HC Deb 10 November 1926 vol 199 cc1193-200

Amendment made: In page 14, line 11, leave out the words "demanding such a supply."—[The Attorney-General.]


I beg to move, in page 14, line 14, to leave out the words "approved by," and to insert instead thereof the words "determined by an order of."

If exception is taken to the proposals of the Minister an opportunity is given to any people who wish to be heard of being able to claim that they be heard. I do not think this could lead to any inconvenience.


I beg to second the Amendment.


This is an Amendment which we cannot accept. The effect of it will be that, instead of the tariff having to be fixed for a term of years to be approved by the Electricity Commissioners, the Commissioners would have to make an order which, by virtue of the 1919 Act, would have to come before Parliament, and would need to have a Resolution of both Houses for its approval. We have deliberately tried to get on with the working of the scheme and the preparing of tariffs and other matters, and are leaving to the Electricity Commissioners the same power here that they had already under the Act of 1922 with re- gard to charges to be made by joint authorities—to be found in Section 18 of that Act—and we see no reason, except the reason which is so vigorously disclaimed, of distrust of the Electricity Commissioners, why they should not be allowed to have the same power.

Amendment negatived.


I beg to move, in page 14, line 35, to leave out Sub-section (3), and to insert instead thereof the words (3) The tariff fixed under this Section shall be adjusted for each electricity district constituted under Section five of the Electricity Supply Act, 1919, according to the respective costs to the Board of the production and transmission of electricity within the district. The object of this Amendment is to safeguard and ensure one of those principles which have been recommended from several quarters, and which were particularly presented to the Government by the Association of Chambers of Commerce, that is to say, that a developing industrial area shall not carry the burden of helping some unprofitable activities of the Board or the losses incurred in the developing of more backward districts. This is regarded as of very great importance in the industrial areas. Particular representations have been made to a number of Members of the House by the South-East Lancashire Advisory Board. I believe that that Board, or its representative, have had an opportunity of placing their very forceful arguments before either the Minister or the Department, with what result I do not know. This matter is of vital importance to the industrial areas of the country where an efficient system is already in existence. In the case of South-East Lancashire 58.9 per cent. of the generating stations are in the higher classes, as against 25.7 per cent. for the whole of the country. Of the whole output in that district over 87.25 per cent. is generated at stations which are already interconnected—I ask the House to bear that in mind—to render mutual assistance to each other and to effect whatever economies are possible. It is one of the most completely covered districts in the country as regards distribution. On any basis of comparison the standard is high. The units sold in that district already average 250 per head, against the quoted figure of 117 units per head for the whole country.

The fear is expressed in that locality, as in other industrial localities, that the tariff which may be charged under the calculation of prices in Clause 7, may in certain circumstances, notwithstanding the safeguarding in Clause 13 about the limiting of prices, in future years be higher than would be the case if the present local development were allowed to continue unfettered. It is perfectly true that there is provision in Clause 13 which says that the owners of selected stations shall be supplied by the Board at no greater cost than the owners of the station would have incurred had they continued to run the station on their own account, so that they cannot charge them more. But in districts of this kind, certain economies continue to arise through inter-connection, and so on, and indeed the Board itself in some districts may be able by comparatively small expenditure on transmission mains, and inter-linking, and so on, be able to achieve economies in some other districts which will reduce the local cost.

In South-East Lancashire there is very little for the Board to do, but in some other districts there is a very different picture. Each of those districts, which take a separate entity for the purposes of the calculation, will show different costs. Quite obviously they will show much smaller costs than will be the case in districts where the development is small or at present non-existent or where the Board have to set out almost de novo to create a generating and transmission organisation. It cannot be fair that the industrial areas of the country should be called upon to carry a share of the Board's activities in some other very remote parts of the country. These industrial areas and districts constituted under the Act either at present form convenient zones for schemes under the Bill or they can be adjusted so that they will be convenient zones. Where, as the result of the activities of the existing undertakings or the co-operation which has arisen from the constitution of the Joint Advisory Board, there has resulted development ahead of other parts of the country, it is really not fair that those areas should be called upon to shoulder some of the burdens in relation to the backward parts of the country. If the Board is able to function with all the economies claimed for it, one would sup- pose it is going to develop the backward parts of the country much more economically and rapidly than any ordinary private or municipal enterprise is ever likely to do. Therefore, the Board should be the last kind of authority to be allowed to fall back upon the pockets of the prosperous areas, whereby to augment its funds for these lesser and more speculative adventures in new areas.

If the development of backward areas is not sound for the existing undertakings, one would suppose it would not be sound for the Board, but the Board, having access to the revenues of the prosperous areas, will be able to so pool its interests and spread its expenditure that it will indulge in development which may be to the advantage of the areas concerned, but which will be to the grave disadvantage of the areas which have to pay. So these efficient areas ask that the price they have to pay to the Board should be based upon the Board's expenses which can properly be regarded as being incurred in relation to that district. It is quite obvious that, say, the development of some part of southern England cannot really result in any economy to the north of England. I do not think it can be shown that the Board is going to carry out development in the east of England which will react favourably on the finances of the north-west or north-east parts. Therefore, why should these industrial areas run the risk—I am not saying that the Board is bound to do this—of the Board being able to charge them with some part of either the losses or the funds which are required to carry out these schemes in the backward areas?

