HC Deb 09 November 1926 vol 199 cc962-70

(1) Subject to the provisions of this Section a joint electricity authority and any local authority authorised by special Act or by Order to supply electricity may sell electric lines, fittings, apparatus, anal appliances for lighting, heating, and motive power, and for all other purposes for which electricity can or may be used (in this Section called "electric fittings"), and may instal, connect, repair, maintain, and re- move the same, and with respect thereto may demand and take such remuneration or rents and charges, and may make such terms and conditions as may be agreed upon.

(2) The exercise of the powers of this Section shall be subject to the following restrictions:

  1. (a) The joint electricity authority or local authority shall not manufacture electric fittings unless expressly authorised to do so by special Act or Order;
  2. (b) The joint electricity authority or local authority shall not sell electric fittings except—
    1. (i) to a consumer or a person who intends to be a consumer of electricity supplied by them; or
    2. (ii) to a contractor who requires such fittings to enable him to supply them to a person who is, or intends to be, a consumer of electricity supplied by the joint electricity authority or local authority;
  3. (c) The prices charged by a joint electricity authority or a local authority for the sale of any electric fittings shall not lie less than the recognised retail price, unless the sale is to a contractor, in which case the prices shall not be less than the recognised trade prices, and if any question shall arise as to what are the recognised retail or trade prices of any electric fittings, that question shall be determined by the committee appointed as hereinafter provided;
  4. (d) Every such joint electricity authority or local authority shall so adjust the charges to be made by them under this Section as to meet any expenditure incurred by them in the exercise of the powers of this Section (including interest upon and sinking fund charges in respect of money borrowed for the purposes of this Section);
  5. (e) The total sums received and expended by any such joint electricity authority or local authority under this Section in each year, including interest upon and sinking fund charges in respect of money borrowed for the purposes of this Section, shall he shown separately in the published accounts of the electricity undertaking of such joint electricity authority or local authority.

(3) The Electricity Commissioners shall appoint a committee comprising representatives of associations representing local authorities who are authorised undertakers, contractors, and persons engaged in the business of making and persons engaged in the business of selling electric fittings, such committee to be appointed after consultation with those associations, and that committee shall determine any question which may be raised under this Section as to the recognised retail or trade prices of any electric fittings, and shall advise and assist the persons concerned as to the method of giving effect to the provisions of this Section.

(4) The purposes of this Section shall be deemed to be purposes for which the joint electricity authority or the local authority may borrow money.

(5) In this Section the expression "contractor" means a person engaged in the business of selling and installing electric fittings.—[Mr. Looker.]


As regards this Clause, it appeared to me at first to be outside the scope of the Bill. But my attention has been called to a somewhat similar Clause in the Act of 1919, entitled "Supply of apparatus," and, in view of that Clause, I am not prepared to rule against this Clause.

Clause brought up, and read the thirst time.


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

The object of this Clause is to enable all local authorities who are authorised to manufacture and sell current to the public also to carry out the complementary business of selling to the public electrical fittings which are necessary to enable the benefits of that electric supply to be received. It is one of the objects of this Bill to carry out the recommendations of the Weir Report, and on this point the Weir Report said all undertakers should be encouraged not only to sell appartus, but also to provide showrooms and exhibit appliances. The Advisory Committee on domestic supplies which was appointed by the Electricity Commissioners also recommended that full powers should be conferred on local authority undertakers for the supply of fittings. This Clause is designed to carry out those recommendations, but it does a good deal more; it provides the only avenue by which it is possible to bring the benefits of electricity to thousands of the smaller householders. If you are to give these small householders the benefit of electricity, you must create the necessary facilities which will enable them to take advantage of them, and, if you do not do that, you will fail by a very large margin to achieve the beneficial results which contribute perhaps the main justification for passing a Measure of this description. Your main difficulty in affording these small householders the benefit of electric light lies in the cost of the installation. It has been estimated that the cost of installation of a house rated at £15 is something like £12, and when you get a house rated at £50, the cost of the installation is something like £60. The provisions of these sums in a lump is beyond the means of the immense mass of smaller householders. Unless you can get over this obstacle, you will deny the smaller class of householders the benefits of the Measure.

