§ "Notwithstanding anything in Section nineteen (Application of Electricity (Supply) Acts to Board) or any other provisions of this Act, the Board shall not exercise any of the powers conferred on authorised undertakers by Section five of the Electricity (Supply) Act, 1922, and accordingly the Board shall not lend money to, or subscribe for, any securities issued by, or guarantee, or join in guaranteeing the payment of interest on any money borrowed or securities issued by a joint electricity authority."—[Sir James Grant.]
§ Brought up, and read the First time.
§ Sir JAMES GRANT
I beg to move, "That the Clause be read a Second time."
It is obviously necessary that some such Clause should be introduced, because, under Clause 19, the Board will be constituted as authorised undertakers, and, under Section 5 of the Act of 1922, authorised undertakers may give financial assistance to a joint authority. It would be clearly unfair that the Board should be able to advance out of its own income funds or out of funds guaranteed by the national Exchequer money to a joint authority to compete with other undertakings. This question was discussed very shortly in Committee upstairs, but it is not quite clear from the Attorney-General's reply whether he fully appreciated the object which my hon. Friend the Member for the Hulme Division (Sir J. Nall) had in raising it. I hope that on this occasion the right hon. Gentleman will give further consideration to the point and that we may have from him a. more sympathetic reply.
§ Sir J. NALL
I beg to Second the Motion.
Under the present law authorised undertakers in the area of an authority may subscribe, in fact do subscribe, to the funds required by the joint authority; but it would be unfair if the funds guaranteed by the Public Exchequer should be advanced by the Board to a joint authority to compete with other undertakings. Particularly would it be unfair if the Board should devote its own income fund, or the fund which it may raise under the guarantee, for purposes which would enable the joint authority to compete with other undertakers from whom the Board have provided these funds. Under Clause 19 of the Bill the Board will be constituted as authorised undertakers. That, of course, is necessary for several reasons under the Bill. This possible application of that status arises under Section 5 of the Act of 1922, which enables authorised undertakers to give financial assistance to the joint authority. While there is good ground for giving the Board the status of authorised undertakers in many respects, it does not seem to be necessary, and indeed it can be shown to be unfair, that they should exercise that particular power of giving financial assistance to the joint authority. I do not see that the adoption of this new Clause can in any way imperil the work of the Board in the carrying out of its proper functions under the Bill. It is merely a safeguard to prevent the abuse of those functions.
§ The ATTORNEY-GENERAL
I rather hope that this Amendment will not be pressed, because I cannot help thinking that it is an illustration of the very danger which the hon. Member for Lime-house (Mr. Attlee), who knows a great deal about these electrical matters, was afraid of, namely, overloading the Bill with a great deal of unnecessary matter in order to meet what are really wholly imaginary fears. In the first place, it is at least very doubtful whether the Board has the power which is here supposed to be expressly taken away from them. The power given by the 1922 Act to authorised undertakers is given only to undertakers whose area is situated wholly or partly within a joint electricity district. It is in the highest degree doubtful whether it would be held that the Board, whose area extends over the 927 whole country, comes within that definition. Secondly, there is not the slightest reason to apprehend that the Board, which is constituted for wholly different purposes, would set about trying to lend money to joint electricity authorities, of which there are three scattered over the country, although there may be more later on. As to the danger that it would lend money which was under a Treasury guarantee, the answer is, of course, that if there were any such danger apprehended by the Treasury, which is the guardian of the public purse, it has express power to limit its guarantee and to impose conditions, and it would very soon see to it that money was not used for purposes wholly alien to the purpose for which the Board was set up. Both on the ground that the Board would not conceivably do it if it could, and that it could not do it if it would, it is unnecessary to have this new Clause.
