for Hampstead, who was not speaking for the power companies? Certainly not. From the persons interested. I will quote from the OFFICIAL REPORT of the Debate to justify myself. I said that we might get practical concessions from the persons interested. I asked my hon. Friend, who has charged me with something approaching a breach of faith, was he the person interested that I was to approach? He told the Committee many times over that he was there as a disinterested Member of Parliament to do his part in the shaping of this Bill. I did the only thing that could be done. I got into communication with the persons interested, the power companies, an association of which my hon. Friend is a Member. It was perfectly open to that association—they chose their own delegation—to have selected my hon. Friend to come and discuss the matter with me. I wish they had done so.

Mr. BALFOUR

What did you propose in Committee which gave rise to this discussion? There was nothing in Committee.

6.0 P.M.

Mr. NEAL

The hon. Member must allow me to make my statement in my own way, on a matter which affects my personal honour. I got into touch with the persons interested in the power companies. I did so because they had the protection of Clause 15, and if there was to be anything taken away from that Clause it must be with their consent. The hon. Member for East Edinburgh (Mr. Hogge), who has only just come into the House, and has not the faintest notion of what has been happening, sneers in his usual manner.

Mr. HOGGE

The hon. Member has no business to say that. I was only remarking on the curious ideas that the powers of this House should be curtailed by any company outside.

Mr. NEAL

I never said anything of the kind, nor do I intend anything of the kind to be understood from what I say. These companies have statutory rights, and if the House is to interfere with statutory rights it must do so with great care. Clause 15 has been given to them in another place. By that Clause the Government stand. If a concession is to be made it must be made by them, and on that point I will read some passages from the discussion in Committee. Speaking on the 5th of this month, I said: Still, it does seem me that there is room for consideration of words, to see whether it is not possible, with the good will of everybody, to get a Clause which shall in no way destroy the advantages which the Government conceded in another place, and yet, at the came time, shell make it quite clear that the rights of the consumer, who is, ultimately, the real person to be considered, shall not be prejudiced, I cannot accept the Amendment moved by my hon. Friend, but I hope that the discussion will throw light upon the matter, and that finally, we may be able, at a later stage, to get words satisfactory to everybody."—[OFFICIAL REPORT, Standing Committee C. 5th July, 1922; col. 96.] In the course of the Debate my hon. Friend the Member for the Moseley Division of Birmingham (Mr. Hannon) said: I hope that this controversy will be brought to a close and that the Parliamentary Secretary will meet the various interests in the spirit which he suggested and that a solution will be found, but that solution must not lose sight of the interests of those people who have put their capital into this industry and have taken the risk of making the industry what it is to-day. Then the hon. Member for Central Portsmouth (Sir T. Bramsdon) said: I am grateful to the Parliamentary Secretary for accepting the suggestion I made, and I am sure he is anxious to meet the wishes of all parties. I take it that the whole of the points that are raised in connection with Clause 16 will be considered by him at the conference, and that all parties who are directly interested in various ways will join him. To that I said: I may have separate conferences. The hon. Member for Portsmouth then said: As far as the hon. Member is able consistently to meet the various parties lie will de so."—[OFFICIAL REPORT, Standing Committee C, 5th July, 1922, col. 116.] Had I failed to meet those persons who are interested I should have definitely gone back on my pledge. This Clause meets the approval of the Power Companies' Association, of which my hon. Friend the Member for Hampstead (Mr. G. Balfour) is a member. I regret that he was not consulted. Apparently he was not in his place during the last few days. I should have been glad to see him, and confer with him upon it.

Mr. BALFOUR

I have been in the House constantly since last Monday night, when the Clause was put on the Paper.

Mr. NEAL

I had not the good fortune to see my hon. Friend. In view of the explanation which I have given, I ask the House to give a Second Reading to the Clause.

Mr. HOPKINSON

The Members present must have heard with consternation the tone of the whole discussion on this Clause. The hon. Gentleman in charge of the Bill seems to regard legislation very much as he might regard an action in the County Court. The Standing Committee upstairs represents the County Court judge. He represents one party, and all the people financially interested in the Bill represent the other. Every now and then he disappears from the Court, sees Counsel on the other side, with the object of coming to an arrangement, and then he comes in and tells the judge, "We have agreed between ourselves to such and such Clauses and to such and such Amendments." The discussion on this Clause does folly justify those of us who opposed this sort of legislation from the start. I do not think it right when Parliament expressed its opinion on the former Electricity Bill, in the way in which it did, that this method of trying to get. back to an old Bill by a side wind should be adopted by the hon. Member in charge of the Bill. I do hope that Members, if they go to a Division, will bear in mind that we may be knocking away the whole of the power of Parliament in proceeding with this Amendment. The agreement between myself and the hon. Member for West Middlesbro (Mr. T. Thomson) is a remarkable fact in itself, and when in addition to that the hon. Member for Hampstead (Mr. G. Balfour) is also in agreement, it is indeed time that the hon. Member in charge of the Bill should pull himself together, and consider the matter. But I have noticed that the whole tendency of legislation now is a series of bargains between one financially interested person and another, in the sole hope of being able by action in this House to get what they want. If this House could he induced on this particular occasion to record its opinion as to the methods of procedure adopted by the Ministry of Transport ever since it was first formed, I do think that we might get a rather better basis of legislation in this House.

Major BROWN

I have listened with great interest to this discussion, and I agree with what the hon. Member for Mossley (Mr. Hopkinson) has said. Just consider the futility of going on with this at all. I understand that it was introduced after Clause 15 was agreed on, and the Government pledged its solemn word about it because opposition arose about Clause 15. Now I understand from the hon. Member for West Middlesbrough (Mr. Thomson) that, in spite of this new Clause being introduced, though he likes it somewhat, still his opposition to Clause 15 is going to remain the same. In that case it seems to me to be futile to attempt to buy off the opposition in this way, and a much more manly and honourable course on the part of the Ministry of Transport would be to withdraw the Clause altogether. It would be more satisfactory to the House to fight out our differences on Clause 15, and I suggest that this course might well be adopted.

Mr. MILLS

My colleague the hon. Member for Spen Valley (Mr. Myers) had intended to put the Labour view on this question. Unfortunately he is detained by committee work, and I desire very briefly to support the protest which has been made here to-day. I do so because it is the desire of the borough council with which I am associated that as far as possible ail that remains of the 1919 Act shall be left upon the Statute Book. For that reason I do hope that the Ministry of Transport will pay some heed to the representations that have been made.

Clause read a Second time.

Mr. G. BALFOUR

There is a series of Amendments to the Clause standing in my name on the Paper. I have no desire to adopt any tactics which may be regarded as in the slightest degree obstructive. I have made my remarks in connection with this Clause already on the Question "that the Clause be read a Second time," and they cover the greater part of the ground. With a view to saving time, I would ask my hon. Friend whether he is prepared to accept one or other of my Amendments to this Clause. By leave of the House, I will defer my remarks to the third and fourth Amendments. If my hon. Friend will accept either of those, I will be content. The third Amendment simply provides that, if a power company is able and willing to supply, it shall be allowed to do so. In other words, it shall he allowed to fulfil the definite binding obligation, given under Clause 15, and this allows the Government to fulfil the undertaking, which in my view, rightly or wrongly, they are attempting to evade by arranging in Committee a discussion upon an Amendment which was moved by the hon. Member for Whitechapel. Alternatively, will the Parliamentary Secretary accept the last of the Amendments on the Paper in my name? I feel certain that on reflection my hon. Friend is bound to agree that I am not asking him to make any concession, but simply to fulfil the obligations which he has already undertaken.

Mr. NEAL indicated dissent.

Mr. BALFOUR

My hon. Friend is evidently not prepared to accept any of the Amendments. Therefore I will move only the last of the series. I beg to move, as an Amendment to the proposed new Clause, at the end of Sub-section (1), to insert the words: Provided also that the Electricity Commissioners shall not by any such Order exclude from the area of supply of any power company any part of that area to which the provisions of paragraph (b) of this Sub-Section may apply unless and until a special Order has been made in virtue of the provisions of Section fifteen of this Act with regard to such part of the area of supply of a power company.

Mr. HOPKINSON

I beg to second the Amendment.

Mr. NEAL

I am sorry that I cannot accept the Amendment, The Clause, as it stands, provides that the Electricity Commissioners may, by the order establishing a joint electricity authority, or after the establishment of a joint electricity authority, by an order made on the application of that authority, exclude from the area of supply of any power company what is mentioned in paragraph (b). Paragraph (b) does nothing more than reproduce Section 14 of the Act of 1919, in a form which is consonant with the present legislation. We are not enlarging the powers of the Commissioners: we are saying only that they may make these orders on two occasions. One is on the establishment of an authority, and the second is when the authority has been established on the application of that authority. But, before the authority can be established the Commissioners have to hold at least two public inquiries. They then make their order, which requires confirmation by the Minister. The Minister may order a further inquiry. A very cogent criticism has been urged upon me at Question Time in this House to the effect that a multiplicity of inquiries means a great waste of public money. I am very anxious to avoid the multiplication of inquiries. The Amendment would set up further inquiries still. What would happen if the Amendment were accepted? The Commissioners will hold their first inquiry. Then they have a further inquiry as to the scheme. That matter requires confirmation by the Minister, with the possibility of a third inquiry. It then comes to this House and to another House for definite confirmation by an affirmative resolution. Following all that, my hon. Friend would suggest that we start all over again under Section 15 by another special order, with more inquiries and more resolutions in this House.

Amendment negatived.

Clause added to the Bill.

New Clause.—(Provision as to railways, etc.)

Notwithstanding anything contained in any Act or Order electricity supplied by a joint electricity authority within their district to any company or authority being the owners or lessees of a railway, tramway, or canal undertaking may be used by the company or authority receiving the supply for the purposes of haulage or traction or for lighting vehicles or vessels used on the railway, tramway, or canal on any part of the system of such company or authority.—[Major Hills.]

Brought up, and read the First time.

Major HILLS

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

The subject is not free of difficulty, though the Clause is quite simple. It allows a railway company which takes supply from any joint electricity authority to use that supply outside the area of supply of that authority, as well as inside the area. When a railway company takes a supply of electricity it ought not to be limited to the area of supply, but ought to be allowed to use that supply for the purpose of traction. It often occurs that the line of a railway company crosses the boundary of several areas, and it would be extremely inconvenient if, when the train of the railway crosses an imaginary line, a fresh supply of electricity had to be taken. In fact, it would be a quite impossible position. You could not electrify any great length of line unless you could carry your power forward into a fresh area. Electric traction is only now beginning. The fact has been recognised, and it is now permissible to companies to use the power outside the area of supply under Section 5 of the Electric Lighting Act of 1909. Section 5 of that Act authorises that to be done, but only with the consent of the Board of Trade, and the powers of the Board of Trade are now vested in the Transport Ministry. If the matter rested there, there would be no difficulty. But the Clause goes on to say that the Board of Trade shall not give such consent until they have given notice by advertisement, and have allowed an opportunity for all persons to be heard, and have, in fact, held a local inquiry. Therefore, no railway can get this very essential power until it has gone to the Minister of Transport and he has held an inquiry.

I am sorry to have to weary the House with more complicated details, but I cannot put the whole ease unless I deal with the Act of 1919. The House is aware of the circumstances in which that Act was introduced. One of the objects certainly was to facilitate the use of electric power upon railroads. To a certain extent, the Act does so. But it does not meet this special point. In fact, it rather darkens counsel in this respect. In Section 12 of the Act, of 1919 are the provisions for the supply of power to a railway company. But there the supply is limited to supply within the district of the Joint Electricity Authority, and there is no power to use the power outside the area. Again, although Section 5 of the Act of 1919 authorises schemes to be prepared for the supply of power, yet it also contemplates the use of that power only inside the area of supply. Further, the whole of the Act of 1919 is stated to be construed as one with the Electric Lighting Acts, and that expression includes Section 5 of the Act of 1909. So it comes back to this—that wherever you go you always have to obtain the consent of the Minister of Transport, and he cannot give that consent without an inquiry. I welcome the statement which the Parliamentary Secretary made on the last Amendment. He told us that he was very much opposed to a multiplicity of inquiries. I hope I may pray that statement in aid. If you go under the Act of 1919, and a railway applies for authority to use power outside an area, two inquiries have to be held. One inquiry is concerned only with the persons inside the district itself, and the second inquiry is concerned with those outside. This cannot be clone by a single inquiry, for the interests are quite different.

It is certain that the use of electric power is going to increase rapidly. I submit that the best thing for the public is that companies should use electricity, whenever they can get it, on their system. What would happen in practice is that the supply would be taken at a substation and used along the line as long as it was profitable commercially. Why should a railway not be able to take the supply on the most economical terms? it surely is to the general advantage that they should do so. I ask, is it not time that these restrictions should be removed? I am not asking for a very big concession. All I want to do is to remove the bar and the expense and the delay entailed by these two inquiries. If the Government feel that they cannot accede to this request, I shall drop the matter, but it is a very important question, and it is in the best interest of the country that electrical power in traction should he facilitated in all ways possible.

Mr. MACQUISTEN

I beg to second the Motion.

The hope of this country is in cheap electricity. We have seen the manner in which Germany utilised her electrical power resources both in war and peace. We, in some singular way, have failed to turn electricity to the same advantage. You can only get cheap electricity if you get the railway companies to use it, and I think they should be encouraged to use it and the supply of electricity to them should be facilitated. I hope the time will come when there will be an amalgamation of companies for the supply of electricity for this purpose. It is absurd to think that when a railway company reaches a certain limit it should be under the necessity of having to comply with these requirements and that we should have a reproduction of what they have in Australia., where there are different gauges involving loading and unloading from one train to another. We must give the railway companies freedom to buy electricity in the best place they can buy it and from the best power company. If we do that, and if the railway companies can get electricity cheaply from the power companies—and if they get it cheaply enough—then we can double, treble and quadruple the efficiency of the railways, cheapen the cost of running them, and bring all the great terminals into enormously increased efficiency. America is doing it as fast as possible, and she has found she can increase terminal efficiency by five times in this way, and the railway companies have increased their efficiency twice, and expect soon to quadruple it. I hope the Minister will not allow antiquated causes and small local jealousies to interfere in this matter. If we continue the artificial obstacles which at present exist, then we are striking a blow at the purpose at which this Bill has, namely, to get a cheap supply of electricity, and I trust the Minister will accept this most wise and far-seeing Clause.

Mr. NEAL

I find myself in complete agreement with what has fallen from the hon. Members who moved and seconded the Second Reading of new Clause. I should point out that when the Act of 1909 was under consideration a Section to which this refers was put in for the protection of undertakers through whose territory these supplies might be taken. Pesonally, I think the lime has come when that might reasonably be taken away. I am entirely at one with the desire to remit inquiries, and further, may I say, I think it extremely desirable that where possible we should have the matter dealt with in the say suggested and not left to Departmental administration. Therefore, unless there is some opposition manifested here or elsewhere of which I know nothing, the Government see no objection to the new Clause.

Clause read a Second time.

Viscount ELVEDEN

I beg to move, after the word "authority" ["supplied by a joint electricity authority"], to insert the words "or power company."

There seems to be no reason why a railway company should have power to get electricity from a joint electricity authority any more than from a power company or in any easier way. What is sauce for the goose is sauce for the gander and it seems to me the argument that the railways might be able To take electricity from one generating station but not from another without an inquiry, is illogical.

Mr. MARRIOTT

I beg to second the Amendment.

The House has obviously seen the reasonableness of the new Clause moved by the hon. and gallant Member for Durham (Major Hills). This is merely a logical, and I venture to say, an irresistible addition to that Clause.

