CLAUSE 9.—(Standardisation of frequency.) (Hansard, 10 November 1926)

Mr. HERBERT
I beg to move, in page 10, line 17, after the word "expenses," to insert the words "losses or damages."
1151 This Amendment and the four next following are all for the same purpose and form one proposed alteration. The object is that the loss or damage which is incurred as a result of the action of the Board should be paid for as well as the actual expenses. I hope that in this case it may be accepted by the Government that the word "expenses" might not be sufficient to meet the point, and that alterations for the purpose of standardisation of frequency might in many cases result in considerable loss or damage to the undertakers, in excess of the actual expense of making the alterations. This point was raised in Committee, but I hope that now that the learned Attorney-General has been able to give further consideration to it he will agree to the inclusion of these words.

§ Mr. BALFOUR
I beg to second the Amendment.

§ The ATTORNEY-GENERAL
As has been said, this Amendment was discussed in Committee, and at very great length, and was finally defeated by 38 votes to 6. In fact the Amendment, if carried, would waterlog the scheme from the start. Under the Bill at present any expenses incurred by any authorised undertakers in standardising frequency are to be repaid to them. I will presently move an Amendment to deal with the ultimate bearing of that expense. The proposal here is to provide that any loss or damage which they might sustain should also be paid to them. As was explained in Committee, if the change-over under the standardisation scheme is carefully and competently done, it can take an almost negligible time. There is at least one instance, which the hon. Member for Hampstead (Mr. Balfour) gave in Committee, in which he was able to do it between a Saturday and a Monday. The time involved, therefore, is very slight, and the inconvenience very small. No doubt, however, if it is not competently done it can take a great deal longer. Suppose that a provision were incorporated in this Clause under which every owner of a selected station and every authorised undertaker was entitled to formulate a scheme for all the loss or damage which he could sustain by reason of a standardisation scheme, I myself have no doubt that we should have brought before the 1152 tribunal a vast body of expert evidence, which would explain to the horrified tribunal that such a scheme as this probably would not be efficiently carried out and would take a great deal longer than two or three days, that it might last. for weeks or months, that the loss of custom would be enormous, that the damage which the unhappy authorised undertaker was likely to incur was almost incalculable; and we should have all that array of expert evidence, which, unfortunately, we are fairly familiar with in the Courts, in cases where prospective, or what are sometimes called speculative, damages are asked for at the hands of a sympathetic tribunal.
If we were to have all the undertakers and owners in the areas in which standardisation took place at liberty to formulate claims for losses and damages, as to which they would produce evidence, I have no doubt that we should have an enormous number of very large claims which, although the tribunal might discount them a great deal, would take a great deal of time and expense to test, and might result in very substantial awards in the aggregate, although in individual cases they might be disappointing to the claimants. That is a prospect which I cannot ask the House to sanction or support. At present the position is that we have a scheme under which, whenever standardisation takes place, there will be, as we believe, a substantial saving in the cost of current, which will be reflected in increased consumption and profits to the authorised undertakers. We are willing to provide that the whole cost of the actual expense of any change-over shall be paid to the particular undertakers affected, because it is not fair that where the expense of a change-over is caused in the general interest the individual who has to make the change should bear that special expense. But we are now asked to go further and to provide that they may formulate claims for losses and damages, which might be immense. We are asked to make far too great a concession to the authorised undertakers, and we are risking the whole solvency of the scheme without meeting any real damage. I ask the House to reject the Amendment and to affirm the decision of the Committee.

Mr. HERBERT
After what the Attorney-General has said, I beg to 1153 ask leave to withdraw the Amendment, although I would suggest that he has drawn a rather more lurid picture than he need have done as to what might happen. If he reads the Clause carefully he will see that, with the Amendment, it includes only expenses or losses or damages "properly incurred."

§ Mr. HANNON
I beg to move, in page 10, line 20, to leave out the word "may," and to insert instead thereof the words "shall if required."
This Amendment is sought because it is possible to conceive a Board which would not be inclined to treat a municipal authority or private undertaker as well or generously or considerately as if it were obligatory on them to do so. Take the case of Birmingham, which is particularly interested in this Clause. The people of Birmingham are, quite naturally, looking to a possible change of standardisation with very grave anxiety. My right hon. Friend indicates that he is prepared to accept the Amendment, and I will not take up further time by explaining it.

§ Mr. BALFOUR
I beg to second the Amendment.