§ Mr. G. BALFOUR
My right hon. and learned Friend, in replying to the hon. and learned Member for Hulme (Sir J. Nall), adopted the same line of argument which is familiar to all who sat through our protracted proceedings in Standing Committee on the Bill. One sentence of the right hon. Gentleman was: "There is no reason to apprehend that the Board will lend money." Will it be any defence, if the Board in fact lends money to a joint authority and all the other authorities are violently protesting, that that was not the intention or the spirit of the Bill, and if they refer back to the proceedings in this House and to the words of the learned Attorney-General to the effect that there was no reason to apprehend that this thing would be done? Will that be held to be a proper defence of the rights and privileges of those people who at that time protested against such an action? I rather think not. The fact is that the Board will become an authorised undertaker, and, being that, the Board will have the privileges which attach to an authorised undertaker, in addition to the duties and obligations imposed on the Board under this Bill.
In these circumstances, is it right or reasonable or honest that we should set up a Board which operates in a dual capacity—in the capacity, first, of 928 approving schemes, and, having approved the schemes, to have the right to make advances to the joint electricity authority which is to be set up in three parts of the country, and this Board to have the power to make advances for the purposes of the joint electricity authority, who are to regulate, if we are to judge by the joint electricity authorities which have already been established, as to the operations of many of the authorised undertakers operating within the area of those undertakings? I trust that my right hon. and learned Friend will pay some slight attention to the pressing arguments advanced from this side of the House by his political friends and supporters, rather than always advance as a reason against our arguments the arguments of the hon. Member for Limehouse (Mr. Attlee).
Lieut.-Colonel Sir FREDERICK HALL
I cannot help thinking that the statement made by the learned Attorney-General confirms the necessity for having this new Clause, or something like it. It may not be necessary to have these exact words. The learned Attorney-General expressed doubts about the Board having the power. When it is a question of setting up important regulations, surely, if there is any doubt as to whether power is given to the Board, there cannot be the slightest harm in putting in a Clause limiting the powers that are desired. The Attorney-General is undoubtedly desirous that these powers shall not be given, but if he, with all his legal knowledge, is not certain whether the Board are or are not empowered in the way suggested, surely now is the time to make it perfectly plain? Too many voluminous Bills go through this House with ambiguous terms in them. When it is acknowledged that there is an ambiguity, surely it is advisable to put the matter right when the Bill is passing through the House? We had protracted debates on the Bill in Committee, and we do not desire a repetition of these protracted debates here. At the same time we do not want the Government to think that we are less desirous now of seeing alterations made in the Bill. Some of us are in deadly opposition to the Bill; I am myself. If we do not prolong the proceedings I hope the Government will not decide against giving us reasonable Amendments to the Bill.
If I understand aright the position of the learned Attorney-General, it is that he does not think it advisable that the power which we seek to prohibit by this Clause should be exercised, that if the Board wish to exercise the power it is doubtful whether they have it, and that they would be unlikely to exercise the power if they had it. Therefore, his only objection to accepting the new Clause is that it lengthens the Bill. There is here a point of very considerable importance to the State. That is the question of the expenditure of public money by a statutory body without any control by Parliament. The Attorney-General, I know, would be opposed to anything of that kind taking place, and he has suggested that the Treasury would have power to withhold their guarantee and so prevent the expenditure of money uncontrolled by Parliament. But may I point out that this body will have two funds which it can use? One is the fund which it gets from the Treasury. The other is a fund which it does not get from the Treasury but which it gets from the various undertakings within an area. What happens is quite obvious. If there is going to be a wish to spend money in this way, all that this particular statutory body has to do, in order to evade the control of Parliament and the Treasury, is to say that it is spending the money not out of what is guaranteed by the Government but out of the other funds, and the funds obtained in that way being thus depleted, the Treasury will have no good reason for withholding the money which may be necessary for expenditure on other purposes. If the learned Attorney-General has no serious objection to this new Clause, apart from the statement that it may add somewhat to the length of the Bill, he should, in the interests of Parliament generally and of our old traditions with regard to the control of expenditure, accept this very moderate and very useful Amendment, which at any rate can do no particular harm even according to the Attorney- General's own views on the, subject.
§ Question, "That the Clause be read a Second time," put, and negatived.
§ Mr. SPEAKER
The next proposed New Clause—[Advances to be made by intending purchasing authority]—is out 930 of order. It seems to me to impose a possible charge on the rates which cannot be done on the Report Stage of a Bill.