Mr. NEAL

I certainly fail to see any distinction between the two, and I offer no opposition to the Amendment.

Amendment agreed to.

Mr. INSKIP

I beg to move, after the word "tramway" ["owners of lessees of a railway, tramway or canal under-taking"] to insert the words, "dock and harbour."

This is only to safeguard undertakings which are in the same position as a tramway or canal undertaking.

Mr. MacVEAGH

I beg to second the Amendment.

Amendment agreed to.

Further Amendment made: After the word "tramway" ["used on the railway, tramway, or canal"], insert the words, "dock and harbour."—[Mr. Inskip.]

Clause, as amended, added to the Bill.

NEW CLAUSE.—(Stand-by supplies of electricity.)

Notwithstanding anything in the Electricity (Supply) Acts, 1882 to 1919, or in this Act, or in any other Act of Parliament, or any Provisional Order or Special Order made under any such Act, a person shall not he entitled to demand or continue to receive for the purposes of a stand-by supply only from any authorised undertakers a supply of electricity for any premises having a separate supply of electricity or a supply (in use or ready for use for tie purposes for which the stand-by supply of electricity is required) of gas, steam, or other form of energy unless he has agreed with the undertakers to pay to them such minimum annual sum as will give them a reasonable return on the capital expenditure incurred them in providing such stand-by supply and will cover other standing charges incurred by them in order to meet the possible maximum demand for those premises. The sum to be so paid shall be determined in default of agreement by arbitration.

(2) Section fifteen of the Electric Lighting Act, 1909, is repealed.—[Mr. MacVeagh.]

Brought up, and read the First time.

Mr. MacVEAGH

I beg to move, "That the Clause be react a Second time."

The object of this Clause is to take the place of Section 20 of the principal Act, and it is what is known as the stand-by Clause. The view taken by many of us in Committee was that Section 20 is not in reality a stand-by Clause, and does not achieve the object which the framers of a stand-by Clause have in view. It is agreed by all the authorities concerned that there should be a stand-by Clause, and this is really only a question of drafting. In Committee the Parliamentary Secretary very properly said he thought there was a great deal in the objection which had been taken, and between then and the Report stage he promised to consider whether an agreed Clause could not be arrived at which would give effect to the object we all have in common. I think the Clause on the Paper achieves that object.

Mr. BALFOUR

I beg to second the Motion.

Mr. NEAL

I entirely agree with the Mover, and on behalf of the Government I accept the new Clause.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Conditions under which restriction on, generating stations and obligation, to take supply from are not to apply.)

The Electricity Commissioners shall not—

1. (a) refuse, under Section eleven of the principal Act, their consent to the establishment of a new, or the extension of an existing, generating station by any authorised undertakers if it is proved to the satisfaction of the Electricity Commissioners that, having regard to all the circumstances of the case, the undertakers are or will, if the consent be given, be in a position to give a supply of electricity adequate in quantity and regularity to meet present and prospective demands of their consumers at a cost not greater than that at which they could give a supply if they obtained a supply of electricity from sonic other available source designated by the Electricity Commissioners; or
2. (b) require under Section nineteen of the principal Act any authorised undertakers to enter into an agreement for taking a supply of electricity from some other specified undertakers if it is proved to the satisfaction of the Electricity Commissioners that, having regard to all the circumstances of the case, including the duration of the period during which the supply is taken, and the estimated financial results likely to be obtained during that period, the undertakers would, if they obtained a supply of electricity from some other source, be in a position to give a supply of electricity adequate in quantity and regularity to meet the present and prospective 287 demands of their consumers at a cost not greater than that at which they could give such a supply if they obtained the supply from those specified undertakers;

unless the Electricity Commissioners determine that such refusal or requirement is necessary in the interest of the general supply of electricity in the district whether provisionally or finally determined under the principal Act.—[Mr. Hannon.]

Brought up, and read the First time.

Mr. HANNON

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

During the discussions in the Standing Committee the question of the rights of small undertakers coming within the operation of joint electricity authorities gave rise to considerable differences of opinion, and after a lengthened exchange of views, the Minister agreed to consider a form of words in which effect could be given to the contention, that the joint electricity authority should not unduly interfere with the rights of the smaller undertakers and distributors. As a consequence of that undertaking this new Clause has been prepared. In my view, it entirely covers what we sought to obtain in the Standing Committee, and have spoken to the Parliamentary Secretary as to the substance of the Clause. May I make this observation, that in connection with the discussion in the House of highly technical matters of this character, it is only right that conferences should also take place outside among persons competent to give assistance in regard to such a Measure as this. I agree with the hon. Member for Stafford (Mr. Ormsby-Gore) that there should not be any tendency to carry legislation by outside conference. I entirely accept that. At the same time I am satisfied it would be almost impossible to carry through tins House a Measure involving so many considerations and so many interests as this, without bringing together the various people who represent those interests outside, and ascertaining their views. If I may say so, those interests were dealt with in the Committee upstairs with the greatest care and consideration, and the Parliamentary Secretary has very fairly and squarely met the various contentions which have been put forward, with the desire to improve the Bill more particularly in the interests of the consumer. I think the Clause now on the Paper deals very effectively with the point at issue.

Sir ALEXANDER RICHARDSON

I beg to second the Motion.

Mr. NEAL

I am grateful to the Mover for what he has said, and certainly I was very much pressed in Committee in reference to this matter. I think it was quite right that pressure should have been exerted. There was a doubt as to whether cases might not arise in which consent would be unreasonably refused to certain new stations or extensions. I promised to consider that matter and this is a Clause which the Government can readily accept.

Mr. KILEY

Does the Parliamentary Secretary realise what, is involved in the last few lines of the new Clause, which gives a very wide discretion to the Electricity Commissioners in any case of dispute or difference of opinion between the authorised undertakers and the Commissioners? Apparently there is no appeal whatever against the decision of the Commissioners. There are 40 local authorities around Load on who view with much concern the fact that there is no such appeal, in case the Commissioners might take a very strong line, and I do not know if that point of view has been represented to the Parliamentary Secretary.

Mr. BALFOUR

I have an Amendment on the Paper which deals with the same subject from a slightly different point of view. The Parliamentary Secretary will remember that in Committee a promise was made that he would consider certain words. The Amendment which I refer deals with the transfer of stations to a joint electricity authority, and it might save time if my hon. Friend would indicate if he is prepared to accept that Amendment also.

Mr. NEAL

I am afraid that I cannot go further than I have gone in accepting the Clause now under discussion. There may be, as I explained t the Committee, borderline cases where there is a very small difference. It may be a difference which will disappear in the process of time, and the Commissioners are charged under the principal Act to endeavour to obtain a more plentiful more effective and more cheap supply, of energy, and they should have regard to the general interests, rather than to be limited by small interests which might well be only of a temporary character. Therefore, the Government do consider these general words which are in the last few lines of the Clause essential, and it is in that sense only that I am able to accept the whole of the Clause. It is a very substantial modification of the powers of the Commissioners as found under the original Clause 11 of the principal Act.

Mr. KILEY

It rules out any appeal.

Mr. NEAL

There never was an appeal. You are setting up technical Commissioners who are chosen because they are experts in the particular matters which are referred to them. I think it would be quite without precedent to suggest that there should be an appeal to a Court of Law from a decision of technical experts who have been appointed for that particular purpose. Of course, if the Commissioners exceeded their jurisdiction or exercised their discretion capriciously or without consideration, then I am the last to say that the Courts of Law might not be invoked to deal with that. So long, however, as they act with discretion, then I think it is essential that their judgment should be final. We may have an opportunity, I understand, of discussing the matter on an Amendment which my hon. Friend opposite (Mr. Balfour) intends to move, but I cannot give any hope, when inviting the House to give a Second Reading to this present Clause, that I shall be able to meet my hon. Friend.

Clause read a Second time, and added to the Bill.

New CLAUSE.—(Amendment of s. 5 of Principal Act.)

Section five of the principal Act (electricity districts) shall have effect as if after the word "authority," in Sub-section (2) of that Section, there had been inserted the words "or other body."—[Mr. Balfour.]

Brought up, and read the First time.

Mr. BALFOUR

I beg to move, "That the Clause he read a Second time."

In Committee upstairs an Amendment was inserted to Clause 5, Sub-section (4), which put in the words "other body," and I think it then put the present Bill out of harmony with the Act. This is a matter of drafting, and I think my hon. Friend (Mr. Neal) will accept it.

Sir J. REMNANT

I beg to second the Motion.

Clause read a Second time, and added to the Bill.

NEW CLAUSE.—(Obligations and rights consequential on transfer of generating stations to a joint electricity authority.)

(1) Whenever a generating station is transferred to a joint electricity authority they shall be under an obligation—

1. (a) thenceforth to supply to the authority, company, or person from whom it is transferred such quantity of electricity as may he required for the purposes of the undertaking for which the generating station was established and as regards the amount that could have been generated at the generating station by that authority, company, or person at a price not greater than the cost at which it could have been so generated; and
2. (b) in the event of any change in the type of current frequency or pressure, to pay such expenses as the authority, company, or person may necessarily incur in consequence of such change;

and if any question arises as to such amount or cost or expenses the question shall be determined by the Electricity Commissioners, and in determining such cost regard shall be had to capital charges (including interest on capital), cost of fuel and labour, and other costs of generation, and to any reduction of cost which might reasonably have been expected to accrue from any improvement of the generating station and plant therein.

(2) Where a generating station which is transferred to a joint electricity authority is in course of construction, extension, or repair the rights and liabilities of the former owners thereof under any contract for such construction, extension, or repair shall be transferred to the joint electricity authority.—[Mr. Balfour.]

Brought up, and read the First time.

Mr. BALFOUR

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

This new Clause is in very similar terms to that moved by my hon. Friend beside me (Mr. Hannon). I should like to refresh the memory of the Parliamentary Secretary, and refer him to what he said in Committee when I had on the Paper this Amendment in exactly the same words— I think it would be inconvenient if I added anything to the specific statement which I made when the Committee last met I have had under consideration the form of words which I shall be glad to show my hon. Friend, and I think his difficulties will disappear when he sees it."—[OFFICIAL REPORT. Standing Committee, 10th July, 1922; col. 184.] I do not know whether I possess some particularly offensive quality which rather irritates and jars my hon. Friend (Mr. Neal), but again it is my lot—while I have spent many arduous hours in the Committee upstairs, when I had a promise at the time I had Amendments on the Paper and we agreed to leave them to she Report stage, when a form of words would be produced, and no doubt the Parliamentary Secretary would be able to arrange matters with me—to be disappointed. I have heard nothing. I have put my Amendments on the Paper, and even since they have been on the Paper, I have not had any communication from the hon. Gentleman. Why? This new Clause really does nothing more than protect the case of stations transferred, whereas the other new Clause just accepted deals with the conditions under which restriction on generating stations and obligation to take supply from are not to apply. I think if these two Clauses are analysed it will be found that they are really a complement of each other. I am afraid without undue delay it would he quite impossible to argue and reason out the whole of this Clause. The other Clause has been accepted. This Clause is in similar terms, and I think it should only be necessary for me to commend it to the hon. Gentleman and remind him of his words in Committee promising to 'consult me as to this Clause.

Sir J. REMNANT

I beg to second the Motion.

Mr. NEAL

I would say at once that if I am at fault in not having carried out any promise made to my hon. Friend (MT. Balfour) I express the deepest regret. I was not aware that I was under an obligation to show him the words of the Clause just passed, but it has been on the Order Paper for something like seven days, and perhaps he will allow me to say with the greatest sincerity that I have been trying to meet him in the precincts of the House, and have not been fortunate enough to do so. I hope that explanation will remove from his mind any idea that there was intended discourtesy to him.

Mr. BALFOUR

May I at once accept my hon. Friend's explanation, but may I also remind him that I was in constant attendance up to Monday night, when all these Amendments appeared on the Paper, and I have also been here since Thursday.

Mr. NEAL

I am very sorry. I hope my hon. Friend will accept my explanation, and regard the matter as closed, with the further observation that he does himself a great injustice if he thinks he is not persona grata with myself. Perhaps he will allow me to pass to the merits of the Clause he has moved. I cannot ask the House to accept this Clause. We have by the Clause last passed dealt with the real substance that was desired to be obtained. My hon. Friend moves a Clause that provides that when a generating station is transferred to the joint electricity authority they shall be under an obligation henceforth to supply that authority company, or persons to whom it is transferred, electricity at a cheap rate and under conditions act out in the Clause. The cardinal objection to the Clause is this. Nobody is bound to transfer their stations to the joint electricity authority. If they wish to do so, then they make their own terms and contracts. They may say that they will not transfer their stations, unless the authority undertakes that it will supply them with a certain quantity of electrical energy at a certain price, at a certain frequency, and under conditions which are the subject of bargaining between the parties in their discussions for the transfer of the station. The objection to the new Clause is that it hampers the bargaining of the parties. I desire that there should be the greatest freedom, and that the joint electricity authority that proposes to purchase and the undertaker who has a station that he may, on terms, be willing to part with should be free to make a mutually satisfactory bargain. This was a necessary Clause of the 1919 Bill when compulsory purchase was the subject of legislation. It was, again, a necessary Clause in the Bill the Government first introduced in 1920 which continued the compulsory scheme. Under the purely voluntary principle the party is able to make his own terms for the sale of his station, and I respectfully suggest to the House that it is quite unnecessary to say on what terms that settlement should be made.

Mr. BALFOUR

Suppose a local authority makes a voluntary arrangement to transfer its generating station to the joint electricity authority. What will be the position if that local authority, having very improvidently transferred its station at a big price to the joint electricity authority, makes a contract to purchase electricity from the joint electricity authority at a high price per unit as compensation for the big price paid, saddling the ratepayers for many years—the very reverse from what was contemplated by the Electricity Acts—with a high price for electricity. This proposal would protect them.

Mr. MILLS

Before the Parliamentary Secretary answers that question, may I put to him another case from an entirely different aspect? There is in the division I represent a generating station owned by a small district council, and many years ago, owing the short-sightedness of the councillors in power at that time, they contracted, apparently in perpetuity, for the supply of electricity to a company outside the division altogether, which leaves a burden on the ratepayers every year. May not that put an entirely different side to the ease presented by the hon. Gentleman (Mr. Balfour)?

Mr. NEAL

I do not think that question arises under this new Clause. I have not had an opportunity to consider it, but I should be glad to look into the matter more closely if the hon. Gentleman (Mr. Mills) will see me afterwards. To deal with the question of my hon. Friend the Member for Hampstead (Mr. Balfour), I really cannot conceive that the joint electricity authority would make so improvident a bargain. It is under no obligation to purchase any more than the undertaker is under an obligation to sell, and it is inconceivable when you are dealing with, business men who will form this joint electricity authority that they will be likely to enter into a bargain which would have the effect he suggests.

Question, "That the Clause be read a Second time" put, and negatived.

CLAUSE 1.—(Power of authorities to borrow.)

(1) For the purposes hereinafter mentioned a joint electricity authority may, with the consent of the Electricity Commissioners, and subject to Regulations to be made by the Minister of Transport with the approval of the Treasury, borrow money, in such manner and subject to such provisions as to the repayment thereof, and with such powers as to reborrowing for the purpose of paying off a loan previously raised, as may be prescribed by the Regulations, and such Regulations may empower a joint electricity authority to borrow temporarily, to issue bonds and to make arrangements with hankers, and may apply with or without modifications any enactments relating to borrowing by local authorities, including provisions as to the enforcement of the security by the appointment of a receiver or otherwise.

