HC Deb 02 March 1925 vol 181 cc144-58

Order for Second Reading read. Motion made, and Question proposed, "That the Bill be now read a Second time.

Mr. R. MORRISON

I beg to move to leave out the word "now," and at the end of the Question to add the words, "upon this day six months."

This is the last of a series of four electricity Bills that have come before this House, and I must say at the outset that the Government have not cut an edifying spectacle in the way in which they have treated us. All these Bills were on the Order Paper of the House last Session. It is common knowledge, as has been stated repeatedly, not only in this House, but outside, and in the Press, that last Session concessions were offered by the companies in return for the passage of the Bills. To the astonishment of Members who take an interest in these matters, we find when the Bills are reintroduced into this Parliament that these concessions have apparently been withdrawn, and up to now no satisfactory explanation has been forthcoming. The public are entitled to some explanation, not only in regard to this Bill, but in regard to the first two Bills, and the Bill which was defeated last week. The public are also entitled to know why it is that the hon. and gallant Gentleman (Lieut.-Colonel Moore-Brabazon), who to-night, again represents the Ministry of Transport, still backs these Bills on behalf of the Government, although he knows perfectly well that last Session the companies offered to make concessions and have now withdrawn them. Ever since the last General Election we have been continually assured, in statements made by the Prime Minister and other members of the Government, that the whole problem of the future development of electricity in this country is receiving the constant attention of the Government, who are reviewing the whole position with a view to deciding upon a definite policy. Surely it would have been better under these circumstances to keep all these Bills back until the Government had decided what their policy was going to be. The suggestion has been made to me that perhaps the Government have made up their mind in regard to their policy, and I am strengthened in that opinion by a somewhat curious statement made by the hon. and gallant Gentleman the Parliamentary Secretary to the Ministry of Transport when a former Bill was under discussion. The hon. and gallant Gentleman said: I can say straight away that the passing of this scheme into operation would not run counter to any plans which the Government may have for a greater electrical development of the country."—[OFFICIAL REPORT, 19th February. 1925; col. 1426, Vol. 180.] If that means that the Government's intentions are settled, and they intend as their policy for the future development of electricity merely to hand over increased, and ever increasing, powers to private companies to ride roughshod over local authorities, then we on this side of the House are prepared to challenge that position, not only in this House, but in the country, and to fight on behalf of the interests of the public and of the local authorities against the interests of private enterprise. The hon. and gallant Gentleman, in his speech last week, gave some interesting information, which was also evidently in the possession of the North Metropolitan Company, whose Bill we are discussing to-night. He said the present consumption of electricity in London amounted to only 130 units per person, whereas in America it was 500 units per person, and he went on to say that in his opinion we in London ought to reach, in 10 years' time, the same figure of consumption as America,. If we did, he pointed out that we should require to have an increase of 1,500,000 kilowatts during the next 10 years; in other words, three times the generation of electricity that we have to-day will have to be provided for during the next 10 years.

That brings me to this Bill, which, by the way, is not an extraordinarily important Bill, except that it is one of a series, all having the same object—the object which the North Metropolitan Company have steadily pursued ever since they came into existence—the object of stretching out their tentacles further and further, and closing in; like some huge octopus, upon district after district of Greater London, with a view to getting those districts under control. In this Bill the North Metropolitan Company are evidently looking forward with joy to the happy days when we shall be producing 500 units per person in London, and are hastening to stake out their claim. I will quote Clause 5 of the Bill. It says: From and after the passing of this Act the limits within which the company may supply electricity for the purposes and under the powers of the Act of 1900 shall he extended so as to include the urban districts of Baldock, Bishop Stortford, Hitchin, Royston, Sawbridgeworth and Stevenage, and the rural districts of Ashwell, Buntingford, Hadham and Hitch in, all in the county of Herts. The Bill not only increases the area, but gives power to charge up to 10d. per unit in new areas. On this side of the House we were all very much interested last week when the Parliamentary Secretary to the Ministry of Transport, in his eulogy of private enterprise in electricity, drew our attention several times to the fact that a company somewhere in the north called, I think, the North Eastern Company, supplies its customers with electricity at 1/2d. per unit. I am sure the hon. and gallant Gentleman will pardon us who represent London and outer London constituencies if we say we are more interested in a company near London than we are in the North Eastern Company in the north, and more impressed by the fact that this Bill proposes to give this company the power to charge not per unit but 10d.

