HC Deb 10 November 1926 vol 199 cc1180-93
The ATTORNEY-GENERAL

I beg to move, in page 11, line 29, to leave out from the word "Board," to the first word "the," in line 31, and to insert instead thereof the words as respects any area or part of an area notify that they are in a position to supply electricity. This is practically a drafting Amendment, and its object is to enable the Board to start in respect of any part of an area as soon as it is ready to supply that area, even if the scheme has not been completed in respect of the whole area.

Amendment agreed to.

Further Amendment made: In page 11, line 33, after the word "area," insert the words "or part thereof."—[The Attorney-General]

The ATTORNEY-GENERAL

I beg to move, in page 11, line 38, after the word "that," to insert the words subject to the provisions of this Act relating to the rights of owners of selected stations. This Amendment is to make clear what everyone would desire to see provided, namely, that the owner of a selected station is to be entitled to buy the energy of that station from the Board irrespective of whether the station is in a power company's area, or a joint electricity authority's area, or any other area. It is obviously intended that the owner shall be in a position so to do, but it might be doubtful unless these words are inserted. I see that my hon. Friend the Member for Moseley (Mr. Hannon) has a similar Amendment down.

Mr. BALFOUR

I do not want to debate this Amendment, but I should like to call attention to the fact that it does very materially alter the Clause as it stands. Does the Attorney-General really intend that? The Clause as thus amended would provide that the Board shall not 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…. subject to the provisions of this Act relating to the rights of owners of selected stations. I am not going to press the point, but I should like to make the observation that I think there is more in this Amendment than the House might imagine from what my right hon. Friend has said.

Amendment agreed to.

Mr. HERBERT

I beg to move, in page 11, line 42, to leave out from the word "company" to the word "or" in page 12, line 4.

I should explain that this Amendment deals with the provision that the Board shall not supply electricity direct to an authorised undertaker situated in the area of supply of a power company without the consent of that power company. Then follow the words which I am proposing to leave out, namely: 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 undertakers or any part thereof; Then it goes on again to say: Or unless the power company are unable or unwilling to supply electricity"— and so on. When this Clause came before the Committee, the provision that the Board should not supply electricity to authorised undertakers in the area of supply of a power company without their consent was only qualified by the words which I am now proposing to leave out; but there was added in Committee a further qualification, namely, that relating to the power company being unable or unwilling to supply electricity on reasonable terms and so on. I venture to hope that the Minister in charge of the Bill will accept this Amendment, and that, having got the qualification which was put in during the Committee stage, he will consent to leave out the first one.

There is this to be said for the power companies, and it is right that the House should remember it, that, under their particular Acts, a large number of corporations and local authorities, who were authorised distributors, obtained an absolute veto on the rights of the power company to supply electricity within the area. Many of those local authorities, however, so far from exercising that veto, are, in fact, actually drawing supplies from these power companies, or are about to do so. That being so, it seems rather unreasonable that the existence of this old right of veto, which is rather a technical matter, should he used to hamper the power companies in circumstances of this kind. I would submit that it is quite sufficient in every case that the only conditions under which the Board should be authorised to supply electricity without the consent of the power company should be that the power company is unable or unwilling to do it on reasonable terms and conditions, to be determined, in case of dispute, by the Electricity Commissioners. That seems to me to be very wide. If the Electricity Commissioners consider that the terms are in any way unreasonable, they can do without the consent of the power company. If, on the other hand, the power company is able and willing to do it on reasonable terms, as they are doing at the present time for undertakings which have the right of veto, I suggest that that is a sufficient qualification, and that the other may very well be left out.

Mr. BALFOUR

I beg to second the Amendment.