(3) Any money borrowed under this Section, and the interest thereon, may be charged on the undertaking and all the revenues of the joint electricity authority, or on any specific property forming part of that undertaking, and shall be repaid, within such period not exceeding sixty years, as the Electricity Commissioners may determine.

Mr. BALFOUR

I beg to move, in Subsection (1), after the word "mentioned" I "For the purposes hereinafter mentioned "], to insert the words "the Electricity Commissioners may by Provisional Order authorise."

This Amendment, standing alone, might appear quite ridiculous, and I would, therefore, explain that it is the first of a long series of Amendments put down in the Committee stage. I purposely do not enter into them, because I know they will not be accepted, and I put the first of them on the Paper in order to preserve my right to raise a point which was raised in Committee, which I took up with the Parliamentary Secretary, and which he indicated he would be willing to look into in some form between that and the Report stage. I wish to deal with the control of this House over the financial matters connected with the joint electricity authority. I must refer hon. Members to the Debate which took place on the Second Reading in this House, when the Parliamentary Secretary agreed—I think he will not dispute my representation of the case—to endeavour to find sonic machinery between the Second Reading and Committee stage in order to make sure that Parliamentary control is preserved over the finances of he joint electricity authority. We then arrived at the Committee stage, and I am sorry to say this is the sort of procedure that has followed me all through this Bill—promises from stage to stage, bargains with certain other people, without, I am afraid, my having had much luck myself. But in the Committee stage the hon. Gentleman again agreed to do something to achieve this end, and he undertook to make favourable representations to the Chairman of Ways and Means to see whether anything could be done by way of alteration of the Standing Orders. I thought, and I still think, that was quite a reasonable method of approaching this matter. It displayed, I thought, a very fair frame of mind and a very fair attitude on the part of the Parliamentary Secretary.

7.0 P.M.

Following that, a proposed Standing Order, No. 191, appeared on the Papers in another place. I am not quite sure whether I am in order—though I think I am—in referring to this matter, as I understood that a like proposed Standing Order would appear on the Papers of this House. This proposal was to provide that any Special Order should lie on the Table, but that Petitions against the Order might he deposited in the House on or before the seventh day after the day on which the Order had been so laid, and petitioners should he allowed to appear and oppose, as in the case of a Private Bill. There are other provisions in the Standing Order, but that is the principal one to which I call attention. My sole object in moving this Amendment is to raise this point, and to ask the Parliamentary Secretary whether he is prepared to put a Standing Order on the Papers of this House, and to arrange with the Chairman of Ways and Means that an Order, similar to No. 191 in another place, should appear here? I also wish to ask the Government whether they will give facilities—so far as I can see, it would take but few minutes—to, pass such an Order through both Houses. That would fulfil the undertaking given by the Parliamentary Secretary on the Second Reading and the indication that he gave to the Committee. It would be received by nearly all hon. Members of this House gratefully as a clear indication of the intention of the Government to retain control over the finances of these great concerns.

Mr. ATKEY

I beg to second the Amendment.

Mr. NEAL

I am sorry I cannot accept this Amendment, for reasons which I will give. Before I do so, may I give a history of this Clause as we now find it, in order to show the efforts made by the Government in another place and here to meet the points of view which have been expressed by the hon. Member for Hampstead (Mr. Balfour) and the statements which I made on the Second Reading and again in Committee.

Mr. BALFOUR

I think I made it quite clear that I merely moved this Amendment as a matter of form, in order to ascertain the views of the Government regarding the proposed Star ding Order. The Amendment is a pure formality, to give me the right to speak at, all.

Mr. NEAL

Yes, but the hon. Member takes the opportunity, while doing that, of suggesting at least that there has not been a complete fulfilment of statements made on behalf of the Government, and I cannot allow that to go forth. The monies to be expended by the joint electricity authority will be monies they will invite the public to subscribe. They will not be monies voted by Parliament—it is quite true that in another Clause of the Bill certain local authorities may, under certain definite safeguards, subscribe—so we are not dealing here with the question of control of money voted by Parliament. When this Clause appeared in the Bill in another place it was minus Sub-section (4), at which perhaps hon. Members will look. The point was then raised by a Noble Lord, who took the same point of view as my hon. Friend the Member for Hampstead has taken, that the amount of the borrowing powers of the joint electricity authority ought to he stated in the scheme. It was to meet that that my Noble Friend proposed, on behalf of the Government, Sub-section (4), which says: A scheme constituting a joint electricity authority shall fix with reference to the estimated capital expenditure of the authority the maximum amount which may he borrowed by the authority— We thought that the point of view voiced by my hon. Friend had been completely met by that. On Second Reading, however, he and other hon. Members stated that that did not go far enough. I said I was quite desirous of retaining for Parliament the last word in reference to this matter of the borrowing powers of the Authority, and I promised to consider whether words could be inserted in Committee to deal with the point. The hon. Gentleman did not tell the House that words had been inserted in Committee to deal with that matter. I should like to call attention of the House to what those words are. The remainder of Sub-section (4) reads as follows: and the authority shall not have power to borrow any sums in excess of the amount so fixed, otherwise than for the purpose of paying off loans previously raised, unless authorised by an Order of the Electricity Commissioners confirmed by the Minister and such Order shall be provisional only and shall not come into force unless confirmed by Parliament. So the way in which the matter stands is this. The original borrowing powers of the company will be defined in the scheme, which is subject to Parliamentary control by a special Resolution on procedure. As I explained in Committee, we thought it quite impossible to divorce the scheme, which will say what expenditure ought to be undertaken, from the borrowing powers. That scheme will have been the subject already of two inquiries, and possibly of a third. For the same reason which I gave in dealing with another Amendment, I am quite unable to invite the House to accept this Amendment, which would say that, having had two inquiries, and possibly three, you should then proceed by Provisional Order and have the matter referred to Select Committees of both Houses, with Parliamentary counsel, agents and witnesses, and the whole expense incurred over again. Therefore I must really oppose the Amendment.

When, however, you come to the second part, namely, subsequent borrowings, which has not been the subject of the same inquiry, I think there is no reason why there should not be a Provisional Order procedure. To that extent I made it clear in Committee, and I did, as my hon. Friend said, promise that I would consult with the Chairman of Ways and Means as to whether some Standing Order of the House might, be made operative to deal with the question which he had in mind. As I understand him, that question was that these special orders are exempted business, therefore they may come on at any hour, and unless hon. Members are put to the trouble and inconvenience of watching closely, they may find that these special orders have slipped through in their absence. I did consult with you, Mr. Speaker, if I may be allowed to say so, on this matter. I was in error in thinking that a matter of this description was within the purview of the Chairman of Ways and Means. The Chairman of Ways and Means, I am informed, deals with what T may call the more mechanical parts of the Standing Orders; but Standing Orders which involve the time of the House, and procedure of that character, are matters for the Government. I think I correctly interpreted the advice you were good enough to give me on this question, that I should take counsel with those who had the right to speak on behalf of the Government in this matter.

I am in a position to say this, with reference to the special Orders which set up joint electricity authorities and which, from their nature., are very important matters—matters not less than of legislative importance—that it is the intention of the Government to put those Orders down on the Order Paper at a time which will give opportunity for their discussion fully and freely by the House. We have a precedent, not very remote, as to how- these matters can be dealt with, in the case of the Burmese Constitution, which, again, was a matter of Resolution, and occupied the whole of a Sitting, when Amendments were moved and modifications made. I hope, in that way, the hon. Member will realise that I am not in fault at all.

Mr. SPEAKER

As this is a matter of some Parliamentary importance, perhaps I may say something which will clear up the point. This is procedure on an Order which shall not come into force unless confirmed by Parliament. I am of opinion that it would be open to an hon. Member objecting to an Order of that kind to move as an Amendment to the confirming Resolution that it should be referred to a Select. Committee, where the parties could he heard. I gather that that really is what is in the mind of the hon. Member who just now moved the Amendment. That was the advice which I tendered to the Parliamentary Secretary to the Ministry of Transport when he came to consult me on the matter.

Mr. ORMSBY-GORE

A rather interesting point of procedure has been raised by what the Parliamentary Secretary has just stated, and what you, Mr. Speaker, have made so clear. Am I to understand that the Clause, as it now reads in the Bill, establishes this procedure for all time, or does it require to be implemented by the promise of the Government to pursue a particular course of action? I understood the Parliamentary Secretary to say that he had consulted the Government, that is to say, the Cabinet, and had received an interpretation of this Clause from them which would enable the matter, while they are in office, to be taken at such a time of day as would give hon. Members the opportunity of discussing it. What is to happen when another Government comes into power? Will the same interpretation be placed upon this Clause as it now stands? I should have thought it would have been safer to use rather more explanatory words: if possible, the same words as were used in the Government of India Act, on which the Burma Rules were founded. They laid down quite plainly the procedure which will be adopted by any Minister making rules under that Act, namely, that he has to come for an affirmative Resolution, to which Amendments of substance and procedure could be moved. It may be that that is the procedure which is permanently laid down in the case of these electricity Orders, but from what fell from the Parliamentary Secretary I was in a little doubt, and I want to have it quite clearly, from him, that his reference to the Government binds future Governments as well as the existing one.

Mr. NEAL

If I might answer the hon. Member for Stafford (Mr. Ormsby-Gore), I would say that the Section which deals generally with these special Orders—of which there are many of a formal and non-controversial character—is Section 26 of the Electricity (Supply) Act, 1919. The proviso reads thus: Provided that a special Order made in pursuance of the powers conferred by this Section shall be laid before each House of Parliament and shall not come into force unless and until approved either with or without modifications, by a Resolution passed by each such House. I think that deals with the point which the hon. Gentleman has put to me. If I may say so, I am grateful to you, Mr. Speaker, for giving me your assistance in the matter, and making the position so clear with reference to Standing Orders generally. We now have it on the authority of Mr. Speaker that a special Order, which raises controversial points, which could not be dealt with conveniently on the Floor of the House could, under his ruling, be referred to a Select Committee. The special Orders under consideration are, of course, of very great importance indeed, and what I was promising, as far as I might, was that if opposition were raised 10 these Orders, the Government would endeavour to give ample Parliamentary time for their discussion, and not try to struggle them through in the dead of the night, when some hon. Members might not be here to take part in the discussion. I hope in that way we have endeavoured to meet quite fully the points that were raised, and that we may dispose of the Amendment of my hon. Friend.

Sir H. NIELD

I am not quite sure the House is very clear as to what is to be the procedure in respect of this particular matter. One understands perfectly well the objection to submit to any further inquiry. Those who have had anything to do with inquiries before the Commissioners, even as to area, know how these things drag out, and what enormous expenditure is incurred. Therefore, as far as regards the earlier part of the Clause, I agree that there should be no further inquiry, but the Parliamentary Secretary does distinguish between those matters, and matters which are proposed to be dealt with over and above the maximum amount authorised in the first instance. It is very necessary, I think, that we should have a very clear understanding of the control this House would have over the power to borrow in excess of this amount for the purposes of paying off loans, because large sums of money may be expended and lost upon ventures of this sort, and I suggest that, to make it perfectly clear, we should add at the end of the Clause the words: "by a Resolution in the same manner as in Section 26 of this Act."

Mr. NEAL

My hen, and learned Friend would really be cutting away from what I have given rather than enlarging it. If I accepted the suggestion of my hon. and learned Friend, I should really be setting up a sort of hybrid Committee of Parliament. I should be grafting on to the special order procedure the provisional order procedure, and that would make the matter confusing.

Sir H. NIELD

I did not advocate for a moment reverting to provisional order procedure, but I do think we might to have ample safeguards before any further capital be raised beyond the original capital sanctioned. The hon. Member thinks it is perfectly clear. I do not share that opinion, but if the House he satisfied, I have nothing further to say.

Mr. BALFOUR

I shall be pleased to withdraw this Amendment. I am glad my hon. Friend has met us in the direction indicated, and I am grateful to you, Sir, for the useful words you have uttered for our guidance. I should like to say to my hon. Friend that if he would study the Standing Orders, to which I have referred, he would see that no harm would come to existing interests, and it would secure all that we have in view.

Mr. DENNIS HERBERT

May I ask whether it is perfectly clear that the particular order referred to here is governed by the words in the previous Act?

Mr. NEAL

I think we have made that clear in the Clause itself. I feel sure we have added words to the Clause that make it clear that these special orders shall be orders which have to be confirmed by Parliament. I have no doubt at all about this.

Mr. HERBERT

My point was as to haw my hon. Friend connects it with the procedure to which he referred under the previous Act?

Mr. NEAL

The two Acts have to be read together. They are one Act.

Mr. SPEAKER

I think that is so. The confirmation would be with or without Amendment.

Amendment, by leave, withdrawn.

Mr. BALFOUR

I beg to move, in Sub-section (3), after the word "years," to insert the words in respect of freehold land, thirty years in respect of leasehold land (but not exceeding the period of the lease if such period is less than thirty years), forty years in respect of high-tension trunk transmission lines, twenty-five years in respect of Overhead lines and mains and services, twenty years in respect of plant and machinery, and ten years in respect of any other assets. In Committee, originally, it was proposed to leave this period entirely unlimited, except at the discretion of the Electricity Commissioners. The Minister in charge was good enough to allow 60 years all round. That period, I think, is quite fair in respect of freehold land and even such fixed assets as permanent structures, but I think it is not quite wise to leave the borrowing powers of these huge authorities unfettered in the discretion of the Electricity Commissioners, and that we should put some reasonable limit to certain classes of wasting assets. The object of this Amendment is to secure a very adequate limit in respect of different classes of assets, and in no way to hamper the authorities, hut to make sure that in the future these authorities will not be authorised to borrow on very long terms, so that, perhaps, 15 years afterwards, the people who are then using electricity find that they have an asset which has largely wasted for revenue, and have to raise capital again, although there is still an unexpired term of 45 years during which they have to hear the burden of the capital already acquired.

Mr. HOPKINSON

I beg to second the Amendment.

I must say the hon. Member has been very moderate in the alterations he has made. He allows 40 years in respect of high-tension trunk transmission lines, which, I think, he will agree is a very long term even for such transmission lines of the very hest quality. Again, 25 years in respect of overhead lines and mains and services is very considerable, when one realises that the atmosphere in the neighbourhood of large towns is full of acid material. Then he suggests 20 years in respect of plant and machinery. Does anyone, who has any knowledge of electricity supply, imagine for a moment that there is a single piece of machinery in the generating stations in this country that will not be absolutely obsolete in 20 years? It is absolute lunacy, and an example of the folly on which this Bill is based, to suggest 60 years, in the first instance, should be allowed for the repayment of loans in this matter.

Mr. SPEAKER

I called upon the hon. Member to second the Amendment. He appears to be opposing it.

Mr. HOPKINSON

I am afraid I was damning it with faint praise rather than opposing it. But if I may devote myself more strictly to this part, my argument has the greater strength. If 20 years be ludicrous, surely 60 years is super-ludicrous. The 60 years' period is typical of the whole idea of the Ministry of Transport about electricity supply. The whole attempt of this Bill has been to stereotype technical practice in electricity supply, and there is no engineer in this country who is not perfectly well aware that, at the present moment, to try to stabilise the production and distribution of electricity is simple madness. Practically every piece of generating machinery or transmission line in this country, in all probability, will be hopelessly obsolete within five or ten years. The Parliamentary Secretary looks at me with awe and amazement, as if I were speaking madness. But I do appeal to the House whether I am not telling the truth when I say we are just on the verge of the greatest changes in the supply of electricity which have ever been experienced both in generation and in transmission? If the Minister and his technical advisers, who, apparently, are fast asleep in these matters, would consider for a moment, they must know that the present plan of generating electricity in this country is largely through coal-driven stations with steam-turbines driving large electric units. He seeks to standardise at a time when there is not the slightest doubt that many people who have technical knowledge of these things know that there are three definite and inevitable steps which are likely to be taken in the generating of electricity within the next five or ten years at the most.

