§ Order for Second Reading read.
§ Mr. DENNIS HERBERT
On a point of Order. I desire to submit a, point of procedure regarding the first Order on the Paper, the Electricity (Supply) Bill. My submission is that this Bill cannot be read a Second time until it has been referred to the Examiners. I should like to assure the House that this point is taken not for the pure purpose of obstruction but in order to ensure that, if possible, the Bill may, in due course, be sent to such an appropriate Committee as may hear counsel on behalf of the aggrieved parties, and examine witnesses. My submission is based, in the first instance, upon the textbook of Parliamentary practice, Erskine May, 13th Edition, where it is stated:If it appears, after its introduction, that a public bill may affect private rights, notice of this circumstance is sent from the Public Bill Office to the member in charge of the bill; and the examiners of petitions for private bills are ordered to examine the bill with respect to compliance with the standing orders relating to private bills; but the reference to the examiners does not affect the order for the second reading of the bill, which remains upon the notice paper, though the second reading cannot be moved until the examiners have reported on the bill.If the examiners find that standing orders relative to private bills are applicable and have been complied with, or if when not so complied with, the select committee Jon standing orders report that the standing orders should he dispensed with, the bill is proceeded with as a 'hybrid' or 'quasi private' bill. That is to say, after being read a second time, it is committed to a select committee …and the committee may be empowered to hear suitors, their agents and counsel, for and against the bill.The Standing Order which is applicable to this case is Standing Order 200a, which provides:Where a Public Bill (not being a Bill to confirm a Provisional Order or Certificate) is ordered to be read a Second time, on a day appointed, and it appears that the Standing Orders relative to Private Bills may be applicable to the Bill, the Examiners of Petitions for Private Bills shall examine the Bill with respect to compliance with the Standing Orders, and shall proceed and report forthwith, and the Order 1684 of the Day relating to the Bill shall not be affected thereby; but if the Examiner report that any Standing Order applicable to the Bill has not been complied with, and the Select Committee on Standing Orders report that such Standing Order ought not to be dispensed with, the Order of the Day relating to the Bill shall be discharged.I submit that that being the case, I have nothing to prove in order to establish my point, except that this Bill may affect private rights, and the Standing Orders may be applicable, and that whether they are so or not is, I submit with respect, a matter entirely for the Examiners to decide, and not for the Chair. One further reason for that is that when the Examiners inquire into the matter the parties aggrieved may be heard by the Examiners upon memorial. There can be no question that certain Standing Orders may be applicable, and I have no need to say more about that. A Bill for the supply of electrical energy is a first-class Bill under the Standing Order relating to private business, and there are Standing Orders which may be applicable to this Bill which deal with provisions for the compulsory purchase or user of land or undertakings, or any working agreements, or purchase or construction of a station for generating electricity or authorising works for the user or compulsory user.
I realise that there may be a further point with which I must also deal. A practice has grown up which has to some extent limited the interpretation of the words "affect private interests." I understand that it has generally been considered that for a Bill to be regarded as a "hybrid" Bill or to be treated in some way of that kind, the private rights affected must be something less than the private rights of every single member of a class. Taking as an example the Bill which was introduced by the hon. Member for Bridgeton (Mr. Maxton) for nationalising the Bank of England— if his Bill had been to nationalise all banks, it is suggested that there would not have been objection to it on the part of the Examiners. Therefore, I feel that it may be incumbent upon me to point out that this particular Electricity (Supply) Bill does affect certain members and certain members only of a class, but does not affect in the same way all members of the class. I will 1685 take, first of all, Clause 29 of the Bill. That Clause makes certain provisions in regard to "any company, being authorised undertakers"— therefore not a I authorised undertakers, but only a company—"and not being a power company,"— a further limitation. But a far more important limitation than that is to be found in the proviso contained in Sub-section (2) of that Clause, which specifically states thatThe provisions of this Section shall not apply to any company which is a London company within the meaning of the London and Home Counties Electricity District Order, 1925.I shall not need to remind you, Mr. Speaker, that there have been many Bills before this House during recent years dealing with certain corporations or persons or interests within the Metropolitan area alone. It has been considered necessary that those should be introduced as public Bills, but they have been treated as hybrid Bills, and I submit that a Bill which deals with companies of a particular kind outside the London and Home Counties area, which, of course, is immensely larger than the Metropolitan area, is on the same lines as a Bill which deals only with companies within the Metropolitan area. Further, I would re Per you to Clause 4. I might state that on page 658 of Erskine May's" Parliamentary Practice" there is a very long list of the Bills to which I have referred, which have been treated as hybrid Bills. Clause 4 of this Bill is to my mind a more striking case than even Clause 29 of dealing with only certain interests out of the whole of a particular class, because that expressly provides for certain generating stations being "selected" and treated as "selected stations." There are very drastic provisions in the Bill referring to selected stations and to selected stations alone. There are also very drastic provisions applying to non-selected stations— provisions of a totally different kind. Therefore, I have two cases in which the owners of stations of a particular and limited class are dealt with in totally different ways from other owners of exactly similar stations.
I venture again to submit to you very shortly that the point to be decided here is not whether this Bill is a hybrid Bill or whether there has been or must be compliance with the Standing Orders, but merely the point that the Second 1686 Reading of this Bill cannot be taken until after these questions have been disposed of by the examiners to whom, under Standing Order 200a, this Bill must be referred before Second Beading, and that that is a matter which, with all respect, neither you nor the House at the moment has power to deal with, unless and until the Bill has been sent to the examiners. I conclude by saying that I have ascertained from the Public Bill Office that the Bill has not been so sent to the examiners.
§ Mr. SPEAKER
I think that the simple point in the submission of the hon. Gentleman may be found in the head and the tail of what he has just said, namely, the question as to who is responsible for the decision as to whether the Bill, as stated in Standing Order 200a, should be one to which the Standing Orders relative to Private Bills may be applicable. The quotation from Erskine May, of course, is not the Standing Order; it is an interpretation of the Standing Order. The hon. Member quoted the words, "may appear to affect private rights." The duty of examining Bills in this respect lies, in the first instance, with the Public Bill Office. They, in the ordinary course of their duty, examined this Bill, and found no cause to lead them to the opinion that this was such a Bill. If they had had any doubt on the matter, it would have been their duty to submit the matter to me. They were so clear on the point that they did not submit the matter to me.
Then last week the hon. Member and another hon. Member, the hon. and gallant Member for Oxford (Captain Bourne), submitted the point to me. It became, therefore, my duty to examine the Bill carefully, and to see whether it was one which ought to go to the examiners. I made that careful examination, and came to the conclusion that the Public Bill Office had been right in their decision— that it was not a Bill which ought to be referred to the examiners. The hon. Member's contention appears to resolve itself really into this— whether he is, or I am, the proper person to take that decision. I wish it could be otherwise, but it certainly does rest upon me, and I am quite clear in my conclusion that the Public Bill Office were quite right in their first decision.
§ Mr. HERBERT
I am sure, Mr. Speaker, that you will credit me with the fact that I did not wish in any way to take up such a position as you have suggested— that it was in any sense a question upon which a Member of this House other than yourself should decide. As a personal explanation I may perhaps say what I think you will agree with, that in the event of the Bill appearing to affect private interests that is a matter not for the Public Bill Office but for the examiners to decide. I had not the slightest intention of suggesting any sort of limitation on the powers of the Speaker of this House.
§ Mr. SPEAKER
In the broad sense of the word, every public Bill in some sense affects some private interests. In this matter someone must have the duty of interpreting the Standing Orders and practice of the House, and the duty of deciding whether the Standing Orders relative to Private Bills may be applicable to a Bill lies, in the first instance, on the Public Bill Office, and afterwards, of course, the responsibility rests with me.
§ Mr. HARDIE
Is there any difference shown by the Committee which examines these Bills between a Government presenting a Bill and a Private Member presenting a Bill?
§ 4.0 P.M.
§ Mr. MAXTON
I do not want to labour this point any further, as the hon. Member who raised it has accepted what has been said on the subject; but it seems to me that there is a very great necessity for this Standing Order being considerably altered so that the ordinary Member of the House can understand precisely what it means. I absolutely fail to see any difference in principle between this Bill and the Bank of England Nationalisation Bill, so far as the affecting of private rights is concerned under this Standing Order. It is a most unfortunate position for any Member to be in. He does not know whether this Standing Order will be used against any particular private Member's Bill, because, as you have indicated, every Bill in some measure affects private rights. As a matter of fact, it is no use unless it does affect private 1688 rights. Supposing it is a Bill to increase the penalty for hitting one's wife, that affects private rights. It seems to me, therefore, that some clearer definition of this Standing Order is required if we are to do our work here in any reasonable sort of way.
Might I just ask you another point? You very properly stated that the extract which I read from Erskine May was not the Standing Order of the House, but was merely an interpretation of it. Of course, I quite agree, but I would like to ask you whether you could, for our guidance, give us any Standing Order of this House which throws any such duty as you have suggested upon the Public Bill Office, because Standing Order 200A to which I have referred does not refer to the Public Bill Office in any way, but states quite clearly that "Where a Public Bill is introduced, and it appears that the Standing Order may be applicable, it shall be referred to the examiners," and so on. There is, I think, no reference whatever to the Public Bill Office or any duty cast upon the Public Bill Office. Therefore, my suggestion was that the Public Bill Office has no jurisdiction whatever to decide whether a Bill which affects private rights affects them sufficiently to be sent to the Examiners or not, but that they must send every Bill of that kind.
§ Mr. SPEAKER
I would suggest that Standing Order 200A be read as a whole. It begins: "Where a Public Bill," and the House has certain officers to deal with all public Bills who form the Public Bill Office. It seems to me that the words "it appears," at any rate in the first instance, refer to the officers of the House who examine all public Bills. If more clarity be needed, it might be desirable to put in there the words, "Public Bill Office," but then that would debar the hon. Member from the right, which he is now exercising, of appealing to me.
§ Mr. THURTLE
May I ask you to clear up a conflict of testimony? The hon. and learned Member opposite said, quite expressly, that this Bill had never been before the Public Bill Office.
§ Mr. RUNCIMAN
On a point of Order. May I ask your guidance? Under Clause 26 (2) of the Bill, it will be necessary for the Treasury to undertake a guarantee, and it may be necessary to issue from the Consolidated Fund sums to fulfil that guarantee. May I ask at what stage in the procedure of this Bill it will be necessary to have a Resolution in Committee of Ways and Means in order to authorise the House to incorporate within it the financial powers which are sought by its authors?
§ Mr. SPEAKER
Clearly, Sub-section (2) of Clause 26 is printed in italics. The Public Bill Office, having examined the Bill, have ordered it to be so printed to indicate to the House that, before that Clause can be considered in Committee, a Resolution of the Committee of the whole House is necessary.
§ The MINISTER of TRANSPORT (Colonel Ashley)
I beg to move, "That the Bill be now read a Second time."
If the Members of the old House of Commons, which was burned down some 90 years ago, could take part in our deliberations to-day, I wonder what they would think of the conditions under which we carry on our work, because their's was a time when handicraft supplied all the needs of the nation. They came to London by horse-drawn vehicles or wind-propelled ships, and travelled down to the House in coaches, or riding, and returned at night by the light of flickering lamps or torches to make a brighter London. When in the House, they had candles to light it and open fires to heat it, and in the winter time, while a few of them were roasting, the rest were left to shiver. Nowadays, hon. Members are transported from Edinburgh or Glasgow by the steam engine in the space of a winter's day, and even at night they travel under conditions unknown to our forefathers, even though they do, as I often hear on Railway Bills, suffer from the want of third-class sleepers and from a deficiency of drinking water. When they arrive in London, they come down to the House by motor, electric trains or electric trams, and the deliberations are carried 1690 on with beautifully shaded lights. We have scientific heating to minister to our wants; and, though it may at times take the dust from the floor and deposit it in our lungs, yet after all what is that in return for so much luxury? Moreover, during a late sitting those of us who are lucky enough to be invited by my hon. Friend the Member for Chatham (Lieut.-Colonel Moore-Brabazon) to go to his room, can there on the wireless listen to to the Savoy Band and imagine for the moment that we are present at one of those convivial institutions dedicated to gyratory movements, which from time to time receive the unwelcome attention of my right hon. Friend the Home Secretary.
What has caused this great change in our social and national life? Surely it is the advent of mechanical power, which week after week, month after month, and year after year becomes more marked applied in a form of electrical energy. As Lord Rothermere rightly stated in an article which appeared under his signature some two months ago, the most Important of all raw materials is power, and the gentle ripples of current originally stirred up by Michael Faraday with his magnet and coil of copper wire have now become great rivers of force and energy subservient to the use of man. Why is it that we in this country are, unfortunately I must say, behind many other countries in our electrical development? In the first place, we have an old-established and well-run gas industry. We are naturally conservative—[HON. MEMBERS: "Oh !"]— in the best sense, and I hope for a long time in the political sense— and therefore, naturally, we did not take to electricity as quickly as other countries which went direct from oil lamps to electricity.
There is a more important reason. When electricity was first discovered, it could only be transmitted a few miles, and could only be used for lighting in congested or thickly populated urban areas, because that was the only place where it would pay. Therefore, any undertaking, whether municipal or of a private company, normally took the municipal area as the jurisdiction over which it was to range. Consequently, there sprung up, under legislative sanction, up and down this country hundreds of these generating stations, and, as the 1691 radius for transmitting energy became greater, as it is to-day, instead of one or two miles being over 200 miles, these stations did not disappear as they naturally would have done, because, again, of our conservative nature, and also, as the House will understand, because of the very obvious difficulty of overstepping the municipal boundaries. Municipal life is an excellent thing, but in the case of electricity it has undoubtedly retarded the development of the big power station, and I am afraid that, as a nation, we are inclined to resist a new doctrine even if its economic advantages are clear.
Today there are in Great Britain 592 public utility stations, of which 494 belong to authorised undertakers, mostly very small ones. Thirty-two of these undertaker-stations are responsible for as much as 50 per cent. of the total output—32 are responsible for half the output—while no fewer than 462 between them are required to generate the other 50 per cent. I put it to the House that it must be wrong that 32 should produce half the energy, and 462 should produce the other half. The percentage of stand-by plant is unduly high—some 56½ per cent. of the maximum load—and the load factor is unreasonably low. The experts tell me— obviously, I am not an electrical engineer, and I can only impart to the House what the experts tell me, and luckily in this case all the experts are agreed, which is extraordinarily different from what is usual—that this question of the load factor is the crux of the whole matter. As electricity cannot be economically stored, it must be generated as required. The demand on a station varies from hour to hour, rising from small loads to peak loads, and, as long as a station is working in isolation, it must have sufficient plant for the peak load, while for long periods most of the plant must be idle. The average load factor is no higher than 25 per cent., which means that only one-quarter of our plant is working at full capacity, and the other three-quarters of the plant is idle. To improve the load factor is really the great object of this Bill, and it should be the object of all electrical reform.
In truth, it may be said that about only one-third of Great Britain is reasonably supplied with electricity. Over practic- 1692 ally all the rest of the country there are small undertakings with territorial rights strong enough to prevent large enterprises being established in their areas, but incapable themselves of generating electricity on a sufficiently large scale and at a price low enough to encourage large scale consumption. In our rural areas about only one-tenth are afforded even the semblance of a supply. Some of our stations are the finest in the world. Given a chance, we are able to produce as good a station as anybody else can produce, but many others are quite small and are producing at an unnecessarily high cost. I am sure the House will agree that that is a deplorable state of affairs.
In this connection I do not think the following criticism which is often levelled at this Bill, is quite fair. It is said, "Look at such-and-such a station. Look at station A or B or C and how they generate electricity at a small cost. Why, is this Bill necessary?" The Bill is necessary because only a small percentage of the stations of this country are in that efficient state. I will not mention any percentage, because I might be one or two points wrong, but it is sufficient at the moment to say that the percentage is small, and the Bill aims at levelling up the standard and making more uniform the efficiency of the stations. In regard to the kind of criticism to which I have just referred, you might just as well say that right hon. and hon. Gentlemen opposite are not Socialists, because they include in their ranks one or two strong individualists such as my right hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood), who is one of the strongest individualists I know in this House.
In the last year, 1924–25, from authorised undertakings we consumed some 118 units per head of the population. What are roughly the comparable figures for other countries? I ask the attention of hon. Members to these figures, because in my mind they are very instructive, keeping in view our own figure of 118. They are: Italy, 140; France and Germany, 200; Belgium, 230; Sweden and Norway, 500; United States, 500; Switzerland, 700; Canada, 900. What emerges from that comparison? We are the lowest on the list, and the other countries which are higher include some of our chief commercial competitors. How can we hold 1693 our own in trade competition? How can we hope for a permanent revival in trade when we are in the position, in this age of electricity, of consuming only one-half the number of units per head of the population which is consumed by Belgium? Hon. Members may legitimately disagree with us as to the exact method of carrying out electricity re-organisation. It is their right to have their own opinions, but that some re-organisation is urgently required is obvious if we are not to lag behind in the industrial race.
It is also asked, "How can we in Great Britain, with comparatively small water-power resources, hope to compete in this matter with countries like Italy, France, Sweden, Norway, United States, Switzerland and Canada?" Is it true, however, that only countries using water-power are generating electricity on a large scale? The United States draws over 60 per cent. of its power from steam stations. Germany draws 90 per cent. Belgium has no water-power at all, and yet Belgium is using twice the number of units per head of the population that we are using. The argument that in this country not more than one-tenth of our future probable requirements could be produced from hydro-electric installations does not disturb me. Why? Because of our abundant supply of coal, and its widespread distribution. Nowhere is coal far distant, and we have abundant supplies of water for condensing purposes, one of the prime factors in determining where a central generating station is to be located. Power must be produced where the water supply is ample, and the means of transporting coal ready to hand. No country in the world can furnish such admirable sites for steam stations as those which exist in this country. Further, I would put it to the House that the possibilities of water-power are easily exaggerated. These hydroelectrical stations, though the operating costs are low, involve heavy initial investment, and consequent high capital charges while a steam stand-by station is often required, too, in case of a drought. No, there is no fear in that respect. If we organise properly, we can produce and distribute power in this country practically as cheaply as any of our commercial competitors.
Now we come to the question: What steps must we take to improve the present position? I say we must foster 1694 the development of mass production by means of large generating units in big generating inter-connected stations. Cheapness is largely a matter of generation. Take the case of the Chicago area, and the wonderful results achieved there. In the last 27 years the total output in that area increased 164 times; the number of customers is 95 times what it was, and one dollar will buy eight times the amount of electricity it did in 1900. Take the case of Glasgow. In 1920 it was supplied by four stations—Port Dundas, Saint Andrews Cross, Govan and Partick working in inter-connection, with an average consumption per unit generated of about 3.1 lbs. of coal. Last year Dalmarnock took the entire load, with a consumption of 1.8 lbs., as compared with 3.1 lbs. under the old system; and whereas 297,000 tons of coal would have been required under the old system to generate 212,000,000 units, for the output in the year ended May last, only 171,000 tons were consumed under the new system, a Saving in fuel of 126,000 tons or 43 per cent. I submit, therefore, that centralisation and inter-connection are wholly justified for these reasons—on the score of saving in fuel consumption, by an over-all reduction in capital expenditure, by improved load factor, by greater security though a less amount of reserve plant is involved, and by an increased load, made possible by tapping inter-connecting transmitting lines. Industrial efficiency can really be measured in many trades in terms of electrical consumption, as, for instance, in the engineering manufacturing trades. To most manufacturers it is an indispensable form of power, though the "power cost" in manufacturing is often not more than 2 per cent. or 3 per cent. But electricity will enable more modern and effective machinery to be installed, with greater output, and will consequently diminish overhead charges.
As recently as the present month, Sir Leo Chiozza Money, who was investigating wages and conditions of labour in the United States, said the maximum use of electrically-driven machinery had given the workers of that Continent bigger wages and cheaper goods. What is the position in this country? It is doubtful whether more than 34 per cent. of the industrial equipment engaged in production in this country, and supplied from public systems, is operated by electricity, 1695 and those who take the trouble to ascertain the facts will undoubtedly find that they use electricity to a much more substantial extent in France, Belgium, Germany and the United States. What has emerged so far? We are at the bottom of the list in the units used per head of the population, and as far as industrial equipment driven by electricity is concerned, we are much behind our chief industrial rivals both on the Continent of Europe and in the United States. But I would ask the House to approach the problem not so much from the angle of power cost as from the consideration of the amount which this country annually has to pay for its electricity. Making a modest estimate, in 15 years from now the annual consumption per head of the population should have increased from the 200 now supplied to 500 units per head. [HON. MEMBERS: "118!"] The figure of 118 which I quoted was the consumption from authorised undertakings—a figure of about 300 would include supply from both private and public undertakings. Even under present conditions, the average cost would be reduced, but if this Bill become law, it is estimated that by 1940 the saving to the consuming public will have reached £44,000,000 per year—that is over and above the normal saving which would be going on all the time, had this Bill not been introduced. That is no fleabite. It is a sum not to be sneezed at in these days of financial stringency. And this is no biased calculation, made by a Minister who desires to get his Bill through or by the Electricity Commissioners who wish further to extend their powers. It is the considered opinion of the Weir Committee —of Lord Weir, Lord Forres and Sir Hardman Lever, who had the opinions of the best and most eminent electricians and experts whom they could get, and they came definitely to the conclusion that this large saving would be made if this Bill became law. That does not take into consideration the further saving which I hope will accrue from the railways.
I daresay some hon. Members have read the speech of the chairman of the Southern Railway to the shareholders a week or two ago, in which it was pointed out that the success of the suburban electrification of its lines had been much greater than was anticipated; that it had produced such satisfactory results that 1696 it was intended to proceed with the completion of the scheme, and that when this had been done their scheme of suburban electrification would be 647 miles in length and the largest in the world. May we hope that this example set by the Southern Company in their go-ahead fashion may be followed by other lines? I think the Southern Company deserve credit for having made this experiment, which is turning out a success, and if other lines follow suit, I hope they will acknowledge that it is due to the Southern Company for having risked their money in this way.
What more may we hope from this Bill? We may hope that there will be a greater effort made to help the distribution end of this business. And I cannot help feeling that in distribution and merchandising our companies are not showing as much enterprise as they should, and that they would do well to copy the methods of the gas companies, which are much more up-to-date and go ahead in this respect than are those of the electricity distributors. One would hope that propaganda in this respect would be undertaken, and that it might include the opening of demonstration halls where the womenfolk could see how labour-saving machinery could come to their aid, and learn that there is much that can be done to save the housewife incessant labour which she now has to go through. In other countries labour-saving devices in the home are far more used than in this country. We are pathetically behind. In 1923, I understand, there were no fewer than 1,000,000 electric curling irons used by the ladies of America, and that gadgets such as that are in widespread use in that great country. Generally speaking, I think we may say quite truthfully that, at any rate in Canada and the United States, the housewife, by using labour-saving electrical apparatus, has learned to be happy though servantless.
This Bill, if it become law, should help to a substantial extent our oldest industry, namely, agriculture. I am not claiming that at once over the whole of the agricultural area of England—that would be absurd—we are going by this Bill to give increased prosperity, or indeed to give increased electricity for lighting or power. Immediately, the only effects will be where the inter-connecting 1697 transmission lines pass from one urban area to another. But the area which will he affected is very considerable. There we may hope that the agriculturists will take advantage of this power and use it in poultry houses during the winter— already poultry-house lighting has largely increased the laying of eggs—and for electric milking. Where it has been tried in this country, it has been a marked success, and I see no reason why electric milking, with its attendant cleanliness, should not be more generally adopted, as in New Zealand. I have endeavoured to show, very briefly, that there is a real need for this Bill, because we are lowest on the list of any commercial nation in the use of electricity; we use very little of it to drive our machinery, and there is a marked absence of labour-saving machines in the home.
Now let us turn to the Bill. In the past, broadly speaking, legislation affecting electricity supply has had all the defects of State interference, without effective control. What do we find in the Weir Report? We find that the Commitee proposethat the country should be regarded as a single unit, and that all the energy required for the country should be generated in a series of stations of convenient size and situation, inter-connected with one another.The result of their scheme would be that the best existing stations would work at a higher load than is possible under present conditions, while other selected stations would come in at peak periods to make up the requirements, and the less efficient would be closed down. Since we are dealing with technical considerations alone, the scheme does not differentiate between private companies and municipal undertakings. Both are included. What seemed important to the Committee was, not the ownership of the station, but the benefits likely to arise. The cost of production is reduced by such a scheme in all stations, though naturally the smaller benefit most. Accepting this scheme, the next problem is how to put it into operation, more especially if the interests of existing undertakings are to be preserved. Here I must emphasise again the distinction which can rightly be drawn between distribution and generation. The object of co-ordinating generation is to obtain the definite advantage of a higher load 1698 factor. There is no similar advantage to be obtained by concentrating distribution in the hands of one distributor. The benefits are doubtful, and are outweighed, I am afraid, by the advantages of local management and competition. Distribution, therefore, as far as this Bill is concerned, is left in the hands of existing authorities. In a, word, as far as distribution is concerned, the Bill maintains the principle of separate authorities, and all the stimulus of local management. In dealing with generation, the advantages of close co-ordination over so large an area are so enormous that it is worth while securing this co-ordination, even if in some instances particular undertakings would prefer to remain separate. Provided co-ordination is secured, the Government have no desire to interfere more than is necessary with ownership and management. The change is limited to the bare essentials.