I gather that my right hon. Friend is not going to accept this Amendment, and, therefore, I shall be able to say what I have to say without waiting for his reasoned argument, knowing that my fate will be the same as on previous occasions. I know that my right hon. Friend is powerless to listen to arguments and make a concession unless the Executive who have this matter under control are prepared to issue their instructions to him, and that he has not received such instructions. Any hon. Member reading these words which my hon. Friend desires should be taken out, would imagine that there was a desire to interfere with any existing right of veto on a supply going into a district. That is not the case at all. This Amendment, while dealing, certainly, with those cases, in which few people are concerned at the moment, deals also with rights of veto in Provisional Orders and Acts of Parliament, which rights were put in many years ago in cases where in fact to-day the whole of the districts are receiving a supply in this way. In Lancashire, for instance, the power company, in relations of the greatest goodwill and amity with all the authorities, is to-clay giving some 40 local authorities the whole of their supply, admittedly on most economical terms; but the old right of veto still exists, so that it would be possible to forbid them to give that supply. The right of veto is not in practical effect, although it is still in the Provisional Order or Act of Parliament.

To leave these words in would assist the objects of hon. Gentlemen opposite. Having got a central board—and, moreover, a central trading board, notwithstanding all that my right hon. Friend has said—owning properties, they would be in a position to say, "Here are nest-eggs scattered about the place receiving bulk supplies, admittedly economically. We find that they have an old right of veto, and we can go back and say to them that they have that right of veto, and that we will give them a supply at a certain price." Under the protection of the guarantee they need not pay any interest for five years on the money used in affording the supply at a rate winch would be uncommercial and disastrous to any industry quoting it, whether it were a State industry or a private industry. They will thereby be able to go into those areas where this old right of veto exists, and absolutely cut out the supplier, possibly a local authority or, as in the case I have cited, a power company supplying municipal areas. In that case the power company or supply authority, whoever they may be, may know that the price quoted is too cheap, and that the authority is not doing it on a commercial basis, because they are not under the obligation to account for their interest for five years if they produce statistics and figures to show that the rate is a right rate, but in the meantime these areas can be taken away from the people who are giving the supply on most economical lines possible by any commercial organisation. The company will be powerless, and the business which has been created, where supplies have been afforded for many years, before there was any thought of central boards or any other authority, will be taken from them compulsorily under the provisions of this Section. My right hon. Friend cannot see his way to accept the Amendment, but I should like him to say a word or two, if possible, of explanation.

The ATTORNEY-GENERAL

I think I can disabuse my hon. Friend's mind and the mind of anyone who has been misled as to what seems to them to be the reason why I cannot accept the Amendment. My hon. Friend began by saying I could not accept it because I had received the orders of the Executive who control the Ministry. I do not even know who the Executive who control the Ministry are supposed to be. The only Executive that controls the Ministry is the Cabinet, and I have received no orders of any kind from the Cabinet with regard to the Amendment, nor indeed have I received orders from anyone. I am going to ask the House to reject the Amendment for the same reason that I asked the Committee to reject it and for the same reason that the Committee, after hearing the matter very fully discussed, resolved that it was undesirable. Let me explain—because I am not sure that it is quite clear in this somewhat complicated Clause—what it is that we are discussing. Under Clause 10 the Board is bound to supply electricity to any authorised undertaker who asks for it. Then comes the proviso that the Board is not to be allowed to supply directly to authorised undertakers in the area of a power company without the power company's consent. That is to say, where Parliament has given a monopoly to a power company this Clause shall not interfere with it. The power company shall have the right to say it will be the intermediary between the Board and the undertakers within its own area, and of course there are provisions later on to prevent an undue price being charged.

Now then comes one condition. There are some power companies in whose area there exist undertakers, chiefly, I think, municipalities, which have a right to veto the entry of a power company into their town. There may be a town within the area of a power company and the position is that the local authority may say to the power company, "You shall not supply within this town," and what we are anxious to do is to preserve that right. Where you have a local authority which has the right at present to say to a power company, "You shall not supply in our town," we think it is right that we shall still maintain that position and allow that local authority to take its supply directly from the Board and not merely to allow the power company to come in and supply the current which the Board is willing to supply. What the mover and seconder desire is that in cases where such a veto exists, none the less the local authority in question shall not be allowed to exercise the veto but shall be compelled to take its supply through the intermediary of the power company. We do not think that is a reasonable suggestion. The reason the seconder gave for the Amendment is in some way an encouraging one because he said if there was this right of the local authority to get current directly from the Board he knew what would happen. The Board would supply at a price with which the power company could not hope to compete.