§ Mr. HARDIE
We were assured in Committee by the Attorney-General that neither the Government nor the people would have to pay for this, but that everything would come out of the industry. I would like to draw the right hon. and learned Gentleman's attention to the case of Ealing, where I live. A notice was recently issued there saying that in future the voltage was to be 230, and the notice added that all lamps and plant on consumers' premises would be changed free of cost. There was much correspondence in the local paper from consumers who wished to know where they stood, and Mr. J. D. Knight, the borough electrical engineer, wrote to the Press assuring the correspondents that they were needlessly alarming themselves. He said that when the change over was made everything would be put to the cost of the department, and to that extent it would cost the people nothing.
The point that I wish to clear up, and it is a point that has never been made clear to me, arises from the fact that in 1154 every change that is made there must be a certain expenditure. As I understand it, according to the Bill that expenditure is to be given as a guarantee by the Government, and it is to be drawn from the earnings of the production of electricity under the Board. When you do that, you must either have a decrease in the cost of producing the current equal to the money you are expending or you must increase the price to the consumer in order to get the money that is going to be paid for all these replacements. I can see no way out of that position as the Bill is drafted. The expenditure is going to be huge. Ealing is a small place, but when you consider the number of people using electricity even there and the number of new lamps, materials and fitments that they will require, you can see how large the expenditure will be. Yet the people of Ealing are all being told not to worry about these new things, that when the time comes they will be changed over at the expense of the council, which becomes the authority under this Bill. The council cannot put that expenditure on the rates. They must go to some other organisation and the next organisation is the Board, which controls the electricity. Can we get a direct statement from the Government that in every instance there is going to be a guarantee by the Government covering all such replacements? There is nothing in the Bill indicating how that money is to be repaid unless the vague statement which has been made once or twice that it is hoped under this Bill to make such an increase in profits as to pay for all these things.

§ The ATTORNEY-GENERAL
I would be glad to answer the point which the hon. Member has just raised, but it would be taking a risk if we were to discuss it on this Amendment, because it does not arise here but on a later Amendment. The Amendment we are on at the present moment merely says that the Board shall advance the sums if required.

§ Mr. HARDIE
Is it the Board or the local authority that becomes responsible?

§ The ATTORNEY-GENERAL
The provision we are dealing with is that the Board may require standardisation, and that if they do they must repay the expenses, and the Bill says that the Board may advance such sums as are necessary. 1155 The Board can only require standardisation subject to the payment to the authorised undertakers or owners of any expenditure they incur. Now it has been thought that there may be authorised undertakers, who are not in the position to find the money in the first instance and then be repaid by the Board, and that they might find it much more convenient if they got the money lent them by the Board in the first instance, instead of finding the money themselves and then being repaid by the Board. To meet them it is now provided that the Board shall advance such sums as may be necessary if they are asked to do so. It does not seem to me unreasonable that they should do that. I shall deal with the point raised by the hon. Member for Springburn (Mr. Hardie) when I come to discuss the matter of the ultimate incidence of the standardisation.

§ Mr. BALFOUR
I should like to ask the Attorney-General what Clause we propose to reach to-night.

§ Mr. SPEAKER
It is rather early to decide that.
Amendment agreed to.

§ Mr. HANNON
I beg to move, in page 10, line 27, at the end, to insert the words Provided that if any authorised owners or undertakers consider that they will be prejudiced by the requirements of the Board they may within one month of the date of such approval by notice in writing specifying the nature of the complaint and the relief sought by them require the Board to refer the matter complained of to the decision of the arbitrator to be appointed under Section four, Sub-section (3) and (4) of this Act, who shall have power to confirm, modify, or rescind such requirement as the circumstances of the case may justify. It is easily conceivable that, in cases where the requirements of the Board are presented to authorised undertakers or owners, questions may arise on which the decision of the Board would be unsatisfactory, and it is only reasonable to ask that, within a definite limit of time, the owner or undertaker should have the right to appeal to the arbitrator. The acceptance of the Amendment would give a great deal of satisfaction throughout the country to owners and undertakers who will be affected by the operations of the Bill hereafter, and would give them confidence that the Government wish to 1156 give them every possible opportunity of obtaining the fullest measure of justice under the Bill. The Amendment is in no way embarrassing, because I know that the Attorney-General objects to loading the Bill with provisions. This Amendment would improve this Bill by conceding to undertakers and owners an opportunity of having their case reviewed as against the Board, if they have a genuine case, and I therefore hope that the Attorney-General will agree to accept it.

§ Mr. BURMAN
I beg to second the Amendment.