Mr. SPEAKER

I understand that the Amendment has not been seconded.

Mr. HOPKINSON

I am seconding it.

Mr. SPEAKER

The hon. Member is speaking to the Third Reading of the Bill. He is rather too progressive. Does he or does he not second the Amendment?

Mr. HOPKINSON

I am seconding the Amendment, but, as you hate ruled that this subject will be in order on the Third Reading, I will defer it until then.

Mr. NEAL

I am rather glad that my hon. Friend's speech has been deferred to the Third Reading, because it may give him an opportunity of reading the Clause. I am quite sure that the speech he has made in seconding the Amendment of my hon. Friend was certainly made without his having taken the trouble to read the Clause, or, I think, the Amendment which he was seconding. The Amendment is to a Sub-section which deals with the borrowing powers for particular expenditure rather than the general borrowing powers of the joint electricity authority. It is a perfectly common form not only in the Electricity Acts, but in every other Act which deals with the control of the borrowing powers of the authorities, for instance, of municipal corporations who have to obtain sanction for their borrowing. Somebody ought to be charged with the responsibility of seeing that these borrowing powers bear as strict a relationship as may be to the life of the asset in respect of which the borrowing is to be made.

In the Committee I accepted an Amendment to insert the term of 60 years. Unless I am very much mistaken—I have not verified this—but I believe in the Standing Orders of the House there is one which provides for the limit of 60 years in respect of the sanction to borrowing powers by the House in the matter of private Bills. Certainly 60 years is the usual term granted in respect of plant, not of wasting assets. Therefore, I went further, anti I promised I would see, in consultation with my advisers, as to whether we could not include in the Clause terms in respect of the matters specified, and that the Mover of the Amendment has suggested. My hon Friend is immediately answered by the hon. Gentleman who seconded the Amendment, who says that these terms are altogether inappropriate. He further states that the Electricity Commissioners or the Minister are embarking upon a policy of stereotyping everything. I am now dealing with the speech of my hon. Friend the Member for the Mossley Division (Mr. Hopkinson), who says that there can be nothing more inappropriate than an attempt to put in a Clause a term of years as a maximum which every applicant would forthwith regard as something he ought to have.

An Amendment may be put into an Act of Parliament fixing terms for the authorisation of things. At that moment your troubles begin, because the person who wants borrowing powers wants to arrange the kind of terms which ought to he given. Although it is quite true you are not bound by them, it is equally true you raise expectations and find it extremely difficult to get away from them. Does anyone suppose for a moment—dealing with the point just put forward in the speech of the hon. Member who last spoke—that the Electricity Commissioners would dream of giving a long term for wasting assets? The fact is that they are giving very short terms indeed for wasting assets. They are constantly in touch with the industry. No one is better qualified to know what takes place from day to day and from year to year; the improvements that are made, and the obsolescence and depreciation which are necessary. They fix a term of years in consultation with the leaders of the great electrical industry, and they take care that no loan period exceeds the life of the assets. If this Amendment were accepted, they would be very much handicapped in doing exactly what the hon. Member who moved it desired they should do. May I in passing say that if this Amendment were accepted, the low term for a generating station would be 10 years? I am sure my hon. Friend has not visualised that, because he says, "any other assets" 10 years. How would that fit in with a great generating station with a long life before it? That undertaking would have a limited loan period of 10 years.

Mr. BALFOUR

"Twenty years in respect of plant and machinery." That is what the Amendment says.

Mr. NEAL

I am not talking of either plant or machinery, but of the buildings. What he has said shows the danger of endeavouring to stereotype in a Clause that which might very well be left to the discretion of the Commissioners who are the best persons to deal with the matter.

Major BROWN

The observations of the hon. Gentleman the Parliamentary Secretary are rather unsatisfactory. I confess I am not persuaded by his argument. It seems to me that what the hon. Member for Hampstead wishes to do is to impose some limitation and some safeguard on the way our credit is involved. It is true that experts deal with this money aspect, but so far as I can see, this money is raised more or less by and with our consent, possibly after Orders have been laid on the Table. At all events, when the ordinary invester knows that this is in some way connected with the, Houses of Parliament, he will think probably that his money has got a Government guarantee. To that extent we are responsible to see that the investors are not misled. I submit that my hon. Friend, in proposing the limitations he seeks to, is in the right. I am not qualified to speak of the matter technically, but I think this House ought to see whether we should not pay more attention to the safeguards, so that people may not be misled in thinking that money invested under an Act of Parliament has a Government guarantee. I quite understand the attitude of my hon. Friend the Parliamentary Secretary, but what Government Office has not always objected to any limitation being placed on its powers? I press again, therefore, the point of view of the hon. Member who moved the Amendment, and express my regret at the answer given by the representative of the Government.

Sir H. NIELD

I also join in this respect, that I regret the attitude of the hon. Gentleman, for this really is a matter of considerable importance. I assume that the ordinary person will imagine that the ratepayers have some regard to expenditure, but these Joint Electricity Commissioners are to be drawn, one member here, another there, and another from somewhere else, and there is not the same opportunity for supervision as there is ordinarily. Therefore, I think it is very necessary indeed that we should have some sort of guarantee. Take the argument of the Parliamentary Secretary. I am sorry he was so ready to take offence, for we are only exercising our conversational powers in an ordinary way, and, we did not mean to disturb him, least of all myself. He referred to the absurdity of the suggested Amendment. He spoke of the prescribed period of 10 years for a generating station, and asked was there anything more ridiculous? Really he does not do himself justice. A generating station is generally freehold or leasehold. It is built upon the ground. Generating stations are not in the air, though they may he some day.

Major HILLS

We can anticipate?

Sir H. NIELD

At present they are on the ground, and are either freehold or leasehold. In that case the matter will be determined by the earlier portions of the Amendment, limiting the borrowing powers to the unexpired period. I do not see myself that there ought not to be some control. Some general words might provide for it, such as putting in the words, "having regard to any security." At any rate it should be for a period not exceeding 60 years. Therefore, I think the House will be well advised to insist upon the Amendment.

Mr. HANNON

I think the Clause should be left as it stands. Surely we must trust the Electricity Commissioners of the district. They have discharged their functions to the complete satisfaction, not merely of the interests with whom they have to do, but the public. You cannot insert in the Bill a continuing series of limitations taking all the powers away from the Commissioners. I should like to know how you can secure adequate capital for the undertaking of the character contemplated in this Bill if you hedge them around by all the limitations suggested in this and other Amendments! I am prepared to trust the Electricity Commissioners in the interests of the country.

Amendment negatived.

CLAUSE 5.—(Power of undertakers, etc., to give financial assistance.)

(4) A scheme under the principal Act constituting a joint electricity authority or other body for the improvement of the organisation of the supply of electricity in any electricity district may include provisions authorising or requiring authorised undertakers, and authorising companies and other bodies, represented on the authority or body to contribute towards any administrative cerpenses of the authority or body.

Mr. G. BALFOUR

I beg to move, in Sub-section (4), to leave out the words for the improvement of the organisation of the supply of electricity in any electricity district. and to insert instead thereof the words under the provisions of Section five of the principal Act as amended by this Act. This Amendment is merely consequential on the one previously accepted by the Parliamentary Secretary.

Major BROWN

I beg to second the Amendment.

Mr. NEAL

This is a consequential Amendment, but I am advised it is quite, unnecessary in this place perhaps my hon. Friend will not press it.

Mr. BALFOUR

In view of what the hon. Gentleman has said I shall not press it, but if he finds it. necessary perhaps words can be arranged between now and the Bill coming back from another place to this House.

Amendment, by leave, withdrawn.

CLAUSE 13.—(Suspension of powers of purchase of undertakings.)

(1) The Electricity Commissioners by al: Order constituting a joint electricity authority or a Special Order clay, as regards any undertaking or part of an undertaking of any authorised undertakers, suspend any powers of a joint electricity authority or the London County Council or any local authority relating to the purchase of such undertaking or part thereof for such period and on such conditions (if any) as the Electricity Commissioners may think fit, and may for that purpose amend the provisions of any Act or Order relating to such undertaking:

Amendment made: In Sub-section (1) leave out the word "constituting," and insert instead thereof the word "establishing."—[Mr. Neal.]

CLAUSE 14.—(Made of exercise of powers by authorities.)

The powers and duties as to the generation and supply of electricity conferred and imposed by or under the principal Act or this. Act on joint electricity authorities may ho exercised and performed by any such authority either by themselves or, if so authorised by special Order, through any authorised undertakers; and where any such authority act through any such undertakers the undertakers shall have, to such extent as may be provided by the special Order, the powers and duties of the authority under the principal Act and this Act.

Amendments made After the word "by" ["by special order"], insert the words "the order establishing that authority or by."

Leave out the words "the special order" ["as may be provided by the special order"], and insert instead thereof the words, "such orders as aforesaid.'—[Mr. Neal.]

CLAUSE 15.—(Limitation On powers of joint electricity aut4orities in areas of power companies.)

(1) Sub-section (1) of Section twelve (Powers of joint electricity authorities in respect of the supply of electricity) of the principal Act shall have effect as if—

1. (a) the words from "except" in paragraph (b) of that Sub-section to the mid of that paragraph were omitted therefrom;
2. (b) the words "or power company" were omitted from the proviso to that Subsection in each place where those words occur; and
3. (c) the following proviso were inserted it the end of that Sub-section:

Provided also that the Electricity Commissioners may by Special Order authorise a joint electricity authority to supply electricity in any particular part of the area of supply of a power company, without the consent of the power company, if in that part of the area of supply any authority, company or person requires a supply of electricity for any purpose for which the power company are authorised to Supply electricity and is prepared to enter into a binding con tract to continue to receive and pay for a supply of electricity upon such terms and conditions (including a minimum annual sum to be paid to the power company) as shall in the opinion of the Electricity Commissioners afford an adequate return to the power company and is also (in the case of a company or person) prepared to give to the power company (if required by them so to do) security for the payment of all sums which may become due to the power company under the contract and if the power company are not willing and in a position to supply electricity to that authority, company or person on such terms and conditions. In determining what terms and condition will afford an adequate return to tile power company the Commissioners shall have regard to the following amongst other considerations:

1. (i) The period for which the authority, company or person requiring the supply guarantees to take the supply;
2. (ii) The amount of electricity and the maximum power required:
3. (iii) The hours during which the power company can be called upon to give the supply;
4. (iv) The capital expenditure in connection with the supply; and
310
5. (v) To what extent capital expended in connection with the supply may become unproductive to the power company upon the discontinuance of the supply.

Mr. THOMSON

I beg to move to leave out the Clause.

In the course of the earlier discussion the Parliamentary Secretary described this Bill as an amending Bill. I think that, whatever view we may take of Clause 15, we shall all agree it is the substantial Clause in the Bill. Not only does it amend the Act of 1919, but it repeals the arrangements then made under which a power company can refuse to allow an authorised undertaking to come into that particular district. It is some what extraordinary that after all the negotiations which took place, and the consideration which was given to the passing of the 1919 Act, that almost before that Act is well under way the Government should now ask the House to repeal one of the most important parts of that Act. The Parliamentary Secretary well said that this Clause was not in the Bill as originally submitted, but it is surely very extraordinary that a Clause of this substantial character should not have been in the Bill as originally submitted, but that it should have been put in when the Measure was before another place. Why was it put in? The Parliamentary Secretary said it was put in at the request of the power companies in another place, and that the Government must stand by it. This House has a right to consider this Clause on its merits, and its very serious effects, rather than as part of a bargain. I hope the House will consider its effect upon the consumers of electricity and electrical development generally throughout the country.

The 1919 Act as well as this Act is supposed to cheapen electricity. I think Clause 15, as far as it amends Section 12, will not have that effect. I will recall the gradual development of the terms under which one undertaker may come into the district of another undertaker. This is one of the many trials of strength over a large number of years between the various interests concerned in supplying electrical power and electric light to the public. In the closing years of the last century, electrical development was largely in the hands of local authorities and municipalities, but with the growth of the power companies conditions were imposed which prevented those companies going into districts which were already supplied by an authorised undertaker such as a municipal authority: conditions were laid down that where a district was in the hands of an authorised undertaker, they could refuse consent to anyone else coming in unless the people who wished to come in were prepared to supply electricity cheaper than the district could get it from its own particular source of supply.

When the 1919 Bill was introduced the power companies suggested that this arrangement was not fair or sound when an undertaker wished to come into their district, although they considered it was quite sound when they were seeking to go into the province of some municipality; when it was a question of the joint electricity authorities supplying cheaper electricity in districts in which the power company had the right to supply, then the company said what was good enough to protect the local authority was not good enough to protect them. It must not be merely a question of the price at which they were prepared to supply but also of the price at which the authorised undertaker was going to supply. Those were the terms under the 1919 Act. It is because it is sought to vary these that some of us take the strongest objection to this Clause.

What does this Clause substitute? It repeals Section 12 of the 1919 Act, which provided that where a joint electricity authority was anxious to go into a power company's area, that company could not object unless they were prepared to supply electricity at the same price as the joint electricity authority, but consent can now be withheld if the power company can show that they are prepared to supply at a price that would yield them an adequate return on their capital. What does that mean? It means that it is going to protect the vested interests of the power companies for all time, because any company will say that it is prepared to supply electricity providing it can get an adequate return on its capital.

The Minister himself in Committee upstairs admitted that there might possibly be some fear and some danger on this point, and that we might have an Electricity Bill seeking to cheapen electricity which was going to prevent a cheaper supply in an area because the power company had certain rights, and were prepared to supply at a higher price which this Clause would protect. The Minister said that no one would wish to adopt such a stupid and unreasonable attitude, but if that is possible, why does not the Parliamentary Secretary agree to the words which originally gave the protection? The reason is to be found in the argument of the hon. Member for Oxford (Mr. Marriott), who said: I want the Committee to observe the real importance and design of this Clause. It is designed to prevent interference with the electric companies power of carrying out their statutory powers and to prevent competition at the hands of the joint electricity authorities. The point is that the power companies have expended a large amount of capital on these undertakings and they are entitled to have this capital safeguarded. But surely the friends of the power companies do not object to competition. Why should they object to a joint electricity authority which has new plant and the latest advantage of electrical development? Why should a district be robbed of the advantage of these improvements because somebody years ago invested their capital in an obsolete form of plant and obsolete methods of distribution? Surely by doing this you are protecting vested interests against the general welfare of the community as a whole. The hon. Member for Mossley (Mr. Hopkinson) said that we were within sight of a great development, of electrical energy, generating stations and methods of distribution, and if that be true then this is not the time to seek to protect those who have invested capital in obsolete plant or plant situated so far from the area of distribution that they cannot supply electricity as cheaply as a new undertaking could do.

This Clause provides that if the power company is prepared to supply at certain rates they can resist and prevent a joint electricity authority giving cheap electrical power and electric light to those in that district. What are the terms? If the power company is prepared to supply on such terms and conditions as will assure an adequate return to the power company. The Commissioners must have regard amongst other considerations to the capital expenditure in connection with the supply; to the period for which the authority, company or person requiring the supply guarantees to take the supply: and they must also have regard to the amount of electricity and the maximum power required and the hours during which the power company can be called upon to give the supply. They must also have regard to the extent to which capital expended in connection with the supply may become unproductive to the, power company upon the discontinuance of the supply.