So, the Bill provides, in Clause 1, for the appointment of a Central Electricity Board, whose sole function will be this matter of co-ordination. From that point of view, it is far more important that the Board should be composed of men of wide experience in finance and business organisation than representative of particular interests or even electrical experts. For technical matters they will have the assistance of their staff and the advice of technical committees, but the Board itself will be broadly representative, and essentially an organising body. They will be a commercial concern, and their commercial discretion will be absolutely unfettered. They will not be a Government Department in any sense of the word. Indeed, I cannot imagine any body less a Government Department than the Central Electricity Board which it is proposed to set up. To the Board, as the executive body, will fall the duty of preparing a technical scheme for the supply of all the energy required, showing the stations to be selected, any new stations that may be required, and the necessary transmission lines. This scheme will be submitted to the Electricity Commissioners, who, acting in a semi judicial and technical capacity, will give the interested parties an opportunity of being heard, and will then confirm the scheme, with or without modifications.
1699 I submit that a scheme, prepared in this manner, canvassed by experts, and confirmed by the Electricity Commissioners, may reasonably be accepted as thoroughly workmanlike. Accordingly, the Government feel that no individual views or objections should be allowed to interfere with its being put into operation. The plan of the Bill is to give the Board general powers of control, but to leave the actual management of the selected stations in the hands of their present owners. But, if such an owner refuses to come into the scheme, then, for the reasons I have just given, the Bill authorises the Board, in Clause 5, to acquire the station, at a price laid down in the Bill. Apart from this clement of compulsion, which must be regarded rather as a safeguard than as part of the normal working of the scheme, the Bill provides that the Board shall arrange with owners of the selected stations to work those stations in the manner contemplated in the scheme.
§ Colonel ASHLEY
By the Minister, as the hon. Gentleman will see if he reads the Bill. Similarly, any new stations that may be required—and, sooner or later, they certainly will be required—are to be built and managed, not by the Board, but by a private company, or a local authority, or a joint electricity authority, or, in fact, anybody who will take on the job, but only by the Board as a very last resort. Again—and this is an important point— the only works which the Board will actually carry out themselves, and the only plant which they will own, will be the transmission lines. These, it is the Board's duty to build, and, if any exist, they are to be acquired, so that when the scheme is in operation the position will be as follows: All selected stations will be worked in the best interests of the country as a whole. The owners will be entitled to a supply for their own needs. As far as this supply can be given by the selected stations, they will be entitled to receive it at cost price, plus, of course, a proper proportion of the Board's expenses. For any amount over the local output, should this prove necessary, they would have to pay 1700 the Board's general tariff. Normally, there would be a surplus, and this would be available for distribution by the Board to other undertakers. Owing to this surplus, and operations at higher load factor, the cost of generation would be reduced below the existing cost, and the owners would benefit accordingly.
It has, however, been represented to us that, before the scheme is in full operation, the cost to the owners, including as it will a portion of the Board's expenses, might be greater than at present—namely, the Board's expense would outweigh the benefits of the improved load factor. While the Government are confident that this fear is groundless, they recognise that it should be met. Accordingly, Clause 13 guarantees that for the first seven years the cost of the owners' full requirements will not exceed the cost at which they could have generated had the Bill not been passed. Therefore, the owners, for the first seven years, are amply safeguarded against any alteration in price, or anything detrimental to their undertakings. The whole object of the Bill is to secure the most efficient generation, and, consequently, the elimination of the less efficient stations. It is confidently anticipated—and I am sure that it will be so—that most undertakers will voluntarily accept a bulk supply from the Board, and shut down their own stations, when they realise that the Board is able to supply them on better terms than they can generate for themselves. It may be, of course, that certain undertakers, for whatever reason, will prefer to maintain their small generating stations. Such an attitude is incompatible with the most efficient system and disadvantageous to the consumers. It would justify the House in granting strong compulsory powers. The form in which we put compulsion in the Bill aims rather at protecting consumers than at forcing undertakers to close down their stations.
Clause 10 provides that, when an undertaker demands a partial supply from the Board, he may be required to take his full needs from the Board, provided the Board can supply more cheaply. Clause 14 provides that if the Board offer an undertaker a supply at a lower cost than the undertaker can generate himself, and he refuses to agree to take such a supply, then the Board may make an order to 1701 reduce his prices by the amount of the difference.
There is one point in connection with the main scheme which I think I should mention; that is, if there is to be interconnection, there must be standardisation of frequencies. The extent to which this may be necessary, and the time for doing it, are left by the Bill to the Board. Under Clause 9, the Board are given power to require standardisation on the understanding that they must bear the whole expenditure, including the cost of altering or replacing plant of the consumer. The Weir Committee I am aware recommended that the cost of standardisation should be met out of State fluids, and they suggested that this expenditure might be repaid without interest, through the operation of the Board. The Government, however, did not feel justified in putting this burden upon the taxpayer, and after they had gone very closely into the figures they decided that the whole expense should be met by the Board, that this could be done without detriment to the scheme, and accordingly the cost is made a capital charge on the Board.
Turning now to the finances of the scheme, and remembering that real economy consists in a judicious expenditure of money, the Weir Committee decided that the capital required under the scheme would be £25,000,000, and that this sum should be guaranteed as to principal and interest. That is their estimate, which has been accepted, but when to that has been added the cost of standardisation, it will be found that the capital authorised in the Bill now stands at £33,500,000 sterling.
The House will understand that the primary object of the Bill is to reduce the price of electricity. Accordingly, provisions are inserted to ensure that any saving in generation shall be passed on to the consumer. The Board itself is placed by Clause 11 on a non-profit earning, basis; and other Clauses provide for the necessary regulation of the prices which undertakers may charge. The Bill, of course, includes miscellaneous provisions, but I will refer to only one. The House will be aware that under the existing law, company undertakers are, in certain circumstances, liable to be purchased by the local authorites, and the price to be paid is the 1702 value of the plant, etc., "suitable to and used by them for the purposes of their undertaking." It has been found that this provision prevents undertakers from accepting a bulk supply and shutting down their stations, even when beneficial, on the ground that the station so shut down will not be included in the plant, for which payment must be made. Clearly this is unfair, and Clause 35 provides that where a company undertaking receives a bulk supply from the Board, they shall be entitled to a proper payment for their station if purchased by a local authority.
§ Sir J. MARRIOTT
Well, either £33,000,000 or £35,000,000. Will that amount be sufficient to cover the acquisition of those stations which are to be shut down?
§ Colonel ASHLEY
We cannot tell how many cases there may be. We cannot imagine that there will be many of them. We cannot conceive owners of any stations not liking to get something at a less cost than they were paying at that time. It is an extraordinarily good commercial arrangement to take something and get that something given to you at a less cost than the cost at which you are producing it. I cannot imagine that there will be many stations which will refuse to accept that offer.
Such is the bare outline of the Bill, and the House will forgive me if I do not go into greater details, because I know that there are a great many hon. Gentle-men who wish to speak, and, if I go into all the details, it will take a long time. But may I ask the House no longer to approach this great question from a parochial point of view. May I ask hon. Members to use some imagination and faith in regard to it? Does this Bill protect the public interest, and docs it maintain the individual initiative? In my opinion, those two questions can be answered in the affirmative.
May I say one word to any hon. Member interested in the gas industry? I cannot conceive that this Bill will hurt the gas industry in any way whatever. It has never done so in America and in other places, where these two industries are working side by side, and sometimes 1703 hand in hand. The prosperity of the one has meant the prosperity of the other, and I cannot conceive of anything in the Bill which would in any way hurt the gas industry and prevent that industry from carrying on its normal business, nor indeed, from largely increasing the business which it does at the present time.
May I appeal to all the power companies and the municipal authorities who operate and own electricity stations? They are not asked to give up the ownership of their stations; they are not asked to give up the ordinary management of their stations. But what they are asked to do is to submit to a co-ordinative control as to the hours they should work, what load they should meet, and generally to assent to a general co-ordination all over the country. How can that hurt them at all? If it goes against the grain that anybody should interfere with their own stations, as it may do, surely they might assent to this Measure for the benefit of their own country. I think they stand to gain substantially in three ways. The whole of their output is guaranteed to be taken. Their stock—I am not familiar with the Stock Exchange—in my judgment will become gilt-edged and more valuable than it is at present. They will sell a greater number of units under the scheme, and will secure an equal profit per unit as they do now. Undoubtedly, they will sell a larger number of units, and they will have much more business. Their sale of electrical apparatus such as cookers, etc., will be increased, and, generally, I submit that they will do much more business than they are doing at present.
§ Mr. D. HERBERT
The right hon. Gentleman says that these companies would have a guarantee that all their output would be taken.
§ Colonel ASHLEY
Yes, certainly. The way they are to generate is to be laid down, and the whole of their output is to be taken by the Board.
§ Colonel ASHLEY
Certainly. Then may I say one word to the owners of the stations which may have to shut down? After all, I know that no one likes to have his own pet station and his own pet 1704 business done away with, but distribution will remain, It is only the generation which is to be done away with, and, if you can get something cheaper than you are now making it, then, surely, it is no great hardship to anyone. May I say one word to right hon. and hon. Members opposite. I see they are going to try out that old chaser, "public ownership," and put it over the national course. Surely, they ought to know that that horse will never complete the course. Wherever it has been tried it has always failed at the first or second fence. [Interruption.] I suggest that they should give up their mid-Victorian ideas.
§ Mr. HARDIE rose—
§ Mr. SPEAKER
I must insist on the hon. Member resuming his seat when I am standing. Colonel Ashley.
§ Colonel ASHLEY
May I appeal to hon. Members to give up their mid-Victorian ideas, to give up silting, as they have sat, at the feet of a German who lived some 50 or 60 years ago, and to become progressive? We on these benches have many brilliant ideas, so many that it would be impossible to put them into operation during the lifetime of the present Parliament. If hon. Members want something which may help them, if they are ever to sit on these benches again within their political lifetime, we shall be very pleased to give them some of our ideas. But, is it any use bringing forward this old argument when all over the world we see that nationalisation has been scrapped in favour of private enterprise, both in the railways and in the mines? I believe that, although hon. Members may bring this argument forward, they cannot seriously think that the House of Commons, and above all the country, will treat it seriously. Of hon. Members who sit on the Liberal Benches, and especially of the right hon. Gentleman the Member for Carnarvon (Mr. Lloyd George), may I ask that they should take a bird's-eye view of this question, an impartial view, and treat it on its merits? I do not know whether the right hon. Gentleman thinks 1705 that he is the father of this Measure. Possibly he does, as the author of "Coal and Power." Possibly he thinks that we have stolen his clothes when bathing. He may think that we have ordered an electricity suit from our tailors, got delivery of it, and had it made to the same cut as his before he was able to don his own. But in any case, I am sure the right hon. Gentleman, whether he thinks that is so or not—even if he thinks that in this matter we have copied his ideas—will realise that imitation is the sincerest form of flattery.
And, finally, to those who sit on the benches behind me, may I say to them that in this Measure we have endeavoured to carry out the principles in which we believe—that it is not the business of the Government to manage or operate, but to co-ordinate and to control. The State should leave to agencies, private companies or public authorities, these operations which they can carry out themselves. No Parliament working through a bureaucracy could have achieved the progress or made the discoveries in the electrical industry which have emerged in recent years. But we can regulate—and rightly regulate— public utilities. I say it is the duty of Parliament to foster to the utmost individual enterprise, removing hampering restrictions; not to substitute its own activities. It is not for us to create wealth our-selves by national undertakings, but to give to our fellow-countrymen freedom to produce that wealth. It is only by adhering to these teachings of the past, which in fair and foul weather have been the sheet-anchor of this country, can we preserve and extend our trade and economic life.
§ Mr. WILLIAM GRAHAM
I beg to move, to leave out from the word "That", to the end of the Question, and to add instead thereof the wordsthis House, considering that the urgent need of the nation for a cheap and abundant supply of electricity can best be secured by the development of a publicly owned and controlled system of generation, main transmission, and distribution, cannot agree to the Second Reading of a Bill which fails to provide for the co-ordination of the production of coal and its by-products with electrical generation, creates cumbrous machinery, strengthens and extends the hold of profit-making companies over an indispensable public service, continues the limi- 1706 tation of municipal undertakings in confined and uneconomical areas of distribution, and affords to consumers in company areas no adequate protection against excessive charges for light and power.In moving this Amendment which stands on the Order Paper in my own name, and the names of my right hon. Friend the Member for Colne Valley (Mr. Snowden) and other hon. Members on this side of the House, I make it perfectly plain, in the first sentence of this speech, that the Amendment is, as the right hon. Gentleman opposite described it, a Socialist Amendment, and it is designed to base the solution of this problem on the principle of public ownership in the State. With that part of the right hon. Gentleman's criticism we certainly do not disagree, but we take exception to his argument that this is mid-Victorian, out-of-date, and not applicable to existing conditions, and almost the whole object of the speech, which I propose to ask the House to consider this afternoon, will be to show that the solution we propose is far more comprehensive, is far simpler, and is far more likely to achieve the results the Government have in view than this Bill which they have offered to the House of Commons.
In order properly to understand this problem we should, I think, go back to at least 1882, but this afternoon it will be sufficient to begin with the situation in Great Britain before the introduction of the Electricity Bill in 1919. Before, however, saying one or two words about that, there need be no difference of opinion between us as to the urgency and importance of large scale change in the generation, control and supply of electricity in this country. All hon. Members, whatever view they take of the Weir Committee's Report, will agree that from many points of view it is a remakable document. From our standpoint, it is a very serious indictment of the existing system, although we do not agree with the broad conclusion which is reached. But the Weir Committee made it perfectly plain that if we proceed by way of comparison with other countries in the world, we are a. long way behind in the consumption of electricity in Great Britain. If I remember rightly, the highest figure they gave in one part of America was 1,200 units per head per annum, and in another almost adjacent part 1,000 unite per head per annum. The broad average in the 1707 United States of America is between 500 and 550, and in Great Britain, only when there is added all the private stations, to which the right hon. Gentleman referred, do we reach a figure of, approximately, 200 units per head per annum.
From almost every other point of view the same criticism applies, because the proportion of our machinery electrically driven, the proportion of our industrial plant used in that way, is far below the proportion in other countries, and more especially those countries which are our serious industrial competitors at the present time. The Weir Committee made a large number of other observations about price, distribution and supply, with which I need not detain the House; but, in any case, it is perfectly fair on our part to point out that, excluding that portion of electricity supply which has recently proceeded on public ownership lines in this country, the indictment must rest very largely on the private enterprise, which, for a variety of reasons, has not responded in full to the test to which it was exposed. All these things were well known to experts, and others, during the crisis of War, and when some of us first entered this House in 1918 we were familiar with the atmosphere of what was called "post-War reconstruction." There was to be a great reorganisation of our internal transport, all kinds of new methods in industry, and, in particular, a new scheme for the generation and distribution of electricity. That scheme was understood to arise partly from the Report of the Coal Conservation Committee, and partly from the Report of the Williamson Committee, which followed that earlier body, and which laid down the basis on which the Bill of 1919 was originally introduced in this Chamber.
What were the broad proposals of that scheme? It was recognised that there must be larger areas for the generation of electricity, and new schemes of supply and distribution. In the original 1919 Bill there were compulsory powers, under which district electricity boards were to be set up, and which were to own and run those generating stations on a larger scale than was then in force. I offer that this afternoon as the first line of reply to the criticism the right hon. Gentleman has advanced of the Socialist 1708 part of our Amendment. Here was a Committee which, before 1919, made a definitely Socialistic recommendation, because these district electricity boards were to own and control those generating stations. It is hardly right, therefore, to say it is out of date, when an influential Committee, on which, to the best of my knowledge, there were no Socialists, or, at any rate, only a minority of Socialists, made that definite recommendation, and believed that recommendation to be necessary in the interests of this vital industry for British industrial and commercial progress.
What happened in 1919? Hon. Members who were in that Parliament will recall that there was a great contest from many points of view in the economic field between people who wanted to make a serious modification of private ownership and private industry in this country, and new systems of ownership and control within limits which they believed to be required by the extraordinary conditions which have followed the War. There was a long contest on the Electricity Bill upstairs, and, at the end of all our deliberations in that Committee, the Measure, with compulsory Clauses for the acquisition of these generating stations and ownership, went to another place. At the eleventh hour, in that other place, the compulsory Clauses were deleted from the Bill and were replaced by a series of mild, voluntary proposals, for a kind of persuasion and agreement, if it could be achieved, with the understanding that, at the earliest possible moment, another Bill would be introduced containing the compulsory Clauses, for the full discussion of which ample time would be afforded in this House, and in another place. That Bill was brought in, but never made any progress, and a year or two later another Bill, a mild Bill, dealing with no essential points for the purpose of this discussion, was passed. Every Annual Report of the Electricity Commissioners under the Act of 1919 from that date has indicated that we cannot get a proper solution of this problem in Great Britain until these compulsory powers are again at their disposal, and they can have larger areas for the production of electricity; in short, until they have some effective power in the form of State intervention, if not State ownership and control.
1709 That is the history of this matter since 1919. But I pause here to make a perfectly legitimate point in criticism. Hon. Members opposite—I do not complain of them in the least, because they regard it as their duty to argue on those lines—are opposed to public ownership, and are anti-Socialistic, as they declare in this House and on platforms outside. The opposition to this Bill in 1919 was, if you like, a triumph for the anti-Socialist forces. They deleted the compulsory powers and got rid of the public ownership. What has been the result? Five or six years of perfectly negligible progress, during a time when our industry has been passing through one of the greatest crises that ever overtook it, when the power of our competitors across the Atlantic and in other countries, with great resources at their disposal, has been growing, and when we have been fighting an unequal battle, without something of the highest importance from a remunerative point of view to millions of our people, a matter of vital importance in helping to place our commodities with greater success on the different markets of the world.
§ Mr. GRAHAM
I do not dispute there has been a certain increase, but the case remains, and I say that not on my own authority, but on the authority of men in close touch with this problem during the whole five or six years. The Minister himself confirms it, and it is confirmed in the Weir Committee's Report. It is the basis of the present Bill. You have made some progress during that time, but the experience of these five or six years has convinced you that some other scheme is necessary, and so this Bill is introduced. What is the vital difference between the original proposals of 1919 and the proposals in this Measure? At that time, as I have said, the idea was to establish district electricity boards owning and controlling these generating stations. This Government obtained the Weir Committee's Report, and, broadly and generally, they have applied the principles of the recommendations of the Report in this Bill. But there is a vital difference. They alter their solution now from the districts—and I do not particularly criticise that, because I believe it is a 1710 sound transition—but they alter it from the districts for all practical purposes, to the State as a whole. But on the other side they do not propose to make the Central Electricity Board they are setting up the owners of these stations. They put them in a position of control over generating stations, which are to be largely reduced in number, down to 58 selected for this purpose. That is the substantial change they introduce. I want to remind the House again that the Williamson Committee recommended the form of public ownership to which I have referred. The Government have gone back upon that proposal. They intended, I have no doubt, to hold the balance between the private interests and the municipal authorities and the rest, and some sort of State interest or control, which would not expose them to the Socialist charge.
That I take to be the basis of their case. But look at the extraordinary economic and administrative Bedlam to which they have reduced it! If any defender of bureaucracy, as we on this side of the House are sometimes criticised for being, had produced this Measure, he would have been ridiculed on the other side from one end of the Chamber to the other. I have not the least hesitation in saying that the proposals we have put forward are infinitely more simple than these, and, in point of fact, far more easy, and do not tend, as these do, to overlapping and redundant checks and hesitations such as are in this Bill. Just let us try to look perfectly fairly at the matter, and see what is in this Bill that has been put before Parliament. You have, in the first place, the Electricity Commissioners, and, so far as I can discover, they will now be made very largely into a kind of court of appeal.
In every Clause in the Measure you realise that. Reference is made to the Electricity Commissioners. Then the Government proceed to set up a Central Electricity Board which is to consist of seven persons, not necessarily with expert knowledge, but a body of men of affairs. That Central Electricity Authority would be a kind of executive or operative body under the Electricity Commissioners. It will be seen in a minute or two what are the guarantees that are to be placed at its disposal. As I understand the Bill, the district electricity authorities are to remain, within limits no doubt. And thus 1711 we have the private interests in the locality and the municipal interets, and, in short, a whole network of agencies under what should be a simple form and a simple scheme in a matter of this kind. I would invite hon. Gentlemen opposite to look at the Clauses in the Bill in reference to those beyond whom the Central Electricity Authority may be the subject of appeal. It includes even the Railway and Canal Commission. I do not know what other bodies they will reach before they go on. All these bodies have to be consulted, and all this in a thing which Ministers opposite say is urgent, and cannot brook more delay. Is it wrong or inaccurate to say that a very large part of the time will be taken up under this Measure in disputes and arrangements which ought to be devoted to the generation of electricity? No Socialist on these benches, however great his enthusiasm, could have devised such a scheme as that which the Government have put forward. It has been reserved for a Government of individualists, driven by forces beyond their control, to put forward the scheme. That is the state of affairs on the administrative side.
Of course, we do not discharge our duty if we confine ourselves to destructive criticism. I think this Bill should be simplified. I am not quite clear as to what the relationship between the Electricity Commissioners and the Central Electricity Authority is going to be. Many of us on this side of the House are far from being satisfied that it is necessary to have the two bodies, and, above all, it is a vital part of our case in every recommendation that we make for public ownership, and in the strengthening even of a scheme like this, which we believe may become one of public ownership, to reduce as far as possible the administrative or the purely control side of the proposition. In any scheme of the sort it should be our duty, irrespective of party, to aim at that, and to get down to the simplest and the plainest possible scheme.
There is other criticism which might be offered on the administrative side. But I pass on to what is in reality of very much greater importance. The Government and hon. Members opposite argue that they are prepared to give great powers of control to the Central Electricity Board, including the power 1712 of co-ordination, mainly because that avoids the public ownership to which they are opposed. But notice the position of undertakers under this Bill? If I were an individualist undertaker I would say at once that I would far rather part with my concern on reasonable terms than occupy the position reserved for me under this Bill. That is a perfectly legitimate line to take. What is the position of undertakers under this Bill? The Central Electricity Board gets all the powers I have described, and the undertakers are left with the naked ownership of their generating concerns. They have to manufacture the electricity according to certain terms. They have all their obligations to the Central Electricity Authority. The terms are complex and will require much explanation during the Committee stage. To take an analogy from the licensed trade, the undertakers are in the position of tied houses; or they remind us sharply of the controlled establishments with which we were familiar during the War. What an extraordinary situation! There is practically complete control, or what I have called naked ownership. It is not really ownership in the ordinary sense, because all effective power is gone. It would be infinitely letter to have public ownership; and I can well imagine that there are hon. Members opposite who will agree that it would be better, rather than this mixture of public control and naked private ownership on which the public control has been super-imposed.
How is the price of electricity to be determined under this Bill? The undertakers are to sell all their product to the Board, and then proceed to buy it back again on terms laid down in the Bill! It is only late in the day, when all other resources have failed, that the Government propose to give the Central Electricity Board power to acquire a station, and even then they are not to do so unless they have quite failed to find any undertaker in the district who will face the job.
As to the finance of the Bill, how does it stand? Power is given under the Bill to raise in the aggregate £33,500,000, which money is guaranteed up to the hilt by 44,000,000 of the British people. The Board are to own the main transmission lines connected with the system, and to undertake to standardise the frequency, 1713 which is an obligation under the scheme, and then the Minister goes on to argue, as in the White Paper, that all this will not penalise the private company. It will, he says, help the private companies because of the advantages which it brings to them. The public guarantee will further strengthen their private ownership. Is that a position which the House is prepared to accept? Is there any hon. Member on the opposite side who does not agree that that raises far-reaching issues and illustrates the extreme position to which the Government has been driven? Ours is a form of State intervention and control which may not suit hon. Members opposite, but it s at least logical. We argue that the principle of public ownership should run right down through the system from the top to the bottom. That is bur case. In fact the ground has been largely pre-pared for hon. Members opposite, partly by the control which already exists and partly by the fact that a very large part of these undertakings is already under public ownership in this country. The Weir Report shows £103,000,000 of capital expenditure by the local authorities.
If you judge this scheme by way of comparison with other countries in the world it fails from whatever point of view. The financial part of it is a rotten proposal—[HON. MEMBERS: "Hear, hear!"]—from the point of view of the legitimate use of public guarantees ! So far from having failed to justify what we have put on the Paper, I trust I have succeeded in proving to the House that the Government's proposals strengthen our policy. Hon. Members opposite may object to proposals of the kind on the ground that there are dangers in the public ownership of industry. But I invite their consideration to certain questions. In the nature of things electricity must be very largely a monopoly. Is it not further true that the argument against public ownership is seriously weakened by the growth of syndicate, combine, and trust in British industry, which trust has its place to an effective extent in the generation and supply of electricity? And further, is it not true that in this sphere there has already been a great penetration by public ownership in the locality? I have met Conservative Members who have argued, quite fairly, that they cannot agree with the whole of 1714 the economic programme which we on this side support, but they have admitted that there are great industries in the State which lend themselves readily and almost inevitably to public ownership and control.