§ The ATTORNEY-GENERAL
My hon. Friend always puts his case so persuasively and kindly that it is very difficult to resist his blandishments. This time, however, I must harden my heart, and, in order to soften the blow, I would like to remind him what the existing position is and how it is being dealt with. Under the present Bill, any standardisation included in a scheme is already subject to appeal under Clause 4. Any other standardisation could, without this Bill, be ordered by the Electricity Commissioners under Section 24 of the 1919 Act, subject only to an appeal to the Minister of Transport, and the only ground on which the Minister of Transport could disallow an order would be that it entailed unreasonable expense on the undertakers, because an order made under the 1919 Act at present would be an order which the undertakers would have to comply with at their own expense. Now we are providing that standardisation may be required by the Board with the approval of the Electricity Commissioners, but it is a condition that it shall entail no expense on the undertakers, because the expense is to be borne as provided in Clause 9. We are putting the undertakers by this Clause in a substantially better position than they otherwise would be, especially as my hon. Friend sees that I have put down an Amendment saying that the powers of Section 24 of the 1919 Act cannot be exercised any longer in an area within Section 9.

§ Mr. HANNON
Do I understand that the appeal will only refer to expenses alone and that no other complaints would come under it?

§ The ATTORNEY - GENERAL
No other complaints that I know of. I was contrasting the position at present with the position under the Bill. The present position is that the Electricity Commissioners may make an order for the undertakers to change the frequency at their own expense, and the only objection that the undertakers can take is that it will cause them unreasonable expense. Now we are providing that, in areas included in the scheme, such standardisation as is required can only be required on the terms that the whole of the expenses are to be paid. So the undertaker is substantially better off than under the existing law, and I venture to think that we are not treating him unfairly.
Amendment, by leave, withdrawn.

§ The ATTORNEY-GENERAL
I beg to move, in page 10, line 28, to leave out the words "shall be a purpose" and to insert instead thereof the words "and the making of such advances shall be purposes."
This is a drafting Amendment and is necessary in order to make the Bill good grammar, having regard to an alteration made in Sub-section (1) in Committee, including advances to undertakers among the powers of the Board.
Amendment agreed to.