There you have the most careful conditions laid down which will protect for all time the expenditure of capital invested by the power company. It is perfectly right that people should have their money protected, but why should investors in one form of industrial enterprise be protected at the expense of the community, while those in other forms of industrial enterprise have to take their own risks in the market. By making this change and altering the Act of 1919, you are retarding the development of electricity and you may be saddling a district with a supply much dearer than they can get elsewhere. In this matter the great hulk of the capital is held, not by power companies, but by municipal enterprises of one sort and another. We are sometimes inclined to think that the great power companies working for profit are the only people who should supply electric power, whereas, as a matter of fact, the undertakings in the hands of municipalities and urban districts hold two-thirds of the total capital invested in these public undertakings. No less than£62,000,000 out of £92,000,000 invested is held by local authorities, leaving some £30,000,000 in the hands of companies. Surely it is a serious matter to repeal an Act, to give to the investors of £30,000,000 a protection which is not given to the holders of the £62,000,000. I do hope that the Government will have regard to the broad public interest, and realise that if they pass this Bill and repeal Section 12 of the 1919 Act, which gave adequate protection to power companies, they are going to hinder very seriously that development and spread of cheap electricity which is so necessary at the present time. Can we wonder now that these terms have been foisted upon the Government that you have in the public Press flotations of power companies; and what do they say in the prospectus? One company is seeking to raise a capital of £1,000,000, and they say: The company, having overcome the legislative and other difficulties which resulted from the War "—

Mr. NEAL

That is not a power company at all.

Mr. THOMSON

At any rate, it is a company dealing with electrical development. By altering the terms of the 1919 Act, which was thrashed out before this House and before a Committee, by varying that, not in the interests of the consumer or the public, we are doing a great deal to retard and not to help electrical development. We have been told that the 1019 Act was originally compulsory, whereas it is now on a voluntary basis, and the Parliamentary Secretary seemed to think that that fact made a difference as to the terms under which a power company might come in. But surely protection of the public is equally necessary whether the arrangement is compulsory or voluntary. Therefore I hope, in the interests, not of local authorities and not of the power companies, hut in the interests of consumers as a whole, the Government and the House will insist upon the terms of the 1919 Act and not seek to repeal it.

Mr. A. WILLIAMS

I beg to second the Amendment.

8.0 P.M.

I do not propose to add many words to what has been said by the last speaker, who was a member of the Committee, but I desire to point out that the urban district councils throughout the country are thoroughly dissatisfied with this Clause. They would propose to fight the thing very fully but for the fact that those who might have been expected to fight with them have come to a compromise with the power companies. The urban district councils are not satisfied with the compromise come to. It seems to me of the greatest importance that the interests of the public and of the local authorities as representing the public should be preferred rather than those of the power companies, and more particularly in a matter such as this of the distribution of electricity, on which the future of our country depends to so large an extent—the industrial future of the distribution of cheap power and possibly, eventually, also a very great change in the conditions of life, by heating electrically rather than by filling the atmosphere with black smoke and poisoning the life of the people. From the point of view of the immense importance of cheapening electricity in this country, and from the point of view of the rights and interests of the consuming public and the local authorities representing them, we say that this Clause is most objectionable and ought to be deleted.

Mr. NEAL

I find myself in some difficulty. The hon. Member who moved the deletion of the Clause is associated with the Municipal Corporations Association, who have agreed to it as meeting to the fullest possible extent the objections which he has raised. My hon. Friend, apparently, thinks that they do not understand their business, and that the Electricity Commissioners and the Government are out to encourage dear electricity. Let me disillusion him, once and for all, on that point. There is no such design in, and no such possible result from, this Clause. The hon. Member has carefully avoided dealing with the new Clause, which must be read alongside this. If he will look at Section 12, his fears must vanish. I am advised by the Commissioners, who know the whole of the area and have looked at it district by district and authority by authority, that the fears the hon. Member has expressed have no ground whatever.

Mr. THOMSON

Why not?

Mr. NEAL

I stated the reasons in Committee, I will tell the House, briefly, now. Section 12, which was a limitation on the powers of the joint electricity authorities, was in the Bill when compulsion was possible, when it was possible to take away a station from its owner without his consent. It was, therefore, necessary in the Bill to put in words providing that the owner of the station should have a supply from the joint electricity authority to whom his station had passed. But that state of things has gone entirely. No one is bound to sell his station unless the terms are satisfactory, and no municipal authority or urban district authority would ever dream of Felling their stations unless the terms were satisfactory. Does the hon. Member, who is himself a member of a local authority, suggest to me, who was for many years a member of a local authority, that it is possible to find anywhere in the land a courted, a borough, a county borough, an urban district, or a rural district authority that would sell its station to the joint electricity authority, and find that by doing so it was unable to get a supply from that station?

Mr. THOMSON

If the hon. Gentleman will refer to my speech, he will find that I did not make any reference whatever to the question of generating stations. I based my argument entirely on the question of the right and power of the company to refuse the joint electricity authority a supply.

Mr. NEAL

With great respect, my hon. Friend must allow me to answer the point I was dealing with. This rests entirely on the sale of a station. If the hon. Gentleman will take the trouble to look at Section 12, paragraph (b), he will find it says that the authority shall not supply electricity in any part of the area of supply of a power company for which the company are therein authorised to supply electricity without the consent of the company except to the precious owner of a generating station"— these are the material words— which has been transferred to the joint electricity authority. The whole basis of chit Clause, and of Clause 15, and of the new Clause, is that the authority has voluntarily sold its station to the joint electricity authority, and having done that, I pat again to the hon. Gentleman the question: Does he suggest for a moment there is any local authority in the land which would sell its generating station to a joint electricity authority if thereby its district was to be cut off from being supplied from that station? The matter really only needs to be stated for it to be realised that the hon. Member's fears are groundless. Under these circumstances what is happening? The Municipal Corporations Association have approved of these words. My new Clause, which is designed to alleviate any fears they might entertain on the subject, provides that the Commissioners may, when they are marking out their area of supply exclude altogether from the area of supply the power company of the district which is served by a generating station which has been transferred to the joint electricity authority, and they may do it on such terms and conditions as they think right, their action being subject to Parliamentary control. Under these circumstances, what becomes of the idea that this is intended to give some extraordinary right to the power company, and that we ought not to consider the interests of the people who have invested many millions—I think the hon. Member put the amount at £30,000,000—in these undertakings. What becomes of the idea that we ought to say to these people, "Your statutory rights upon which you have invited subscriptions of public money are nothing and are to be ignored." If that is the hon. Member's view I doubt if he will find any other hon. Member of the House to support him in that view.

Mr. THOMSON

What about the 1919 Act?

Mr. NEAL

Will the hon. Member take the trouble to look at it? The 1919 Act was based entirely on taking property away from the undertaker without his consent. When you do that, when you take property without the consent of the owner and without his having a right to make any bargain, it is obvious you must under those circumstances protect him from the effect of what Parliament has done by depriving him of his property. There is a totally different consideration here, and if the hon. Member would really be guided by the advice of the leaders of the association, of which he is a vice-president, who have considered this matter in the closest detail, and have agreed to the Clause at a conference to which he was invited but did not come, he would not make alarming speeches of the character he has done. By so doing he is hardly treating this matter seriously. I want to say one word in answer to the hon. Member for Consett (Mr. A. Williams). There is, I admit, some distinction between the cases of the urban districts, in whose interests the hon. Gentleman made some observations to the House, and of the other authorities. But I have had that matter surveyed with the closest care. Perhaps the hon. Gentleman will pardon me if I do not weary the House at this time by attempting a detailed examination of it, but I can assure him that the Commissioners have looked at and have tabulated the whole of the districts, urban and rural, which might be affected, and they have assured me that no harm whatever can come to those urban districts from the effects of Clause 15. The Commission have full powers to deal with this matter in a way that may be just. I do not want to argue the matter at greater length, but I repeat that the fears which have been expressed are not at all likely to materialise.

Viscount ELVEDEN

The hon. Gentle, man who has just spoken has referred to the necessity for dealing fairly with the capital already invested in these undertakings. I congratulate him on his desire to do that. I believe he is doing it. I want to see more electricity used in this country. If you deal unfairly with the money already invested in these undertakings, you will not encourage other people to put in more money. I hope, therefore, the hon. Gentleman in charge of this Bill will stand by the Clause as it is before us.

Major BARNES

The hon. Gentleman in charge of the Bill has shown some resentment of the manner in which my hon. Friend the Member for West Middlesbrough (Mr. T. Thomson) has dealt with the Amendment. He is not, I am sure, averse to hon. Members attempting to make themselves familiar with matters that conic before them, and his resentment no doubt was solely directed against the form in which my hon. Friend presented his argument. The hon. Gentleman cannot resent the attempts of some of us who understand what is happening under this Clause, in view of the fact that most of us have received from a number of quarters serious representations. My hon. Friend behind me spoke with special authority for the Urban Districts Association, and I think the Minister in charge of the Bill has himself admitted that he put forward a case which needed a reply. Whether that reply has been satisfactory to my hon. Friend, I do not know. It is all very well to say that the Municipal Corporation Associations have conic to an agreement on this matter. But one knows there are often differences of opinion even inside associations. Sometimes very important members of associations find that their interests are not quite the same as those of other members, and a Minister who is as skilful as my hon. Friend is very often able to come to an agreement by satisfying the more influential members of the association, while leaving those who are less influential not yet satisfied. I do not think that in addressing himself to the case my hon. Friend finally disposed of it. I understand his case to he that, under the Act of 1919, it became compulsory to transfer these generating stations, and, therefore it was necessary to make some provision there by which the owner of the station could get a supply. My hon. Friend says that that is all gone, that there is no compulsion now, that no owner of a generating station need sell it, and, conversely, that no joint electricity authority need buy it; and that, therefore, the transfer of a generating station will now take place with full knowledge of the position in which both buyer and seller will find themselves after the transfer has taken place, in view of Clause 15. In other words, a person who is going to sell a station now takes Clause 15 into account and fixes his price accordingly, while an authority which is going to buy a station has to face Clause 15, and will take that into account. Therefore, the one will get as high a price, and the other will give as low a price, as he can.

Mr. NEAL

It does not affect the price.

Major BARNES

The consideration. If my hon. Friend is going to assure me that the transfer is going to take place without any consideration—

Mr. NEAL

Section 15 will have no materiality at all on the question of price.

Major BARNES

I am dropping the term "price," and using the term "consideration." There is to he a transfer, and I understood my hon. Friend to say, when putting the case, that the consideration for the transfer would he affected by the presence of Clause 15, that Clause 15 would have a discounting effect, and that, therefore, no one would be prejudiced, because the whole thing was voluntary. The case against Clause 15, as it has been put to me and to a number of other Members in the House, is that really its presence in the. Bill will affect these transfers. I have had placed in my hands the case against Clause 15 which has been formulated by a number of local authorities, who are not even satisfied with the new Clause. In dealing with the effects of the Clause, and speaking subject to the way in which the Bill is now affected by the new Clause, to which I will refer in a moment, they refer to the advantages that are expected to accrue from the establishment of joint electricity authorities—advantages of generating cost—and say that the stations referred to within the area of a power company will be shut out entirely from those advantages, and may be compelled to sell current at increased prices owing to their being compelled to take supplies from the power company. The position therefore, is that they cannot transfer their station to a joint electricity authority. I take it that they mean that they will he prejudiced, and must, therefore, go on with what may he an inefficient station; or, if they transfer their station to the joint electricity authority, the joint electricity authority would be in a position to recoup themselves by the supply of current to that station. Their opinion, therefore, is that the presence of this Clause will really prejudice the transfer of these generating stations. They go on to point out that, if the Clause is passed as it stands, the effect will be that every local authority affected will oppose the establishment of the joint electricity authority, so that one of the prime considerations of the Act of 1919 will he difficult to realise. Finally, they prophesy—prophecy is always dangerous, but still it is their view, and I think the House is entitled to be made aware of it—that local authorities will refuse to assist in the financial arrangements necessary for joint electricity authorities as provided for in the present Bill. From all points of view, therefore, they conclude, the Clause, so far from assisting to provide a cheap and abundant. supply of electricity, threatens very seriously to have the opposite effect.

That was their view of Clause 15 as it stood. Since then, the new Clause has been put down by the Parliamentary Secretary, and it was within the cognisance of those who were drawing up this case. Their view in regard to the situation is that even the new Clause does not protect them as they think they ought to be protected. It does not meet the situation in which they think they will be placed, and does not save them from the necessity of pressing for the deletion of Clause 15. As I understand, and as they appear to understand, the new Clause gives to the Electricity Commissioners power to exclude from the area of a power company certain areas, and, therefore, may be used as a safeguard. On that point I would say that, if Clause 15 is really going to do no harm at all, I do not quite understand why a safeguard should have been introduced. If these powers are to be used as a safeguard, it is pointed out that the procedure of removing a part of an area from the jurisdiction of a power company is very difficult. It requires a special Order, which can only be made, after inquiry, and must first be submitted to the House of Commons and the House of Lords and receive the affirmative decision of each House. There is no guarantee that such a proposal to remove part of an area from the jurisdiction of a power company would not be very bitterly opposed in either or both of the Houses, so that even this proposal does not meet the case, inasmuch as the remedy is contingent, while the evil which it is sought to remedy is actually accomplished if Clause 15 be passed. That is the view of a great many local authorities, and I do not think it has been entirely met by the Parliamentary Secretary. In Clause 15 provision is certainly made for supplies being taken from a power company on a basis which is not at all satisfactory, namely, upon the basis of the cost a production, which is laid down in the Bill as having to take into account certain elements. I think the situation would have been very much better if the Government had seen their way to leave these generating stations to be supplied upon a competitive basis. If the power company wish to take their supply from the joint electricity authority by all means let them do so, but at present I do not feel that either the Bill or the Government has been cleared of the charge levelled against them by my hon. Friend the Member for West Middlesbrough (Mr. Thomson), that, if this Clause be inserted, despite the safeguards, what will happen will be that consumers in particular areas will be loaded with a cost which, if the Clause, were not in the Bill, they would not be called upon to bear.

Mr. THOMSON

I should not have troubled the House again had not the Parliamentary Secretary been somewhat severe on me in his remarks. I do not object to that, but I think he is wrong. In the first place, with regard to the attitude of the Association of Municipal Corporations, he knows that the letter which was sent to him by the association makes it plain that they do not in any way bind hon. Members of this House who may happen to be members of the association. They were only speaking for the committee which met in London, and I have first-hand knowledge that many large local authorities entirely disagree with the view that they have put forward. Therefore, I submit that I was perfectly within my rights as a Member of this House in taking a different attitude, and that I was not in any way bound by the findings of the Association of Municipal Corporations. The hon. Gentleman said that the generating station was the key to the whole situation, and that outside of that there was no substance in my Amendment. Does he really mean that?

Mr. NEAL

Certainly.

Mr. THOMSON

May I ask his attention to Section 12, which we are seeking to amend? Section 12 says: A joint electricity authority shall have power to supply electricity within their district subject to the following limitations, that is to say, the authority shall not supply electricity in any part of the area of supply of a power company for any purpose for which the company are therein authorised to supply electricity without the consent of the company. It goes on to say, the consent of the company may be withheld on certain conditions. The whole substance of my speech and of my objection to this Clause is that the conditions under which that consent may be withheld are radically altered; Section 12 of the 1919 Act says that consent may be withheld in an area of supply, quite apart from any generating station, if the power company are not prepared to supply at a reasonable price, and a reasonable price means on the same terms practically as the joint electricity authority or authorised under-takikng can supply. Now you alter that condition entirely, and the power company can withhold its consent to the joint electricity authority supplying in their area of supply if the power company can show that they are willing to supply on these new terms, and the new terms are not a question of reasonable price, but of giving an adequate return on the capital expended.