§ Sir J. NALL
May I submit, Sir, that the proposed New Clause imposes no charge on the public Exchequer, but deals only with the relationship between local authorities and the undertakings controlled by companies in their areas?
§ Mr. SPEAKER
I did not say that it imposed any charge on the public Exchequer, but it imposes a charge or possible charge on the rates. It would he out of order to impose a charge or a possible charge on the rates on the Report Stage of the Bill. Sub-section (4) of the proposed New Clause clearly contemplates an additional charge on the rates.
May I, with all respect to your ruling, Sir, suggest that that particular sub-section although it forms part of the proposed New Clause is not the most important part. The question of obliging notice to be given, as to whether powers are to be exercised or not, is of very considerable importance, and I do not know if, in these circumstances, you, Sir, would allow the proposed New Clause to be submitted omitting Sub-section (4). I suggest it is of some importance that notice should be given where there is an intention to exercise this right.
§ Mr. BALFOUR
May I direct your attention, Sir, to the wording of Subsection (5) of the proposed New Clause which says that money borrowed in this way shall not be reckoned as part of the total debt of the local authority and shall not in any way enter into the debt arrangements of the borough—clearly indicating that the advances to be made and the service of those advances as to interest and so forth, will be met out of the undertaking, that the charge will be on the undertaking and that no charge is imposed on the rates. As I understand it, this is a convenience Clause to enable the purchasing authority to say in advance, "You may go on and expend, and we will make the advance but you will have to take charge of the service of the debt, and the interest on that money." I think, with great respect, that in these circumstances the Clause does not impose any charge on the rates, but is a mere matter of convenience.
§ The ATTORNEY-GENERAL
May I point out that my hon. Friend who has just spoken only read down to the middle of the sub-section which he cited. The proposed new Clause does not say merely that money borrowed under this Section shall not be reckoned as part of the total debt, but that it shall not be reckoned as part of the total debtfor the purposes of any limitation of borrowing under the enactments relating to borrowing by the local authority.In other words, it can be borrowed in addition to the total amount which may otherwise be raised. If hon Members look at the earlier part of Sub-section (5) they will find the wordsThe raising of money for the purpose of advances under this Section shall be a purpose for which a local authority may borrow.It is quite clear that the result would be to impose a liability on the borough which, if not met out of other sources, would be a liability on the rates.
§ Mr. BALFOUR
May I make myself quite clear? I think the right hon. and learned Gentleman will acquit me of any intention of stopping deliberately at any particular word in the proposed new Clause. I think my right hon. and learned Friend has not quite understood the meaning of this Clause. Quite clearly if a local authority gives notice for the purchase of an undertaking and makes arrangements to carry on that undertaking, there must be something which will enable them technically to barrow the money without interfering with the loan arrangements of their borough. I think it is clear that the whole service of any debt so incurred will be a charge on the undertaking, and that is why specific arrangements are made in this Clause to overcome the difficulty which would arise if the local authority had power to give notice in advance, but had no power to say, "Go on and expend; we will make advances to you, and you, the undertaker, will cover the interest." That is the point involved. The purpose of the Clause is to give specific power to the local authority to raise these moneys, but the raising of the moneys is not in any way to affect the loan arrangements of the borough, and the undertaker will have to take care of the service of the loan.
§ Mr. SPEAKER
The purpose of the Clause may be quite excellent. On that point I prefer to say nothing, but it is clear that Sub-sections (4) and (5) contemplate a possible charge on the rates, whether it be large or little. My duty is to follow the Rules of the House, and I cannot allow a proposal to impose a possible charge on the rates, simply because it is a little one.
§ Mr. BALFOUR
I submit that this point would be met if the proposed New Clause were amended by the addition of the wordsprovided that no charge shall be put on the rates clue to the operation of this Section.That would make it quite clear.
§ Sir J. NALL
May I ask you, Sir, whether you would allow me to move the first three Sub-sections as the proposed New Clause?