Commander BELLAIRS

How are they to get the benefit when they are charged the ordinary retail prices?


They will get the benefit, because, unless you can provide the facilities to enable them to pay the initial cost of installation, they will not be able to get electric light at all. The only way you can give them these facilities is by a great extension of the hire purchase system, and the only avenue for all practical purposes by which you can give the benefit of the hire purchase system is through local authorities who are authorised to supply electricity. The contractors, partly because their financial resources are not equal to it, and partly because they are not able to see their way to do it, in very few cases have supplied these smaller householders with electrical appliances on the hire purchase system, and, where local authorities who have the power to sell fittings have carried it out, it has meant an enormous increase in their customers, particularly among the poorer classes of the community. It is with this principal object in view that I wish to commend this Clause to the consideration of the House. It is an agreed Clause. The private contractors now recognise that local authorities have no desire unduly or unfairly to compete with them, but are only anxious to co-operate with them in providing the neighbourhood with a supply. I dare say hon. Members have received a pamphlet signed by electrical contractors' associations which are strongly in favour of the Clause, after several months' consideration.

Various local authorities who have already been authorised to manufacture electricity have been circularised recently with the idea of finding out what the position is regarding the supply of fittings, and whether or not they are hampered in carrying out their duty in providing a utility service by lack of means to sell fittings on the hire purchase system. The figures are illuminating. Out of 79 district councils, 50 have said in most unhesitating terms that they are enormously hampered in providing electrical facilities because they have no power to provide them on the hire purchase system. Out of 64 boroughs who returned answers to questions sent them, 50 said they were overwhelmingly hampered for lack of these facilities. One of the biggest boroughs says many applications for a supply, with requests for wiring the houses on the hire purchase system, have been received. Practically all new houses are wired in the building, but there are hundreds of potential consumers in houses of the older type if the hire purchase system could be arranged. When we turn to the other side of the picture, that is to say the case of those local authorities who are authorised to sell, the figures are more illuminating still. In Ipswich they have completed 1,200 installations. In South Shields up to June, 1926, 12,000 applications were received, and over 7,000 were connected, while at Newcastle-on-Tyne, which is operated not by a local authority but by a company, in six months they had 6,860 applications for wiring under the hire purchase system, and 2,500 have been connected. All the trend of recent legislation has been to give local authorities the necessary powers to sell electrical apparatus, which would furnish a supplementary branch to their power to manufacture and sell electricity, and during this Session the House on seven separate occasions has specifically authorised this power to be granted to corporations applying for sanction to manufacture electricity, and it is absurd to suppose that this trend of legislation is going to be reversed.

The present position is that 75 per cent. of the municipal authorities engaged in supplying electricity have this power, and the other 25 per cent. are deprived of it. It is rather illogical and inconsistent to refuse the remaining 25 per cent. what the other 75 per cent. have. Up to now the opposition to the grant of these powers has come from the representatives of electrical contractors and from those hon. Members who take the view that municipal trading of any description is a thing to be condemned and reprobated by the House. I know quite well that, in spite of the contractors' agreement, this Clause will look like heresy to many Members on this side of the House, but I beg them to look at the matter with a more open mind. I am as much opposed to the general principal of municipal trade as they are, and should oppose any Measure which purported to give local authorities power to compete with ordinary tradesmen in the commodities of daily life. But when you come to the provision of utility services, the matter stands on a very different footing, and if we are to give localities the benefit of these services, which can in many cases only be carried out by a local authority, it is vital that we should not tie the hands of that local authority in any way. If we are to continue this principle of encouraging local authorities to provide these utility services, but at the same time hamper them by refusing facilities by which alone the great mass of the people can take advantage of them, it is rather like encouraging a man to engage in a race for the benefit of the public on the condition that he does not make use of one of his legs. I commend the Clause to the consideration of the House, and hope that by its means we shall he able to extend the benefits of electricity to the mass of small householders.


I beg to second the Motion.