Mr. NEAL

Will the hon. Member look at the new Clause, which absolutely covers this point in paragraph (b)?

Mr. THOMSON

I submit that the new Clause does not deal with the matter entirely. It deals with allocating certain areas to certain power companies and certain joint electricity authorities. Apart from that allocation you have other areas where this allocation does not take place where by this Clause you prevent that competition which was given in the 1919 Act, and if my hon. Friend's interjection is

valid and this amended Clause does what he suggests, what is the need to amend Clause 12? What is the need to vary the terms on which the power company may withhold its consent? Surely that argument cuts both ways. If the new Clause deals with the matter, there is no reason to amend the Clause which he seeks to amend?

Question put, "That the words of the Clause down to the word 'Sub-section'["the end of that Sub-section"], stand part of the Bill."

The House divided Ayes, 153; Noes, 80.

Division No. 335.]	AYES.	[8.30 p.m.
Agg-Gardner, Sir Jamas Tynte	Guest, Capt. Rt. Hon. Frederick E.	Parker, James
Atkey, A. R.	Guthrie, Thomas Maule	Parry, Lieut.-Colonel Thomas Henry
Baldwin, Rt. Hon. Stanley	Hall, Lieut.-Col. Sir F. (Dulwich)	Perkins, Walter Frank
Balfour, George (Hampstead)	Hamilton, Sir George C.	Perring, William George
Barnett, Major Richard W.	Hamilton, Patrick Joseph Henry	Pollock, Rt. Hon. Sir Ernest Murray
Barnston, Major Harry	Harmsworth, C. B. (Bedford, Luton)	Pratt. John William
Barrand, A. R.	Harmsworth, Hon. E. C. (Kent)	Purchase, H. G.
Bartley-Denniss, Sir Edmund Robert	Hayes, Hugh (Down, W.)	Ramsden, G. T.
Birchall, J. Dearman	Hennessy, Major J. R. G.	Randies, Sir John Scurrah
Borwick, Major G. O.	Hills, Major John Waller	Ratcliffe, Henry Butler
Boscawen, Rt. Hon. Sir A. Grlffith	Holbrook, Sir Arthur Richard	Reid, D. D.
Bowyer, Captain G. W. E.	Hood, Sir Joseph	Richardson, Sir Alex. (Gravesend)
Boyd-Carpenter, Major A.	Hope, Sir H. (Stirling & Cl'ckm'nn,w.)	Roberts, Rt. Hon. G. H. (Norwich)
Bramsdon, Sir Thomas	Hope, Lt.-Col. Sir J. A. (Midlothian)	Robinson, S. (Brecon and Radnor)
Breese, Major Charles E.	Hopkins, John W. W.	Robinson, Sir T. (Lanes., Stretford)
Bridgeman, Rt. Hon. William Clive	Home, Edgar (Surrey, Guildford)	Rodger, A. K.
Briggs, Harold	Houfton, John Plowright	Roundell, Colonel R. F.
Brittain, Sir Harry	Hunter-Weston, Lt.-Gen. Sir Aylmer	Rutherford, Sir W. W. (Edge Hill)
Brown, Major D. C.	Hurst, Lieut.-Colonel Gerald B.	Sanders, Colonel Sir Robert Arthur
Bruton, Sir James	Inskip, Thomas Walker H.	Scott, A. M, (Glasgow, Bridgeton)
Buckley, Lieut.-Colonel A.	Jameson, John Gordon	Scott, Sir Loslie (Liverp'l, Exchange)
Burn, Col. C. R. (Devon, Torquay)	Jephcott, A. R.	Seager, Sir William
Carter, R. A. D. (Man., Withington)	Jodrell, Neville Paul	Shortt, Rt. Hon. E. (N'castle-on-T.)
Cecil, Rt. Hon. Sir Evelyn (Aston)	Johnstone, Joseph	Simm, M, T. (Wallsend)
Chamberlain, Rt. Hn. J. A.(Blrm.,W).	Kellaway, Rt. Han. Fredk. George	Smithers, Sir Alfred W.
Clough, sir Robert	Kidd, James	Stanley, Major Hon. G. (Preston)
Coats, Sir Stuart	King, Captain Henry Douglas	Steel, Major S. Strang
Cobb, Sir Cyril	Lew, Alfred J. (Rochdale)	Stephenson. Lieut.-Colonel H. K.
Colfox, Major Wm. Phillips	Lewis, Rt. Hon. J. H. (Univ., Wales)	Sturrock, J. Leng
Colvin, Brig.-General Richard Beale	Lindsay, William Arthur	Sueter, Rea-Admiral Murray Fraser
Conway, Sir w. Martin	Lloyd-Greame, Sir P.	Surtees. Brigadier-General H. C.
Cope, Major William	Lorden, John William	Sutherland. Sir William
Cowan, D. M. (Scottish Universities)	M'Connell, Thomas Edward	Taylor. J.
Cralk, Rt. Hon. Sir Henry	McLaren, Robert (Lanark, Northern)	Thomson, Sir W. Mitchell (Maryhill)
Davies, Thomas (Cirencester)	Macpherson, Rt. Hon. James I.	Thorpe, Captain John Henry
Davies, Sir William H. (Bristol, S.)	Macquisten, F. A.	Tryon, Major George Clement
Dawson, Sir Philip	Malone, Major P. B. (Tottenham, S.)	Wallace. J
Dewhurst, Lieut.-Commander Harry	Marks, Sir George Croydon	White, Col. G. D. (Southport)
Edge, Captain Sir William	Marriott, John Arthur Ransome	Whitla, Sir William
Elliot, Capt. Walter E. (Lanark)	Martin, A. E.	Williams, C. (Tavistock)
Elveden, Viscount	Middlebrook, Sir William	Wilson, Col. M. J. (Richmond)
Evans, Ernest	Moles, Thomas	Winterton. Earl
Fell, Sir Arthur	Molson, Major John Elsdale	Wise, Frederick
FitzRoy, Captain Hon. Edward A.	Mond, Rt. Hon. Sir Alfred Moritz	wood, Sir H, K. (Woolwich, West)
Flannery, Sir James Fortescue	Moreing, Captain Algernon H.	Worsfold, T. Cato
Ford, Patrick Johnston	Murray, Rt. Hon. C. D. (Edinburgh)	Yate, Colonel Sir Charles Edward
Forrest, Walter	Murray, Hon. Gideon (St. Rollox)	Yeo, Sir Alfred William
Foxcroft, Captain Charles Talbot	Murray, John (Leeds, West)	Young, E. H. (Norwich)
Fraser, Major Sir Keith	Neal, Arthur
Gardiner, James	Newton, Sir D. G. C. (Cambridge)	TELLERS FOR THE AYES.—
Gardner, Ernest	Nicholson, Brig.-Gen. J. (Westminster)	Colonel Leslie Wilson and Mr.
Gibbs, Colonel George Abraham	Norris, Colonel Sir Henry G.	Dudley Ward.
Gilmour, Lieut.-Colonel Sir John
NOES.
Acland, Rt. Hon. Francis D.	Barker, G. (Monmouth, Abertillery)	Cairns, John
Adamson, Rt. Hon. William	Barton, Sir William (Oldham)	Cape, Thomas
Ammon, Charles George	Benn, Captain Wedgwood (Leith)	Casey, T. W.
Banton, George	Bowerman, Rt. Hon. Charles W.	Clynes, Rt. Hon. John R.
Barker, Major Robert H.	Bromfield, William	Cory, Sir J. H. (Cardiff, South)
Davies, A. (Lancaster, Clitheroe)	Hurd, Percy A.	Rendail, Athelstan
Davies, Rhys John (Westhoughton)	Irving, Dan	Richardson, R. (Houghton-le-Spring)
Davison, J. E. (Smethwick)	John, William (Rhondda, West)	Royce, William Stapleton
Edwards, C. (Monmouth, Bedwellty)	Jones, G. W, H. (Stoke Newington)	Sexton, James
Edwards, G. (Norfolk, South)	Jones, Henry Haydn (Merioneth)	Shaw, Thomas (Preston)
Edwards, Hugh (Glam., Neath)	Jones, J. J. (West Ham, Silvertown)	Short, Alfred (Wednesbury)
Entwistle, Major C. F.	Kennedy, Thomas	Smith, W. R. (Wellingborough)
Finney, Samuel	Kenworthy, Lieut.-Commander J. M.	Sutton, John Edward
Foot, Isaac	Kenyon, Barnet	Swan, J. E.
Gaibraith. Samuel	Lawson, John James	Thomas, Rt. Hon. James H. (Derby)
Ganzoni, Sir John	Lowther, Maj.-Gen. Sir C. (Penrith)	Thomas, Brig.-Gen. Sir O. (Anglesey)
Gillis, William	Lunn, William	Ward, Col. J. (Stoke-upon-Trent)
Graham, D. M. (Lanark, Hamilton)	Lyle, C. E. Leonard	Waterson, A. E.
Grenfell, D. R. (Glamorgan)	Mallalieu, Frederick William	White, Charles F. (Derby, Western)
Griffiths, T. (Monmouth, Pontypool)	Murray, Dr. D. (Inverness & Ross)	Wignall, James
Grundy, T. W.	Myers, Thomas	Williams, Aneurin (Durham, Consett)
Guest, J. (York, W. R., Hemsworth)	Newbould, Alfred Ernest	Wilson, Rt. Hon. J. W. (Stourbridge)
Hallas, Eldred	Newman, Sir R. H. S. D. L. (Exeter)	Wintringham, Margaret
Halls, Walter	Nield, Sir Herbert	Wood, Major M. M. (Aberdeen, C.)
Hayday, Arthur	Parkinson, John Allen (Wigan)
Hirst, G. H.	Pearce, Sir William	TELLERS FOR THE NOES.—
Hodge, Rt. Hon. John	Poison, Sir Thomas A.	Mr. T. Thomson and Major
Hogge, James Myles	Raffan, peter Wilson	Barnes.

Viscount ELVEDEN

I beg to move, in Sub-section (1, c), to leave out the words Provided also that the Electricity Commissioners may by special Order authorise a joint electricity authority to supply electricity in any particular part of the area of supply of a power company, without the consent of the power company, if in that part of the area of supply any authority, company or person requires a supply of electricity for any purpose for which the power company are authorised to supply electricity and is prepared to enter into a binding contract to continue to receive and pay for a supply of electricity upon such terms and conditions (including a minimum annual sum to be paid to the power company) as shall in the opinion of the Electricity Commissioners afford an adequate return to the power company and is also (in the case of a company or person) prepared to give to the power company (if required by them so to do) security for the payment of all sums which may become due to are power company under the contract and if the power company-are not willing and in a position to supply electricity to that authority, company or person on such terms and conditions, and to insert instead thereof the words Provided that, if in any particular part of the area of supply of a power company the power company are not willing and in a position to supply electricity to any local authority, company, or person, who is prepared to enter into a binding contract with that power company to continue to receive and pay for a supply of electricity upon such terms and conditions (including the payment of a minimum annual sum) as will, in the opinion of the Electricity Commissioners, afford an adequate return to the power company and is also (in the ease of a company or person) prepared to give to the power company (if required by them so to do) security for the payment of all sums which may become duo to the power company under the contract, then and in such case the Electricity Commissioners may, by Special Order under Section twenty-six of the principal Act, authorise a joint electricity authority to supply electricity in that particular part of the area of supply of the power company without the consent of the power company. Unfortunately, I was prevented from moving this Amendment in Committee, but subsequently the Parliamentary Secretary said that he would accept it on Report. It is an Amendment which I believe is approved by the Parliamentary draftsman.

Mr. NEAL

My Noble Friend correctly states that this is an improved form of words, and I accept it.

Lieut.-Commander KENWORTHY

This is a very substantial-looking Amendment. I do not know how much substance there is in it, but I hope that this is not making any radical change in the Bill as it came down from Committee.

Mr. NEAL

There is no change at all.

Mr. J. JONES

Does it mean that a local authority supplying electricity will be put in an invidious position, as compared with a public company.

Mr. NEAL

I do not think that question arises. This is a proviso directed to a particular state of things.

Amendment agreed to.

CLAUSE 16.—(Limitation, on prices charged.)

(2) If the receipts of the joint electricity authority on revenue account in any year are insufficient to meet the charges payable out of revenue in that year, the deficiency shall, unless provided for out of a reserve fund, be apportioned amongst the authorised undertakers within the district of the joint electricity authority who take a supply of electricity from the joint electricity authority in proportion to the number of units of electricity supplied to them in that year: Provided that in any case in which it appears to the joint electricity authority that the deficiency in any year can by a reasonable adjustment of charges, or otherwise, be made good out of moneys receivable by the joint electricity authority in any succeeding year or years, or that the deficiency is so small as to justify postponement of any apportionment, the joint electricity authority may refrain from making any such apportionment, and such deficiency may be included in the charges payable out of the revenue in any succeeding year or years.

Mr. MACQUISTEN

I beg to move to leave out Sub-section (2).

The trial of the bureaucrat is all over this Bill, but I do not think that any Clause discloses the trail more clearly than this Sub-section. How are the authorities to know where they stand? If the producing authority is to conduct its business on ordinary commercial lines, it is its duty to calculate properly in advance so that it will be able to meet any deficiency. This Sub-section is an encouragement to sloppy estimates. It is almost to imitate the way that the government of the country is carried on. No electricity authority would think of carrying on its business in that way and have to bring in additional estimates. All Governments do it., and this Government has been as bad as any previous Government. The authorities must know where they stand. There is no provision made for them to collect the money from their own customers. The producing authority is to come along at the end of a year and say, "Our accountant has been off with influenza, and we have made a mistake. We find that a number of units were not accounted for, and we are going to divide it up amongst you." That is something on the lines of the telephone authority which comes along and charges you for calls which you have not had. That may be good enough for a Government Department, but this is supposed to be a business enterprise. Sub-section (1) says: The prices charged for electricity by a joint electricity authority shall be so fixed by the authority, subject to such directions as may be given by the Electricity Commissioners, that, over a term of years to be approved by the Electricity Commissioners, their receipts on income account shall be sufficient to cover their expenditure on income account (including interest and sinking fund charges), with such margin as the Electricity Commissioners may allow. It is their business to calculate and to make a thorough job of it year by year, and not to come along at the end of the year when all the customers have paid their accounts and say, "We want more money." The thing it utterly unbusiness-like, and the Clause uoght to be deleted and the thing put on to the ordinary business lines of a commercial company.

Lieut.-Commander KENWORTHY

I second the Amendment with great willingness. We had a similar example of this extraordinary provision for making good the results of inefficiency in another Bill emanating from the Department of the hon. Gentleman or his predecessor, namely, the Railways Bill. In that Bill, charges for freights are always to be arranged so that there is no loss to the company, however inefficient they are, with a certain sort of safeguard as to certain Committees being able to say whether they are inefficient or not. The principle is not that the companies should make good their profit and loss on trading account by greater efficiency, by looking for the wastage, and, if necessary, getting rid of the men who have done badly and replacing them by others, but it is simply arranged that they are to get it from the general consumers. That was carried through despite the opposition of several hon. Members. The appetite grows on what it feeds on, and when the Electricity Bill is introduced we have the position suggested that in managing their concern they may run into debt, they may find that they are spending more money than is coming in, and the consumer, the general body politic, have to make good the losses. That is putting a premium on inefficiency. It is the sort of legislation that we would expect from this Government, and in particular from the Department over which the hon. Member presides.