With that argument in mind our contention on this Bill should present no difficulty whatever to many hon. Members opposite. But there is another large consideration which we must not forget. Reference was made a few days ago to the burden of our National Debt of £7,700,000, hung round the necks of our industry and commerce, and round the necks of our people. It is conceded that there is small prospect of getting more than limited sums under the heading of inter-Allied debt. Meanwhile the United States of America has shown great industrial progress, and even the Continent of Europe is making recovery within limits. And here are we in Great Britain, sandwiched in competition between these great forces on either side, with all this burden on our industry, of which a generous supply of cheap electricity is the very life-blood. Here is a Bill proposed by the Government which, in practice, can do nothing to mitigate that burden. It introduces a multitude of complications, of no advantage to those who depend on cheap electricity. Our scheme is the only basis on which the broad recommendations of the Weir Committee can become a reality; the present proposals mean that they will only operate in the bog of this Bill. For these reasons I urge that it should be rejected, and to that end commend our Amendment to the House.
§ Mr. DENNIS HERBERT
It is with a regret which is only equalled by the sense of duty which compels me to do so, that I rise to oppose the Measure brought forward by the Government. It is apparently necessary, from what I have heard during the last day or two, for me to ask to be allowed to make one personal observation, and that is to say that I have not and never have had any interest whatever in any electricity undertaking in this country, and my firm has never, during the time I have been a member of it, had any interest in, or acted in any way for, any electricity undertaking. With regard to the Amendment which I put upon the Paper, there is also a word I would like to say. 1715 It appeared first of all, and by my express intention, under my name alone and on my sole responsibility, having been drafted by me without consultation with any of those whose names were afterwards affixed to it, and without in any way being prompted by any of those who have taken any part in regard to this Bill. With regard to the speech of the right hon. Gentleman who introduced the Bill, I may, perhaps, fairly congratulate him on giving what one might call a charming sort of tea-party description of the uses of electricity, with which I am happy to be able entirely to agree with him, and also an interesting exposition of the very delightful things which this Bill is intended to do, objects again with which I entirely agree. My trouble, and the trouble of those associated with me, is that we do not believe the Bill will succeed in doing what it is intended to do.
The objections to this Bill may, roughly, be classified under three heads, the first being general objections to the scheme, with which I hope to deal in a few minutes, and the other two being the financial aspect and the technical aspect. On the financial aspect and the technical aspect other hon. Members associated with me, who are far more competent to speak on those topics than I am will, I hope, give the House the benefit of their criticisms; but I will permit myself one observation on each of these two aspects. With regard to the financial aspect, at the very best, and if the Government's hopes are entirely right, even then the State is handing out a credit for £33,500,000 at a time when, as we have been reminded frequently in this House in the last few weeks, one of the things which the Government should restrict as much as they possibly can is the handing out of these Government credits, in order to restore and improve the credit of Government loans generally. That £33,500,000 is to be a loan which, as far as I can gather from the Bill and the White Paper and the Report of the Weir Committee, is not expected to be remunerative for some years to come. What we fear, and what I think we are justified in fearing, is that the financial result may be very much worse than this; and it is undoubtedly possible 1716 under the Bill, and we fear it is probable, that the scheme will land this country in responsibility for loans immensely greater than £33,500,000—several times that amount—and that those millions will be spent upon a scheme which will not succeed in producing the profit necessary for the service of those loans, and that consequently the service of those loans will fall upon the taxpayers of the country.
On the technical aspect of the scheme I desire only to say that, as far as can be gathered from the most careful study of the Reports both of the Williamson Committee and of the Weir Committee, and most careful attention to what has been said in this House and outside by Members of the Government, this scheme is drawn up and based entirely upon the calculations and opinions of most able men and great experts, I admit, but theorists, Sir, theorists and consultants with no experience whatever in the practical management of these great undertakings. I venture to say—whoever replies for the Government will correct me if I am wrong —and to say with confidence, that advice which has been offered and which has been urged upon the Government and these Committees from those practically concerned in the running of electricity undertakings, has not been taken advantage of. As the words of my Amendment on the Paper indicate, those associated with me and myself are not opposed to some form of legislation. I may say for myself that I most entirely agree with what the Minister of Transport said in his speech as to the need of there being some legislation to, if I may use a homely phrase, put straight the muddle in which the industry is in, in some respects, at the present time. But I go further than that, and I say that when the time comes many of those associated with me who are far better able to do so than I am will be prepared to make constructive suggestions for a less dangerous scheme, one which has far more certainty of success, and, at least, does not entail the risks which the Government scheme has, and that we shall be only too glad of the opportunity of assisting the Government, of whom generally we are supporters, in passing satisfactory legislation for dealing with this great electricity problem.
Complaint has been made by the Government of words in the Amendment 1717 on the Paper suggesting that the Government scheme is calculated to bring about nationalisation of the generating of electricity. I am inclined to confess that, perhaps, there is something in that, though in a different sense from what they suppose. To my mind the Government's scheme is calculated to bring about something far worse than the nationalisation of the electricity generation industry. To compare nationalisation with the proposals of the Government is like comparing a healthy human babe with one of those horrible monstrosities of which we sometimes hear. As the Minister of Transport said, this is not placing the industry under the control of the Government, or Departments of the Government, but under the control of a board, a board the members of which are appointed, not by Parliament but by the Minister of Transport, appointed not at his will and pleasure, but definitely for a period of not less than five years. They are supervised, as he says, by the Electricity Commissioners. Who are the Electricity Commissioners? Something very similar to this board—partners in a mistaken, if not an evil, scheme.
The Minister of Transport said the Commissioners are a semi-judicial body to whom various matters are to be referred. Very semi—demi-semi, and less than that. The Board concoct a scheme; the Electricity Commissioners approve the scheme; the people aggrieved can appeal to the Electricity Commissioners. Is that a judicial proceeding? We have had some of it, and we know what it means. The Electricity Commissioners produced a scheme for the London and Home Counties Area. It was turned down by the Courts as ultra vires. Ultimately they produced another scheme, and I had the great pleasure and satisfaction of being able to bring about through Parliament an alteration of that scheme which that semi-judicial body had declined to entertain. We are not being given that chance under this Bill. Parliament is scarcely mentioned in this Bill. There are, I think, four comparatively small occasions on which that abominable thing, the product of Coalition days, a Special Order is necessary, and it is only or those four matters, and only by that particular method, that Parliament has the slightest control of any sort or kind over the autocratic powers of this 1718 autocratic Board and its partner the Electricity Commissioners.
May I try to put in a nutshell our principal objection to this scheme, an objection which, I think, goes so much to the root of this scheme that it prevents any possibility of making this Bill a practical one on the Committee stage—from our point of view that is, though I do not expect hon. Members opposite will necessarily agree with me in this? I do not believe and I am justified in my disbelief by the speeches of the chairmen of the great power companies at their general meetings—that these great undertakings will be prepared to work the selected stations under the orders of this remarkable Board. I do not believe for one moment that, with the very best will in the world and with the very best patriotism, they would dare, as representing the shareholders of their undertakings, to abandon their responsibilities, rights and powers to a Board of this kind. If I am right in this, what does it mean? That practically every one of the selected stations will have to be taken over by the Board. I am perfectly certain, if that is going to happen, no company or individuals will be found in the future willing to put up money for new generating stations.
The result will be that the generation of electricity will become the absolute monopoly of this Board, and it will be calculated to lead to nationalisation, because, in these circumstances, it would be easier for a Government in the future to adopt nationalisation. In the meantime this scheme is worse than nationalisation, because it means putting the whole of this industry under the control and into the hands of a Board quite uncontrolled in any way by Parliament. It may be quite true that some of these points can be dealt with in Committee, but I want to point out what seems to me to be the strongest accusation against the Government, namely, that they have brought in a thoroughly impractical scheme upon which they have not taken, proper advice. Members of this Board are to be appointed by the Ministry of Transport for a period of not less than five years, and apparently there is no power to remove them. They are subject to nobody except the Electricity Commissioners, to whom I have already referred as partners in this scheme. This Board will have power to acquire undertakings 1719 and establish new ones, to acquire transmission lines and lay down new ones. There is practically no control over them whatever. For this purpose they must incur enormous expense, and the whole of that money—I believe it has been estimated at about £33,500,000—is to be raised on the guarantee of the State. Among the remarkable things which this Board can do—it possesses powers which Parliament has never yet given to anybody else—is to regulate the relations between charges and dividend. It has power to limit the charge made by power companies for supply, and all this power is to be given to a Board of the nature which I have described.
All this might be justifiable if we were certain, or even if there was a strong probability, that the result of this scheme would be to produce a cheap and abundant supply of electricity. But this scheme, if it fails—and I do not want to put it higher than that—is going to put back, not merely the electrical industry, but almost every single industry which might make use of electricity, 10 years and probably a quarter of a century. This means that it will absolutely sterilise all the possible improvements in electrical generation until we have got rid of this scheme, which is one, when once put into operation, that will be able to claim it has not had time to prove its efficiency until it has been in existence at least 10 years. I believe that this scheme is distrusted and is believed to be a fallacious scheme, I know that it is generally opposed by the managers of every great electrical undertaking in this country.
Of course, I know that some people say that those connected with this industry would oppose any Measure of this kind. What justification is there for saying that? If you wish to improve any great industry, and you contemplate laying down a great scheme for co-ordinating that industry to increase and cheapen its products, to whom would you go for advice? You would go to the people who have already brought it to a certain pitch of efficiency. I believe I am right in saying that, in spite of the unfortunate condition of electrical undertakings in many parts of the country, there are electricity undertakings in this country which cannot be beaten by anyone in the world. If this Bill is backed 1720 up by people who say that you must go in for this scheme in spite of the fact that it is opposed by practically every experienced authority in this country, then we shall be quite prepared to realise that the Bill is a mere dream or, as it may be better described, a very serious night-mare.
We are not opposing this Bill, as some people have stated, because we are afraid of the very mention of Socialism or nationalisation, or because we are afraid of any sort of Government control or Government interference with electrical undertakings. I and many of my friends believe that the less the Government interfere with private enterprise the better, but we are prepared to agree that there are cases in which there must be some form of Government control. No party has supported more than the Conservative Party in the past the development of railways entirely created under powers given to them by Parliament by means of statutory powers, and therefore involving from the very first a certain amount of Parliamentary control. That we are prepared to admit as being necessary in this case, but we cannot support a scheme which we believe is going to take the generation of electricity entirely out of the hands of every private, municipal or public undertaking in order to place it into the hands of this Board, not Parliament.
There is one point which has been put to the House over and over again whenever hon. Members have been advocating nationalisation, and it is the case of the Post Office. They say because the Post Office has been a success why should not electrical generation be a success? There are two things that strike one in this respect. First of all, the carrying about of letters and parcels is quite a different proposition from generating electricity, which is a great scientific subject which is probably now only in its infancy. On the other hand, there is nothing much more to be learned as to how you can carry parcels about, and improvements there will not be discovered by the Post Office but by Railways and others who are employed by the Post Office. What is more, under this scheme we shall have nobody directly responsible to Parliament. We shall not have a Minister for Electricity in this House to answer for the misdeeds of this Board.
1721 [...].0 P.M. If the Government should determine, as appears to be the case, that they are prepared to go on with this Bill, I hope they will adopt the course to which I think they cannot object, that is, that at some stage they will see that this Bill is referred to such a Committee as can hear the parties concerned and receive evidence. I raised this as a point of procedure this afternoon, and I hope the Government will believe me when I say that I did not do so for the purpose of obstruction, but simply to ensure that the parties aggrieved might be heard by counsel before a Committee which can receive evidence. I wish to say on my own responsibility—I think the same view will be taken by many of those who think with me—that if before the close of this Debate the Government will give us a definite assurance that they will treat this as a Hybrid Bill, then we shall feel that we are far better able to do our best to assist the Government to see whether it is possible to knock this Bill into a shape which is not so dangerous as we believe this one to be at the present time. I suggest that that is only a reasonable request, and I very much hope that, before the conclusion of this Debate, the Government will see their way to give us a promise that they will do this. I would only, in conclusion, state again that it is with the very greatest regret that many of us have found ourselves obliged to oppose this Bill. We recognise that some electrical legislation is necessary, in the interests of the country and in the interests of the industry, and we supported that view when we stood at the last General Election as supporters of the Prime Minister, who had put that in the forefront of his programme. We believe, however, that this Bill is one which could not be worked into a satisfactory shape without such radical alterations as, under the Rules of Procedure of this House, would, after the Committee stage, require that it should be withdrawn and another Bill introduced in the new form. That is our reason and that is our justification for taking up the attitude that we feel bound to oppose this very dangerous Bill, even on Second Reading, because we feel that opposition in Committee to particular points in the Bill would not be sufficient. I most earnestly beg that the Government will, before this 1722 Debate ends, meet us to the extent I have indicated, by giving us an undertaking that they will have this Bill treated as a Hybrid Bill.
§ Mr. HARRIS
We have had this afternoon the interesting spectacle of a coalition in opposition from both sides of the House approaching this problem from very different points of view. As I was listening to the last speaker, I could not help thinking that one of the best things to be said for this Bill is the fact of his opposition and the opposition of certain of his friends. I have no doubt that the various interests in the country would view with delight the defeat of this Bill. That would be a great satisfaction to them, because it would further entrench them in their present position. Nothing could be more disastrous than that the question of electricity supply should be left as it is, and, undoubtedly, a very reluctant Government find themselves forced by the weight of evidence to take some drastic steps; but I do not think they have been very fortunate in the ultimate form of their Bill. It is a bastard child of Socialist and individualist parents. It has the faults both of Socialism and of individualism. It entrenches vested interests more, and it does not secure adequate public control and guarantee to the community in regard to what it so urgently requires, namely, an efficient and progressive system of electric supply.
One cannot help thinking, when one considers the history of electricity in this country, that it is owing to this lack of ideas that our country lags behind all other nations of the world in its system of electricity supply. It is quite a mistake to suggest, as the Minister rather seemed to imply, that we were not first in the field. On the contrary, Great Britain was almost the first country to make experiments in electricity, but its very speed has been the cause of our present antiquated methods. It was assumed in the early days, as the Minister rightly pointed out, that the primary purpose of electricity was lighting, and, secondly, that it was essential to have small local government areas, owing to the difficulty, in the light of early technical knowledge, of transmission over large distances. Accordingly, the country was mapped out into small areas, and the local government unit was 1723 made the basis of making concessions. The result was the creation of a great number of vested interests—not merely company vested intersts, but municipal vested interests — and, whenever an attempt has been made at reform, on whatever lines, there has always been opposition of such an organised character that that reform has been impossible.
I remember when, about the year 1902, attempts were made in London to get a bulk supply of electricity. The London County Council promoted a Bill, but that Bill was destroyed because of the organised opposition, not only of company interests, but of local government authorities which had their own municipal supplies. Year after year, every attempt to get a satisfactory system in London failed, owing to the fact that a satisfactory system of electricity supply could not be obtained without interfering with existing vested interests. One year the Bill was introduced by a public authority; next year it was introduced by a company. Hundreds of thousands of pounds were wasted in promoting Private Bills, and meanwhile the public was suffering from an inefficient supply and high prices. What London alone has had to pay because of our backward system of electricity supply it would unpleasant to contemplate. Since the War, the country has awakened to the need for something to be done, and we have had endless commissions. I think it was the Prime Minister who said the other day that a commission, very often, was appointed in order to delay the solution of the problem. If that be so, these commissions and committees have been very successful. Nearly all of them have told the same story and made the same recommendations. Whether it was the Committee under the chairmanship of the present Lord Forres, known as the Williamson Committee, or the Coal Conservation Committee, or the Board of Trade Committee—all of them came to the same conclusion, namely, that you could not have a satisfactory supply of electricity without co-ordination and public control, and some kind of unification throughout the country.
As the result largely of the Williamson Committee, we had the Bill of 1919. That Bill had a fairly smooth passage through the House of Commons. It put forward 1724 a scheme which in many parts of the country was welcomed, and certainly was approved by municipal authorities; but at the very last moment, in the House of Lords, the Bill was so drastically amended that practically it has become a dead letter, and has done very little towards the further progress of electricity supply in this country. It was too late in the Session for the Bill to come back to the House of Commons, but a promise was then made that at a later stage, in a year or two's time, the compulsory powers would be restored. However, whatever the reason may have been, those compulsory powers have never been restored. Two years ago I ventured to bring in a very short Bill, which received a Second Reading, proposing to restore the compulsory powers deleted by the House of Lords from the Bill of 1919, but, owing to the difficulties of Parliamentary time, I never got an opportunity of having it discussed in Committee. Last year I reintroduced that Bill, but it was defeated, by an overwhelming majority, by hon. Members opposite, the only exception being that the Parliamentary Secretary, who is probably as great an expert on this subject as there is in the House, went out of his way to support my Bill.
I cannot help thinking that, if that little Bill had been allowed to see the light of day, the need and necessity for this cumbersome and clumsy Measure would not have existed. It was simple and short, and would have done all that was required, because, like the hon. Member for Watford (Mr. D. Herbert), I dislike all these Boards and, especially, irresponsible Boards which are not responsible to this House. We have had one little experiment in the London Traffic Board, which has not done much to simplify London traffic. It meets behind closed doors, and one never knows what its decisions are or how they are arrived at. Now we are to have another Board. It would be far better, having outlined in the Act of 1919, an elaborate system of local electricity authorities, to let them function. Only two or three, at the most, have come into being, and the one for London has only been in existence two or three months. Surely it would be better to let them have a chance to see what they can do to solve this problem. If they were given the power of compulsion originally provided by the Act of 1919, I venture to say that, without all 1725 this paraphernalia, without all this elaborate machinery, they could do all that is necessary to co-ordinate the supply of electricity and give us the satisfactory system that is required if this country is to come into line with others.
I do not for a moment accept the suggestion of the hon. Member for Watford that all is well. On the contrary, all is wrong. Undoubtedly, we are very much behind other countries. The Minister is perfectly right when he says we are last in the list. We ought to be first in the list, for our industrial needs are far greater than those of any other country in Europe. We require cheap power far more than France, Germany, Italy, Switzerland, and all the countries that have made such immense strides in the development of electricity, because we are, fundamentally, mainly an industrial country. Unfortunately, however, our prejudices against municipal trading prevent us from making progress. Hon. Gentlemen opposite, in always stirring up the Socialist bogey, are only playing into the hands of the extremists who are against private enterprise. Undoubtedly, there are certain monopolies that must either be municipally controlled or municipally owned. We might as well go back to the days of the old water companies. I am old enough to remember the controversy about the water companies of London, when it was considered a terrible thing to propose to take them over. We had chaos in London through the competition in the supply of water—and a very bad supply it was. We were always in danger of running short, and the standard of purity was not too good. The fear of interfering with private interests in the supply of water made the unfortunate Londoners pay very dear for their water supply, and it ultimately had to be taken over. In the same way, there was a time when roads were run by private enterprise, and there are toll gates to-day. Within 60 miles of London there are still old toll roads, and people have to pay 2d. to go through these roads, which are run by private enterprise.
Electricity, at any rate, is going to be as essential to the community as the supply of water; it is our life-blood; we cannot exist without it. As a matter of fact, over half the capital sunk in electricity supply in England to-day is in the hands of municipalities; more than half the electricity supplied is supplied by local authorities, and it is their interests as 1726 much as any other interests that are going to be affected by this Bill. I think it would be very much better and simpler, instead of going in for this grandiose scheme, with all its cumbersome machinery of Boards and Commissioners and guaranteed capital, to recognise that in the Act of 1919 we laid a very sound foundation, and to let the local electricity authorities function, to let them have the compulsory powers which they so badly need in order to sweep away the obstacles in the way of a satisfactory system. It would be far better to take that line of least resistance than to try to pilot through Committee this big, cumbersome Bill. I am afraid that by the time it comes out of the Committee its own parents will not recognise it. On the one hand, hon. Members above the Gang way will do their best to mutilate it in their own particular way, while, on the other hand, hon. Members opposite, in charge of vested interests, will be criticising it from their point of view.
If the Bill is not workable now, I am afraid in the end it will be even less workable. My own view is that this is an urgent question that cannot be avoided. It has to be attacked, but this is not the best way to do it. It would be much better to follow the recommendations of the Williamson Committee and the Coal Conservation Committee. This is the result of a new Committee—the Weir Committee. For every problem we seem to have to go to Lord Weir, whether it is to find houses or to provide electricity. If we wish to get a speedy solution of this urgent problem by far the best plan is to amend our existing legislation instead of embarking on an entirely new grandiose scheme such as is represented in this Bill.
§ Mr. ROBERT HUDSON
The opposition to this Bill is evidently to come from three quarters. We have, first of all, hon. Members opposite, who would like full nationalisation; we have a body of so-called experts in our party who are going to criticise it on technical details; and we have a third, and after the speech of my hon. Friend the Member for Watford (Mr. D. Herbert) I think a very ineffective opposition, from certain Members of our party who oppose it because it may possibly lead to nationalisation. The right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham) 1727 made a very lucid speech which seemed to me to have no bearing whatever on the Amendment standing in his name. The Amendment states that the Billfails to provide for the co-ordination of the production of coal and its by-products with electrical generation.We did not have a word about that from him. Itcreates cumbrous machinery, strengthens and extends the hold of profit-making companies over an indispensable public service, continues the limitation of municipal undertakings in confined and uneconomical areas of distribution.We had nothing about that. Either he omitted to mention it, or he had not read Clause 16, which deals with that particular point. Finally, the Billaffords to consumers in company areas no adequate protection against excessive charges for light and power.That is another point he did not mention, though I might direct his attention, in case he has not noticed it, to Clauses 12 and 29, which cover those particular points. The hon. Member for Watford gave us a very interesting speech, but I thought he rather ran away from what he had put down on the Paper. His main objections were, first of all, to its financial aspects, and, although he provided us with a picture of the possibility of spending more than £33,000,000, he gave us no reason why that expenditure should take place. Even if it did exceed £33,000,000—I am not suggesting that it will—that is but a drop in the bucket compared with the annual saving of £44,000,000 to £66,000,000 a year which the Weir Committee anticipated in our annual electricity bill if these proposals materialse.
§ Mr. HERBERT
I quite agree with that point, but the whole of the Government case is dependent upon the question whether that saving is going to be effected.
§ Mr. HUDSON
Quite so; but the hon. Member gave us no reasons whatever why it should not be effected. He said he had certain technical objections, and they amounted to this, that the scheme was passed upon the advice of persons who were theorists and had no technical knowledge of the generation of electricity. I do not know exactly who did and who 1728 did not come before the Weir Committee, but surely the hon. Member is aware that some of the Electricity Commissioners, graduated through the municipal school of generation of electricity and served for many years as big electrical engineers in charge of generation. We are also entitled to say that these schemes we are now putting forward, based on the Weir proposals, correspond in almost every particular with the recommendations of the various Commissions which have been set up in other countries to discuss the future of electrical generation.
My hon. Friend might read the Report of the Commission set up by the Governor of Pennsylvania. No one would accuse the United States of having Socialistic leanings. He will find, if he studies that report, that the lines on which they suggest co-ordination of the supply of electricity follow very closely indeed on the technical lines suggested in this report. The only difference I have been able to discover is that the power companies in America are subjected to very much stricter regulations than anything we propose, more especially in the extent to which they are allowed to issue capital for the purpose of their undertakings. If he will also read the report on the development of power in the Northern States—those great industrial districts of Massachusetts, New York, New Hampshire, stretching right across to Chicago— he will find exactly the same technical basis that we are proposing, so that I do not think it is possible to maintain that the technical matter on which the Weir Report is based is the theories of statisticians and not the practical conclusions of experts.
The hon. Member for Watford further anticipated that the power companies would not play. He said we could reasonably deduce that fact from recent speeches of chairmen of power companies. I think the position of the chairman of a power company addressing the shareholders before a Bill is passed into law which contains drastic provisions limiting in some way its functions and its opportunities of profit is a, very different matter from the attitude of the same chairman after the Bill is passed, and he is requested to consider the alternative of running his power station in such a way as to lower the cost and increase the sale of units in his own area, 1729 and being compulsorily taken over on the terms set out in the First Schedule. While I am on the point of the First Schedule, I think the Government would be well advised to strengthen somewhat the conditions under which a power company shall be taken over by the insertion of the words "properly or circumspectly" after the word "expended." I understand there is a considerable feeling on the part of municipalities that they are being badly treated in comparison with power companies.
On the broad point of opposition from Members on this side of the House who consider the Bill is a step towards nationalisation, I should like to put forward this consideration. Surely, the strongest argument in favour of nationalisation is the argument that, under private enterprise a service necessary for the public has not been provided at an adequately low cost. Assuming for a moment that the technical bases of the Bill are correct— and I have no reason to suppose they are other than correct—surely, when the Bill is passed, and after it has been in operation, and the results we anticipate are secured, the expansion of the demand for electricity and the consequent cheapening of supply will have been so great and the cost of electricity to the consumer will be so low that the last possible excuse for nationalisation will be cut away, in that it will not be possible to show how, even under unified control, it will be possible to secure cheaper electricity for the nation. I think, when the time comes, when we have to stand on our record under this Act, we shall be able to show the triumphant result of private enterprise conducted under proper regulations and control.