§ The ATTORNEY-GENERAL
I beg to move, in page 10, line 37, at the end, to insert the following new Sub-section: The Board shall be entitled to be repaid by the Electricity Commissioners in each year the sums required to meet the interest and sinking fund charges in respect of money so borrowed, and the payment of such sums shall be treated as part of the expenses of the Electricity Commissioners, but shall be shown as a separate item in their accounts and in their demand notes for contributions towards their expenses. Provided that the apportionment of the expenses of the Electricity Commissioners under this Sub-section, instead of being made in accordance with Section seven of the Electricity (Supply) Act, 1922, shall be made on the basis of the revenue received from the sale of electricity other than electricity sold in bulk to authorised undertakers. This is the Amendment to which I referred earlier as affording a convenient opportunity for discussing a matter which was raised by the hon. Member for Springburn (Mr. Hardie). It is a point which gave rise to considerable discussion 1158 in Committee and the Amendment is in fulfilment of a promise which I made to the Committee after hearing the views expressed there by Members on all sides. The proposal concerns the ultimate incidence of the cost of standardisation. Under Clause 9 the Board may in certain circumstances require alteration of frequency for the purpose of standardisation in various areas, and it is provided that the actual expense shall be repaid to the authorised undertaker by the Board. How much it will cost will depend on the extent to which standardisation may prove necessary. It is a matter which has been carefully considered on behalf of the Government and the estimate which we made—on the assumption that the Bill would go through as we originally contemplated—was that there would be a net cost of about £8,500,000. No doubt it may be a little more now, thanks to the delay which has happened, but that figure gives an idea of the expense which, it is contemplated, will ultimately be incurred. On the other hand, it is not intended to standardise the whole country at once. Therefore, the whole expense will not be incurred in the first instance. It is a considerable sum of money, and the question of the provision of the necessary sinking fund and interest to cover that expenditure has naturally been considered very carefully. The capital cost is included in the financial provisions of the Bill and in the Money Resolution passed by the House. It is included in the £33,500,000 which the Board is authorised to borrow. But that only involves the immediate payment of the sum and we have still to decide who will ultimately find the money.
It seems to the Government there are three possible alternatives as to the Persons who should be asked to pay. Quite definitely we decided at an early stage that it was not fair to ask the State as a whole to bear that cost. That is a suggestion which the Treasury refused to sanction and the Government decided it would be an unreasonable burden to put upon the taxpayers of the country. This proposal is going to improve matters in regard to the cost electricity and thus benefit the people who consume electricity rather than the general body of taxpayers. There remain still the questions whether or not the expense should be borne by the particular district in which the standardisation has 1159 been ordered; whether it should be borne by the people inside the area of a scheme at a particular moment; or whether it should be borne by the general body of consumers of electricity throughout the country. Those are the three remaining alternatives, and on them different people take different views. There was expressed in Committee a very strong view that it would not be fair to place the whole burden upon the particular area to be standardised, and the arguments which supported that view seemed to me to be unanswerable. If you could prove that standardisation of frequency benefited only the area in which the standardisation took place, then it would be reasonable and proper that the people in that area should be asked to bear the cost, but of course that is not true.
Standardisation is not in itself so great an advantage. The advantage at which we aim is interconnection, and standardisation is only a means necessary to obtain that end, and the advantage of interconnection is just as much with the areas which are already on the frequency to which a particular area is being altered as it is with the area which is being altered. Therefore it seemed to us plain that it would not be fair to ask Birmingham, for example, to alter its own standardisation at its own cost when the object and effect of the alteration would be to benefit not merely Birmingham but other districts to whose standard the Birmingham standard was being raised. Thus the first alternative was ruled out. Then came the discussion as to whether it would be fairer to place the expense on the people inside the area of a scheme only or on the general consumers. Those hon. Members who were on the Committee will recollect that the general view, indeed, I think, the universal view, expressed there was that it should be placed on the general body of consumers.
That view was justified on the ground, first, that the Bill as drafted does not propose that one scheme for the whole country should be brought into effect at once. It contemplates and indeed provides that there are to be successive schemes for different parts of the country with the ultimate object of linking up the whole country. It would seem very unfair that if Birmingham, taking it as an illustration, and one adjoining district 1160 formed part of the scheme, those two districts should bear the whole cost of standardising one of them, when the ultimate object of standardisation was not to benefit those districts but to make them part of an organic whole—the whole country—which was ultimately to be interconnected and which would, therefore, ultimately benefit all over from the standardisation in those districts. There is also a point which I think is material in the minds of some hon. Members—that the mere fact of standardisation will at once cheapen the cost of electricity. It will render possible that mass production which is one of the secrets of reduced expenditure, and therefore will benefit all those parts of the country which are using plants of the standard frequency whether they are immediately included in a scheme or not. On those grounds, the Committee seemed to take the view, and indeed asked the Government to accept the view, that the expense should be borne by the whole body of consumers of electricity.
There remains only the question of how the expense should be spread over that body. Amendments were set down in Committee—one, I think, in the name of the hon. Member for York (Sir J. Marriott) and the other, I think, in the name of the hon. Member for Cambridge (Sir D. Newton)—which provided that the cost should be an expense of the Electricity Commissioners, and therefore should be borne in the same way as the other expenses of the Electricity Commissioners—that is, in proportion to the units consumed. Objection was taken to that proposal on the ground that the power supplied to various industries was, in proportion, very much larger than the number of units supplied for lighting and similar purpose, and that, further, it was being supplied in large quantities at a very advantageous time and at a very low price and a very low margin above cost. It was argued, if you loaded those charges with the extra expense of standardisation, you would render it impossible to continue to supply the industrial enterprises which were taking power current at the existing price. It was suggested to the Government and, I think, outside the Government, that the fairer way of apportioning the cost to the consumers was to apportion it in proportion to the sale on the basis of the revenue received.
1161 We propose, therefore, that the revenue should be the basis on which the apportionment should take place. That is the scheme embodied in the Amendment which is now before the House. We ask for a provision that the Electricity Commissioners shall repay each year the interest and sinking fund. I cannot say exactly how much the sum will be. It is a difficult sum to work out, but taking the estimate I have already mentioned and reckoning 5 per cent. for interest and 1 per cent. for sinking fund, you would have 6 per cent. on about £8,000,000. Whatever the sum may be, the total expenditure so to be borne in each year should be spread over the whole of the revenue received from the sale of electricity and apportioned between the different suppliers of electricity in that proportion. It will be said: "If you charge that expenditure you increase the price"; and I agree. You cannot have this expenditure without, to that extent, increasing the price, but the whole hypothesis of this Bill is that the net result of it, taking into account all expenses, including this expense, will be to cheapen the cost of electricity materially. Although it is true that you will slightly increase the cost of electricity by the infinitesimal fraction of a penny which will have to be put on to each unit by this expense, you will reduce the cost by more than that amount by the saving which will ultimately result from this scheme.

§ Mr. HARDIE
Which is also hypothetical.