It may be argued that at a prohibitive price like this the company cannot expect to do very much business. Whether they do or not, and I personally think they will do very little business indeed in these new areas, that makes all the more important the point that we on this side of the House are desirous of making, which is that, regardless of whether they do any business in the new territory which they propose to take over or not, they are staking out their claim for the future, and we are permitting them to do it. Ever since I have been a Member of this House, I have noticed that every time a Bill like this interfering with the powers of local authorities comes up, and some unfortunate Member on this side of the House quotes as an example West Ham or Poplar, or any of the other East End councils, supercilious smiles appear on the faces of many hon. Members opposite. One can almost hear them saying, "They are only socialist districts; we take no notice of what West Ham or Poplar does." For that reason I do not propose to refer to anything that West Ham or Poplar has done, but I would draw the attention of the House to the attitude taken up by what, in my judgment, is the most orthodox Conservative local authority in the United Kingdom. the Middlesex County Council. I feel perfectly sure mention of the Middlesex County Council will not provoke a sneer on the face of any hon. Member opposite. The complexion of the Middlesex County Council may be judged when I tell you that out of 79 members five are Labour, and most of the others are Conservative. There are only five Labour representatives, or there have been only five in the last council; there will be considerably more than five before this week is ended.

Captain GEE

You are an optimist.

Mr. MORRISON

The Parliamentary Committee of the Middlesex County Council had this Bill under consideration, and were so concerned about its provisions that they lodged a petition in the House of Lords alleging that the Bill was contrary to public interest, and it was contrary to the public interest that this company should obtain in perpetuity a virtual monopoly of the supply of electricity, and submitting that the com- pany's undertakings should be purchasable by the joint authority when established. The Middlesex County Council Parliamentary Committee petition asked that a sliding scale of prices to consumers and dividends to shareholders should be inserted in the Bill for the protection of consumers, and that the prices proposed to be charged should be reduced after consultation with electricity experts. The right hon. Gentleman the Member for Ealing (Sir H. Nield) was at that time Chairman of the Middlesex County Council Parliamentary Committee, and they were advised that they had not a proper locus standi, and instead of proceeding with their petition in another place, they decided to accept an invitation to confer with the company.

Sir H. NIELD

If the hon. Member will accept my denial. I wish to state that I had left the Chair long before that question was considered.

Mr. MORRISON

I was not making any reflection upon the right hon. Gentleman.

Sir H. NIELD

I was a member of the Committee.

Mr. MORRISON

The right hon. Gentleman says he was a member of the Committee, but that he has ceased to be its Chairman. On the advice of the experts which the County Council Parliamentary Committee called to help them, they abandoned their position in the House of Lords against the Bill, and accepted instead an invitation to confer with the company. The company adopted the old couplet: Will you walk into my parlour, Said the spider to the fly. The result of the conference with the company was that the Middlesex County Council Parliamentary Committee were persuaded to abandon the first point of their opposition, "That this Bill is contrary to the public interest."