I do not want to under-estimate in any way what has been conceded in Committee in the form of the guarantee under Clause 13 to owners of selected stations, but I do ask the House to consider this. Whereas the Committee said that by 1940, if these recommendations are carried out, they would be able to supply power at an average of one penny all over the country, I am sorry to say that some Government propagandists have spread that information in a form which may lead very many people to think they are going to get their household light at one penny per unit in 1940. That is a very popular fallacy in a good many parts of the country at the present time, that they are going to get it at a penny a unit as a result of this scheme. I think, to do justice to the Weir Committee and those Who advised it, what they thought was that they would be able to supply power at one penny by 1940. The power companies say that under the ordinary existing process of development, they ought to be able to supply power at one halfpenny by 1940. In parts of the country it is already being supplied at that. In the industrial areas a great many consumers of industrial power, if they cannot get it at .5 or so, cannot use it at all. Yet under the present form of the Bill, those consumers run the risk of having to pay slightly more and others who at present are not able to use the power, because the price is not sufficiently low, may under the operation of this tariff proposal in the Section as it now stands never be able to avail themselves of the supply at a figure which they can afford, because the local undertaking may never get a sufficient reduction in price owing to the operation of the Board's tariff.

The whole point of this is that, though we have got certain guarantees under Clause 13 which prevent prices being raised, there are no guarantees to ensure that areas of the country, as distinct from owners of selected stations independently, will get the advantages which properly accrue from their own activities and their own development in their own areas. That is a very important point. The Bill as it is drafted says: The tariff fixed under this Section may, if the Board think fit, be different for different areas. That may operate the other way. They may say, "Well, here is a district with a comparatively low figure, and we are rather short on the general account. This district shall have a separate tariff and it is to be raised." A general tariff for the whole country, which one presumes will be about the average of the whole country, will obviously be higher than the tariff properly chargeable to the efficient districts. That is one of the unfortunate aspects of nationalisation which creeps into this Measure. [HON. MEMBERS: "Oh!"] It cannot be called anything else if you are going to make the efficient areas pay for the non-efficient. If you can make them all efficient, then each one can stand on its own merits and my Amendment ought to be adopted. But the ground of opposition to this Amendment is that this must be a national scheme for the whole country, and that unless it is carried out as a national scheme under public ownership it cannot function at all. Everyone knows that the public will never tolerate a private undertaking or municipality, or even a local joint authority, being allowed to charge the industrial North with the losses incurred on new schemes in the South. Therefore, the claim that a tariff ought to be adjusted to the actual costs incurred by the Board in each electricity district seems to be absolutely unanswerable. It is vital to the industrial undertakings of the country. I hope the Government, notwithstanding the concessions which have already been made, will ensure that in these efficient districts we shall in due course get the reduction which the development of those districts justifies to the consumer.


I beg to second the Amendment.

I was a member of the South-East Lancashire Advisory Board for some 2½years and I know the time, trouble, skill and foresight which have been expended by that authority on this problem. We in that district are very largely concerned in this matter and do not wish that all this trouble should be thrown away and the benefit of all this skill and foresight taken from us to go to other parts of the country. The right hon. Gentleman in charge of the Bill has all along said that its object is to give cheaper electricity. If there is one part of the country which needs cheaper electricity it is the South-East Lancashire area.


It needs more light.


We want more light and more power. I do not hesitate to say that if this Bill does by any chance make electricity dearer in that area, it is going to kill the very purpose for which it is intended. Electricity at a penny a unit is of no use to the Lancashire cotton spinner. It has to be under a halfpenny as the ordinary normal price, otherwise it is better for him to develop it from his own steam engines. We have to compete with the world and we should be enabled to compete on fair terms. We want cheaper electricity and if we can be assured that under the Bill, South-East Lancashire and contiguous areas will benefit in the future by the foresight we have exercised, we shall be perfectly satisfied, but until we are so satisfied, it is our duty to oppose this Bill and if possible prevent it passing. I am very much afraid that that is not possible, but I submit that this Amendment should have the consideration of the House.


The speech of the Mover of the Amendment would have been cogent and, I think, irresistible had his object been to permit different tariffs to be fixed for different areas, but unhappily that is not his object because that is what is in the Bill already. His object is to make it compulsory, first, to fix different tariffs; secondly, to calculate them in a certain way and, thirdly, to fix them with regard to certain defined boundaries. The first result of the Amendment would be that no tariff would be fixed for a great part of the country because tariffs can only be fixed, according to this Amendment for the various districts set up under Section 5 of the Electricity Supply Act, 1919, and there are large parts of the country in which no such districts have been delimited. Secondly, it is by no means certain that the areas comprised in any particular scheme will be coterminous with the areas comprised in one particular district under the Electricity Act. If they happen not to be co-terminous then we shall be faced with the extraordinary difficulty from the practical point of view of dividing up different parts of the same scheme and making different calculations and having different tariffs in parts of the country which are served by the same generating station and form part of the same area under the scheme. In fact, the tariff may be different for different areas, and there is every intention that where there are different costs there shall be different charges. This Bill, as we have been reminded by its opponents, is not intended to be a temporary but a permanent Measure. We hope in the ultimate future, as the country is more and more linked up and interconnected, it may gradually be possible to equalise the tariffs. For a long time, no doubt, the tariffs in some of the more efficient areas will be lower than the tariffs in less effi- cient areas. That will be so until the less efficient areas are improved up to the higher standard. The Bill, as framed, foresees that necessity and permits the Board to fix different tariffs, and the only effect of this Amendment would be to compel the Board to fix tariffs according to particular districts which in many cases are non-existent, and to deprive the Board of a discretion which, if they are the type of Board we all expect them to be, can be safely entrusted to them.

Amendment negatived.