As was stated by more than one speaker on this side of the House on Friday, we believe in private enterprise if conducted properly, because we believe in human nature. Human nature to-day is surely the result of the evolution of centuries of various habits and social and political ideas. Those centuries have imprinted on us a certain outlook and a certain attitude towards right and wrong, and a certain bias. Its traditions and usages may be modified in the course of time, but they certainly cannot be cast off in a day. We have lived for centuries under 1730 a system of competitive economic order which has, all said and done, given us a reasonable increase of material welfare and has afforded individuals a degree of independence and responsibility which correspond more or less to our needs and aspirations. We have always recognised that the individual's right to look after his own interest should be subjected to some form of control in the overriding interest of the needs of the community.
The problem we are up against to-day is not a new problem, but the old one we have met for centuries and centuries, of deciding whether or not changed conditions sanction the readjustment of the balance between freedom and authority in any economic enterprise. The Williamson Committee, in 1919, recorded that parochialism was the bane of the electrical industry. The Electricity Commissioners have been provided for the last five years with powers of moral suasion, but moral suasion has entirely failed to overcome that parochialism, that blindness very often to private vested interests, and above all that insane jealousy in many cases shown by municipalities. We believe that if we are to get some system of electricity that will work we must take powers that will overcome those vested interests and that parochialism—[HON. MEMBERS: "Hear, hear!"] I wonder whether hon. Members opposite will say" Hear, hear" when they hear the end of my sentence— and also powers to put an end to that insane parochialism and jealousy of the municipalities. [HON. MEMBERS: "Hear, hear!"] I am glad that there are some hon. Members who applaud that sentiment.
I should like to deal with various points in the Bill. I would suggest that when the Minister is appointing the members of the Board he should consider the question of including one member representing organised labour. It is most important that we should take this step at the beginning of this new enterprise, and I hope that whoever replies for the Government will be able to say that that point has not been overlooked. From the point of view of ensuring our object and of getting cheaper electricity, the Minister would be well advised to set up an Advisory Council on electrical prices on the lines of the Advisory Committee on building trade prices which, I understand, has happened 1731 comparatively well in the case of the Ministry of Health. There is one point mentioned in the Weir Committee's Report which has not been included in the Bill, and that is on the question of rating. It seems to me that we shall be well advised, despite the plausible arguments against it, in exempting transmission lines from rating. Those lines are to be provided at national expense for the benefit of the nation as a whole, and it is unfair to make a present to the local assessment areas through whose district the transmission line passes of the money which would be involved if we allowed the transmission lines to be rated. Any local assessment area through which the transmission lines pass is bound to benefit in any case owing to the development of ancillary industries which will take the power from the transmission lines. I think that is quite adequate remuneration for the transmission lines passing through their territory.
We have heard many rumours as to the opposition from gas interests. We are told that their position will be prejudiced owing to the competition of electricity. I believe those fears are entirely groundless and that there is no prospect of gas, so long as it is efficiently manufactured as at present, losing any ground to electricity in the sphere of domestic heating or cooking. The right hon. Member for Central Edinburgh in his Amendment suggests that no provision has been made for co-ordination between the production of coal and byproducts and the generation of electricity. There is nothing in this Bill as I see it which will prevent such co-operation. There is nothing to prevent a gas company, as soon as the time comes when low-temperature carbonisation becomes a commercial proposition, which it is not at present, making an arrangement with an electricity company to erect joint stations for the utilisation and production of gas and electricity, the gas company distributing the gas and the generating station distributing the electricity. It is important to allay these groundless fears of the gas companies, because of the excellent example which they have set the country in providing and working schemes of co-partnership and getting their employés to share in the undertaking.
1732 Finally, I suggest for the consideration of the Government, and the Treasury in particular, that a large part of the £32,000,000 which is to be raised for the construction of the grids might well be raised in the form of Electricity Stock Certificates, rather like War Saving Certificates. The Government would be able to sell considerable numbers of these certificates and reap very great advantage from doing so. It would solve the difficulty of funding their interest for the first few years, it would encourage the growth of a large body of people interested in the expansion of the electrical industry, and it would help to form a useful body of public opinion which might be calculated to exercise a salutary influence on local municipal undertakings and secure that they would connect up to the grids and take electricity at a cheaper rate, instead of sticking to their own parochial undertaking. It would help the Government to take a first step and a useful step in setting an example in industry by interesting the consumers and the persons employed in the industry in obtaining a stake therein. In other words, it would lead to a greater spread of what we all hope to see, namely, a property-owning democracy.
§ Sir CHARLES WILSON
I oppose this Bill for many reasons. In the first place, I strongly disapprove of the gibe at the great municipalities as to their "parochial jealousy" which has been made by the hon. Member for Whitehaven (Mr. R. Hudson). I will show that he is absolutely in the wrong in making any such insinuation, and I will prove the case from my own city of Leeds. Some of us have for 40 years been trying to get rid of superfluous authorities, and now another and a greater tyranny than has ever been previously devised is to be imposed upon us. That is a very serious state of affairs. I listened to the Minister of Transport, who has the voice of the charmer, but I refuse to listen to the voice of the charmer, charm he never so wisely, because I am satisfied that behind this Bill there is a mailed fist which does not consort with the smooth tones and the smooth hands of the Minister of Transport.
With respect to the suggestion of parochial jealousy, I will endeavour to show that electricity in this country has succeeded in spite of all Governments rather 1733 than by reason of any help from Governments. Years ago an Act was given to a company called the Yorkshire House-to-House Electricity Company to operate in Leeds. When that concern was set up it was provided that in the event of its ex-propriation the municipality must provide a 5 per cent. irredeemable stock in payment for every £100 spent by the company on capital account. At the particular time chosen for the expropriation of the company money was worth about 2½ per cent., but in the meantime Parliament had passed a law that there should be no more irredeemable stocks issued. Leeds then found itself in a very awkward position, and to get out of the difficulty it came to this House for relief. I will not worry the House by describing the Clause adopted, but they skirted round thin ice, and Leeds got its relief and issued stock acceptable to the parties who had to sell, by which they had to pay £170 for every £100 spent on capital account. Sheffield issued a 2½ per cent. stock, and had to pay £225 for every £100 spent on capital account.
We have raised in Leeds £4,000,000 for our electrical undertaking, and we have supplied everybody that this House would allow us to supply and were ready and willing to supply others. Quite recently, it became necessary to come to a Government Department to get a "fringing" order to supply one person outside the boundary of the City of Leeds. That gave, me a start, and I said to the Town Clerk of Leeds that this was so ridiculous that we must go further and ask for increased powers enabling us to sell generally to people who wished to take our supply of electricity. We could have supplied large areas by including them within our city boundary, but this House threw out the Bill after the Department had reported in favour of our having the power to extend our boundary. Having spent £4,000,000 on our electricity enterprise, we were not allowed to sell the product of our great station to people round about us, as we were desirous of doing. This condition of things not only applies to the City of Leeds but to some of the power companies. I did what I could in the West Riding to help the Commissioners to get their scheme through. The Yorkshire Power Company came with a Bill to Parliament with a view to going on with a certain section of work, but their Bill was thrown out.
1734 That is the sort of thing that has happened in this country right through. Municipalities and power companies have come here time after time and spent thousands of pounds in getting their enabling powers, and in many cases they have been refused their powers or their powers have been cut down. They have never been given a fair chance in this country to develop the electrical industry. Some of us are of opinion that the machinery suggested in the Bill is not necessary, and that if the municipalities were given further powers and wider areas—and the same argument applies to the power companies—in view of the immense areas already covered, what it will take the new Board 14 years to do we could do in nine.
§ Mr. R. HUDSON
If the hon. Member will look at Clause 16 (1), he will see that provision is made to cover exactly the difficulty he has mentioned.
§ Sir C. WILSON
I know quite well what there is in the Bill, and I propose to go through it Clause by Clause. These Clauses are contradictory. The Bill, as a whole, out-Herods Herod in its Socialism. I wonder that hon. Members on this side who represent the Labour party do not support the Bill with both hands. It is nationalisation of a very bad kind, and it is spoliation also. What is at the back of this thing? On looking at the Government's memorandum, I notice reference to administrative difficulties, where experts in the matter have been called in. The Commissioners are having to admit that they have been absolutely beaten in the job. I remember the old story of David, who took a fancy to Bethsheba and sent her husband into the front rank to be shot. I also remember that the product of that unholy desire came to a bad end. Here is the case of the Electricity Commissioners, who have been at work for several years, and it is now proposed to put another authority in front of them to be shot down. They will issue their orders, and what will happen? They have their eyes on the profits that are now being made by the power companies and the municipalities, after years of lean times.
Power companies had to go on for 13 or 14 years before they made a penny of profit. We, in Leeds, had a lean time for many years. Why should the reason- 1735 able profits of the municipalities and the power companies be taken away? As far as I can see, they are to be used to cover other areas with small user or non-paying user. I have my own opinion about the commercial morality of that, and I say that it will not bear looking at. The whole of this Bill is contrary to what we have fought for, and gone into our constituencies to explain, and if it be thrust down our unwilling throats, as it may be, the result will be bad for the prosperity of the Conservative party. I have here a mass of opinions from well-informed men of good standing all over the north. They hate this Bill with a deep hate. It is my duty to voice that hatred in this House. Why should the Bill be rushed? We have not yet had the Weir Report. That Commission sat in secret Why? Because it was not advisable to let some of us know what was aimed at by this Bill. But the Bill shows distinctly what is being aimed at.
It is a very artfully and carefully drawn Bill. I refer first to Clause 2. It says that the Board are not to generate electricity themselves. But if you read the Bill further, you find in Clause after Clause that in certain circumstances the Board not only may but will generate electricity for themselves. If anyone ventures to express diversity of opinion, either a municipality or any other undertaker, with the Board, the Board can take over the functions of that authority, and the authority can be bought out at a price which is absolutely unfair. That is spoliation also. But why should all the existing stations be thrown into the melting pot. In Leeds we are producing at a very low rate, indeed. We are selling power at .85, and the total sale is, on the average, 1.38, and our production is .43. Why should we be penalized? There is another suggestion in the Bill. It is that we must sell our product to the Board, that they shall add certain charges to that price, and then resell to us, and we must resell to our customers. That is the worst sort of circumlocution that has been heard of in this House for years. Some of us thought it had been killed. How is it going to help electricity supply? We have the right to sell directly to consumers now without this added charge. The added charge must of necessity interfere with the cost of electricity.
1736 I am in favour of two of the objects of the Bill, the cheapening of electricity and the conservation of coal. It has been found by experience that the wastage of coal is in the small concerns. Yet the small private concerns are to be protected by this Bill; they are not to be touched. That is what is said to-day. But to-morrow, when the others fall, they will fall too. Whether the private concerns carry on or not, this is not consistent. On the contrary, it is a gross inconsistency. There is no wastage of coal in a great station like that of Leeds. For two years we have been wanting to erect another station, as we have hundreds of customers waiting, and we cannot supply them. The Commissioners have held us off. Is that helping forward the distribution of electricity? The quibble is made that it would be better for the electricity to be obtained from some other person. That is not going to cheapen electricity. If we send electricity to Bradford, there must be a measuring point between the two places, and there is a certain loss. After it has passed the meter there is another loss before it is passed to the consumers; although loss on cable transmission is not what it used to be, still there is a loss.
There is a hatred in the North of all boards. I dislike them myself intensely, although I did what I could to bring about a joint scheme for the West Riding. The people will not have it. That is the long and short of it. If you put it upon them when they are in such an unwilling state, this business will not succeed. Let us turn to the question of standardisation. That is another electrical engineer's strong point. In the West Biding we have practically a 50 frequency. In Cornwall there is a 25 frequency. There is no object in bothering to alter the Cornwall frequency, because it is too far away to be of any use, and the existing arrangement would do the job in Cornwall just as well as another. There is a great deal of nonsense talked on this subject. This is a proposal to standardise at great expense. If we eventually succeed in taking electricity from the air on a fresh plan, a great deal of the existing machinery will have to be scrapped. Our German friends are on the track of this discovery: they are on the track of snatching electricity from the air. We shall then have a lot of unnecessary machinery. I ask that this Bill 1737 be taken back and recast on the lines I have suggested. The people of the whole country would then welcome it and work for it and bring it to success. Force it on them against their will, and it is bound to be a failure.
My next point refers to the Electricity Commissioners. They are armed with powers as dictators—such powers as have never been given to any body of people in this country before. I ask myself why? I have come to the conclusion that the people who could not be convinced before by common sense are now to be bludgeoned into the new plan. It is so wrong that I hope the House will show its feeling unmistakably. Under one of these Clauses any scheme may be extended in any direction at any time by the national Board. I use the term "national" because the proposal involves nationalisation. See the unfairness of the position. Parliament, having delayed us for years, is now, apparently, to make a panic-stricken rush. The House ought not to do this thing. There ought to be a further inquiry, at which men of experience, the best electrical engineers of the country, could be heard. Then perhaps a decent Bill would be brought forward. Nobody knows why an electricity station is "selected"; all that is left in the hands of the dictators. We do not trust either the new authority or the Commissioners. I say that advisedly. We have had experience of the Commissioners, some of whom, I believe, are within my hearing. We say that they have not helped us as they might have helped us. I do not want to be placed under the heel of any more dictators.
Why should the owner of any station be removed? That is proposed in a very drastic way. The Board can pick a quarrel with any municipality, and if the municipality objects the Board can step in and take possession, and not merely hold, but operate. That is the sort of nationalisation which I am condemning. Then as to appeals, will anyone tell me the difference between the new Board and the Electricity Commissioners? It is true that they are different in name, but I say unhesitatingly that appeals from one to the other will never be considered satisfactory by anyone. When there is to be an appeal it should be to an absolutely independent body, the ordinary Courts 1738 for choice. When you come to settle the price of other people's property, and it has to be settled by one side, it is not a fair way to deal with the matter.
I wish also to draw attention to the fact that the serious interference with the rate of interest to be allowed—its being limited to 6½ per cent—will not attract capital to this industry. I have discussed the proposal with stockbrokers and financiers and men who understand the subject, and they say that it is a ridiculous figure. It all points to what I said at the beginning. The difference between the 6½ per cent. and what is made is to be expropriated and used possibly to subsidise rural districts. It is not a fair transaction, and it cannot be commended as a matter of commercial morality at all. When you come to the question of rating, there again one of the greatest follies that could be perpetrated by this House is suggested. The Government Departments are always wanting to get off their fair share of contribution to the rates. I take jolly good care at home to see that they pay their share of rating. Is it not fair that all should shoulder a fair share of rating? No one should escape, and the Government should set an example. I am not going to subscribe to the wretched doctrine of the Bill in that respect.
The subject of electrification of railways has been much discussed, but on inquiry the railway managers have found that the cost of changing from steam power to electricity involves so enormous a cost that they have unanimously and absolutely turned down the proposal. I admit that a cable running beside a great railway would have been of very great advantage in those parts of the country which I may describe as non-paying parts. But that has gone by the board. The industrial area of the country is already covered. If you want to cover the rest, let the territory be allotted fairly to the municipalities and the public companies, which will deal with the matter in a much shorter time than is possible under the proposals of the Bill.
I would like to give the experience of the power companies in regard to Parliamentary delays. It is really a very serious matter indeed, and is on all fours with what happened with regard to 1739 Leeds. Let me quote from the report of the West Yorkshire Power Company:There may be parts of the country where progress towards standardisation and cooperation is not so advanced as with us, and where legislation may be helpful: I do not know this, and in what I say now I confine myself to the area of our Power Company, which includes the whole of the manufacturing and industrial portion of Yorkshire, which is within my own knowledge. No doubt other electricity undertakings have much the same history as our Yorkshire Company, but I will only speak of our own company and what we have accomplished.You will remember that in order to provide for the future, the Ferrybridge site was purchased in the year 1917. Plans were prepared, and the consent of the Board of Trade to the construction of a station on this site was asked for in March, 1918. At that time new electrical legislation was foreshadowed, which ultimately took shape as the Electricity (Supply) Act, 1919, and led to the appointment of the Electricity Commissioners to promote, regulate and supervise the supply of electricity.7.0 P.M.Pending the passing of this Act we had to hold our hand. The Electricity Supply Act came into force on 23rd December, 1919, and in January, 1920, the company made application to the Commissioners for consent to proceed with their Ferrybridge station. The Commissioners deferred their consideration of this application in view of the inquiries which they proposed to hold as to the general reorganisation of the supply of electricity in the company's area.In November, 1921, they gave a conditional consent to the establishment of the Ferrybridge Station; but, as the future of the company's undertaking was dependent on the decision come to by the Commissioners as to the general reorganisation of supply in the area, and as again further legislation was pending, the board did not feel justified in proceeding.The Commissioners then proposed to cut the area of the company into two main portions, one forming the Aire and Calder district, whilst the large southern part was to be joined to their North Midland scheme, and a small portion included in the South-East Lancashire district.The Commissioners held their first Inquiry in Leeds in May, 1921, the second in Sheffield in October. 1922, and the third at Bradford in May, 1924.At the Bradford Inquiry in May, 1924, agreements were reached as to a scheme for the Aire and Calder electricity district, in the northern part of the company's area, and the company undertook to promote a Bill in Parliament to enable these to be carried into effect, but on presentation to the Parliamentary Committee this was not allowed to proceed, although Sir John Snell, the Chairman of the Electricity Commission, gave evidence in support of it.1740 It is all on a par with the experience we have had. I look at this matter from a totally different point of view to that of my hon. Friends, the members of the Labour party. I am speaking as a Conservative member of this House, and I say that if this Bill is forced through it may suit the Labour party, but it will not suit the Conservative party.
§ Mr. HARDIE
This Debate to which we have been listening is one of the most interesting we have heard. I should, however, like to begin with a remark about the Minister who opened this Debate. It is very strange that men who get the position of Ministers should act so inconsistently even in the introduction of a Bill as to contradict themselves in five minutes as he did to-day. He began by pointing out, in one section of his speech, that we in Glasgow had, by our big power station, known as the Delmar-nock Station, been very successful, and then a little later he said that wherever one had communal enterprise it had always failed. It is sheer nonsense. You ought not to use that argument.
§ Mr. HARDIE
The Minister ought to know better than to use that argument among intelligent people, because we in Glasgow claim rightly that we have made a great advance towards the cheapening of electric power. Our power station as it stands to-day is the second in the world, and can compare even with Niagara, with all its cheap water power. The whole of this Bill, in my view, is tremendously disappointing. We have heard so much in this House that something would be done, and that it would be in relation to industry and especially to the foundation of industry, the coal trade. The men who have, in the past, as Ministers, talked like that did not make themselves familiar with the manufacture of electricity from coal or they would not have said that. The way that electricity is going to help trade and electricity among other trades is not by a Bill like this. The promises that have been made have no relation to what is contained in this Bill.
As to the manufacture of electricity by water and the high capital charges that have been mentioned, one authority in London says that if we could catch every 1741 drop of water that falls in England and could raise it to a sufficient height to get sufficient pressure to make electricity we would not save 250,000 tons of coal. We think there is plenty of water power in England with the weather we get, but that is where you land. To-day the Minister of Transport has been speaking for the Government. He has been telling us that the high capital charges of water power is what makes that negligible. What are we doing about the Severn scheme? Proposals were made in the past that if we could only harness the Severn, we were going to do such wonderful things. When Ministers who have not had any experience of industrial engineering came down to hard facts and got them handed to them, they began to slide away from such statements as were made with regard to the Severn.
One ought to take the Bill and begin by getting at the basic principles. The basic principle of this Bill to me is that it seeks to establish another middleman. The real need of cheap electricity is understood by those who know something about manufacturing. It is more understood there than anywhere else, but, instead of going direct for a real communal cheapening of electricity, the Bill first of all makes certain of the position of the investors. It begins to secure them right away. Next one comes to the question of what is going to be the governing body under this Bill. One gets a Board, and all that Board is empowered to do is to buy and sell something which it is not supposed to make. We have heard to-day that a small station can never be as efficient as a large station. That statement should not be made broadcast, because, after all, it depends upon the heat you take out of a ton of coal. The heat is the basis of the generation of electricity by coal.
The Board, we find, is to be appointed by the Minister of Transport. Why should this be left to the Minister of Transport? After hearing his effort to-day, I would not allow him to appoint a typist in my office, let alone choose members for a Board with responsibilities such as this Board is to be faced with. Why should it be the Minister of Transport, and why should not the House of Commons have some say in appointing these men? If we are to have that control and if 1742 we are to spend the £33,500,000, surely the House ought to have some say as to who are to form the Board. We are not told the qualifications of the members of the Board, but we are told that this Board, of whose qualifications we know nothing, are to have the power to appoint a technical committee and, in order to show that there is no bias anywhere, you can only be a member of that technical committee under this Bill if you are employed in a selected station. No one who knows anything about this would say that it is absolutely necessary that, because a man happens to work in a selected station he is a superior engineer to a man who happens to get a job in an unselected station. If the Government had been serious about this, if they had wanted to avoid all the criticisms that their own Members have been flinging at them to-day, instead of defining this committee in this way they would have chosen a much wider field for the members of this committee, a field that would include men without financial interest and without even the interest of retaining their jobs. That could have been done if these men had been selected from the lists that can be supplied by the many technical institutes with which this country is so richly endowed. From these institutes you can get the men you want, and men, too, free from holding any shares in the undertakings with which the Bill seeks to deal.
Turning to Clause 4 (c), which deals with the standardisation of frequencies, I feel that under any circumstances I shall vote against this Bill, because here we are asked to pay £33,500,000 to wipe up a mess caused by private enterprise. All the inefficiency and all the multifarious frequencies even in the City of London come from private enterprise. The reason is that in putting down new stations they changed the frequency in order to secure that the other fellow could not steal their business, because it would mean that the consumer would have to instal new machinery in order to take their supply. That is why you have a great number of frequencies even in London. Here you have a suggestion that the Government is to pay £33,500,000 to get rid of the muddle created by the inefficiency of private enterprise. Not only are the Government to straighten the thing out, but they are not to own it when they have done so. 1743 After we have spent this money and brought the business up to date, we are to say to private enterprise, "We are very grateful at being allowed to bring your business up to date and efficient, and, if you become inefficient again, we will bring it up to date once more." What I would like the Minister to tell us is this: Clause 4 provides that a private generating station shall not without the consent of the owners be included in the scheme as a selected station. What is meant by a private generating station? Is it a station producing only for its own use and not selling, or is it a station which is merely called private but which sells to one or more companies inside its own combine or trust? The Minister is absent—perhaps he is out looking for supporters for the Bill—otherwise I should like him to give an explanation.
Now I come to Clause 6, where we find it provided that the Board may make arrangements with any authorised undertakers, or with any company or persons not authorised undertakers, for the provision of such new stations as are required by the scheme. This Clause contradicts the previous Clauses. If new stations are required, it follows that the local authority is the best and cheapest medium through which they can be brought into being. In sub-section (2) of the same Clause we find in regard to new stations, that the Commissioners may by a special order authorise the Board to provide the station themselves. That is another contradiction. If the matter was on a technical basis I could understand the Board coming to the Commissioners; but this is a matter which may involve disputes, where a private company will be fighting for something on the commercial side, and it is a matter which ought to be referred to the Commercial Department rather than to the Electricity Commissioners.
Clause 7 provides, that the price to be paid by the Board to the owners of the selected station for electricity shall be the cost of production, to be ascertained in accordance with the rules contained in the Second Schedule. If we turn to the Second Schedule we find an example of how to draft a Schedule which differs from what the Bill contains. We are told by the Minister that this Bill is to increase 1744 efficiency. This Schedule is headed "Rule for determining cost of production of electricity at selected stations." These do not deal with efficiency. Efficiency is not mentioned here. These are only rules for dealing with costs, and the costs may be inefficient costs. If those who are behind this Bill want to get something done, why do they not come down to the real basis of efficiency instead of dealing with such matters as "sums expended for fuel, oil, water and stores consumed"? Why do they not eliminate the price and deal with the question of the amount of heat extracted from the fuel, whether that fuel be coal or oil? Then they would know whether a plant was efficient or not, but in no part of this Bill is there any proper basis laid down for determining the efficiency of a plant.
The fuel basis is the first thing to be considered. You must get your fuel and get your maximum of heat out of it, and the question of machinery follows. A Bill which seeks to improve the present situation without having that principle definitely laid down in it, is, to my mind, not understandable. I begin to be suspicious when I see such an omission. Even a 16 year old school boy, if asked about the commercial value of the generation of anything from heat, will tell you that the more you take out of coal the cheaper you make the product. There is nothing in the Bill to deal with that aspect of the subject. On the question of standardisation, Clause 9 seems to contradict Clause 7. In Clause 7 we are not told what is to happen if we spend this money, but in Clause 9 we are told that the matter is left to the discretion of the Electricity Commissioners. This Bill is based upon a report, but when one reads that report one finds that the whole sequence of ideas brought out by the investigation of the committee which made the report has been broken up—for what reason I do not know—and since that sequence, has been broken, the result is illogical. If we are to get cheaper electricity in this country, we shall not get it by a Bill like this which, I repeat, sets up another middleman. We shall get cheaper electricity by the nation taking over full control of manufacture and distribution.