Mr. BALFOUR

Not at all. I said they could supply owing to the fact that they would be in a position to quote a price which had no relation to the cost to themselves of manufacturing the electricity in order to take the business, knowing that they could correct the price in subsequent years.

The ATTORNEY-GENERAL

If my hon. Friend did not mean that the Board could quote a price with which the power company could not compete, I do not understand his argument. If he meant that he did think the Board would quote a price with which the power company could not compete but that the price would not be fixed on commercial lines, I would ask him to study a little more carefully the Bill to which he has devoted so much attention, because by Clause 11 the price the Board is allowed to charge is rigidly fixed and they cannot quote below commercial prices. Therefore the Board could only under-quote the power company if it were the fact that they could produce so much more cheaply than the power company could hope to do that the power company could not hope to compete. I think very likely that will happen and I quite think the effect of the Board supplying electricity under the scheme will be that electricity will be supplied much more cheaply than it can be generated outside the scheme. That is the object of the Bill.

Mr. BALFOUR

The difficulty—and I have had experience and proof of it already—is that quotations are made on a calculation which satisfies everyone but which is falsified in practice, and I have cases at present of calculations which have been submitted by public authorities which have been falsified in practice. They could not be justified in practice.

The ATTORNEY-GENERAL

In this case the. provisions are elaborately set out in Clause 11 for the fixing of the price and the Electricity Commissioners, whose competence and impartiality my hon. Friend has said he does not challenge, have to be satisfied before the Board can fix the tariff. There is no reason to doubt that they will see to it that a proper price is fixed. There is no reason why a local authority, whose interest it is to get a cheap supply and who have a right at present to get it, should be debarred from it because the power company wants to supply at more expensive rates. On this ground we have carefully preserved the rights of the power company in all cases where it has at present a statutory right to supply electricity, and in cases where it has no such statutory right we see no reason why this obligation should be imposed.

Mr. ATTLEE

Of all the roles which the hon. Member for Hampstead (Mr. Balfour) has played the most engaging is that of the philanthropist. The power company comes into an area and everything in the garden is lovely, current is supplied at the very lowest prices and it is all settled so nicely. But everyone knows it is the existence of the veto that has brought down the power company's price to something reasonable, and the endeavour of the Amendment is to sweep it away. It is clear that what the hon. Member is aiming at is to get, as far as he can, a monopoly in the area. I was rather interested to hear his assertion that the Ministry is in the hands of some executive. The Attorney-General seemed to wonder what that could be. We know perfectly well on this side because we are charged with it ourselves. Of course it is Moscow. They think the hidden hand of the Bolshevists has made the Chairman of the. Anti-Socialist Union introduce this Bill. Now he realises the credulity of hon. Members on the other side. The things they believe of us are the same as they believe of him.

Mr. KELLY

I rise because of the reference of the hon. Member for Hampstead (Mr. Balfour) to what is taking place in Lancashire. He refers to many of those municipal undertakings which are taking their bulk supply from a private company which operates in that part of the world. I notice he suggests that this right of veto that the municipalities possess should be taken away. I wonder what authority the hon. Member for Hampstead has either from Rochdale or any other of those municipalities for supporting such an Amendment as is here suggested, if it means that veto is to be taken away from them. As far as we are concerned, we shall make a fight for the municipalities, to redeem their veto, and the only thing we feel sorry about is that they ever went to private companies even to secure their bulk supply.

Amendment negatived.

Colonel ASHLEY

I beg to move, in page 12, line 31, after the first word "Board," to insert the words then, whether or not those undertakers are also the owners of a selected station. The object of this Amendment is to provide an option for the undertaker to have a dispute as to costs settled either by the Electricity Commissioners or by an appeal tribunal. I think the House will agree with me that it is inexpedient to have an appeal from the Commissioners and, in addition, a hearing before an appeal tribunal. Therefore, the proposal in this Amendment is that the undertaker shall have an option to go to the Commissioners or to the appeal tribunal. The existing Clause was accepted in Committee upstairs by the Attorney-General on the understanding that he reserved his right to make an alternative suggestion. I am in the recollection of the House when I say that a previous Amendment on the same lines has been accepted and passed.