Mr. NEAL

The views expressed by the hon. and learned Member (Mr. Macquisten) who moved the Amendment are not those which I can commend to the House. Section Hi deals with the charges which are to be made by the joint electricity authority. The joint electricity authority will be a public body and they are to fix their charges in such a way as to give a supply as cheaply as may be to the authorities whom they serve, not. to the ultimate consumer, but to those who will distribute energy to the ultimate consumer. But when you are dealing with electrical energy it is common knowledge to anyone who has studied the matter at all that you may have a short period where you do not get your return immediately. You have just laid down a little additional plant which does not become fully productive in the first year or two. What are you to do? You know that over a very short term of years it will be fully productive. It is not a question of having estimated at all, but of perfectly accurate forecasting. You know the customers who are coming to you, and you know that over a short term you will be able to get a return on that capital.

Lieut.-Commander KENWORTHY

That is foreseen.

Mr. NEAL

That is exactly what I am saying, and that is what is provided for by Clause 16.

Mr. MACQUISTEN

No.

Mr. NEAL

I say that is what is provided for by Clause 16. If the House will just look at Sub-section (1)—

Mr. MACQUISTEN

I am not dealing with Sub-section (1), but only with Sub-section (2).

Mr. NEAL

I understand that, but the Clause must be read as a whole. It provides that the prices charged for electricity by a joint electrical authority should be so fixed by the authority, subject to such directions as may be given by the Electricity Commissioners, that, over a term of years, to be approved by the Commissioners, their receipts on income account shall be sufficient to cover their expenditure on income account (including interest and sinking fund charges), with such margin as the Commissioners may allow. Let the House consider the case I am putting of something which is not immediately carrying its full load and producing its proper revenue—the Commissioners looking at it, and saying, "Over a term of years this will produce an adequate revenue, and we ought not to burden the consumer at once with an extravagant price in order that next year we may reduce it, and the year after we may reduce it again." We ought to do what is always done in such cases by business people—equate, and if there is some deficiency in the early stages, we will make that good in the way which is indicated in Subsection (2), to which my hon. and learned Friend directly applies. Having provided, therefore, that each year is not necessarily to produce such a financial result that you might have to make such a charge as would prevent your getting the customers that are required, and prevent your making your undertaking successful, you have to provide such machinery whereby in the interim that matter may be dealt with.

Sub-section (2) does it. It provides that if receipts are insufficient out of revenue in that year the deficiency shall, unless otherwise provided for out of reserve—which is a perfectly common business process—be apportioned amongst those undertakers within the district who take the supply of electricity from the joint electrical authority in proportion to the number of units of electricity supplied to them. Who is going to apportion it amongst them? Themselves. They are members of the joint authority. It is not a case, as suggested by my hon. and learned Friend, of some bureaucrats coming in and dealing with the matter. This Board, which has as part of its constitution those undertakers as essential members of it, considers how to deal with this temporary deficiency which has arisen. It may say: "We will carry it to reserve." It may say: "Well, we all have our own reserves"—as these distributing agents have. "This is a small matter. We will wipe it off by a small levy amongst ourselves." Or they may go further and say: "It is so small, and the margin is negligible, that we postpone dealing with it until next year." In other words, this Clause, I submit to the judgment of the House, provides the ordinary business method by which business people who conduct undertakings of this kind would deal with it. It is not a question, as my hon. and learned Friend suggests, of bureaucratic control at all. It is not a question of bad or loose estimating, but of making provision for a plant which is not becoming fully remunerative in its infancy.

Mr. HOPKINSON

I must say I am rather surprised at this idea of what constitutes business put forward by the Parliamentary Secretary. This Subsection amounts to this, that if a manufacturer, that is the joint electricity authority, finds out he has made a mistake, or that the price of coal has gone up, or that the engineers are not so efficient as he thought, and thereby makes a loss of revenue during the year, the manufacturer having made, possibly by his own fault, a loss on the transaction, is then to go to the wholesale agents who have dealt with him and say, "I have made a loss on the manufacture of electricity this year. You people must provide the loss which I have made, but I will allow you the liberty of apportioning out amongst yourselves what proportion of the loss you will bear each one." That is the most extraordinary piece of business I have ever come across in my life. You have all these authorities, the undertaker and the joint electricity authority—the joint authority which is going to sell to the undertaker, and the undertaker who is going to sell to the retailer—but if the manufacturer, as this Section of the Clause suggests, through his own loss or through some unavoidable circumstances makes a loss on his manufacture, then the burden is to be borne by the wholesale merchant, who is to have this magnificent privilege, and we are informed by the hon. Gentleman, of consulting with other wholesale merchants who also purchase from that particular manufacturer, and dividing up among themselves the loss the manufacturer has made. It seems to me it is one of the most extraordinary ideas possible to think that the business of this country, or of any other country, is conducted on such lines. This Subsection of this Clause seems to me to be the microcosm of the whole Bill.

Mr. J. JONES

Some of us are not business men, and therefore we cannot altogether understand the arguments that have just been advanced by the hon. Member for Mossley (Mr. Hopkinson). As far as we are concerned, we recognise the position, those of us who happen to belong to authorities that represent localities where we have invested a great amount of public money in electrical development, and I venture to suggest that if the hon. Member had represented a constituency where they had gone in for the development of electrical undertakings he would not have argued in the way he has just done. A public body investing its money in an electricity undertaking is not investing its money for the benefit of people who want profit. It invests its money for the purpose of-developing its industries in its own district. We have spent in West Ham, although we are a poor neighbourhood, nearly £2,000,000 in the development of cheap electricity; and we have, in a period of years, to redeem all the capital invested. I want to point out that the consequence of that has been that we have been able to develop subsidiary industries to our main industries, and have established several factories which otherwise would not have been able to to be carried on. While private firms engaged in electrical production are only expected to pay dividends on capital invested, we are expected to do more. We are expected to produce a profit to some extent upon the result of our activities, and are expected to redeem our capital within a certain limited period of years. That places us in a different category from the ordinary investing public. We have been successful in our task. We have been able to keep the price of gas down as a result of our electrical development. As far as I understand the argument of the last speaker, it is that we must be "cabin'd, cribb'd, confin'd."

Mr. HOPKINSON

That is not what I meant. The position under this Subsection is that the authorised undertaker is really in the position of a wholesale dealer and is selling by retail to various people using electricity, and the position of these people, who may be municipalities or private companies or bodies set up under this Bill, may be very awkward because they are to be held responsible for the losses made by someone else.

Mr. JONES

That is exactly the position of the ratepayer in every case. Suppose we have a municipal tramway service. If at the end of the year there is a loss on the service, that loss has to be made up by the general body of ratepayers. Yet the public get the advantage in cheaper fares, and what they lose on the swings they more than get back on the roundabouts. If business is to be run in watertight compartments and a public body has to prove that each department is profitable, what becomes of the trams, the parks, the recreation grounds, and even the sewers? There is no profit out of sewers except rats. We in West Ham are hundreds of miles away from the coalfields. We ought to have the dearest electricity supply in the country. But we have one of the cheapest. Why? Because we have developed electricity for the purpose of providing the means of production in the direction of developing industries in our own neighbourhood. And we have succeeded. If the manufacturer has to pay a little more at the end of the year because of the loss that may have been caused by the development of electricity, he has gained more by the fact. that he has obtained cheap power for the production of his goods. The manufacturers have opposed an increase in the charges for electricity. We on the West Ham Town Council have tried to increase the charges for electricity in order to bring the undertaking up to a profitable level, but the manufacturers have unanimously opposed us. They believe in cheap electricity.

Mr. HOPKINSON rose—

Mr. DEPUTY-SPEAKER (Sir Edwin Cornwall)

I have allowed the Debate to wander rather far afield. This Amendment deals with the distribution of the deficiency. It is not now in order to go into the general question of electricity supply.

Mr. JONES

The reason for the deficiency has been that in the London area we found ourselves in the hands of a monopoly. The only chance we had of breaking down that monopoly was to develop our own electricity supply, and in doing so we had to run certain risks. Those risks we have run, and the result has been that to some extent we have had to subsidise industry.

Mr. MACQUISTEN

I submit that the hon. Member is not speaking to the Amendment at all.

Mr. DEPUTY-SPEAKER

I have already said so.

9.0 P.M.

Sir W. BARTON

I have had a great admiration for the lucidity of the arguments of the Parliamentary Secretary throughout the progress of this Bill. Consequently I regret having now to find myself in conflict with what he has said. It seems to me that the Amendment is thoroughly justified, and that all the arguments used by the Parliamentary Secretary are fully dealt with under Sub-section (1) of this Clause. The quite exceptional power which, apparently, is to be given to these joint electricity authorities, would result in sloppy finance. They would know that when, because they put down fresh plant, or when, because of the general management of their undertaking, there would be a deficiency at the end of the year, that deficiency could quite easily be covered by a fresh charge on those who had already paid the price which had been fixed. I agree with the hon. Member for Mossley (Mr. Hopkinson) that that would be, a wholly unbusiness-like proceeding. Surely it is the duty of the authority to spread the deficiency over a period of years. This Sub-section (2) is not only redundant, but mischievous.

Mr. HAYDAY

I was rather hopeful that the Parliamentary Secretary would have given us such an explanation as would have cleared away all possible doubt in this matter. That he has not done. This Sub-section certainly opens up very grave possibilities. The Subsection does not deal with any single private company or any single municipal authority. It deals with some joint concern that may be composed of municipalities or a great private combine. Such a concern might find a very large deficiency to be met at the end of a year. If looseness is permitted there will be negligence, and negligence and looseness together will have the result that there will be no desire to make the income meet expenditure. If the concern is sure that on review at the end of the period, whatever has happened, it can make good that deficiency by calling upon those who are jointly interested in the concern, that is to say, the wholesalers, and that the deficiency can be allocated to the consumer, who has already paid the charges for the particular period, the possibilities are serious. That is the possibility which presents itself to my mind. If that be so, if this Sub-section is giving some covering power to the joint partners in the concern to recover from consumers who have already met their accounts then it seems to me entirely unnecessary, and the first Sub-section should stand by itself. It enables them to meet their charges over a period of years. If there happens to be a deficiency on the first year, then it will make them more careful in their estimate for the forthcoming year and enable them to so rearrange their charges that there will be less possibility of a deficiency at the next annual review. It appears to me, in the absence of some more lucid explanation, that the Amendment is thoroughly justified, and if the Mover forces it to a Division I shall be bound to support him.

Mr. NEAL

I hope a few words may induce the House not to press this Amendment. The main structure of Clause 16 is in Sub-section (I), and it is intended to make the undertaking of the joint electricity authority self-supporting. For that purpose the charges are to be fixed with such a margin as the Electricity Commissioners may decide. We cannot, however, exclude from view the possibility that there may be a deficiency, and surely, when dealing with a public authority which has no private funds of its own, we must provide some means of dealing with such a contingency. The question which has been put to me by the hon. Member for Oldham (Sir W. Barton) is, I think, covered by the Proviso to Sub-section (2). It provides: That in any ease in which it appears to the joint electricity authority that the deficiency in any year can by a reasonable adjustment of charges or otherwise, be made good out of moneys receivable by the joint electricity authority in any succeeding year or years, or that the deficiency is so small as to justify postponement of any apportionment, the joint electricity authority may refrain from making any such apportionment, and such deficiency may be included in the charges payable out of revenue in any succeeding year or years. That, in substance, meets the argument of my hon. Friend the Member for Oldham. The intention is that there shall be no charge upon the undertakings which themselves constitute, in part, if not in whole, the joint electricity authority, if by a readjustment of charges the deficiency can be met, or if the sum is so small that it is not worth while troubling with it in that year. The House must realise that the contingency—I hope the remote contingency—that there might be some deficiency has to be provided against.

Mr. MACQUISTEN

I do not think the explanation given by the Parliamentary Secretary is satisfactory. In the ordinary course the undertakers, the wholesalers, as they have been called by the hon. Member for Mossley (Mr. Hopkinson), go to the producing concern, and ask the price of electricity for the coming year. A figure is named, and the undertaker fixes his price to his customers accordingly. He renders his accounts, and these accounts are discharged. Is is to be suggested that, at the end of the year, the producer may go to the wholesaler, and say, "In fixing that price I made a mistake, and I am going to take something more?" Thereupon the wholesaler will turn round and say, "I have sold the stock to my customers, based upon your price, and I have no money to give you." He cannot open up the accounts again; there is no provision made for going to the retail customers. If there was even that, there would be justice in it; if the undertaker could go to the customer any say, "You have had my electricity and the benefit of it, but it was too cheap, and I want something more to meet the demands which are being made upon me."

Mr. HAYDAY

What would you say if the customer in that case replied, "I paid the price demanded"?

Mr. MACQUISTEN

That is what he would say, and say justly, and I want the undertaker to be in the same position—to be able to say to the producer, "We paid the price you asked." I submit that the position under the Sob-section, as it stands, is most anomalous. Fancy the belated claims that would come in. No body can possibly fix these charges if they do not know exactly what they themselves will have to pay. If they do not know that they will be helpless, and there will be a continuous resurrection of old accounts. It is all very well to tell us that there is no possible way of meeting the case. In Sub-section (1) of Clause 16 I see the Electricity Commissioners may allow a margin. It is up to the Commissioners to allow such a margin as will enable the joint authority to build up a reserve. They have the control in their own hands. They know what it is going to cost them. They mar make an estimate and arrive at too high a figure, and if they have a substantial surplus, let them keep it to provide for such a contingency as suggested. Are they to come around to a consumer at the eleventh hour, after he has discharged his debt and demand an increased price? Are they to do so, not even at. the eleventh hour, but at the thirteenth hour? It is the case of the unjust steward turned upside down. Are they to come round at the end of the year and say to the consumer, "We are very sorry, old chap, but we want more," and if lie says, "But I have paid according to the figure which was fixed," they can reply, "We cannot help that, we have got power under this Sub-section." That is the business-like proposition that is put before us. I say that the thing cannot hold water for one moment, and I beseech the Parliamentary Secretary to wipe out this Sub-section.

Mr. NEAL

I thought my bon. Friend was rising to make a suggestion, and I gave way to him for that reason. All I was putting to the House was that we must have some scheme for dealing with this possible contingency. I cannot imagine that the difficulties suggested would arise if full effect were given to the proviso, that the authorities may refrain from making an apportionment if it can be shown that the deficiency can be met by an additional charge in future years, or if it is too small a balance to deal with. I think that really meets the case. I would be perfectly willing to strengthen this Sub-section against the making of a levy. I would be perfectly willing, if I carried the House with me and if the present Amendment were withdrawn, to strengthen this by inserting the word "shall" instead of the word "may," the effect of which would be that, where the authority was of opinion that by a reasonable adjustment of charges or otherwise, the deficiency could be made goad out of moneys receivable in future years, or that the deficiency was so small as to justify postponement of any apportionment, they "shall" refrain from making any levy. If that would meet my hon. and learned Friend the Mover of the Amendment and those who have spoken in the same interest I am prepared to move it myself.