The second point was that there ought to be a sliding scale of prices for the consumer and dividends to the shareholders but then the company refused to consider anything concerning their finances, and the matter was dropped. Now I come to their third point the reduction of the proposed charges, and that was met by a promise from the company to insert a provision enabling the Middlesex County Council to make application for a revision of the prices charged to the consumer; and with that very tiny concession the petition was withdrawn. I am not blaming the Middlesex County Council for withdrawing their opposition, because they were advised by their experts that they had no proper locus standi. The local authorities are in a much worse predicament in North London, and the area of this company, because they cannot afford to have continuous legal expense and the expense of engaging experts to fight this Bills. Consequently the company has been approaching these local authorities which gave them trouble one by one and they endeavoured to buy them out. The district of Southgate sold their powers for £5,000 a year to this company and other hon. Members will deal with other authorities where similar arrangements have been made for giving up their powers of purchase. No wonder a circular round asking Members of this House to support the Second Reading. As a matter of fact no opposition has been lodged except by two railway companies, and the opposition of the Middlesex County Council has been met. I have informed the House how that was done, and the company have been informed that there will be no opposition to the Bill in Committee except on one Clause dealing with the protection of railway companies.

Mr. DENNIS HERBERT

Does the hon. Gentleman mean to suggest that all the local authorities concerned have been bought up in that way?

Mr. MORRISON

I did not say that, nor did I even suggest it. I gave the case of Southgate, and I said other hon. Members would probably bring forward the cases of other local authorities. I can give the hon. Gentleman another case if he would like one, and that is the district of Tottenham.

Mr. HERBERT

I apologise for interrupting the hon. Member, but I thought his words rather tended to lead the House to suppose that the opposition of all the local authorities had been settled in the way he had alleged, and that is not so.

Mr. MORRISON

I had no intention of misleading the House in that way. This leads me to give this House the real attitude of the Middlesex County Council not only in regard to this Bill but in regard to the electricity petition generally, and this is to be found in a resolution passed in October, 1923, when a general discussion took place at a meeting of the Middlesex County Council on electric supply generally, and in regard to the North Metropolitan Company in particular, and the following resolution was passed: That the Parliamentary Committee be instructed to consult the London. County Council and other bodies necessary as to the steps which it is desirable to take in order to secure the constitution of a public Joint Electricity Authority in the metropolitan area. For the past two years I have not been a member of the Parliamentary Committee of the Middlesex County Council myself, but I understand that that Committee did consult the London County Council, and that Council informed them that it was too late now to alter what had been done. Even if the London County Council did say it was too late it seems to me that it is never too late to mend. May I give the instance of Hornsey. For reasons which I have already given I have kept out of my instances Poplar and West Ham, and I am now dealing with the attitude of a very Conservative authority. In Hornsey I do not think the council has a single Labour member upon it. [An HON. MEMBER: "One!"] The Hornsey Corporation have their own electricity supply and they supply current cheaper than the North Metropolitan Company. Not long ago they wanted to increase their plant in order to keep pace with the demands for electricity in their area and the North Metropolitan Company kept them from doing so.

Sir H. NIELD

My hon. Friend must remember, if he is not acquainted with the proceedings in Hornsey, that after wards Hornsey was allowed by the Electricity Commissioners to extend its powers.

Mr. MORRISON

That is so, but it does not remove the fact that I am trying to impress upon the House that local authorities, who have their own electricity supply, such as Hornsey, are in a perpetual state of warfare with the North Metropolitan Company. May I give another example of the contempt with which these huge trusts treat municipal authorities? It will be found in this particular Bill. If hon. Members will look at Sub-sections (2) and (3) of Clause 25, they will see there an extraordinary comparison of the way in which a company like this treats, firstly, municipal authorities, and, secondly, railway companies. Sub-section (2) of Clause 25 says: Before the Company break up any street under the powers of this Section the Company shall (except in cases of emergency) give twenty-one clear days' notice to the local authority of the borough or district in which the street is situate of their intention so to do, and the Company shall in carrying out any works in such street and in reinstating the same conform to all reasonable requirements made by the local authority. It will be noticed that it is not necessary for the North Metropolitan Company to get the consent of the local authority. It says: The Company shall … give twenty-one clear days' notice to the local authority that they are going to break up the street, and then they proceed to do it. If hon. Members will now look at the next Sub-section they will see the difference. In this case the company is not dealing with local authorities but—Greek is meeting Greek—they are dealing with railway companies, who are quite on their own level. When it comes to railway companies, Sub-section (3) says: The Company shall not without the previous consent in writing of the London Midland and Scottish Railway Company, the London and North Eastern Railway Company or the Great Western Railway Company exercise the powers of this Section with respect to any street belonging to or forming the approach to any station or depot of any such railway company. In the case of a local authority they give 21 days' notice and pull up the road, but when they are dealing with a railway company they dare not approach the place until they have got the consent of the railway company in writing.