Another point not explained in the Bill is this. When the change over is being made, in order to standardise, and it is compulsory to put in a new trans- 1745 mission line, there is nothing in the Bill to say that this line is to belong to those who have spent the money. Even that is to be handed over. To me the whole Bill is a mass of contradictions. It seeks to improve and cheapen production while it sets up a new authority, makes local area authorities, and links up the efficient efforts of municipalities with the inefficient efforts of private enterprise. If it is thought in this way to balance the price, the promoters of the Bill are mistaken. They are not going to hoodwink the municipalities by methods like this. I am sorry the Minister did not remain to hear my references to Glasgow—whether he would have understood them or not—because I think he will find that we are a greater force in matters of electricity than he imagines.
§ Mr. BURMAN
I approach this question from a municipal standpoint. It seems to me, from what I have heard, that there is an impression that this Bill affects power companies only, but, in point of fact, it affects municipalities a great deal more than power companies, because there are more municipalities concerned with electricity, and there is no department of municipal trade in which municipalities have made greater efforts than in connection with generating; stations. I myself have no experience in these matters other than that gained as a member for many years of a very big municipal electricity undertaking, and I know the municipalities view with a great deal of jealousy any possible interference with their rights by a Measure of this sort. That we want something more than we have at present is, I think, undoubted, but the new powers conferred in this Bill will bear very hardly on some municipalities in connection with the development of electricity. I shall devote my remarks to one special point. I feel bound to say something on behalf of those electricity undertakings which have not the frequency that is to be laid down as a standard. One of the cardinal principles of this Bill is that there shall be standardisation of frequency, and we know exactly on what lines that standardisation is to be brought about. The frequency seems to have been selected not on a scientific basis but on the rule of the majority. Some 75 per cent. of the undertakings in this country have a certain frequency, and, therefore, that is to 1746 be the standard. What about those who are not on that particular standard, representing as they do about 25 per cent. of the total undertaking?
It appears to me, speaking for electricity undertakings in that position, that if this Bill is to be passed into law, we shall wait trembling to know our fate. One of the very largest undertakings in the country, that of Birmingham, is in this position and the very introduction of this Bill has paralysed our efforts. We do not know what to do, or where to move, or what step to take. A central board is to be brought into existence. It will mature plans, and at the end of some considerable period of time—it may be 12 months, or it may be five years— it will produce a scheme which will be thrown at us, and we shall have to make the best we can of it. The question of standardisation rests purely and simply on the question of cost. Standardisation is a magnificent ideal after which all industries strive, but which very few attain, and standardisation in electricity is a very good thing if it can be reached at a cost which is commensurate with the advantages secured. The Memorandum to the Bill suggests that a sum of £8,500,000 will cover the cost of standardisation, but that is very wide of the estimates made by those closely associated with this problem. The President of the Institution of Electrical Engineers, who is also chief engineer of the Birmingham undertaking, in his inaugural address to the Institution last October gave some particulars with regard to the possibilities of a change, and he estimated that in Birmingham alone the change over from one frequency to another would cost £6,700,000.
If we apply that figure to the whole of the non-standard authorities throughout the Kingdom the, total will run into a sum far in excess of that mentioned in the Memorandum. That statement by the President of the Institution of Electrical Engineers, I may add, has been verified by those concerned. I know the Government estimate is different; but Government estimates are often wrong, and very likely we may find that the estimate made by those actually in charge of great undertakings is more nearly accurate. It is also suggested that the non-standard stations are inefficient. I do not propose to trouble the House with figures, but I may say that since the last 1747 Electricity Act was passed, in 1919, the Birmingham station has developed at an astonishing rate. During the six years the number of consumers has increased something like 186 per cent.; and its generation has increased to the extent of nearly 90 per cent. At that rate of progress it is perfectly certain that long before the year selected as the ideal year by the Weir Committee, namely, 1940, we should have reached the standard of 500 units of consumption per head at a cost of one penny. At the present rate of progress we should attain that standard much earlier than the date mentioned, and yet this is a station which, if the Bill becomes law, will be regarded as inefficient and will be scrapped. Not only will it be scrapped, but it will be accompanied in that fate by other important municipal stations, and there is also, as we know, a very great company undertaking on the north-east coast. I urge on the Government to give us some right of appeal from this central board, so that we may know exactly where we stand in regard to standardisation, a certain amount of time for the change over and generous treatment if we have to come into line with the other authorities.
Captain T. J. O'CONNOR
Representing, as I have the honour to do, a constituency which has made singular advances in the generation of electricity within even the last three or four years, it would ill become me to express anything but approval of the main purpose of this Bill, but I fear—and it is a fear shared by those with whom I have been considering this Bill—that it may prove that the Government may find that the old adage about hell being paved with good intentions has some pertinence when applied to this Bill. On the other hand, after consideration, I have come to the conclusion that the defects in it, so far as I am concerned, are not sufficiently grave to warrant a vote against the Bill on Second Beading, but that there are defects of so pronounced a character that radical revision on the Committee stage will be necessary before I, at any rate, could cast my vote in its favour on the Third Reading.
This Bill is undoubtedly based upon the Report presented by a most mysterious Committee, and I feel that if the Government finds its action in regard to this 1748 Bill challenged in many respects, it really has only itself to blame, because that Committee, Lord Weir's, met in January, 1925, and reported in May of 1925, and yet it is not until March of 1926, almost simultaneously with the publication of the Bill itself, and disallowing the critics any opportunity of close and careful study of the Report, that the Report is made public. It met, apparently, in secret, its evidence is hitherto unpublished, it is understood that existing undertakings were not invited to give evidence, and the vague character of its Report and the looseness and inaccuracy of its figures are such as to inspire many of us with but little confidence in its general conclusions. I shall have a word or two to say in a moment as regards the Weir Committee's conclusions relating to finance, upon which, of course, the whole Bill is based, but taking even details of the Report, one would have thought that a Report which was to be the basis of so prodigious a Bill as this would not have contained, at any rate, arithmetical inaccuracies, and yet on page 27 of the Report, the plant available is shown as in 1940 at 176,850, whereas it should be, arithmetically, 226,850, or a 50 per cent. error. There is another error as regards maximum demand on page 29, and I think I am justified in making this small criticism, that a Report which is based on slovenly arithmetic of that kind cannot command the confidence which it otherwise would command.
In addition to that, the whole way through this Report the present position, as it is referred to in the Report, is the position that existed in 1923, and that position bears no relation whatsoever to the position at the present time, and that is one of the main points in the gravamen of the charge levelled against the Weir Committee. To the casual reader of the Committee's Report, there is nothing to indicate that the present position therein referred to is the position in 1923, and that illusion is maintained in the Memorandum which is published by the Government in introducing this Bill. Therefore, it may be that those who look to that Report are looking to a guide which is highly illusory in many respects, because 1923 was, of course, a year which came at the very top of trade depression. It came at a time when social legislation had lowered hours of labour, and conse- 1749 quently the load factor had not yet been adjusted to those reduced hours of labour, and in every other way it was a year which could not be taken as typical of the present position in 1926. Speaking only for the municipal undertaking in the borough of Luton, of which I am extremely proud—because we are already producing electricity there at a cost considerably less than the Government can promise us under this Bill if we wait until 1940, so that I feel justified in feeling a certain pride in the figures associated with the Luton undertaking—since 1923, we have halved our charges, and even since the beginning of last year, when this Committee sat, the generating costs have been reduced from about .74 of a penny to .62 of a penny, which is a considerably greater average reduction in price than the average reduction which is contemplated if the Bill is totally successful between now and 1940.
Turning to the Bill, it is significant that there is not a word said throughout the whole course of the Bill about cheapening electricity. There is no obligation placed on the Board in any direction to deliver a cheap supply of electricity to the public, and I think it is important for the public of this country to realise that this is not a Measure which, at any rate in its ex-pressed terms, is designed to guarantee to them a cheap supply of electricity. A Board has to be set up. It is a hybrid body. It is not responsible to anybody except, apparently, to the Minister of Transport. There is not one single word in the Bill as to the constitution of the Board, which I suggest is of material importance. It is all very well for the Minister of Transport to say that it is intended that the Board shall be composed of financial gentlemen and this, that, and the other, and for the hon. Member for Whitehaven (Mr. R. Hudson) to say it ought to have a representative of labour on it. Actually, the Board is restricted by the terms of the Bill, and there is no guarantee whatever as to what its personnel shall be, and there is nothing, if I may attempt to curdle your blood, Sir, with dire prophecies about the future, to prevent my hon. Friends on the other side, if they can come in with a Socialist majority at the termination of five years from the appointment of the Board under this Government, substituting a 1750 purely Socialist Nationalisation Board, to carry on the general electrical undertakings of the country. In my submission, it is absolutely essential that the constitution, as well of the powers, of the Board should at least be defined in the Bill itself.
The Board, of course, is the child of the Electricity Commissioners. The Weir Report is the child of those Commissioners, and the Board follows as the offspring in the second degree, and it is unreasonable, therefore, to think that there will be any enormous conflict of outlook between the Electricity Commissioners and the Board, should conflict arise between private or municipal undertakings and the Board on the various matters which arise under the Bill. Those of us who are going reluctantly into the Lobby in support of this Bill on its Second Beading cannot promise the Government that that perambulatory process will be repeated on the Third Reading, unless between now and then there has been instituted a really judicial body, which will have seizing of all matters of dispute—and there are thousands and thousands of them—that may arise under this Bill, as between private or municipal undertakings and the Electricity Board.
It is when I come to look at the finance of the Bill that I feel really the greatest hesitation dogging my steps on my way to the Lobby, because we are told, again on the basis of the Weir Report, that figures amounting to £33,500,000 will have to be guaranteed by the Government. As to £25,000,000, of that, there is not one shred or syllable of data as to how the figure included in the Weir Report is arrived at, and if my information is correct—and I shall be glad if the learned Attorney-General, who is going to open the defence of the Government in this case, will indicate to me whether or not I am wrong—I understand that Sir John Snell, himself one of the Electricity Commissioners, has stated that this cost would be £35,000,000 and not £25,000,000 at all. That is merely the amount for the construction of the grid, but when we turn to the standardisation of frequencies, a figure is given which passes my comprehension, because I am not technically skilled in these matters, but which, I am told, is probably very vastly under the mark.
I want to assume that the worst may happen, and that it may he necessary to 1751 take over a considerable number of selected stations and to compensate them. Assuming that—and we have to face facts —the Weir Report tells us that about £103,000,000 worth of undertakings in the country at the present time are municipal undertakings. The compensation which is suggested in the first Schedule in the case of taking over all those municipal undertakings is confined to compensation for any outstanding loans. I do not know whether the Government considers that there is the remotest chance of compensation on that scale being passed by the House of Commons, because, reverting to the Luton undertaking, that has a market value at the present time of well over £500,000, but the amount of loans outstanding is only £150,000. That has been reduced from something like £350,000 of money lent, and it is seriously suggested that, should it be necessary for the Government to take over this station, it should take it over and confiscate the balance between £150,000 of loans outstanding and the £500,000 which the undertaking is worth. I see Mr. Attorney-General observing the second Part of the Schedule, which I am sure he will say covers that contingency, but it does not cover it at all. It merely says:Provided that if in any case it is proved to the satisfaction of the Electricity Commissioners that a substantial part of the cost of the generating station or main transmission line has been defrayed otherwise than by means of loans"—which is not this case at all—any such annuity may be increased by such amount as the Electricity Commissioners think just.Not only the position of the Electricity Commissioners as sponsors of this new Board, but the past experience of the municipalities does not lead them to be encouraged at the idea of having their claims adjudicated on by the Electricity Commissioners. In my submission, therefore, it is essential that a proper judicial authority should be set up to decide these claims, and it is probable that equity will demand that the claims will be so great that they will vastly exceed the sum of £25,000,000 allocated in the Bill for the setting up of the grid. Private companies are a little better treated than municipalities in this respect, but there again there is a purely arbitrary method of submitting to arbitration. Why, if undertakings are 1752 to be taken over, should they not be taken over on a valuation basis? I have indicated two or three reasons which I feel ought to actuate the Government and deserve their careful consideration in the period between the Second Reading and the time when the Bill comes back to the House of Commons. Municipal undertakings in this country are reluctant to change in many cases, and in many cases they are justly reluctant. They are certainly reluctant to adopt this Bill, but those of us who see in it the bare bones, the skeleton, of an outline of real electrical progress for the rest of the country would not be able to support it unless, by the time it comes back to this House, it has ensured some of the safeguards which I have endeavoured to indicate.
§ Sir HERBERT CUNLIFFE
I do not share the reluctance of the last speaker in going into the Lobby in support of this Bill. I am bound to confess that I heard so much talk, before I had read the Bill myself, about Socialism and Nationalisation, that I began to think that I must look more closely into it, but, speaking for myself, I am not going to refuse support to any Measure which is beneficial in itself, merely because somebody gets up and shrieks "Socialism." I think the party to which I have the honour to belong is big enough and bold enough to undertake problems of the kind we are now dealing with without any regard to the gibes of those who are terrified by the words Socialism and nationalisation. I should like to say a word or two upon an aspect of the matter which struck me as being of some importance. This has been referred to, although not quite from the point of view I desire to take. I was at some pains to ascertain the views in regard to the Bill of a municipal electrical undertaking which has met with a very great measure of success. I naturally went to my own constituency, which has had a municipal electrical undertaking for some 20 years, and they have met with a very great measure of success. I think their operating costs are about as low as those of any undertaking in the country. They have pursued with great success the policy of progressive reduction in cost, and progressive reduction in charges to their customers.
1753 Perhaps the House will allow me to give one or two figures which, I think, will show I am not wrong in saying that the Corporation of Bolton has met with a very great measure of success in its electricity undertaking. They started in 1896 with an operating cost of 8.850d. per unit. This they have succeeded in reducing to 1.120d. per unit. The average price obtained in 1896 was 5.40d. and the average price to-day is l.26d., but they are able to supply some very large textile consumers at 0.7d. per unit. There has been an enormous increase in the number of consumers. The number in 1899 was 559, and now it is 10,257. Their output has increased to 280 units per head of the population, as against the 110 referred to in the Weir Report as the figure for Great Britain. I got into touch with the Corporation of Bolton with a view to ascertaining what their views were. This was at a time when my own mind was in a state of transition as to what was the real view to be taken about the Bill, and they were feeling apprehensive on one or two points. It may interest the House to know what they were. They said they had pursued this policy of making economies to secure reduction in costs, with a view to passing it on to their consumers, and they were anxious to know whether they could be assured that they could continue to carry out their policy of progressive reduction in cost, without having that neutralised by the extra cost of inefficient undertakings which were to be brought into the general scheme.
The second point upon which they desired satisfaction was whether, assuming that they were in a position to effect reductions in cost of production, they would be able to give the benefit to their own consumers, or whether they would be swamped in the general scheme. I took the liberty of telling them that, as far as it appeared to me, their apprehensions on that score were unfounded, but I took the opportunity to consult my right hon. Friend the Attorney-General, and he was good enough to confirm the view which I had taken. He gave me the assurances which the Bolton Corporation desired, and upon that I got again into communication with the representatives of the corporation, and they said, upon those assurances, it was their view that the Bill ought to be supported. They had 1754 said before, that provided they were assured on those points, they were so satisfied with the national importance of improvement in the supply of electricity, they thought it was right that even those who were in a position to provide an economical supply should make some slight sacrifices, but they were naturally very much concerned that they should not be debarred from pursuing their policy of progressive reduction in cost, and should not be prevented from giving the benefit of that progressive reduction in cost to their own consumers.
I do not want to detain the House by going into the general question, but I thought it was right that I should let the House know that all municipalities do not take the view which my hon. Friend the Member for Central Leeds (Sir C. Wilson) and my hon. Friend the Member for the Duddeston Division of Birmingham (Mr. Burman) take, that this is a Measure that ought to be opposed. I shall go into the Lobby in support of this Bill, not only because it commends itself to my own judgment, but because I have behind me the support of a great corporation, which has made a great success of an electrical undertaking itself.
§ Major KINDERSLEY
I rise with great reluctance and regret to support the Amendment of my hon. Friend. I understand that it is considered necessary, in rising to speak against this Bill, or certain aspects of it, that one should state that one is not interested in electrical undertakings. I am not so interested, and never have been, and though I cannot say I may not have some electrical shares in my name as a trustee, I think it a great pity that in this House it should be thought that Members who are interested in commerce or industry should for that reason not be able to put the national interests above their own private interests. I know hon. Members opposite think that a course of Karl Marx at Ruskin College qualifies them to criticise matters of this kind, but, personally, I would far sooner hear the criticism and take the advice of those actively engaged in industry and commerce in this country. I do not propose to deal with any aspect except the financial aspect of this Bill. The State is proposing to guarantee a sum of £33,500,000. I do not suppose it is necessary to argue that there is no 1755 difference between a guarantee and putting up the money. In other words, if you guarantee money, you must face the possibility of losing that money, and, of course, the Bill itself naturally does so, because Clause 26, Sub-section (2), makes provision that any money lost shall be charged upon the Consolidated Fund of the United Kingdom. Also, I think, many Members will remember that when the party opposite proposed a guarantee for a loan to Russia, they tried to argue there was a great difference between a guarantee and putting up the money, and we on this side argued the exact opposite.
I heard nationalisation described the other day by no less an authority than the Attorney-General as the expropriation of an industry, and carrying it on by the State at the expense of the taxpayer. There is no doubt expropriation there is not confiscation, but you have to face the problem that you may carry on this industry at the expense of the taxpayer. Therefore, I maintain that this Bill savours very much of nationalisation. But I do not merely oppose it on these grounds. The difference between us and the party opposite, is that they want as much nationalisation as they can get, because they believe in it as a principle, whereas we do not believe in it as a principle, and want to see as little as is necessary. There are certain circumstances, I think, in which Parliament is justified in interfering with private enterprise, if it be satisfied that some services can be more cheaply and better performed by a body which they choose to clothe with statutory powers. There are, for instance, the Harbour Commissions the Port of London Authority, and the Metropolitan Water Board, but what I want to point out is that in all those cases there is no State guarantee whatever. Those great corporations have to carry on their business on an economic basis, and they have to find the necessary funds for meeting their obligations out of their dues and tolls.
This is a totally new departure. Here you have an authority, the Electricity Board, constituted, and a Government guarantee of £33,500,000—and very likely it may be more—given to this authority. I am prepared to admit, for the purpose of my argument, that the supply of electricity can be cheapened by enlarging the 1756 statutory powers of the Electricity Commissioners, or by establishing a statutory authority as proposed by the Bill. I am all in favour of what this Bill proposes to do, but what I object to is the method of doing it. What really are we asked to do in this Bill? We are asked to underwrite, in advance, to the tune of £33,500,000, the scheme which may be produced by this authority, which we are being asked to clothe with almost unlimited statutory powers. That is really what the House is being asked to do.
I understand that this Bill is based very largely on the Weir Report, and this Report deals with many technical matters, about which few men in this House are qualified to speak with information. I certainly am not, but some who have that technical knowledge, from a life spent in the industry, do not agree at all that this Bill will effect what it sets out to do. They are described as interested—I have made some remarks about that already—but if I want the opinion of anyone about electricity I go to people who know about it, just as the Chancellor of the Exchequer, if he wants to know anything about banking, goes into the City and asks those who know about it. I take the opinion of those who say this Bill will not effect what it sets out to do. The great power companies are of that opinion. As far as I know, neither the Government nor the Weir Committee heard these objections at all before they framed their Bill. Parliament is being asked blindly to accept the Report of three gentlemen, who may be supermen, and to guarantee the capital and interest for an enterprise the details of which have not been examined.
That is the situation. There is no getting away from it. I maintain that this House is not a body which is qualified to go into business of that kind. That is my objection to schemes of nationalisation. The House has no right to collect money from the taxpayer and embark it on business without his consent. The only suitable body which could decide how money should be invested are the taxpayers themselves, relying on the expert advice of bankers and others whose business it is to advise them and who have access to the very best financial and expert experience. If this scheme is sound and the figures given are correct, you can go to 1757 the City of London to-morrow and get this scheme underwritten in the ordinary way. If it is not sound you cannot do so. This House has no right to collect money from the taxpayer and embark on business about which the House is absolutely and entirely unfit to form an opinion. If the Board which is being clothed with these enormous powers cannot produce a scheme which would stand the scrutiny I have described, of the business community, and it is not sound, it certainly ought not to be guaranteed by the taxpayers. If it is sound, there is absolutely no need for any guarantee—absolutely none. It may be argued that this guarantee is required, not because the business will not be perfectly solvent, but because we want to get our money as cheaply as possible. What does that argument amount to? If you give a give guarantee, you give one and the reason does not matter twopence. It is a guarantee just the same. The other day there was an issue in the City of London by the London Power Company, which was made at the price of 96. That stock was well received by the public. Supposing it had been guaranteed by the State, what difference would it have made? Perhaps a difference of 2 or 3 per cent. in the price, which is really negligible. I maintain it is not right, for the sake of that small difference, to embark on a principle which I believe to be absolutely financially unsound and which may be followed in other cases with great detriment and great loss.
There is one other argument I wish to put. It is most important at the present time that the credit of this country should be improved. The Chancellor of the Exchequer has got to meet and fund large obligations in the near future and about the only hope I can see for any reduction of taxation is by keeping down the rate of interest which the Chancellor has to pay on the National Debt. These continual obligations guaranteed by the State, such as those under the Trade Facilities Act and now in this proposal which at present is for £33,500,000 and may be a great deal more before we have finished, tend to over-extension of the State credit and make it more and more difficult for the Chancellor to be able to fund his debt on any reasonable terms. If the Chan- 1758 cellor can get the rate of interest down to 4 per cent., this undertaking also will be able to get its money at a proportionately lower rate, and it will be far better that the Government should give up this guarantee, which, if their figures are right, is entirely unnecessary, rather than add to the already over-extended credit of the Government.
That is the only point with which I want to deal though there are many other points I could bring forward, but there are several hon. Friends of mine who are going to speak and who will deal with thorn better than I could. Our objection to this Bill can be summed up best in the words of the Report of the Coal Commission on the subject of nationalisation of mines. I know that the Coal Commission said rather conveniently that this scheme was not nationalisation, but they ended their Report on this question with the words:We have felt bound not to recommend it unless we felt satisfied that there was presented a workable scheme offering a good prospect of success and of a clear economic and social gain. We have seen, however, no scheme that will withstand criticism; we perceive grave economic dangers; and we find no advantages which cannot be attained as readily, or more readily, in other ways.I therefore, ask the Government, as my hon. Friend the Member for Watford (Mr. D. Herbert), asked them, to refer this Bill to such a Committee as will enable those interested in this undertaking to be represented in the ordinary way by counsel and have their objections heard. There are grave blemishes in this Bill which have got to be remedied before it will satisfy myself and my friends. I have spoken only of one aspect, and I beg the Government to consider that very seriously, because they are embarking on a plan which has not been tried before and are setting a precedent which might be followed to the great detriment of the State in the future. On that consideration will depend very largely, the action of myself and my hon. Friends.
§ Mr. HANNON
I would like to say at once that I am directly interested in electricity undertakings, but that will not prevent me from stating my views, and I entirely agree with what one of the hon. Members above the Gangway said, namely, that in this House I think we should always put the national interest before any personal considerations. I am not addressing my criticisms 1759 on the Bill for the reasons suggested by the hon. and learned Member for Bolton (Sir H. Cunliffe)—because somebody shouts socialism or nationalisation. I am offering the few comments I have to make from what I conceive to be the point of view of practical administration and utility in the interests of the community as a whole. In the first place, I ask in all seriousness, Why the Bill is necessary at all? We, who were present on the momentous occasion when the Prime Minister delivered his great speech at Birmingham, had an altogether different conception of the possible quality of the Bill to be introduced on this subject. We were all agreed, and we are all agreed now, that there must be co-ordination and unity of expansion in relation to the distribution of electricity, for lighting or domestic power, but we suggest, with great respect to His Majesty's Ministers, that this is the wrong line on which to proceed to secure that objective. First of all, in 59 instances in this Measure, the Electricity Commissioners have the power either to approve or to veto a particular action on the part of the proposed Board. Nobody in this country has had greater admiration for or has so frequently called attention to the efficiency of administration of the Electricity Commissioners than I have, because the present Commissioners, in the face of great difficulties and a variety of embarrassing circumstances, have done magnificent service to the country. But is it seriously held that, at this time of the 20th century, you are to invite a body of outstanding business and financial men to join a Board charged with such great administrative and directive responsibility and to place themselves practically body and soul under the direction of a purely official body which is a subordinate Department of the Government? I hope the Government do not take that feature of the Bill too seriously.
My hon. Friend the Member for West Lewisham (Sir P. Dawson) and I, have put down a Motion for an Instruction to the Committee on this Bill because we felt, and I think many of my hon. Friends have felt, that it was eminently desirable, if this Board was to be set up, that it should be a body entirely competent to determine its own policy. 1760 I think most practical people will agree that in the suggestion embodied in the first Clause of the Bill, the cart is being put before the horse, because instead of asking the highly-qualified body of experts constituting the Electricity Commission to prepare a scheme, you are asking a body of untrained—technically, at all events—gentlemen who are about to constitute the board, to prepare a highly complicated and technical scheme of which the Electricity Commissioners must subsequently approve. I should have imagined, that from the point of view of common sense, the scheme of the Bill would be that the Electricity Commissioners, with all their wide knowledge and experience and administrative capacity should be asked to prepare the scheme and then the quality of the scheme, in its practical aspects as affecting the financial and business interests of the country, would be determined by this new independent Board which is contemplated under the Bill.