Mr. HOPKINSON

Would not the Amendment suggested by the Parliamentary Secretary conflict with the first part of Sub-section (2)? That really is the part of the Sub-section to which the chief objection has been raised, and it specifically states that the loss is to be made out on that particular year. What it comes to is this: Supposing the generating station people have made a loss on generation. The first part of the Clause says that it shall, unless provided for out of a reserve fund, be apportioned amongst the authorised undertakers within the district of the joint electricity authority who take a supply of electricity from the joint electricity authority in proportion to the number of units supplied to them in that year. Surely the intention of that part of the Clause is that the undertaking authorities shall pay up out of their revenue for that particular year, and that that year stands by itself. The first part of the. Clause surely refers to a loss made and that has to be liquidated at the end of the year, whereas the second part refers to a provision for carrying forward the loss to future years. I submit that the two portions of that Clause are different, and if the hon. Gentleman's Amendment were put in I think he would find, whatever wording was adopted, that it was in conflict with the spirit of the first part of the Section.

Mr. NEAL

I do not think so, but if that point really has the substance in it which the hon. Member thinks it has, I will endeavour to see whether some Motion may be made in another place. I suggest, however, that if I do meet the point, if I make it imperative on the authority to endeavour to provide for this deficiency by reserves, increased charge, or postponement. I hope the hon. and learned Member for Springburn (Mr. Macquisten) will agree to that.

Mr. MACQUISTEN

Might I suggest that the Parliamentary Secretary should make the matter more certain, and should deal with the difficulty pointed out by my hon. Friend the Member for Mossley (Mr. Hopkinson) by changing, in Sub-section (2), "shall" ["the deficiency shall unless provided for"], to the word "may"?

Mr. NEAL

I will do that also.

Mr. MACQUISTEN

I think that is exactly what a business man would do, namely, say that he had settled the account for last year, he had shown it to his customer, and he must make up his own loss.

Amendment, by leave, withdrawn.

Amendments made.

In Sub-section (2), leave out the word "shall" ["the deficiency shall unless provided for"], and insert the word "may."

Leave out the word "may" ["the joint electricity authority may refrain"], and insert the word "shall."—[Mr. Neal.]

Lieut.-Commander KENWORTHY

Should not the word "may" ["such deficiency may be included"] be also changed to "shall"?

Mr. NEAL

No. That is quite right, and will be dealt with in another way.

Lieut.-Commander KENWORTHY

But it says: Such deficiency may be included in the charges payable out of the revenue in any succeeding year. Surely the whole sense of the concession should make it that it "shall" be included in the charges payable out of the revenue in any exceeding year?

Mr. NEAL

It is really not so. It may be so trivial a deficiency as to be carried over, and if you put the word "shall" in, it would defeat that object.

CLAUSE 18.—(Amendment of Section 16 of principal Act.)

(1) Section sixteen of the principal Act shall have effect as if for the words "under this Act" there were substituted the words "under or in consequence of this Act," and as if for the words "in consequence of this Act" there were substituted the words "in consequence of any such transfer scheme, agreement or arrangement":

Provided that any question as to whether a transfer scheme, agreement or arrangement, not made under the principal Act, was in consequence of that Act, shall be determined by the Electricity Commissioners.

(2) The Minister of Labour may make rules as to the procedure before the referee or board of referees under the said Section sixteen and may by those rules provide—

1. (a) for limiting the amount of costs and providing for the taxation thereof;
2. (b) for fixing the fees to be paid to the referee or members of the board of referees and for determining by whom such fees are to be paid.

Lieut.-Commander KENWORTHY

I beg to move, in Sub-section (1), to leave out the words have effect as if for the words 'under this Act' there were substituted the 'words under or in consequence of this Act,' and as if for the words 'in consequence of this Act' there were substituted the words in consequence of any such transfer scheme, agreement or arrangement,' and to insert instead thereof the words: be read and have effect as though the words 'or any other Act or Order confirmed by or having the force of an Act of Parliament' had been inserted therein after the words 'this Act' wherever they occur in the said Section, and as if the words Electricity Commissioners' had been inserted therein in lieu of the words 'Minister of Labour.' This Amendment is brought forward at the request of the electrical engineers employed by the municipal authorities and big electrical companies, and their association, to meet what they represent as a very real grievance. They are afraid that under the Bill, as at present drawn, on the question of compensating them for loss of employment under the Bill in cases where they would not otherwise have lost employment, the provision is weak, and the words I propose to put in would strengthen that. Secondly, they object to the Minister of Labour having the power to set up the referees to decide whether they are entitled to such compensation. They point out that the Ministry of Labour has not the technical staff to deal with a great number of men, and there may be a great many cases waiting to be dealt with. Consequently, they prefer that it shall be the Electricity Commissioners, as in the previous Act. We have heard a good deal about the necessity of compensating capital for any losses it may incur under this Act, and we have heard a great deal about men and corporations who have put their money into electrical undertakings, and that they have great rights of compensation. I am not arguing that now. This Amendment is trying to make some further provision for compensation for men who have put the capital of their whole professional lives into the posts they have gained under, the different electrical authorities. They are men who have given very devoted service in the past for not very high pay, and the positions they have built for themselves represent their whole capital. They want to be certain of fair and swift compensation if they are displaced for no fault of their own under the provisions of this Act.

When this Clause was brought forward in Committee, the hon. Member in charge of the Bill dealt with it rather lightly. I was not present, but I read the Debate. He talked about these electrical officers being like Oliver Twist, always asking for more, never satisfied, and so on and so on. If he were in the position of a man who has got to a certain age when it was not easy to find fresh employment—especially in these days, with the blessings of the Government to which the Parliamentary Secretary belongs, it is not easy for anyone to find fresh employment —and finds through no fault of his own, and owing to the reorganisation of the electrical undertakings in which he works that he is deprived of his post, I do not think he would use that argument. That man is thinking of his future and of his family. He wants to be certain that he will he compensated, as I believe the Bill intends to see that he shall be compensated. It is not fair to joke about that and compare him to Oliver Twist. It is true he is only a highly-skiklled employé, it is true he is not a capitalist—to whom the hon. Gentleman is always very tender —except in the sense I have said, but he has certain rights, and the association feel very strongly that those rights should be strengthened rather more than is provided for in the Act. With that object they have requested me to move this Amendment, and I hope the Parliamentary Secretary will see his way to think better of this than he did in Committee, and to accept the quite simple Amendment, which is not an extravagant request, contained in the proposal I am putting before the House.

Mr. C. WHITE

I beg to second the Amendment.

Mr. J. JONES

I do not know whether the hon. and gallant Member who moved the Amendment means that those men 'who are likely to find themselves displaced as a result of a re-organisation in the electrical industry will also be entitled to compensation in the event of their losing their positions. I would remind him that they are a large number of stokers, engine attendants and others who have worked for many years in connection with the electrical undertakings of the country.

Lieut. Commander KENWORTHY

Yes, the Amendment applies to them.

Mr. JONES

These men may find themselves out of employment in consequence of the re-organisation. If the hon and gallant Gentleman means that all officers and servants shall have the same sort of treatment, I am prepared to support the Amendment. If, however, the Amendment only refers to established officers who occupy higher positions, I am going to oppose it.

Lieut.-Commander KENWORTHY

It is not so, at all. The words of the principal Act, which apply to the Amendment, are Any officer or servant who has … been regularly employed in or about the undertaking.

Mr. NEAL

With what has fallen from my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Ken-worthy) and the hon. Member for Silver-town (Mr. J. Jones), I am in sympathy, but their object is fully secured by the Bill. The Amendment goes far beyond that. By Section 16 of the principal Act, full rights of compensation are secured to all officers or servants of whatever grade, if, owing to a transfer of the whole or any part of the undertaking, they are prejudiced owing to the passing of this legislation. That is in conformity with the usual Parliamentary practice, that where you alter the condition of things to the detriment of a workman or other servant, you compensate him. When the Bill was introduced in another place, representations were made on behalf of the members of the Electrical Power Association, asking that the Government would extend the Measure in this way. They said that the transfer might not be under the Act, but it might be in consequence of the Act. Accordingly, Clause 18 was inserted in the Bill to meet their case. It says: Section sixteen of the principal Act shall have effect as if for the words under this Act' there were substituted the words under or in consequence of this Act.' Therefore, as it stands, everyone who is dispossessed through a change in policy which is effected by the principal Act, or by this Bill, gets compensation. The Amendment, however, goes very much further, and provides that if at any time in consequence of some transfer of an undertaking, not because of the new policy, but because the old owner has sold his station to a new owner, then everyone effected shall have a right to compensation. That is a principle which cannot be accepted. That is not something that is done by Parliament. If any body sells his business to a purchaser, and the purchaser choses to change his staff, no right of compensation arises in the staff, nor could there possibly be any such Clause introduced or proposed. The compensation is based entirely on disturbance caused by this legislation. If the disturbance is caused directly or indirectly by this legislation, then the servant gets his compensation; if it is something quite outside this legislation, I think the hon. and gallant Gentleman will see that the Government cannot possibly accept the Amendment.

Mr. HOPKINSON

The hon. Member in charge of the Bill has not explained the objection to the further part of the Amendment, which seeks to substitute the words "Electricity Commissioners" for the words "Minister of Labour." If I may, I will put the objection myself. There is a good deal more in this Amendment than there seems to be. The gentlemen who instructed my hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) put forward what appears to be a very innocent Amendment, but it really means a very great deal. If the referees are to be appointed by the Electricity Commissioners instead of by the Minister of Labour, it will make a very great deal of difference. We know perfectly well, from what was told us during the passage of the Grampian Electricity Bill, that the Electricity Commissioners are people of an extraordinarily liberal mind, and that they are willing that taxpayers' money shall be thrown away to any possible extent. It is not their money, and apparently the more the merrier. Evidently therefore, having watched the progress of the Grampian Electricity Bill through this House, and having seen the action of the Electricity Commissioners in advising upon that, these officials have come to the conclusion that if it is to be a question of deciding what they are going to receive as compensation, it would be very much better to be in the hands of the Electricity Commissioners, who cannot be tackled in this House, than in the hands of the Minister of Labour, who can. Therefore I hope the hon. Gentleman will not accept the Amendment

Mr. HAYDAY

Perhaps the Parliamentary Secretary will clear up one point. He said that the Amendment went so far that, assuming an old proprietor sold out his business to someone else, that fact could be brought sufficiently within the meaning of this Amendment so as to give a right to consideration and compensation. The wording of the Amendment, however, is or any other Act or Order confirmed by or having the force of an Act of Parliament. Is it in relation to those words that the hon. Member adopts that attitude!

Mr. NEAL

Yes, certainly, because many transfers have been made of stations erected under the old Act. With reference to the remarks of the hon. Member for Mossley (Mr. A. Hopkinson), I must say, in all good temper, that he has not read the Bill. All that the Minister of Labour can do is to nominate an arbitrator.

Lieut. - Commander KENWORTHY

The Parliamentary Secretary tells us that those people who are nervous about their future wish to safeguard their future, and I quite admit that that is the case. That is why I am supporting their case here. The idea of a private owner selling something outside the Act altogether, and of the people employed by him wishing compensation in such a case is a very different matter. The words of my Amendment limit the effect to, "Any other Act or Order confirmed by or having the force of an Act of Parliament." That certainly cannot cover the ordinary private sale. If it be a sale of property established originally under some Act of Parliament, it will not be a case of some small concern owned by some private individual—John Smith, or somebody—who sells it to some other undertaking. It will be one of those municipal undertakings, established by the House of Commons. It is in such an undertaking that the officers, employés and servants—who do not get the advantage very often of the higher wages in the ordinary commercial procedure, but who have accepted a lower wage because they thought perhaps that they had security and also were serving the community—are asking for their future to be safeguarded. I must say I think the Parliamentary Secretary is not sympathetic to a perfectly just demand, and I am very sorry indeed the Amendment has not been accepted. If I get any support, I am quite prepared to divide the House.

Amendment negatived.

CLAUSE 19.—(Methods of charging and revision of prices.)

(1) Sub-section (2) of Section thirty-one of the Schedule to the Electric Lighting (Clauses) Act, 1899 (which relates to the method of charging by undertakers), as incorporated with any Act or Order passed or confirmed either before or after the passing of this Act shall cease to have effect, and -where any such Act or Order does not incorporate the Schedule to the Electric Lighting (Clauses) Act, 1899, but contains a provision corresponding to the said Subsection, the Act or Order shall have effect as if that provision were omitted therefrom.

(3) With regard to any Act or Order passed or confirmed before the passing of this Act which limits the price to be charged for electricity, but does not incorporate the said Schedule to the Electric Lighting (Clauses) Act, 1899, the Act or Order shall have effect as if the provisions set out in the Schedule to this Act, mutatis mutandis, were contained therein in substitution for the provisions therein contained as to the revision of prices, and where any such Act or Order does not contain any provisions authorising the periodical revision of prices, the prices to he charged by the undertakers shall he subject to revision in accordance with the provisions set out in the Schedule to this Act.

Mr. NEAL

I beg to move, in Subsection (1), after the word "undertakers" ["charging by undertakers"], to insert the words "is hereby repealed, and such repeal shall apply to that Schedule."

This is a mere drafting Amendment, and I simply move it.

Amendment agreed to.

Further Amendments made: In Subsection (1), leave out the words "either before or after the passing of this Act shall cease to have effect," and insert instead thereof the words "before the passing of this Act."

After "1899," insert the words "or incorporates it subject to an exception of the said Sub-section."

In Sub-section (3), after "1899," insert the words "or incorporates it subject to an exception of the said Section thirty-two."—[Mr. Neal.]

CLAUSE 20.—(Amendment of Section 15 of Act of 1909.)

Section fifteen of the Electric Lighting Act, 1909 (which relates to the supply of electricity to premises having a separate supply), shall have effect as if the expression "premises having a separate supply" included premises which have a separate supply of electricity or on which a separate supply of gas, steam, or other form of energy is in use or ready for use for the purposes for Which electricity is demanded or received.

Mr. MacVEAGH

I beg to move to leave out the Clause.

This is purely consequential on a new Clause which I moved earlier in the day, and which was accepted by the Government.

Mr. HANNON

I beg to second the Amendment.

Mr. NEAL

This is, as my hon. and learned Friend said, consequential, and so it may be struck out.

Amendment agreed to.

CLAUSE 21.—(Power of persons not being undertakers to supply electricity.)

(1) Notwithstanding anything, to the contrary contained in any Special Act or Order, it shall be lawful for the owners or lessees of any railway generating station, or of any generating station erected under statutory authority for the purpose of working tramways or light railways, to supply electricity therefrom upon such terms and conditions as may be agreed—

1. (a) to a joint electricity authority; or
2. (b) to an authorised undertaker; or
3. (c) to any consumer, subject, in the case of premises situate within the area of supply of an authorised undertaker, to the content of that undertaker:

Provided that no such supply shall be given under the powers conferred by this Section—

(i) without the consent of the Electricity Commissioners, or otherwise than subject to such conditions as they may impose;

Mr. NEAL

I beg to move, in Subsection (1, i), after the word "Commissioners," to insert the words who before giving their consent to a supply to any consumer shall have regard to the interests of any undertakers (other than electrical undertakers) who may be affected thereby. This is moved by me in pursuance of a promise, which I made in Committee, to consider some form of protection for gas companies.

Mr. J. JONES

Does this mean, in the case, say, of the East End of London, where gas companies are very powerful, that the electrical undertakings owned by a municipality would have to go through the microscope so far as their rights are concerned?

Mr. NEAL

This is an Amendment to Clause 21, which deals with the special circumstances under which a railway company, or someone of that kind, may deal with their surplus energy by selling it to some undertaking, as in the case mentioned by my hon. Friend.

Amendment agreed to.

Further Amendment made: In Subsection (1, i), leave out the word "they," and insert instead thereof the words "the Commissioners."—[Mr. Neal.]