I am opposing the Bill, because in this Bill the company is merely skimming the cream off the surface, and failing to satisfy the needs of ordinary consumers. I oppose it also, because I think the company is looking forward to the time when it will have to be bought out, and the powers which it is proposed should be given in this Bill will immensely increase the price which it will demand from the public when the time comes for it to be bought out. I do not think that this House ought to confer upon a company of this sort, entirely free of charge, powers which will add immensely to the assets of the company. Finally, I oppose the Bill, because I think it is contrary to the public interest. Very great suspicion has been aroused in the minds, not only of many Members of this House, but of many of the public outside, in regard to this series of Bills. The Secretary of State for War, speaking from the Front Government Bench last week, put the matter in a nutshell when he said that he opposed the Bill which was then before the House—and there is not a great deal of difference between that Bill and the one with which we are now dealing—not because that Bill represented private enterprise, but because it represented the abuse of private enterprise I think the reason why a, great many Members on the other side of the House voted against that Bill, and succeeded in defeating it, last week—and I hope the same reason will actuate them again to-night—was that this series of Electricity Bills represents an abuse of private enterprise.

Mr. BROAD

I beg to second the Amendment.

I think we can hardly take too wide a view of the importance of this great question of the production and distribution of electric power in this country. I am convinced that it is one of the great national issues which will have to be faced on national lines before very long, if this country is to regain its industrial supremacy. I am convinced that the country which is best equipped for the production and distribution of electrical power on the most economic and scientific lines is the country which is going to reign supreme in industry in the near future. And that is not only so in regard to power and light. There are great developments which I believe will take place very shortly in electrolytic and other electro-chemical processes, and even, possibly, in the electrical decomposition of coal, on which researches are now being made, with a view to getting the full value out of the coal and doing away with our present furnaces. I believe that these developments will open up a very great future, and, with that in view, I hope the House will pause before it allows private interests to peg out claims, not for the purpose of exploiting those areas or those claims, but in order to put them in a position of bargaining, with no termination at all to their powers, which are to be granted to them for all eternity. This point is especially worthy of consideration in this area of the North Metropolitan Company, because this area is being developed as a great industrial area. A great deal of money has been spent in widening the Lea navigation and in widening the locks so as to allow Thames barges to come up, and everything points to its becoming a great industrial area. Some of the Bills that have been before us during the last week were aspirations of companies, that were previously distributing companies, to develop as power companies. In this case we have a company which has had a long experience as a power company, and, if we want to examine what our future is to be, we must look into the record of that company so far as it has gone up to the present. If we do that we shall see, I think, that, instead of this great power company having served its customers more cheaply than the smaller municipal authorities, there is, in one corner of the area which they call theirs, the little borough of Finchley, which is able to produce and supply its current for lighting and power at a price considerably less than that charged by this tremendous company. We know by experience that, when this great power company has an added area at its disposal, it has, for all practical purposes, the sole right of distribution, because, once that company can supply its power, then, even within the area of any other district which 'might apply for a statutory order as a distributing authority, we find it taking away from that distributing authority the great levelling factor of the power load. It would be entirely in the hands of that great company, so that the authority would naturally be timid as to laying out any of the ratepayers' money in competition with the company. We find, therefore, that this Bill gives the company an absolute monopoly in its own sphere, and a right to compete in the spheres of other people.