The passage of this Clause will be hailed with a sigh of relief by every municipal electricity undertaking in the country. It will also remove a very grave anomaly because, although a number of municipalities hold these powers, they have only been prevented from putting them into force by reason of the opposition, which has been so very strong. Fortunately, now we have reached agreement with the contractors, and I hope one of the most vexed questions connected with electricity supply will be removed once for all. It is only right and just that municipal bodies should have the same rights and privileges as companies. I have been for many years a member of a municipal electricity undertaking possessing these powers, and it has been unable to put them in force by reason of the opposition of the electrical contractors. I hope the Clause will pass, and that the difficulties and troubles which have hampered municipalities in the past will be removed.


I am very glad to find myself in entire agreement with the Mover and Seconder of the New Clause, and I only intervene because I was one of those who in Committee upstairs opposed this innovation in a general Act, to provide very widely extended powers of trading by municipalities. Since a general agreement has been arrived at between the interests concerned, the various contracting associations and those responsible for the administration of municipal undertakings, cannot now oppose these powers being given in this Act. In Committee upstairs, my right hon., and learned Friend the Attorney-General, with a generous conception of the wideness of the privilege given to the Committee to express its views, allowed us to have a free vote. I do not know what action he will take this evening, but if we are allowed a free vote. I hope that those hon. Members on this side of the House who entertained serious doubt as to the rectitude and public wisdom of inserting a provision of this kind in an Act of Parliament, will see that there is a good reason for their views and support the insertion of the New Clause. In saying that, I wish to register my personal opinion that this House ought always to take the greatest care and to exercise the greatest caution in adopting any proposals which tend to the extension of municipal trading; generally. I am satisfied that the provisions of this New Clause are so guarded and so in conformity with what would be best in the interests of municipalities, and particularly the extension of the housing powers of those municipalities, that I think the House ought to accept the New Clause.


As the House has been already informed, this Clause, or a substantially similar Clause, was moved in Committee, and I thought it right then on behalf of the Government to say that I would leave it to a free vote of the Committee to decide as they thought fit. I am proposing to take the same course this evening. My reasons for taking that course are, that on the one hand there is a strong feeling among Members of my party against what is known as municipal trading, a feeling which to a large extent I share, but on the other hand one has to remember that this particular power has already been given to, I think, 80 different local authorities out of some 380, and that this very Parliament in which we are now meeting has during the last two years seven times passed Bills which conferred this power upon individual local authorities. There is a good deal to be said for the view that it is illogical that whenever a local authority goes to the expense of promoting a special Bill, it should be able to get the power to sell electrical fittings, whereas when a general power is sought the right is refused. The present position is, as the House no doubt realises, that under the Act of 1919 any local authority may let out on hire electric fittings, but no local authority can sell such fittings unless it is specially empowered to do so by a special Act of Parliament. The suggestion is that this New Clause will remove that anomaly by allowing powers to sell without a special Act. It does not seem to me that this is a matter which raises a party question, and it is not a matter which affects the particular proposal which is my main interest in this Bill, namely, that of setting up the Board and what is known as the grid system. Therefore, I think the fairest thing to do to the House and to those hon. Members who feel strongly about this matter, is for me to say that the Government will take no side and will leave it to a free vote of the House.

Captain SHAW

I am against municipal trading, speaking generally. I realise that in regard to the very small houses which pay a small rent, if the occupiers wish electricity to be installed in their houses and they apply to a contractor to put it in, that contractor, naturally, is going to get a profit out of the work. If on the other hand the local authority who are supplying the electricity are empowered to put in the installation on their own terms, it will mean in many cases that they will put it in without any cost to the householder, because by so doing there will be a greater consumption of the electricity which they supply. It seems to me that in those cases where the local authorities are empowered to instal electricity, small houses paying small rents will get the electricity installed, whereas otherwise they would not be able to get it. I would suggest that an Amendment should be added, to the effect that local authorities should only be allowed to instal electricity in small houses of a certain low rental value at the undertaker's own price. If that were done it would mean that the local authority would only instal plant in a house if it were of a small rent, decided beforehand, and would be prohibited from selling any electric fittings to the rest of the community except at recognised retail prices. If the Clause goes through as it stands, it will prevent many small houses of small rentals from getting an installation of electricity.

Question put, and agreed to.

Clause added to the Bill.