From the discussions which have taken place on this Bill, both inside and outside the House, it might be inferred that the great power companies and other electricity undertakings in this country had not been discharging adequately the work entrusted to them by Parliament since they were established under the powers given by this House. Believe me, there is no class of enterprise in this country which has more zealously and efficiently or more successfully carried out the obligations imposed by Acts of this House than have the great power companies established for the generation of electricity in this country. I think it is a great pity—and I entirely agree with the observations made by other hon. Members—that the Government, in giving its instructions to the Weir Committee, did not suggest to that body that they should take into consultation with them, or, at all events, receive evidence from, the promoters of these great undertakings which had rendered such valuable and constructive service to the industrial and social life of the nation. These enterprises and companies have raised on the promotion of their respective undertakings £30,000,000 of capital from the investors of this country, and I venture to think a great number of these investors are people in a comparatively humble position. These enterprises are the custodians of the future safety of that 1761 capital, and I suggest to the Government that under this Bill sufficient precautions are not taken to safeguard the interests of these investors of that capital in those undertakings as the Measure now stands. In that respect there must be some very substantial modifications in the text of the Bill when it comes to Committee.
As to the average price of the electrical energy supplied by these undertakings, might I remind hon. Members that last year it was nine-tenths of a penny per unit. Then people talk about high prices! Here is the fact of the actual result of the work carried out. I would again call the attention of Ministers to the difficulty of the Bill as it stands in dealing with the appeals from the decision of the Electricity Commissioners. One hon. Member suggested that as the Central Electricity Board and the Electricity Commissioners were more or less children of the same family, there would be a tendency to continuity of agreement. But in the event of disagreement, with whom is the appeal to lie? I do not see, except in one or two instances in the Measure, where the appeal will lie. I know one or my hon. Friends suggested that being children of the one family, as children sometimes do, the Board might assert an independence and refuse to accept the decision of the Electricity Commissioners. To whom, then, is the Board to appeal? In the final result who is to deal with the difference between these two august bodies? Where in the long run is the control of Parliament to come in? Where is Parliament to exercise that control that it ought to do over the administration of the whole, and in the circumstances provided in the Bill over the Electricity Commissioners themselves?
The Measure as at present framed—and we all desire to see a great constructive, comprehensive scheme of electrical supply developed—is objectionable because you have a new administrative institution practically completely outside the control of the House of Commons. Under the Bill, as it stands, it may possibly happen that in a particular area—and I think certain hon. Members will agree with me —you may have a power company and a distributive company with powers under the Orders of this House, also a municipal undertaking, the Joint Electricity Authority set up by the Act of 1919, and now 1762 this fifth wheel in the coach, the Central Electricity Board. In the midst of them you have the private undertaker struggling to maintain his position and generate electricity. It seems to me that the so-called co-ordination contemplated by this Bill, and which no doubt is the intention, and an excellent intention, of the Government, is very remote from realisation. All this possibility of overlapping and competition is there because you set up a Central Electricity Board which may supply either existing customers or potential customers of the undertakings over which the Board exercises control, so that the Board is actually becoming a competitor for the distribution of electricity with the undertakings over which it exercises control, and whose price the Board has the power to determine. I certainly suggest that is not satisfactory either from a business standpoint, from an administrative standpoint, or from a common-sense point of view.
I would suggest also to the Minister that many power companies' areas are sufficiently large in themselves to be regarded as a unity under any scheme of co-ordination which may be brought about under this Bill. It is not advisable in these difficult times, when the difficulty of raising capital is so great—and none need more public confidence in the raising of capital than electricity undertakings— to interfere in these fantastic ways with the successful operations of existing concerns. You have 24 areas at least where confidence is continually growing in the business qualities of the undertakings. While it is most desirable that every possible means of linking up should obtain, be encouraged, and ultimately established, it ought not to be a policy to be pursued at the expense of undertakers who have taken great responsibilities on their shoulders and have managed their enterprises with great success over a large period of time.
The Minister of Transport in his speech this afternoon seemed very halting in giving us his undertaking that prices were going to be reduced, even if these schemes became operative. One could easily understand the difficult position of the Minister; he is relying upon figures submitted to him by his advisers. But it would be a bold speculation to maintain in the view of the experience we have had of undertakings of a similar character in 1763 this country and abroad—a bold speculation, I say, for the Minister to say that at any near appointed time we were going to reduce the price of electricity below what it is at present. It is quite true that the scheme suggested in the Measure largely encourages social amenities and improves domestic and social life in our villages and towns. But if this is to be accomplished at the expense of industrial enterprises in our larger cities, and already existing undertakings—and to be part of the new process of development— I should regard it as an unwholesome means of carrying out what, in fact, is a very good object in itself.
I should like to ask the Minister whether he can give us any satisfactory reply to the question raised by an hon. Member on this side. I attended a conference at Birmingham on Friday. If the Minister could have seen the attitude and heard the observations of gentlemen present, all of whom are interested in great undertakings, he would, notwithstanding his customary complacency, have had an unhappy five minutes. We in Birmingham would like to know how much it is actually going to cost to change over from our existing 25 cycle frequency to 50 cycle frequency which is to be the standard in this Bill? We have had no figures given to us up to the present time. I hope before the Debate closes we shall be told in round figures, or as nearly as possible, what the actual cost of conversion may be. In this particular scheme of the standardisation of frequency my hon. Friend the Parliamentary Secretary will understand that Birmingham is no insignificant consideration.
It will be particularly aggressive in the present instance, where its interests are so intimately affected. Nothing gives me greater disappointment than to find myself unable to support a Measure to which I had looked forward with great anticipation, not merely since the speech of the Prime Minister but for a long time previous to it. I had hoped we should see a Measure which would bring about the projected co-ordination, linking-up and all the rest of it without imposing upon existing undertakings and upon the country what I conceive to be a Measure of injustice through a Bill the text of which presents many unplanned, half-baked means of arriving at the result 1764 contemplated by the Government. I sincerely hope that when the Bill goes into Committee it will undergo very sub stantial modification, and that many of the serious blemishes which we on this side of the House now see in it will, with that kindly consideration which is always characteristic of His Majesty's Ministers, be removed, and that we shall be able to construct out of the Bill an Act worthy of the promises made to the' electorate by His Majesty s Ministers.
§ Mr. J. HUDSON
The course of this Debate, more perhaps than many other Debates held this year, has brought out the curious inconsistencies of hon. Members opposite when discussing questions dealing with public and private enterprise. We have had from the hon. Member for Central Leeds (Sir C. Wilson) fulminations against the Bill on the ground of its Socialism, although the same hon. Gentleman, in his capacity as one of the municipal fathers of Leeds, has been responsible for many years past for the development of famous examples of municipal Socialism. On the other hand, we have defending this Bill, described as a purely Socialist Measure, a Minister who, in his time, though I am not sure what his connection may now be, has been president, I believe, of the Anti-Socialist Union. This is an example of the uncertainty that hon. Members find themselves in because of their failure to grasp the realities involved in the development through which our community has passed during the last few years. Whether Conservative anti-Socialists like it or not, the facts that confront us, and confront the Minister as he puts forward this Bill, are that economic forces have brought about such changes in relation to the supply of electricity that in a large number of areas electricity is supplied as successfully—we think we can prove more successfully—by public enterprise through municipalities than by any other form of enterprise. So successful have the municipalities been that in the case of Leeds it is possible to supply power, and it is supplied at the present moment, at 85d. per unit. In my own town, Huddersfield, we are supplying it regularly at 1d., in Rochdale the charge is 1d., and many other towns that I might refer to also supply it at so cheap a rate. Surely there cannot be very much danger from 1765 Socialism when electricity can, be supplied so cheaply as that. Unfortunately, from my own point of view at any rate, side by side with this remarkable development there has been a great development of private companies, particularly since the party opposite has had the opportunity of assisting private enterprise. In many eases private companies in areas contiguous to the municipalities I have described are supplying electricity at a very much higher price than the figures I have quoted.
Whatever may be the view of hon. Members discussing electricity to-day from the point of view of production, I suggest that very few householders looking for a district in which to reside will feel pleased when they discover that it is under the control of a power company rather than getting its electricity through the municipality. The good name of municipalities has now travelled so far that most people, if the choke could be given to them, would have their electricity supplied by Socialistic means rather than through private enterprise. This Bill, instead of facing that very simple issue, has involved us in even greater complexities than those which the ordinary developments of the day have created. We shall have a Board, we shall have Commissioners, and we shall have opportunities of appealing to the Minister of Transport; and, as has been pointed out by my right hon. Friend the Member for Central Edinburgh (Mr. W. Graham), we are bringing in innumerable other Commissions and bodies like the Railway and Canal Commission, and in the long run this series of checks and counter-checks will make it extremely difficult for a successful municipality, whatever may be the case in regard to a private company, to develop to a more successful degree still the industry for for which it is responsible.
I cannot understand why, in the Debate to-day, hon. Members opposite are apparently so angry with the Minister over the provisions of this Bill. My complaint against it is that the checks and counter-checks of which I have spoken will work in such a way that in the long run it is the large power company rather than the municipality which will get a special advantage from the Measure. The Minister may be pleased that I should say this, in order to give a little con- 1766 fidence to his anti-Socialist supporters, and perhaps bring them into the Lobby with him when the Bill as put to the vote. I am not consciously endeavouring to help the Minister to get his supporters into the Lobby with him.
The danger that I see in connection with this matter can best be illustrated by an account of the position in which my own municipality stands at the present moment regarding electrical supply. The town of Huddersfield was able to supply power particularly cheaply. During the last few years it has appealed to the Electricity Commissioners whose powers I feel will be increased by this Bill to extend its plant so as to give it a reserve in case of a breakdown. Instead of giving the municipality of Huddersfield those opportunities the Commissioners have pressed for the creation of a link between Huddersfield and Halifax, but even with that link and the extra 2,000 kilowatts Huddersfield will be able to fall back upon, this town will be in the position that they require this year 14,000 kilowatts and the total capacity is 18,000. As a matter of fact, if an electrical industry of this sort is to be run successfully, and the Weir Report admits this, there should be from 60 to 75 per cent. extra power for the undertaking to fall back upon. At the present moment Huddersfield has an extra 4,000 and they are using this year 14,000 kilowatts. It will be worse next year. Let me contrast that with the neighbouring authority, the Yorkshire Electric Power Company.
This is why I find it so difficult to understand the attitude of hon. Gentlemen opposite, who profess to be safeguarding the interests of the various power companies. The Yorkshire Electric Power Company at the present time has a total capacity of 73,000 kilowatts, but only 34,000 are required, so that that company has a margin of more than 100 per cent. Not satisfied with that, quite recently special permission has been given by these Commissioners, whose powers are so much increased by this Bill, to that power company to increase its capacity. I believe the Commissioners' permission was that there should be an increase of 30,000 kilowatts. Actually there has been an increase, and indeed this great power company seems so arrogant that it appears to do what it likes whether the 1767 Commissioners give their consent or not. Actually there has been 38,000 kilowatts allowed, so that the total capacity of this company will be 113,000 kilowatts next year while the amount they will require will only be 37,000. That is to say, they will have a margin of nearly 200 per cent.
The danger that I see is that towns like Huddersfield, which have been injured particularly in the last year or two by the policy of the Electricity Commissioners have not been allowed, although it was easy for them to do so, to increase their margin of power, and they are being driven into the hands of those power companies. I fear when this Bill is passed the Minister may take over this power company's station as one of his selected stations, and then it will be extremely hard for a successful municipality like Huddersfield to resist the plans that the Electricity Commissioners side by side with the power companies, are working out. I suggest to the Minister and to the party opposite that the proposal would have been much more simple and effective from the point of view of municipal supply if there had been a simple scheme of generation of electrical supply in something like the form suggested by the Amendment which has been moved by the Labour party.
§ Mr. HUDSON
I should not suggest Commissioners with a five years' guarantee of office in the way that this Bill provides, but I suggest that there should be a system of supply for which the nation is responsible and for which Parliament in the long run can be responsible. The system ought to secure that every undertaking can be fully criticised by Parliament where it would be much easier to bring forward the mistakes for which the Commissioners have been responsible. I do not see unless some plan of that sort is evolved how there can be that radical cheapening of supply which to-day is so much required. Hon. Members opposite have spoken about the necessity of cheapening the supply of electricity in connection with industry, but I am more concerned to see the cheapening of supply from the point of view of the housewife. I was glad to note the 1768 stress which the Minister of Transport laid on the necessity for improvements that can be effected for the women if the supply of electrical power is very much extended.
I think the right hon. Gentleman took a rather flippant example to drive his point home, but if he could realise, as we realise, from the experience of our own wives the need of the coming into the household of the vacuum cleaner and other similar things that saves so much toil and worry on the part of the women in the home, he would see that instead of this being what has been described as a tea-party discussion it is a matter of very real concern to the women of this country. It is for that reason, as well as for improving and developing industry, that we want to see the improvement that I am sure the Minister has in mind in bringing this Bill forward. If the right hon. Gentleman had taken up the plan of the Labour party, he would have obtained his object much more quickly and the women of the country would have much more quickly been saved the labour that so many of them experience in the conduct of a household.
§ Sir GEORGE HUME
To those of us who have spent many years in trying to deal with a problem of this kind, the course which this Debate has run can have been a matter of no surprise whatever. After all, human nature is very much the same in this House as it is on the other side of the river, and, in trying to clear up the difficulties in the London area— which is a small State in itself—these problems are found to be very similar to those with which the Government is attempting to grapple in the Bill that is now before us. The unfortunate thing is that, when we have to deal with problems of this kind, which are really serious matters from a national point of view over large areas, they simply seem to give occasion for Socialists and anti-Socialists to fight over the battle-ground. We hear of the advantages of private companies as against municipalities, and vice versa, but we seldom get right down to the kernel of the matter and ask ourselves how and by what method electricity is going to be generally and efficiently and cheaply produced. We have been told all the difficulties. My hon. Friend the Member for Moseley (Mr. Hannon) has told the House what 1769 the attitude of the companies was in his part of the world when the Bill was produced. I can assure him that it was nothing to the attitude of the companies in London when we first took up these discussions with them as to the co-ordination and combination of the undertakings in London. But during the years, having gone closer and closer into the matter, all interests have come to realise that it was necessary that something should be done to improve the conditions and to pass out of what I may call the patchwork areas with which we have had to deal up to now, and to try to co-operate together for the common good. We have reached a point where, as the House knows, companies have entered into agreements, and have received in return, of course, an extension of life, or where, on the other hand, they have submitted to control. Surely, if it be possible for such a thing to take place in London and the companies to-day who have been parties to those agreements are not complaining that it is going to lead to disaster—if that be possible for London, surely it is possible for the country as a whole.
I would like to go a step further. I venture to say that no such arrangement would have been possible in London, even after years of hard work, had there not been some body in London willing to make a sacrifice. It was only because the London County Council—which, as the House knows, was the purchasing authority for the London companies in 1923— it is only because the London County Council was willing to hand over the whole of those powers to a new authority that might be set up, and negotiated on that basis, that an agreement has been come to, and London has got its electricity authority to-day. As far as I know, no such offer has been made to the country as a whole. I am quite convinced that, unless there be a measure of compulsion, it will be absolutely impossible to do anything from a national point of view, and, if that be so, then I think the need for a national treatment of this matter is a real one. What is the alternative of the Government? We were told what it is in the most interesting speech of the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham), who pointed out all the inconsistencies of the arrangement suggested in the Government Bill, and the beautiful simplicity of anything that might be produced from 1770 the other side of the House. It is easy to make frontier lines in a new country, where straight lines can be drawn, as they can, for instance, in Australia, and, sometimes, in the United States; but surely we have to take account, in this country, of the contours and complexities which have arisen from the conditions and from history.
In our view on this side of the House, any Bill must take into account the activities of the companies and municipalities as well, and must endeavour to conserve as far as possible the energies of these various undertakings. We think it is our duty, on this side of the House, to see to it that, where big undertakings have been working successfully, nothing shall be done to discourage the flow of capital into the industry. Surely, more can be done by a living and complex organism, where the human unit is free to act, than by a State-created, State-owned and State-operated undertaking. Let us eliminate that. The hon. Member for Moseley rather startled me when he asked, why is this Bill necessary at all? Of course, that is the attitude among those who have not taken the trouble to follow the progress of events, and who do not know the state of affairs as regards electricity supply. One and another has asked, why not have further inquiries, why not another committee, and so on. We have been told, "You have not taken evidence." May I weary the House for one moment by referring to the Report of the Electric Power Supply Committee? We had on that Committee such well known representatives of the. companies as Sir James Devonshire and the Hon. Sir Charles Parsons. As the House knows, the Report of that Committee was unanimous; and that Committee was not the start of things, for, in their Report, they say that, shortly after their appointment, the Reports of the Coal Conservation Sub-Committee of the Reconstruction Committee and the Electrical Trades Committee appointed by the Board of Trade were laid before them, and they adopted five of the recommendations of those Committees that had been working beforehand: Those recommendations were as follow:(1) That when British industry is subjected to the test of keen international competition after the War, its success will depend upon the adoption of the most 1771 efficient methods and machinery, so as to reduce manufacturing costs as much as possible.(2) That a highly-important element in reducing manufacturing costs will be the general extension of the use of electric power supplied at the lowest possible price, and it is by largely increasing the amount of power used in the industry that the average output per head, and, as a consequence, the wages of the workers can be raised.(3) That the present system, under which a supply of electricity is provided in a large number of small areas by separate authorities, is the result of a policy adopted at a time when the applied science of electrical engineering was in its infancy, and is incompatible with anything that can now be accepted as a technically sound system.(4) That the interconnection of electrical supply stations, recommended by the Board of Trade in their letter of the 25th May, 1916, however desirable in itself, cannot alone meet the requirements of the situation.(5) That a comprehensive system for the generation of electricity, and, where necessary, reorganising its supply, should be established as soon as possible.Then, if it be asked what witnesses we had before us, I would mention that we had witnesses representing the Association of Municipal Corporations, the London county Council, the Urban District Councils' Association, the Convention of Royal Burghs of Scotland, the Incorporated Association of Electric Power Companies, the Institution of Electrical Engineers, the Incorporated Municipal Electrical Association, the Committee for the Interconnection of the Lancashire and Cheshire Electricity Supply System, the Association of County Councils in Scotland, the municipal authorities in Ireland, the railway executive committee, six corporations supplying electricity on the north-east coast, and so on—I could go on for another dozen and then it is suggested that we have not evidence before us, and that these Committees have been working in the dark. [An HON. MEMBER: "When was than?"] That was in 1918, but what has changed since then There has been a certain extension of activity amongst the companies and municipal authorities but I do not think that any one of us here is out to blame the companies or the municipal authorities. I think we must all recognise that, under the conditions under which they have been working, they have been doing their work exceedingly well—some better than 1772 others, it is true In the County of London, I will admit that there are-municipal authorities which are selling power more cheaply than the company undertakings. In the Greater London area it is the other way round. It depends, I presume, to a large extent on the situation of the stations, on the facilities they have, and on the ability of the engineer in charge.
In all these circumstances it is amply proved that something has got to be done. I believe the country has made up its mind that something shall be done. I have heard nothing here to-day as to what the alternative is to the Government proposals, except what comes from our Friends on the other side. No one has suggested a scheme under which there will be less control. It is a very serious suggestion on the part of my Friends here that they are going to vote against the Bill, when there is no alternative proposed, when they know there has got to be an alternative, and the only alternative is the one which hon. Members opposite will bring in if they refuse to do anything. Under all the circumstances, I shall vote for the Bill with a clear conscience, satisfied that a step is being taken which, at all events, after careful consideration in Committee, may produce a scheme which will be of advantage to the country. Of course, we shall hear the statement made—and this is one of the paradoxes of the situation—by one authority and another that they can provide electricity cheaper in their own particular area than it can be produced under a large national scheme. That may be so. While they are working on a small scale conditions may be so much to their advantage that they can do it. But the moment you try to conceive of this problem on broader lines, they could not enlarge their stations, they have not got the water or the coal, or facilities for obtaining fuel, and the moment they began to enlarge they would find themselves in difficulties. The great thing is this: Electrical power should be available for all areas in the country, as far as practicable, at a generally workable cost.
There are one or two things that I should like to ask to be considered in committee. Nothing should be done in the Bill which will discourage the flow of capital to the industry, and the cost of 1773 administration should be kept down as far as possible. Take the London area, for instance. We have not only municipal and company undertakings, we have also the Joint Electricity Authority and the Electricity Commissioners, and the. Board in addition will put a burden on the electricity industry in the London area which may become serious. The more that burden can be kept down, the better it will be. The conditions in London, or in any area where an electricity authority exists, should be very carefully safeguarded. There is another point on which I feel strongly. It is the tendency of all Governments, and all Departments, to endeavour to get the appeals from victims into their own hands. We find that the private citizen is debarred from getting to the Law Courts if he is aggrieved. I find the same tendency in this Bill. There must be a proper appeal. Where private interests are concerned you cannot leave it to any Committee of the Government or any individual official to deal with such private interests. The more the State steps in, the more important it is that the individual shall have recourse to the Law Courts. With these few words I hope the House will pass the Second Reading.
§ Mr. GROTRIAN
This Bill is recommended to us on two grounds—that it will cheapen the supply of electricity to consumers and that it will do that without any interference with private enterprise —that it will in fact save the consumer something like £44,000,000 per annum. I wish I felt confident that either of those propositions would come true, Of course, if it is proved that these results can be attained under this Bill, and that they cannot be attained by private enterprise, I for one would say private enterprise must give way, but I should like to examine those two propositions. First of all, will it cheapen electricity to the extent claimed or at all, and if it will not, such drastic interference with a now prosperous industry will be most regrettable. You have here an industry that is just recovering from war conditions, going ahead rapidly by leaps and bounds—I think I have heard the increase has been something like 50 per cent. in the last two or three years—and an industry which, if left to itself, will accomplish anything this Bill can accomplish. 1774 I think that is admitted, although some people qualify it by saying it may take longer to do under private enterprise than it would under the Government scheme.
There are two questions with regard to supply. There is the supply to industrial undertakings and there is the question of bringing cheap electricity into rural districts where they have no electricity at all. Last year the power companies of the country sold the whole of their output at an average price of 9d. That 9d., of course, had to bear all the, costs of generation, all the overhead charges, and all the interest on capital. I do not think there will be any substantial improvement upon that figure at any rate under the Government scheme for some years to come. Of course, it is easy to show favourable results on paper if you start out by paying interest out of capital and do not have any sinking fund for five years, but eventually all these costs, and the costs of the board generally, have to come upon the industry. They have to be paid by the consumer. There is no other way they can be paid unless they are paid by the taxpayer, and no one up to now has been so wild as to suggest that that burden should be borne by the taxpayer. I do not believe that under the scheme for some years we shall, be able to buy very much cheaper than this.
Then there is the rural1 aspect. We hear some rather wild statements on this aspect of the question. It is going to bring light into dark places. I am not sure even that crops are not going to grow quicker because electricity is brought into the district. But how is it going to be brought into these districts? If you get a district where your cable is passing through, you will have available on the spot supplies of cheap electricity, but that is not the whole problem. That is hardly the beginning of it. Who is going to distribute this electricity? The: Central Board do not propose to distribute electricity. Therefore, somebody will have to undertake the job, and it must be done by private enterprise. To do that, money will have to be raised. Presumably, a prospectus, will be issued in order to try to get the money, and these are the sort of facts that will have to be put in the prospectus, if you are to tell the truth: "Here is a sparsely populated district. It will take a great deal of cable to pick up these, isolated places in the 1775 district. That will be very expensive. You cannot hope to see any profit on your undertaking for seven or 10 years, and when you do see that profit the Government will deprive you of the full benefit of what you have done." Would anybody subscribe to a proposition of that sort? If not, the money will not be raised to bring this electric light into the rural areas, as the Central Board themselves do not propose to distribute electricity.
Unless you are going to bring electricity into areas where they have not got it, and unless you are going to cheapen, electricity materially to the consumer, are you justified in interfering with the powers at present possessed by the companies? The companies are operating upon a Parliamentary franchise—a perpetual franchise given by Parliament—and under that Parliamentary bargain they have raised something like £30,000,000. None of these companies made any money in the early stages. In that way they suffered the fate of pioneers, and now that they are beginning to get on to their feet and become prosperous, you are taking power in this Bill to deprive them of the right to make up now for the lean years that they suffered and to pay any arrears of dividends. It is not true to say that the power companies have not been of great value in this country. I would call attention to what is said of the power companies on page 16 of the Weir Report:While the power companies have rights that are definitely monopolistic, it would be unfair to ignore the fact that very valuable development has been achieved under their aegis, and that all of them have taken big risks and few of them have yet attained the standard dividend.If that be true, as it is true, Parliament is not justified in interfering with these companies, just as they are beginning to come to their full fruition in performing this valuable service to the community.