Mr. ATTLEE

I think the right hon. Gentleman has moved one Amendment and spoken in respect of another.

9.0 p.m

Sir J. NALL

This Amendment is of importance because it has relation to the next Amendment to be moved on behalf of the Government. If it is a question of demanding supplies it is of very great importance, because if the Board is to impose the condition that the whole of the requirements of that particular undertaker must be taken from the Board, some of the larger organisations in the country may be placed in a great difficulty, and may, in fact, be penalised by the price they have to pay. Where an undertaking has a series of stations inter-connected into a common system and the Board come along and select one station, and the Board is to say, "We will only supply you on condition that you take the whole of your supply from us and close down all your other stations," great dislocation will result. I do not think, from what I. have heard outside, that that is the intention, but it is a possibility under the Bill as it is drawn. This Sub-section (3) provides that, if an authorised undertaker owns a generating station which is not a selected station, and demands a supply from the Board, he can be required by the Board to take the whole of his supply from them. What is the intention in administering this Clause as it is proposed to be amended? Clearly, the owner of a selected station will demand a supply, and because he is also the owner of a non-selected station, he ought not to be penalised, and ought not to have the whole of his system dislocated because of this provision. I think it would assist in the consideration of this particular series of Amendments if the Government would at this stage give some further explanation how they expect this to work, before we can really decide which Amendment ought to be adopted.

Amendment agreed to.

Mr. JAMES BROWN

On a point of Order. There is an Amendment in my name on the Paper in page 12, line 18, at the end, to insert the words "(d) supply electricity within the area of supply of the Ayrshire Electricity Board without the consent of that Board. I have been sitting patiently, waiting to speak on that Amendment, and it has not been called.

Mr. DEPUTY-SPEAKER

It would not be strictly in order to go back on an Amendment which has been already passed over. The Amendment to which the hon. Member refers has not been selected, and it is not customary to give a reason why an Amendment has not been selected. As the hon. Member has raised a point of Order, I would explain that this Amendment deals with a particular area. If we were to deal with all the different areas which the Bill may affect, there would be no end to our discussion.

Mr. BROWN

This is a very important area.

Mr. DEPUTY-SPEAKER

If we were to discuss specific areas, they would all be important areas.

The ATTORNEY-GENERAL

I beg to move, in page 13, line 21, to leave out from the word "Commissioners" to the word "to" in line 23, and to insert instead thereof the words who if and so far as the ground of appeal is that the cost of taking the supply from the Board will not be less than the cost at which electricity is being produced by the undertakers shall, if so requested by the undertakers, refer that question. This is an Amendment designed to give an option to any aggrieved undertaker as to what tribunal he shall go to. It is not desirable to provide an appeal from the Commissioners to an arbitrator, because that puts the Commissioners in a very invidious position, besides making for delay and expense. But we do not want to take away the right of going to an arbitrator and, as we did in an earlier Clause, we insert these words here to give the aggrieved undertaker the option of going to whichever body he desires, either to the Commissioners or an arbitrator, at his will.

Mr. ATTLEE

Will the right hon. Gentleman give us an explanation of the previous Amendment? We had this explanation on the last one.

The ATTORNEY-GENERAL

I am afraid I should be out of order if I tried to do that.

Mr. BALFOUR

This Amendment goes, I think, a little beyond what the Attorney-General has indicated. The words proposed to be left out are wide, whereas the words proposed to be inserted, so far as a ground of appeal is concerned, seem to me to restrict the rate. I think the Amendment goes beyond what the Attorney-General has suggested.

The ATTORNEY-GENERAL

I hope not. I should like to explain that the Committee discussed at length the question of an appeal on financial questions and technical questions, and it was considered that appeals on technical questions were prima facie a matter for the Commissioners, and that appeals relating to financial matters should go before the arbitrator.