We find that came factor in my own district of Edmonton. We parted with our distributing powers to this company, and we have found that the company has only used Edmonton as a convenience for running its mains and. tearing up our roads. They have done practically nothing to provide a distributive supply for lighting purposes, and when, in 1921, we had power from the Ministry of Health to build close upon 2,000 houses on an estate in our district, and a contract was let for 500 houses, we accepted the limitation of an eight-foot ceiling on condition that we could have the electric light laid on. The mains of the company only go through our main road and one or two of the main cross country roads. They have not attempted to go down the side streets. We said, "Here is a block of 500 houses going up. Light them. You have the distributing powers." They said they could not undertake it. This is their letter:— I am writing to you at Mr. Guy's request in connection with a meeting which was held by the Council a few days ago and, generally, on the subject about which I wrote you at considerable length on 23rd January of last year. I am afraid that, owing to the financial situation and the fact that we have yet to raise a considerable amount of capital to carry out our very extensive programme for the next year or two, we shall not be prepared to lay out the considerable sum required for the first 500 houses you contemplate erecting, which sum I estimate would be in the neighbourhood of £5,000, this including a high pressure main and sub-station and low pressure mains on the estate where the first 500 houses would be erected. Provided, however, the council are prepared to advance the money at 6 per cent. interest"— at a time when we had to pay 7 per cent. for it —"we, on our part, arc prepared to carry out the work on the lines which have been discussed and which are set out at some length in my letter referred to above. This is a company which has obtained the privilege of power distribution because of the wonderful power of private enterprise. They have the distributing power in the district, and when we put to them an economic proposition for a compact body of 500 houses, they refuse to lay their main unless, in addition to giving away our powers, we find them money as well. Is that the kind of company the House is going to give extended powers to in perpetuity? I hope not. When it comes to finding money in other directions, we find that the adjoining district of Tottenham, at a critical point in the company's career last year, when this Bill was in front of the House, were negotiating with this wonderful power company which could not find £5,000 to lay down their mains for an extension of their distributing powers. Tottenham has laid no money out. There were no assets to take over. But this company, thinking to influence the position, was prepared to say to Tottenham, "We will give you immediately £7,000, then we will give you £1,000 a year for three years, and then your present lease of the powers to us expires and we will pay you £9,000 a year for the remaining period of this lease." So that for the whole 25 years the power company is prepared to pay Tottenham £127,000. I can quite understand a local council in such a district, harassed as they are by the rising cost of things, being anxious to take that money, but I want the House to declare, and I think they will, that this is a most vicious principle, that Tottenham, because they came in at a critical moment, can be bought, and that the other districts have to pay for it because they did not come in at the critical moment. If the Bill goes through, when their powers come up for renewal they will not be in a position to bargain like that.

What does this mean in Edmonton? It means that the power and light users in Tottenham, besides paying their ordinary rates, will have to pay, as power users, an exceptional amount of rates in respect of their electric power. It is not fair to those users at all. It is as if a Government, anxious to reduce the Income Tax to a great combine, take over the General Post Office and say, "Pay £10,000,000 a year and you can charge your customers, the public, what you like." That is practically the position. Rights and powers are conferred on the company, but I defy anyone to say where are the duties and responsibilities which are imposed on the company and what power there is to see that they are enforced. This is a vicious thing because it is putting an extra pressure of rates on the very people who are maintaining the whole fabric of society, that is the industrial productive concerns. It is not the people who gamble on the Stock Exchange or corner commodities. The whole life of the community is based on our industrial concerns. They are the people who have to use the power. At present they are unduly pressed by what they con- sider the unfair rating of machinery and if, in addition to that, they have to pay 50 or 100 per cent. more for their electric power to meet the charges of this company so that they can recoup themselves for what they are paying to the Tottenham Council it is a great injustice, and I should think if this House was filled with industrialists to-night, and not merely with financiers, they would vote wholeheartedly against the Bill as a lesson to the company that this kind of finance is not exactly straight business. That is one of the great things they have to recognise. I mentioned just now how they were serving us in Edmonton. They have had these powers many years. Edmonton is a highly industrialised district. My hon. Friend mentioned that the average consumption of electricity per head in London was 130 units per year. The average number of units used in Edmonton, where this company has a monopoly, is 24 units per year. There are some 13,000 premises in Edmonton. Of these, up to date, only 758 are connected up, and I make bold to say there are not, perhaps, 2,500 out of the 12,000 houses which are within reach of the cable and could get connected up if they wanted to, so has the company neglected the area.