Does this Bill interfere with private enterprise? How will it operate? I suppose the Central Board will go to a big power station and say, "You are very efficient. We shall take you as one of our selected stations. You must run the station, but we will tell you how to run it. If you do not run it as we think you ought to run it, we shall expropriate you 1776 and buy you out on terms which we think reasonable. If you do not like the terms that we offer we will have arbitration, but not arbitration in the ordinary sense of the word, where one party appoints one arbitrator, the other party appoints the second arbitrator and they jointly appoint an umpire. We will appoint the arbitrator. We will be the judge in our own case as to the price we are to give you for your undertaking." Suppose the Central Board come to one of the selected companies and say, "You must double your station. It would cost you £2,000,000." The company owning the station reply, "We cannot raise £2,000,000. You have so messed up the finances of this company that we cannot get the money." What is to happen then? The Central Board do not propose to raise money. If the company who own the station eventually refuse to find the £2,000,000 or are not able to find the money, the Central Board will take the station away from them and in the last resort run it themselves. That may not be nationalisation, but I think it is worse than nationalisation. I agree with what was said on this point by the right hon. Member for Central Edinburgh (Mr. W. Graham). He said that if he owned an electricity station he would rather hove it nationalised in the ordinary way than dealt with as it is proposed to deal with it under this Bill.
It is said, "Look at the benefits you get under the Bill. We guarantee that you shall not have to pay a greater price for the electricity you buy back from us than the present price at which you generate." In my opinion those guarantees are quite illusory and unfair as between one undertaker and another. We are told, "You will be allowed to buy back from the Central Board all the current that you want for your own customers, but you are only allowed to buy such an amount as is generated at your station." Supposing by linking up two or three stations it is not necessary to run one station full time, and suppose the Central Board say, "Now that we have linked up we shall only want you to run your station to tide us over the peak load." In that case the amount of electricity generated at that station would be exceedingly small, and if we are allowed only to buy back the amount generated at the station, we shall have to buy the 1777 rest of the current we want for our consumers from the Central Board at the Board's price, and that will be a great deal higher price, in spite of the guarantees, than our customers have to pay to-day. Many of the power companies will want less electricity for their consumers than they require to-day because, if we look at Clause 10, "Obligation of the Board to supply electricity to authorised undertakers." the proviso says:Provided that the Board shall not(a) supply electricity directly to authorised undertakers situated in the area of supply of a power company without the consent of the power company unless the undertakers have an absolute right of veto on any right of the power company to supply electricity within the area of supply of those undertakings.What does that mean? In Yorkshire, certainly in Lancashire, the power company is supplying many municipalities, and those municipalities have an absolute right of veto against the power company coining into their area, if they so wish. The power companies are supplying those municipalities under contract, with the consent of the municipalities. All these circumstances come within this definition in Clause 10, and if the Bill goes through in its present form the power company will lose all these customers, very big customers, who have contracts running up to 10 and 15 years, and the Central Board will step in and supply the electricity.
There is one further way in which this Bill will interfere very seriously with private enterprise in the power companies. Suppose a power company at present supplies a big manufacturer with a large load. You come along and say. "The Central Board are now compelling us to alter our frequency, and you must alter all your motors. Of course you will be paid for altering the motors." But the big" manufacturer will say, "Who is to compensate me for the months that my mill is idle, because I cannot use it?" The answer is, "No one is to compensate you." Therefore he will say, "All right, I do not want you to supply me with current any more. I will put down my own plant. If I am to have my works messed about like this, I would rather go to the expense of supplying machinery than to take the current from you." Exactly the same thing would happen where manufacturers are now taking a partial supply. There are many 1778 cases where a man runs his machinery for what it is worth and takes the rest of the electricity that he wants from a power company. If he has to change all his motors and if his works are to be disturbed he will say, "I will put down more plant and I will run the whole of my own works instead of, as now, running only part."
It may be said that all the criticisms of the Bill to-night have been merely destructive. The question may be asked," What do you propose?" It is not for us to propose. But I suggest to the Minister that he might very well let the power companies alone. Their business is increasing very rapidly, they are generating at a very low rate, and if the powers of the Electricity Commissioners were slightly extended they might do everything that this Bill can do except, perhaps, run this gridiron cable all over the country. It is no use linking up places for the sake of saying that you have linked them. Unless it is a commercial proposition, you had better leave that plan alone. It might be all right to link up Leeds and Bradford. I daresay that has been done already; I believe it has. But it is no use linking up Leeds and Birmingham, and forcing Birmingham to change its frequency merely in order to link up. There is nothing to be gained by that process. It is no use saying to Hull, a Division of which I have the honour to represent, "You must link up with York and take a cable through that sparsely populated 40 miles between Hull and York." That is no good. Unless linking up is commercially feasible it had better be left alone.
I would like to say one word for the smaller stations. These smaller stations, in many cases, were the pioneers and the mainstay of electricity supply in many of the smaller towns. The corporations of those towns said, "We have got the Provisional Order, but we cannot run a station because there is no money in it for years. If you like to take the Order and run a station as a private enterprise, we will hand over the Order to you." Those people went into many towns and brought electricity to places where it would never have come for years but for their action. Of course, they lost money by doing so. But now they are getting on a better footing. Their 1779 difficulty has, always been this: They always have had hanging: over their heads, the purchase Clause. They knew that they had only a certain number of years to run, and they were compelled to make reserves against the maximum contingencies that they could foresee. In the same way, they have been prevented from linking up. A lot of them would have linked up, no doubt, but they could not. Supposing Town A had linked with Town B, and A was bought out by the municipality on its acquiring its own station at the end of the period. Town B would be left in the air, as it were, and there would be a very expensive cable, perhaps 10, 15 or 20 miles long, laid in the ground, which the local authority would not purchase. These facts ought to be remembered when criticisms are passed upon the small people who do not generate as economically as otherwise they might do. The Bill seems to be to be full of anomalies and full of injustice. If it obtains a Second Reading—I have not the slightest doubt that it will, because the Socialists on both sides of the House will see to that—at any rate it might be referred to a hybrid Committee to be properly thrashed out. That would be the fairest and the safest way to proceed.
§ Lord APSLEY
I believe it is a fact, and almost a truism, to say that no great enterprise has ever been conducted except in face of very considerable, and some-times almost overwhelming, opposition. If I might give an example, I would mention the scheme—initiated, I believe, in the brain of a single individual—for bringing water from Fremantle, in West Australia, to the gold fields of Coolgardie and Kalgoorlie—a scheme which brought upon itself opposition of such a virulent nature that the individual in question committed suicide before he saw the scheme completed. Yet that scheme did succeed, and it was not only a great convenience but created the very prosperous State of Western Australia. I might might mention also the Canadian Pacific Railway scheme. There are no doubt many hon. Members who can remember the opposition that Was raised against the plan to carry that railway through the Rocky Mountains to the Pacific. The opponents of the scheme said, very plausibly, "The whole economic future 1780 of Canada lies to the South, towards Chicago. That is where our trade centres lie. What is the good of taking this railway through the Rocky deserts?" Yet the scheme was carried out, and it created Canada.
It is the volume, and, I might almost say, the variety of the opposition to this scheme, which leads me to believe that we are on the eve of a great enterprise. I am particularly reminded, by the opposition from a particular quarter on the Conservative benches, of the opposition in this House against a Bill in 1694, in the reign of the Prince of Orange, which installed the Bank of England. One of the Amendments proposed to that Measure expressed a fear lest the Bank should hereafter join with the Prince and make him absolute, so as to render Parliament useless. I am almost beginning to wonder whether history is repeating itself, with my right hon. Friend the Minister of Transport in the place of the Prince of Orange. Yet the Bank of England has been installed and Parliament perhaps is not effete. I believe that the Electricity Board, which the Bill is going to instal, in whatever shape it eventually comes out of Committee, will eventually take a place in the history of this country not unlike that of the Bank of England. I believe that to-night my right hon. Friend is forging a tool which may be likened to the Bank of England, of which, I believe, a very famous authority said:Though it may not be perfect, it is a tool which has done its business well.I would like before I sit down to add this plea, and I am led to it by seeing the example of the electrification of another country, Italy, which has been brought on very considerably during the last few years, chiefly, I believe, impelled by the brain of Signor Mussolini. Supermen are not always infallible, and there is one thing that I believe was forgotten in that case, which was that, in the interests of industry and of the electrification scheme, they forgot about the beauty of the country. There are in Italy to-day great overhead cables carrying power from one place to another which are, to say the least of them, an eyesore to anybody who travels in that country. In pleading the aesthetic side, I believe I am not pleading to unsympathetic ears. To the Prime Minister, and to the Leader 1781 of the Opposition, if he were in his place, I would be speaking to sympathetic ears. There is also a commercial side to this plea. If we were to follow the example of Italy and carry great overhead cables through our countryside, we should be doing ourselves irreparable damage. I saw in an American newspaper not very long ago that the amount of money spent by American tourists in this country was almost equivalent to the interest on the debt which we are paying to them yearly. I have no other confirmation of that newspaper paragraph, but it is a very considerable factor, and one that we should study. I would urge to the utmost that every effort of modern science should be exercised to bring these high tension cables, through pipes or by whatever means may be found most economic, along the existing means of communication, roads or railways, without the use of overhead cables in order to save the countryside. Apart from the details of the Bill, in supporting it I do so believing that for the needs of the country something must be done.
Mr. TREVELYAN THOMSON
There have been so many criticisms of the Bill from all sides of the House that one wonders in what shape it will emerge from Committee. It is a rather interesting speculation. I would like to refer to the speech of the hon. Member who told us what had happened with regard to electrical development in London and how, through the good offices of the London County Council and power companies, a joint electricity scheme had been established. I would like to ask the Government why it has not been on those lines that they have proceeded. That was the recommendation of the Williamson Committee. Surely there was no need to appoint the Weir Committee until they had carried out the recommendations of the Williamson Committee that, it is true, were embodied in the 1919 Bill, which, unfortunately, was emasculated in another place. The Government of that day did promise to bring in a Supplementary Bill to restore the compulsory powers. I submit that to proceed along those lines would have been infinitely more satisfactory than the hotch-potch of a Measure which the present Government have introduced. It would have utilised existing undertakers, both municipal authorities and power companies, by 1782 linking up those authorities. One would then have had all the advantages that this Bill seeks to bring about. It is perfectly true that you would have had to bring in compulsory powers in order to do it, but you would have achieved greater success with less difficulty on those lines than by the extraordinary Bill before us.
Reference has been made to the concern felt by many municipal authorities as to their position under the Bill, and I can confirm it. It is a very real fear as to how they may be treated. I would like to put in a plea that before the Bill leaves the Committee stage there should be more details as to the composition of the Board. At present it is left entirely in the hands of the Minister of Transport. Whatever confidence we may have in the present Minister of Transport, we do not know who his successor may be, and it is best to put in an Act of Parliament provisions for the selection of the right type of person to act as members of this Board. It has been suggested that these representatives should have experience in municipal undertakings, which are already supplying practically two-thirds of the electrical power throughout the country. I hope something may be done in Committee to provide for the composition of the Board so that these interests may be properly represented. Reference has also been made already to the desire for a proper appeal from the Board. It is not much good saying that one can appeal to the Electricity Commissioners because the Board is the child of the Commissioners, and one does not get the independent judgment necessary when appeals are made. I hope that something may be done to establish a judicial authority to which appeals can be made from the judgment of the Board.
There is only one other point to which I should like to draw attention, and that is the difference in price in the first Schedule in the prices paid for the acquisition of the generating stations. I would like the Minister to say why one scale of compensation should be laid down for power companies and another for municipal authorities. Needless to say, the scale is to the advantage of the power companies, and the municipal authorities want to know why they should be treated differently on a scale which deals with taking away the same class of generating stations. I hope that before the Bill leaves the House it may establish the 1783 control of Parliament much more effectively than at present. Reference is made in almost every Clause to matters left to the discretion of the Electricity Commissioners. A great deal more should be left to the discretion of Parliament. Parliament should have the final say as well as the decision in many matters now left to the discretion of the Board.
§ Lieut.-Commander BURNEY
It is true to say, I think, that the majority of the speeches we have heard to-day have been in opposition to this Bill, and as the Debate has proceeded it has become fairly evident that the objections to the Bill have been grouped under four main heads. There have been, of course, many other objections of detail, but the main objections are to be grouped into four main classes. First, there are those who say that the introduction of high tension distribution or the gridiron system will not necessarily mean any cheaper supply of electricity, but that, if the existing electrical undertakings are left to themselves, they will be enabled to provide that electricity to the consumer as cheaply as the Government scheme will involve. Secondly, it has been suggested that the reduction in cost from 2d. a unit to a 1d. a unit is dependent upon the increase in consumption capacity of the country as a whole. Thirdly, objection has been taken to the fact that the Board of Control necessarily implies the setting up of a bureaucratic organisation which will increase the cost of running the existing undertakings. Fourthly— and I think this was the point made by the hon. Member for Watford (Mr. D. Herbert)—it is suggested that a monopoly in the hands of this Board will be uncontrolled by Parliament and will largely prevent development in so far as invention is concerned, stereotype conditions and prevent persons working in the free atmosphere which prevails at present. For my part, I think these criticisms are based on a very slender foundation.
I do not think this question as a whole can be dealt with properly unless the considerations are divided into, two separate and distinct parts. First, there is the question of the technical and economic considerations. When that has been investigated and settled, than there is the secondary, problem of how the 1784 technical development is to be applied and translated into effect. That may be taken as the executive or political side of the question. I wish to emphasise that these are two separate matters which the House has to consider and it is no use endeavouring to confuse the one with the other. One is a perfectly clear technical question which can be con sidered without any relation to party differences. The other necessarily involves consideration of the political principles which guide the various political parties. As far as the technical question is concerned, I do not believe —and I have not heard—that any high authority on electricity in this country will come out in the open and say that the distribution of electricity by high tension lines is a wrong policy. It has been done in every other country where there is a large number of consumers and a system has been developed in countries like the United States and Canada in a much higher degree than in this country. In fact there is no country in the world in which the development of high tension electric trunk lines would be of more value than in this thickly populated and highly industrialised country of ours. Those who have attacked this Bill have not suggested that a method of high tension electrical distribution should not be introduced at all. What they have said, in effect, is that we should leave the electricity industry to itself and in time it will introduce this system, and, they say further, that if the electricity industry is left to itself it will introduce such a system more quickly than the Government will put it into effect should this Bill become law.
Mr. A. HOPKINSON
Apparently the hon. and gallant Member is not aware that there are scores of miles of high tension distribution cables in this country.
§ Lieut.-Commander BURNEY
I should say that there are thousands of miles.. At the same time if the Hon. Member will allow me to develop my argument I think I can prove to him that what has been done in this country in this respect, bears no relation whatever to the idea which the Government are endeavouring to carry but by this Bill. I admit this is a highly technical and difficult problem to 1785 put quickly and shortly but one must do one's best. To go back to the point with which I was dealing, the idea underlying this Bill is the introduction of a grid-iron system which will cover the whole country. An hon. Member who spoke earlier tried to show that in this matter Cornwall and Leeds were so far apart that they could not be considered in relation one to the other. I disagree with that statement. I submit it would be quite possible, under a. system of electrical supply such as is suggested, for a power station in Cornwall, given the necessary high efficiency, to supply energy to Leeds or vice versa, The mere distance is not comparable to the increase of efficiency which it is possible to secure by putting up stations where proper conditions for efficiency apply.
§ Lieut.-Commander BURNEY
If you transmit at 250,000 volts the capital expenditure is not so great as to prevent electricity being transmitted economically over such a distance.
§ Mr. BASIL PETO
If the hon. and gallant Member will look at Paragraph 32 of the Weir Report he will find that the northern parts of Scotland and the extreme western part of England are excluded. That does not indicate that Cornwall is to be linked up.
§ Lieut.-Commander BURNEY
I am not saying that Cornwall is to be linked up. I think it is more than likely that in Cornwall the conditions requisite for putting up a really efficient station do not exist.
§ Lieut.-Commander BURNEY
What I am trying to make quite clear is that the distance separating Cornwall from Leeds, taken merely as a question of distance, is not a condition which would prevent the efficient distribution of electricity. I made it clear, I think, that I was not taking either of these places necessarily as a place in which we would 1786 find the conditions necessary for putting up a highly efficient station. Let us take the present state of affairs on this basis. Supposing that, by a wave of a wand, this high-tension distribution scheme could be put into operation; would it or would it not, with our present electricity output, reduce the price to the consumer? At the present time electrical energy costs us about £17,000,000 for every penny per unit of cost of supply. If we reduce that cost by one-eighth of a penny it would be sufficient to pay £2,000,000 per annum, which is the amount required to pay interest and sinking fund upon the £30,000,000 which the Government are now asking. Not only that, but with the other conditions which will apply, such as the high load factor and the doing away with the inefficient stations, it is shown in the Weir Report that our cost of energy to the consumer will be reduced by .64 for these reasons alone, and this is £10,000,000 per annum on the basis of the present electrical energy consumed in this country. Therefore, if you take off the £2,000,000 which we have to pay in interest and sinking fund on the money which the Government want to provide for this development, we should get a net profit to the country of £8,000,000 per annum, on the basis of the electrical energy which is consumed in this country to-day.
Let me go further and put it in this way, that if it is the truth that this technical development will give this result, the question as to whether it should be taken over by a scheme of nationalisation, such as is suggested by the party opposite, by the development of individual enterprise, as is suggested by many hon. Members on this side of the House, or by a system which lies halfway between the two, namely, a system of Government control, as is suggested by the Government, will make no difference whatsoever to the efficiency or otherwise of the scheme itself. Therefore I think there is no more advantage in saying that the scheme itself shall not be introduced than was the case when the Lords of the Admiralty endeavoured to prevent the introduction of steam into the Navy because they did not want to do away with masts and yards. It is suggested—and great exception was taken to this fact—that the Government Bill 1787 suggests that a large number of new stations should be put down, and that because those new stations are to be put down, various approved undertakers will necessarily have their own stations shut up, and that, they consider, is very detrimental to the interests of the electrical industry. But let us get down to actual facts. We know that the cost of a new station may be perhaps £15 per kilowatt installed, or, say, for a large station of 100,000 kilowatts, £1,500,000.
§ Lieut.-Commander BURNEY
I was saying that the capital cost involved in putting up a new electrical station is something approximating £15 per kilowatt year of energy supplied by that station.
§ Lieut.-Commander BURNEY
I venture to disagree with the hon. Member. I mean per kilowatt year of energy supplied if the power plant be running at full capacity.
§ Lieut.-Commander BURNEY
I am not so great an authority on these matters as the hon. Member, but, at the same time, one does know that if you have an output of 100,000 kilowatts, the capacity of the station may be in the nature of 130,000 to 135,000 kilowatts installed, and if you make an allowance in capital cost for that, I think my hon. Friend opposite will find that £15 per kilowatt is not very far wide of the mark, in so far as the capital cost per kilowatt year supplied is concerned, if the station is running at full capacity. [Interruption.] It is a little difficult and rather complicated to deal with, especially when there are interruptions, but what I was endeavouring to put forward was this, that with a decrease of only .14d. on the cost of supply you would give a return on that money of 33⅓ per cent. per annum, and it has been shown, in the Report and elsewhere, that with the new stations there is not only the possibility, but the probability, that the cost of supply of energy will be that amount less as compared with the more inefficient stations which they will replace.
1788 Let me take another factor. The Report shows that if the high load factor is increased from 25 per cent. to 35 per cent., as is likely under this system, there, again, you get a decrease in cost of approximately the same amount; that is to say, that you again get a saving of £5 per kilowatt year or a further return of 33⅓ per cent. on your money, and what the Government are suggesting under this scheme is that the new money provided for these new stations will in fact give the country a return of not less than 66⅔ per cent. on the money so invested. I do not believe that any business man would object to a return of that amount. It is perfectly clear that the electrical experts of the country have had this in mind for many years, and, as has been shown in the Electricity Supply Act of 1919, endeavours were made to link up in this way, but because there were no statutory powers given under that Act, practically nothing was done except in two instances.
Therefore, I should like to congratulate the Government very heartily on bringing in a Measure which really will tackle this problem from a fundamental basis. But I do not think this Bill goes anything like far enough. What they are suggesting at the present time is that we should standardise the frequency. I would suggest that they should embody the standardisation of voltage or pressure. It was left out of the Bill, although it was included in the Weir Report, because, I understand, the Government did not wish to overload the Bill, and I am further informed that an extra capital expenditure of something like £20,000,000 would be required if the voltage was to be standardised at the same time as the frequency was standardised. [Interruption.] I think the hon. Member for Reading (Mr. H. Williams) is a little facetious, and in support of that I should like to quote the Chairman of the British Electrical and Allied Manufacturers' Association, who says:There is no doubt that the cheapening of plant and apparatus by standardisation of voltage would be even greater than that due to the standardisation of frequency.With all respect to the hon. Member for Reading, I would rather take this advice to support me than I would take his. As the Prime Minister is here, I would specially like to direct attention to this 1789 point: I had a conference, lasting for several hours with the managing director of the biggest electrical manufacturing firm in this country, and he informed me that, if we are to get standardisation both of pressure or voltage and of frequency, the cost of every electrical instrument or of anything to do with the electrical equipment of the country—the cost of manufacture as opposed to operation— would be reduced by 20 per cent.; that is, because one would introduce better systems of mass production, there would be fewer specifications, and so forth. Last year our total output in electrical equipment was £70,000,000. A reduction of 20 per cent. on that amount is £14,000,000 a year, and that means that there is to be an expenditure of £20,000,000 throughout the country in order to save £14,000,000 a year, which is a return of 70 per cent. per annum on a capital expenditure of £20,000,000. I think it will be admitted that, instead of taking two bites to the cherry, you ought to introduce standardisation of pressure at the same time as you introduce standardisation of frequency, so that there should be only one great change carried out in our electrical industry. I would, therefore, ask the Government seriously to consider whether in the Committee stage, or perhaps before that, they could not introduce into their Bill some means of insuring that the standardisation of pressure should be tarried out at the same time as the standardisation of frequency.
I would like to point out one or two points in regard to the executive of political aspect of the Bill. As far as that side is concerned, I think the great criticism is that the benefits which the Government expect will not be translated into practice quickly enough. There is too much consideration given to what are termed the authorised undertakers, and, secondly, the composition of the Electricity Board, as we have heard before, is somewhat anomalous. If they are to prepare these various schemes, they must have a technical staff attached to them, and if they also have the Electricity Commissioners, to whom all schemes have got to go, it seems to me one or other of these technical boards is redundant, and either the Electricity Commissioners should be joined to the Central Electricity Board, or the Central Electricity 1790 Board should have their own experts and be in complete charge.
There is one other point to which I would refer, namely, Clause 4, Sub-section (2), under which the Electricity Commissioners are to publish a scheme and give to authorised undertakers and to other persons an opportunity of making representations. This means that every authorised undertaker will employ counsel, and we shall, perhaps, take years to get the Bill through. I would remind the House that in the London area and the East Lancashire area, it took many weeks under the old 1919 Bill for an agreement to be come to. It would seem to me that if the Government were to exercise their statutory powers with more emphasis than they propose to exercise them, we should get the results of this Bill translated into practice somewhat more quickly. There is little doubt that this expert staff will be required, because I think that the Board will have to take over the stations which are selected, as I venture to think very few of the approved undertakers will consent to run their stations under this Bill, and, therefore, they will eventually become the owners of the majority of the efficient electrical stations in this country. 10.0 P.M.
In conclusion, I would suggest that this Bill might be supported by Members on this side of the House, because there is no doubt that some form of unified control is essential Either one has got to have complete nationalisation, as suggested by hon. Members opposite, or to continue the system of muddles in which we are to-day, or we have got to support the Government in steering between the Scylla and Charybdis of these other two difficulties, and support the Government in this system, which does at least give us a unified system of technical development, and with that technical development proceeding on the right lines, we shall be able at a later date to secure that the control and executive functions will be made to operate successfully.
§ Mr. CLARRY
I have only a few minutes in which to state some general views, and before doing so I would like to state a view that has been put to me by what may be known as a rival industry —I refer to the gas industry—and as feeling has run somewhat high in regard 1791 to this Bill, I think a few words from me in explanation should be stated first of all. I refer, primarily, to the loosely-made accusation that interested parties oppose certain views. Although I hold no shares or interests whatever in gas or electricity, I have an early association in the gas industry of which I am very proud, and because of that association I am able to keep more or less in touch with the views of that industry. A few weeks ago one of our leading daily newspapers published a statement in which they said the vested interests of the gas industry were doing their utmost to wreck this Bill. The same day this was published, I am given to understand, there was an official letter written to the editor containing a strong denial of the suggestion, but that reply was not published in the paper, and no notice was taken of the denial. But I am authorised authoritatively to state here, that the gas industry as an industry have never taken any step whatever to oppose the Bill, are not taking steps now, and do not intend to take steps to oppose the Bill. They feel that as regards gas and electricity, there is room for both, and special spheres for both, and as this Bill deals primarily with electricity, it is purely a domestic matter for the electrical industry, who are very well able to look after their own interests.
But, very naturally, the gas industry have views of their own both as taxpayers and particularly where the Electricity Commissioners, I will not say tread on their preserves, but endeavour to assert some of that arrogant autocracy in that direction, and they very strongly resent that there is no sort of impartial appeal from the decision of the Electricity Commissioners. I have noticed in the speeches to-night that is an expression of view held pretty generally. I trust the Government will take some steps to remedy this matter. Another point with which they would also like to deal in Committee is the matter of finance, where it borders on a subsidy to a competitive industry, and it can be said in fairness, which will be endorsed, I feel sure, by the House generally, there should be no question of subsidy of one industry as against another.