Mr. BALFOUR

I think it is somewhat too restricted. There may be questions within the scope of financial questions which should come within his jurisdiction. It is restricted to one single item of finance.

Amendment agreed to.

Sir J. NALL

I beg to move, in page 13, line 41, at the end, to insert the words (d) where any authorised undertakers owning a generating station not being a selected station demand a supply from any other undertakers, who own both a generating station which is a selected station and a generating station which is not a selected station, the Board shall not require the imposition of such a condition as aforesaid except with the consent of the last-mentioned undertakers The point is that where one authority sells current to another authority, which also owns a station which may not be a selected station, then under the terms of the Bill the Board can make the first authority impose a condition on the second authority to close its own non-selected station. That does not appear to be fair. The same point arose on the Amendment on which there was some little confusion just now. It is entirely beyond the intention of the Bill that where a supply is given through the Board owing to one station being selected that the Board, for no reason at all, should say that the non-selected station must shut down, which is the inevitable result of saying that the whole supply of that authority must be taken from the Board at the price laid down. It will deal very harshly in the case of certain local schemes. While the Board, obviously, must be protected against being abused as a kind of stand-by authority, and must be able to impose reasonable conditions, it is unnecessary that they should be able to make the first authority pass on these onerous conditions, which involve the closing down of subsidiary and non-selected stations.

Mr. BALFOUR

I beg to second the Amen dment.

I hope the Attorney-General will be able to do something to meet the case which has been put quite clearly by my hon. Friend. I understand there was some kind of promise made in Committee that the matter should be reconsidered on Report stage. I will add nothing to the arguments which have been advanced, they are quite clear, and a good case has been made out for the attention of the Government. I do not know whether the softening process is beginning and that we shall have better fortune in the later stages of this Bill. So far we have had to pursue quietly our arguments, and we have done so without dividing the House, because that would be merely wasting time and would serve no good purpose. We have been, in the most friendly manner, endeavouring to assist our own Government to shape this Measure into a good Bill. If the Attorney-General has had time to look up the reference to what occurred in Committee, perhaps he will refresh our memories on this point.

The ATTORNEY-GENERAL

I have looked up what happened in Committee, and I am glad to say that refusing to accept this Amendment is not inconsistent with anything that happened in Committee. The hon. Member for Huddersfield (Mr. J. Hudson) in Committee said: If the right hon. and learned Gentleman will undertake to frame something more substantial we shall be satisfied. And my answer was: Of course, I will consider any representations which the hon. Member may make, although I cannot promise to change my view.

Mr. BALFOUR

I do not suggest that there was any pledge on the part of the Attorney-General.

The ATTORNEY-GENERAL

I am much obliged. It is right that the House should know that there was no promise. I have been very careful to endeavour to implement every promise I gave during the Committee stage, and I think the hon. Member will agree that I have fulfilled those promises. I have considered the representations made, and I am sorry to say that what I anticipated in Committee in June last has turned out to be the fact. I am not able to change the view I then adopted. The difficulty is that, unless some protection is incorporated in the Bill the Board would be used as a kind of stand-by by people who want to run their own stations for their own convenience. When they run short they would make use of the Board's supply and go back to their own supply When it suited them better. Obviously that is not the purpose for which the Board is constituted, and accordingly the Clause provides that the Board, if it is asked to supply undertakers who are again passing on the supply to somebody else, may impose, as a condition, that the whole of the supply must be taken from the Board. Then there is a provision that the Board is not to impose or require such a condition unless satisfied that the cost for a period of not less than seven years in future of the Board's supply shall be less than the cost at which electricity is being produced at the generating station of the undertakers or sub-contractors. If the undertakers do not agree with the view of the Board, then, under proviso (b), they have a right of appeal on any question of cost to the arbitrator, and on any technical matters to the Electricity Commissioners. The Ministry feel that these protections are sufficient and that it would not be practicable or reasonable to go further than we have already gone in protecting the position, having regard to the importance of ensuring that the Board shall not be used as a mere convenience by people who want to run their own stations.

Amendment negatived.