We have heard of the efficiency of private enterprise. I believe a large number of hon. Members opposite are very concerned about private enterprise. Private enterprise, when it becomes monopolistic, requires very stringent watching and care and supervision. As the Bill makes no provision for that, as there are no obligations on the company, we are offering something which evidently, from what they are dealing out to Tottenham, must be valuable as far as that big area is concerned and we are getting no consideration in return, and I think the House will recognise that this is an unconscionable bargain when all the value goes on one side and there is no return on the other. I hope the House will take the matter very seriously into consideration because the much vaunted private enterprise stands condemned by the progress of this record during the many years it held its place. We all know why the North Metropolitan Electric Power Company was so anxious to handle our districts. They have sites on which to put their transformer stations and sub-stations for the tramways. It is remarkable in that connec- tion, that the North Metropolitan Power Company and the North Metropolitan Tramways Company have their offices in the same building. I believe that the directors and the principal people are hand in glove. The tramways system of North Middlesex belong to the county council, but is leased to the tramways company, and on the trading of the tramways company they receive a certain proportion of the profits. The power comes from the North Metropolitan Power Company. It is remarkable that the power company can pay 10 per cent., while the tramway company is run at a loss. I think the matter requires very careful investigation, and I hope it will have such investigation when the county council's Tramway Bill comes before this House, as to whether the North Metropolitan Power Company is not using our tramway system as a milch cow for their own benefit.

These are very serious allegations—[HON. MEMBERS: "Hear, hear!"]—but I think that I have shown enough, and that my hon. Friend who moved the Amendment has shown, by the financial dealings with the district council and the way they are prepared to silence opposition by what I would call wrong consideration—a consideration to which this Housee ought never to agree but ought to condemn in any company that adopts it—that there is something in the, financial arrangements of this company that should be looked at very carefully, especially when it comes in a group of companies that are acting together in the commercial field. We know what happens to a. great extent in regard to the passing of trade from one company to another. We have seen the great traffic combines at work, and we know how they can put the traffic underground or bring it above ground as they like. That sort of thing may be legal in private companies, but when it comes to companies they are asking us for monopolies in this way we say that there ought to be very careful supervision, that the power ought to he retained by Parliament and not given in perpetuity, so that Parliament can see that things are conducted on a fair basis in the interests of the community.

I hope that the general public will never regard with favour certain procedure, and I hope that this House will never accept it. I refer to the fact that when com- panies come here their proposals in the interests of private concerns are so urged by certain hon. Members, who may be connected with associations which are engaged in backing private concerns, that the interests of private concerns become of greater regard than are the interests of the general community. In a degree, we are considering the same problem as that which we considered last week, because this Bill is extending the powers of a company, limited now to a certain extent, over a much wider area. I hope that the House will come to the conclusion that it cannot extend these powers any further, that the whole matter must be reconsidered, and that the Government will undertake its responsibilities and will investigate and come to their own conclusions and deal with the question of electricity from a national point of view. If, on the other hand, the Ministry of Transport, is going to support this Bill they will be doing something that is regarded as a precedent, and which may have a fatal effect upon the restoration of our industry and commerce.

I know full well that the argument may be put forward that this company wishes to raise another £500,000, and that they are going to extend their power stations and put in plant. No one is more concerned than I am to see more work in the engineering and electricity trades. For 30 years before I entered this House I was engaged in making electrical apparatus, and I have many of my own comrades who are out of work to-day, but for any company or for any debater to use such a point to press an interest which is not the right and true interest., is a very mean advantage to take of the plea of the unemployed. Therefore, I hope such arguments will not enter into the Debate to-night, that the Bill will be considered on its merits, and in the light of our experience of the transactions and operations of this power company.