Generally as to the Bill, I am very glad to see that in this case there are none 1792 of the extravagant possibilities held out by advocates of the Bill as in the past few years. I refer primarily to electrical development, which, we have been told in the past, was going to give work to our unemployed, that it was going to solve the coal problem, that it was going to revive industry by giving them cheap and ample power, and that it was going to give the domestic user electricity at one penny a unit. In this case, I am glad to say, they have come down to more or less hard facts in their advocacy, and the most they promise, in general terms, is a problematical reduction in the price of electricity in the year 1940. Even for this only there would be something to be said for the Bill, but I wonder whether full consideration has been given to the charges which have first to be met in connection with the administration of this Bill before the consumer gets anything at all. I am told by authoritative people in this matter that there is quite a reasonable possibility that there may be even an increase in price of electricity during the interim period between now and 1940.
Looking generally at the Bill, and I spent six hours over it yesterday— [HON. MEMBERS: "Shame !"]—I cannot help coming to one conclusion, that the Bill might aptly be called "The Electricity Commissioners Bill,'' and might be entitled "A Bill to transfer a flourishing industry into the hands of bureaucratic inefficiency." It is, I think, a very dangerous experiment. I have some ground for making that statement with regard to the bureaucratic inefficiency. If we look through the Bill we find that there is to be a Board which obviously is only put there as a figurehead, because it is stated in the Bill on many occasions that "It will be lawful for the Board with the approval of the Electricity Commissioners," also "if the Board satisfy the Electricity Commissioners"; "unless the Board satisfy the Electricity Commisisoners"; "the Board shall not without the consent of the Electricity Commissioners." These statements occur exactly twelve times in the Bill. You cannot say the Board is going to control electricity when you have such reiteration of that statement. Further there are statements to this effect— "The Electricity Commissioners may determine"; "statements are to be submitted to the Electricity Com- 1793 missioners"—I have nothing much to say about that. In all that phrase "The Electricity Commissioners may determine" occurs eighteen times. Further, "terms in default of agreement may be determined by the Electricity Commissioners." That occurs seven times. Further it says: "In addition to this in certain cases the Electricity Commissioners may appoint their own auditors." There are only two places in which the Bill gives any scope for an appeal against the Electricity Commissioners decision. I would like to ask the Minister why the Electricity Commissioners have purposely avoided any impartial court of appeal from their decisions. Who will say that the Electricity Commissioners are not bidding for absolute control.
You, Mr. Speaker, have only given me a limited time, and I would not like to exceed that in any way. Therefore, in conclusion I can only say that, much as I would like to support this Bill or any other Bill which had reasonable prospects of carrying out its objects, I cannot agree that this Bill has any prospect of success in its present form. It seems almost beyond amendment, and I am afraid I, personally, at any rate, cannot see my way to vote for this Bill primarily because it undertakes such very serious risks with such little prospect of reward. Electrical development, unfortunately, has come into the spot light of politics in the last four or five years, and we cannot afford to let the subject rest where it is, even if nothing more was heard of this Bill. As the matter is of very vital interest, I suggest to the Government that they should consider their way to appoint a Committee of both Houses which will hear impartially all relevant evidence on the subject of electrical development, and having heard it, give a decision purely from the national interest and not from the viewpoint of the Electricity Commissioners in their cloistered seclusion of Savoy Court.
§ Mr. ATTLEE
In the remarks I shall address to the House on the subject of this Bill, I want to deal with the broad main principles of the Measure. I do not intend to indulge in any discussion of technicalities or of detailed points wherein I think the Bill ought to be amended, nor shall I give the results, if any, of Sabbatarian exercises in mathematics on the Bill. I want rather to consider the 1794 points of agreement and of difference which have appeared in this rather curious three-cornered duel which has been going on to-day. The one point on which there is no dispute is the importance of the subject. There is a very large body of agreement on the technical basis of the Bill. The first point I make in favour of the Bill, because I like to give a point in favour when I can, is that after all this Bill does look at the industry as a whole, and that is a measure of the advance we have in the attitude even of the Conservative Government towards industry. Recently we have had two reports on two separate industries, one on a prosperous industry and the other on an industry which has fallen on bad times. In each case, in the case of electricity and of coal, we have had the industry looked upon as a whole, and not as a mere muddle of conflicting interests. That goes quite a long way towards the Socialist attitude towards industry, because we have never subscribed to the idea that the industries of this country were to be the sport of private interest. We have always regarded them as part of the economic basis of this country.
When we look at the electricity industry, we can look at it from two points of view. First of all, we can look at its importance from the point of view of industry as providing light and power, and, connected therewith, cheap transport, and we can urge that in the interests of the industry of this country it is vitally necessary that the supply of this commodity should be as cheap and abundant as may be, and we must judge the proposals of this Bill in the light of the need of this country if it is to hold its own place in the industrial world, of having a cheap and abundant supply of electrical light and power. But there, is a second point of view which is equally important and one that comes home very much to Members on these benches, and that is the importance of electricity development from the social point of view. We are not considering this merely as a means of getting rich or merely of enriching a certain industry or even merely as increasing the economic welfare of this country. We regard it as a vital service that is to be used for the social development of this country.
The right hon. Gentleman who introduced this Bill took us on a short trip 1795 through the past, referring to the growth of the age of steam and machinery, and I think all of us deplore to-day that when those inventions came into the world they were so far under the domination of laissez-faire that the whole development was allowed to go without any social planning, and what we see in electrical development is the possibility of replannig both the life and the industries of this country to give better effect to industrial development, a better distribution of population and a better life for the people. Therefore the point that we make in our Amendment is the paramount need for direction of these great and growing industries, direction in the interest of industry and the interest of our social life.
That is why, not from any belief in abstract doctrines preached by Karl Marx or anybody else, but from the sheer necessities of the case we believe that this great industry should be publicly owned and publicly controlled, from generation through transmission to distribution. As a matter of fact the Government would seem really to have come to the same conclusion, only they have not had quite the courage of their convictions. It is quite clear to anyone reading through this Bill that the Government are trying to get all the advantage they can from centralised generation and public control without openly coming out and saying: "We want this industry in public hands." Their position is very difficult. One sympathises with the right hon. Gentleman the Minister of Transport. He has introduced a Bill which those behind him here termed Socialistic, It is a most amazing situation. Only about 18 months ago I received a letter from the right hon. Gentleman with a blood-red seal of the Anti-Socialist Committee, with the motto, "Socialism is the enemy," and asking me for a small subscription.
§ Mr. ATTLEE
No, I did not send a subscription, because, on the one hand, I had not the money, and, secondly, I was not an anti-Socialist. But I never thought I should live to see the day when the right hon. Gentleman would be pilloried by his own supporters as a Socialist, and particularly by an hon. Gentleman like the Member for Central 1796 Leeds (Sir C. Wilson). That hon. Gentleman is a great municipaliser—in Leeds! In Leeds it is l'etat, c'est moi. The hon. Member for Central Leeds would possibly vote for a Bill bringing everything under his own control. The exhibition of the Minister of Transport is rather an amazing one, but then the right hon. Gentleman only acts upon the best advice he can get. In this matter of electrical supply it is inevitable that monopoly means monopoly control. The right hon. Gentleman knows quite well that unless that monopoly is controlled by himself, it is monopoly at the expense of the people. I have no quarrel at all with the idea of centralised generation, but the right hon. Gentleman does not go quite far enough for me. I should like to see the Bill provide for the taking over of those stations which are necessary for national generation. Hon. Gentlemen opposite, below the Gangway, have said that there is not much fun in taking over a generating station if you cannot make a profit out of it, and if you cannot do as you like.
I am in entire agreement with the idea of stretching this gridiron right over the country. Where we quarrel is, that the right hon. Gentleman has not gone beyond the control of the main transmission lines. Everybody knows that the profitable part of electricity is that of distribution, and in this case distribution is, apparently, to be partly in municipal and partly in company hands. I do not contend for the moment that extravagant profits are being made at present, but it is a fact that, broadly, you get lower prices with municipal undertakings. You get quite as good service, and, in many cases, better and equal returns in the way of profits—which I do not believe in personally in the circumstances—because I believe in allowing them to go to the consumer.
There is nothing in the Bill that deals with the distribution areas, which is a very important point. I think the right hon. Gentleman made quite a fair point when he said that these things have grown up in rather a jealous way, that growth has been hampered, perhaps, by the concerns being too closely tied to our areas of local government. We have now created certain larger areas in establishing the joint electricity authorities areas, 1797 and there is the possibility of those growing into real regional areas. At present municipalities are still hampered in distribution by their boundaries. They may or may not get an Order for extension. Companies, again, scramble for areas of distribution without any reference to what is the most economic line of supply. It is true there is some control by the Electricity Commissioners and some control by the Joint Electricity Authority, but in effect the same scramble remains. Now that we are having an Electricity Bill we should consider the whole question of a reorganisation of the distribution areas as well as consider the centralising of generation.
The next point is that there is no real control of prices. I believe that to be essential. If we are going to achieve some figure comparable to other countries, we must have a real reduction in prices. Hon. Members will have seen the interesting curve in the Weir Report showing the relation of price to demand. What provisions we have in previous Acts and in this Bill for the control of prices are, I believe, in the main illusory. I believe the only way to have an adequate control of prices is by having public control of distribution. I want to work towards getting all distribution in municipal hands. It will be said that the people are not being exploited, because the companies do not earn very high dividends. No; but in my opinion many of the companies are not really interested in a cheap and abundant supply of electricity. I do not believe they are primarily interested in electricity supply: they are interested in other things.
I was rather amused to hear hon. Members, talking from the standpoint of the companies, say that this Bill was a particularly involved one, setting up this and that authority. Some of the companies, to my mind, are very involved. What one generally finds is some sort of financial grouping of companies and manufacturing interests, possibly of cables or possibly of machinery. They run jointly some sort of investment company, perhaps, that investment company holding all the shares in the distributing companies, and it takes an expert to see where the profit comes from. Whether it is that the supply companies are run for the sake of getting rid of the productions of the various manufacturing companies whose interests 1798 are so strongly represented on the boards of all distributing companies we do not know, but we may suspect, because it is part of the higher industrialism of to-day to run some industry that is allied to your own with a view to getting off on to it some of the goods that you produce, as is done in the case of shipbuilding companies and the shipping lines, and is done by the coal companies, which have their by-product concerns and sales companies, and so forth.
I see a great danger in allowing the company interests to remain as they are in this Bill. If we wish to regard electricity as something that is going to revolutionise social conditions in this country, going to allow us to develop our towns on different lines, going to encourage us, for instance, instead of allowing London continually to spread, to create by our system of transmission lines new industrial areas and new residential areas, there is a danger in permitting these company interests to remain which may have all sorts of antisocial consequences.
In regard to this Bill, I complain that the machinery by which it is going to work is very clumsy and there is no direct control. You have first of all the Commissioners; then you have the Board which exercises its power through selected stations. You have certain areas under the power company and there is the distributing company. You have other areas under the Joint Electricity Authority and municipalities, and you get a complication of machinery all round. I would rather see something much simpler in the way of public control. We have the question of setting up the Board, which certainly is rather an unknown quantity. The hon. Member for Luton (Captain O' Connor) made our flesh creep by suggesting what this Board would be like if the Labour party crossed over to the other side and appointed a wicked Socialist Board. I can imagine some other terrible Boards. I can imagine a Board consisted of persons mainly interested in manufacturing machinery and cables, and others interested in the coal industry.
I have said something with regard to the companies, and now I will say something about the municipalities. I think we have suffered somewhat in the past, and we are still suffering to-day, from the 1799 fact that municipalities often take too parochial a view in regard to these matters. Even the hon. Member who represents Leeds took rather a parochial view, although all Leeds may be his parish, and so did the hon. Member for Luton. We have to take a very broad view in regard to this question, and we do not want to take the view of special interests. The hon. Member for Hitchin (Major Kindersley) said it was wrong to talk about people having interests in these matters. We do not object to hon. Members putting forward their views on this subject, but naturally we have to put a little salt on the table in considering what they amount to. A man may say, "I am interested in electricity companies, but these are my views as a plain man." We had some interesting quotations from scripture by the hon. Member for Central Leeds (Sir C. Wilson), I would remind the House that the interest in Christianity on the part of people who made silver shrines for Diana was not exactly friendly; and the views on nationalisation of people who earn their money out of private companies are in the same position.
There is one other point that I want to make before I sit down, and that is with regard to the relationship between the electrical industry and other industries. I have had, as I imagine most Members have had, a very interesting little brochure from the British Electrical and Allied Manufacturers' Association, and the writer of that brochure, Colonel Morcom, says:In each case, in the Samuel and Weir Reports, we have a new controlling body— in the one case a National Fuel and Power Committee, in the other a Central Electricity Board.Then he says:Great care will have to be taken to prevent interference and overlapping of these two bodies, unless, indeed, a Central Board can be so devised as to fulfil both functions.It will be seen that experienced people think alike, because that is exactly the point we have put in our Amendment, that is to say, the necessity of collating our fuel supply and our electricity supply. We have, as a matter of fact, gone into that in considerable detail, but that will be dealt with later by other speakers. It is interesting to note that this experienced Gentleman comes to the same idea as 1800 to the need for close co-operation between these great industries, and, further, he asks for strong powers for the Central Board. I think that the Ministry have been rather timid. I think they ought to have set up an authority with full powers. I should have liked to see all the powers of the 1919 Act restored. After all, everyone knows that the 1919 Act was mangled simply by selfish interests that were strongly entrenched in the legislature, and, ever since then, those who have been responsible at the Ministry of Transport for electricity, and everyone who has been dealing with the practical question of getting co-operation in the electrical industry, has been deploring the way in which those powers were sacrificed.
We are asking that the Government should take its courage in both hands, that the principles that are implicit in this Report, the principles that are implicit in this Bill, should be carried out to their logical conclusion, and that, in addition to the technical agreements that we have embodied here, in which nationalised generation and nationalised main line distribution are suggested, we should have municipalised inter-connection in joint electricity authority areas; and let us go further than that, because, when once you touch an industry like this, you have to look round very carefully to see exactly where you are. Let it be remembered that the industries which supply the needs of the electrical industry are themselves highly concentrated, and, in effect, are almost monopolies. If you want a cable to-day, you have to go to a ring of cable manufacturers, and so it is with numerous items that you want; you will find that you are in the hands of a ring, and very often you have to go abroad, when you are told that you are unpatriotic. Therefore, you want to have some control over the manufacturing industries that supply the goods on which the electrical supply industry depends. We say that this Bill does not go far enough in any of these respects.
Finally, I suggest that this Bill— I have not dealt with minor points, because I do not think the Second Reading is the time for minor points or for mere Committee points — this Bill represents a great advance in the mind of the Conservative party, but not a great advance in its executive capacity. It knows the right ideas; it is feeling for them; but it has 1801 not quite the courage to stand up to its own Back benches. We are waiting to see the Government stand up to the interests. I want to hear the Government say: ''We realise the importance, in the national interest, from the industrial point of view, of electricity supply; and we realise that we cannot leave these important things, on which the industry depends on, in private hands." Let them say, as they have a big majority in the House, "We are able to make a big appeal to the country. Let us disregard interested opposition of all kinds and go ahead boldly on principle and then we shall not suffer." If the Government will reform this Bill on the lines we have indicated in this Amendment we can go forward. If not, the Government's knowledge of the situation is not equal to their will power, and in everything they touch they are always going to have the people who can see a bit ahead kept back and held back by the people who are dull and out of date.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Lieut.-Colonel Moore-Brabazon)
We always have an interesting speech on electricity from the hon. Member for Limehouse (Mr. Attlee). We have had several this year, not without their definite effect in the Lobby. But to-night I am wondering whether he was really pleading for what he believes in, because he pleaded for nationalisation, whereas what he really believes in is municipalisation. I sometimes wonder, if he were on these benches introducing a scheme of national electricity, what would be the attitude of Members behind him who are interested in municipal matters. He occupies a very exalted position as Vice-President, I think, of the London Joint Electric Authority, and there is already a marriage between private companies and the State, and a good deal of the future domestic happiness of that authority depends on whether he will be able to make those two interests work together for the benefit of London. In the same way, I am. convinced that, if we can get amalgamation between the companies and the Board, it will be successful for the whole of England.
When we deal with this Bill, one must approach it with a great spirit of confidence in the future of this country, or else leave it alone. The object of all of us in this House is to see that this 1802 country becomes prosperous again. We have, as we look at England to-day, a country that is singularly well situated from the point of view of electrical development. It is a district closely packed, from the industrial point of view, and where a system of coordination from the point of view of electricity ought to be very easy to effect. We have had, so far, no less than £200,000,000 invested in electrical undertakings. We anticipate that in the next 14 years another £200,000,000 will be invested, and really what we are deciding in this Bill is whether that money is going to be invested on sound technical lines, or whether we are to go on in the present haphazard way.
I do not blame anyone for the position in which we find ourselves to-day. No one 40 years ago could have seen exactly how everything was going to develop. But I cannot believe anyone is really sincere when he says the present position is satisfactory. It must be far from satisfactory. We have heard to-day the plea that Leeds should put up its own new generating station and that Bradford, only 11 miles away, should have power to put up its new generating station. In that case we should have two new super-generating stations within a distance of 11 miles of each other. I say without fear of contradiction that if that sort of thing is to continue in this country we shall be the laughing-stock of the world.
There are two schools of thought. There are hon. Members opposite who would like to nationalise the whole business from generation to distribution. There is an opposite school of thought, which practically has not been voiced to-night, which is for the taking over of all the electricity in this country by private enterprise. I would like to dwell on the latter possbility for a moment. If we did that we should have to have a super-man to deal with the problem, and as I look for the super-man to take over this vast job, I have settled on the hon. Member for Hampstead (Mr. Balfour). I will take him to be my electrical Mussolini. I will clothe him with the mantle of Faraday or, to bring it more up to date, with the coat of Mr. Insull. Then I want to see how he would deal with this problem. I am sure that he would, first of all, inter-connect his great stations, that he would close down the 1803 inefficient stations, carry the load on his main stations and stabilise their frequency. Why am I right in thinking he would do that? Because he does it already. The hon. and learned Member for South-West Hull (Mr. Grotian) has expressed fears on the question of change of frequency and the way it would be organised. The hon. Member for Hampstead organized it so as to change the frequency at a week-end, and yet my hon. Friend says that places would be closed down for months.
Let me take another point. I wish to refer to the North East Power Company. I am sorry to have to quote the North East Power Company, because it always annoys hon. Members opposite. I take the North East Power Company in opposition to some of the very efficient municipal enterprises, because it deals with a big area, whereas municipal stations generally deal with a concentrated area. When you are trying to develop a big area, inter-connection comes in as a very much bigger proposition. What have the North East Power Company done? There is an area which, from the electrical and efficiency point of view, is an example to the whole world. There they have inter-connected, and there we see happening what we hope to see happening in this great scheme of ours. There is a perfect model of what we want to do on a bigger scale throughout the whole of England. But I say that when these types of organisation have succeeded, when interconnection and standardisation of frequency have proved a commercial success, it is a very bold thing for the hon. Member for Watford (Mr. D. Herbert) to come in and question the technical lightness of inter-connection. This thing has been proved by every power company.
§ Lieut.-Colonel MOORE-BRABAZON
If the hon. Member will read the OFFICIAL REPORT to-morrow I think he will see that he was very doubtful of the advantages of this technical scheme.
§ Mr. HERBERT
I may have questioned some of the arrangements proposed in the Bill, but I expressly stated that inter-connection was one of the things which everyone agreed was advisable, 1804 and that it had been done by private enterprise already.
§ Lieut.-Colonel MOORE-BRABAZON
I am glad to hear the hon. Gentleman say that, because inter-connection is one of the ground facts of this Bill. I fail to see why what has been done in the case of the microcosm of a power company belonging to the hon. Member should not be equally successfully in the macrocosm of industrial England. It is only right that we should try to see why this particular scheme should pay. When you are paying for electric current you are paying for three things. You are paying capital charges on the cost of the generating plant, you are paying capital charges on the cost of distribution, and you are paying running costs. This Bill does not touch the distribution side at all—except in this respect —that we leave it still in the hands of the efficient purveyors of electricity, and in this hope: that if the price of electricity is to be reduced their market will be increased. But we do touch the two other points, that is the capital cost of generating plant and running costs. On the capital charge side it must be remembered that if you are generating in small stations you are having an enormous amount of stand-by plant. It is estimated that in this country no less than 68 per cent. of the capital on generating plant represents stand-by plant. That is because of the lack of inter-connection. The other point is that if you inter-connect and carry your load on your most efficient station, you reduce your running charges.
The whole point of this Bill is summed up in these words: that the advantages obtained from inter-connection are such and give you such economy as to be more than what you have to pay in interest on capital for the inter-connection. That has been proved by all electrical practice throughout the world. The electrical undertaker is really a merchant in electricity. He sells electricity. Here we have a Bill which on all sound technical knowledge will give us cheaper electricity. So we are really giving to these merchants cheaper raw material with which to deal. Yet they resent it. Never in my life before have I known a merchant who resented having his raw material reduced in price. Nor is it a question of quality. The kilowatt-hour 1805 is a "unit" all over the world; it must be one thing. Really at the back of the opposition of the power companies is the thought that their business will be upset. They believe that it is impossible to divorce generation from distribution, that the two are inter-connected from the point of view of business. One thing cannot go without the other.
The power companies were set up really to do one thing, which they signally have failed to do, and that is to supply power in bulk to towns, to the municipalities. Power companies have done wonderful work. Nobody is going to contradict that. But they have not been able to supply power in bulk to the municipalities, not because they could not in many cases offer better terms but because of the local pride of the local authority. Who have been trying to educate the local authorities as to the advantages of taking power in bulk more than the power companies? They have done their best to convert them; they have preached the gospel of taking power in bulk up and down the land, with not very great results, but still they believe in the principle of supplying power in bulk. Yet what does this Bill do? It offers to supply power in bulk to them. Now the boot is on the other leg. Instead of getting support for what is a sound technical scheme when they can supply local authorities, the moment you prepare to supply the power company the thing falls to the ground and becomes blank. That is what has happened. We, have heard to-night a good deal of talk with regard to co-ordination, as if the possibility of co-ordinating electrical supply in this country could be done by writing out a bill or by the stroke of the pen. The only thing that can co-ordinate electricity in this country is a physical entity in the shape of interconnection in the shape of a grid. You cannot get efficient generation without it. This is one of the features of this Bill. The Bill imposes on the country a grid without which everything is nothing else but talk.
I am sure many Members would like to know how a scheme like this fits in with what we consider the future development of the country. First of all, let me say a word in regard to the observations of the hon. and gallant Member for Uxbridge (Lieut.-Commander Burney) with regard 1806 to the standardisation of pressure. He maintained that the standardisation of pressure as well as of frequencies would be desirable. The standardisation of pressure is an even more difficult and technical problem than the standardisation of voltage, but the Commissioners are well on the way to standardize down the pressure for London. You may want to run a railway at a very high pressure, but you do not want to run a sewing machine on a very high pressure. It is not possible to standardise the pressure in the same way. How is this scheme going to fit in with the development that we hope for in this country? Take the question of coal. If it is thought right and economic to generate coal at the pit mouth, there is nothing wrong with this scheme. You have got your grid, you can pump it into it; you have your grid connecting the whole of England in which the power can be distributed. If low carbonisation becomes successful, you have your grid into which waste power can be pumped. Already the waste heat of blast furnaces is being harnessed. More and more will that come in, more and more will waste heat throughout the land be used. There is 250,000horse power of water power wasted in England to-day. It is not a great amount, but need it be wasted? With the grid, you can pump it into the grid. It will all help to reduce the price of electricity. The harnessing of the tides may be a practical proposition or it may not, hut still if it is to be a practical proposition, with the grid there is something whereby you can use it. Otherwise it only becomes available for the district with the high tide.
Consequently, all these advantages are apt to be stopped if we are not allowed to proceed with this Bill which sets up a Board, the first business of which is to interconnect. I hope hon. Members will not think that the moment this Board is set up it is going to interconnect everywhere irrespective of every consideration. The business of the Board will be to work out where the flow of current from one place to another will be such as to pay, and only in those circumstances will they interconnect. The Board is to view the problem from the point of view of £ s. d., and the amount of money to be earned by interconnection. It is free from Government control as far as possible, and only along those lines can 1807 we get ahead in this purely commercial business. I think it very regrettable if all the advantages which this scheme puts forward, are going to be stopped by a bogey of nationalisation. I like to look upon the Division which is to take place to-morrow as being a conflict in electricity, a conflict between the volts and the ohms. On our side are the volts, the standard unite of pressure against the ohms the units of resistance, and I would like to see an enormous majority of volts showing the great pressure there is for this particular reform. It is only through that pressure that current will flow, as it is the object of this Bill that current should flow, cheaply through the whole of this country. That is the purpose of our Measure.
§ Ordered, "That the Debate be now adjourned."—[Mr. G. Balfour.]
§ Debate to be resumed To-morrow.