§ The ATTORNEY - GENERAL
Certainly; the hon. Member is quite right. It is quite true that if anybody thinks this Bill is not going to reduce the cost of electricity, then obviously he cannot think it is going to benefit the consumers. We are going only on the basis that we are satisfied, by such advice as we have been able to obtain and such experience as the rest of the world has had, that electricity is cheapened by interconnection and by generating at the most suitable places in the way provided for by the Bill. It is only for that reason the Bill has ever been introduced. If it were not going to cheapen electricity there would be no point in bringing it forward. We are satisfied that it will do so, and on that assumption we are bound to proceed. The only question 1162 which we are here determining is how this particular item of expenditure shall be apportioned, and we have brought before the House, in pursuance of the promise which I gave to the Committee, the plan which we believe to be the best, and which certainly is also the one which the Committee thought was best when the question was being discussed before them.

§ Mr. HANNON
I would like to bring to the notice of the House the danger of this proposal operating very unfairly on certain of the great electrical undertakings in this country. In electrical production Greater London provides one-fifth of the actual output of current in this country, and under this proposal, therefore, Greater London will have to bear one-fifth of the total cost involved in bringing about standardisation schemes. While in entire agreement with my right hon. and learned Friend the Attorney-General that this Bill will reorganise the whole possibilities of the development of this industry in the country, and will on that basis certainly reduce prices, it will nevertheless take a great deal of argument on his part to convince London consumers that they are deriving positive and direct benefits for the cost of bringing about standardisation either in Birmingham or on the North-East Coast. I am all for taking all possible expenditure off Birmingham; I think it would he most undesirable that one centre should he charged the whole expenditure incurred in bringing about standardisation in it, but, at the same time, we have to consider the extent to which the charges for the expenses of the Electricity Commisioners will be increased in the case of certain undertakings in London. Taking the proportion of £8,500,000, and assuming that that amount was spent within a comparatively short period of time, it would mean that the electrical industry of Greater London would be responsible for the provision of one-fifth of the total liability for interest and sinking fund, and I am informed that, if it were worked out in the case of particular undertakings, it would increase their present responsibility to the Electricity Commissioners by ten or eleven fold.
I hope every Member of this House will do everything possible to facilitate the 1163 operation of this scheme in the country, but I do not think I can give a silent vote on this Amendment or allow it to be passed without calling the attention of the House to the effect which the Amendment is bound to have on the charges for the distribution of electricity by certain undertakers in those districts far removed from the centres where standardisation will have to be brought about. While everybody desires—and my hon. Friends above the Gangway here, who have been somewhat critical during the course of this Debate, equally desire, I am sure—that everything possible should be done to facilitate electrical production in this country in the future, at the same time it seems a little unfair that in the arrangement of the cost of getting out these changes so much should fall upon enterprises which are already very heavily burdened with charges in their own areas. Therefore, while in no way obstructing the passage of the Amendment, I hope it will he borne in mind that in the development of this great national scheme, existing enterprises are bearing a very substantial part of the cost.

Lieut.-Colonel Sir FREDERICK HALL
I should like to join my hon. Friend the Member for the Moseley Division (Mr. Hannon) in drawing the attention of the House to what I must call the harsh manner in which this Amendment will operate in connection with the London companies. The London companies have, after all, gone ahead during the past five or six years with their various schemes, and they would have gone ahead more quickly if it had not been that they have been interfered with by the Government. I am not altogether complaining of that but that is the fact. First of all, there was the War, then there was the appointment, in 1919, of the Electricity Commissioners, and then there was the question of bringing schemes forward for increasing output in London, which unfortunately, through various vicissitudes, were held up by the fact of the Commissioners having been appointed. They naturally, having a new position with regard to generation and distribution of electricity in London, were very particular, in going through all the various points, to see that every care was taken, but that does not do away with the fact that London was held up with regard to its current. The Barking station, which was opened by His Majesty 1164 in May of last year with a generation of 100,000 kilowatts, would have been, in the ordinary course of events, open and working several years previously, and, therefore, I join issue with my hon. Friends of the Labour party on this question, and aver that the London companies have done their best under very difficult circumstances to increase the necessary output of electricity for the purposes of lighting, of power, and of assisting the industrial areas.
The right hon. and learned Attorney-General drew attention to the fact that £8,500,000 is placed on one side for standardisation, but many of us think that that sum will eventually be found to be very much less than the entire cost of standardisation. Only time can tell, of course, but considering that it is going to be based, as the right hon. Gentleman says, on the revenue accruing to the various concerns, it will involve an expenditure, based on 5 per cent. plus 1 per cent. sinking fund, which will result in increasing the cost to the London companies by £100,000 per annum. I am always being told that the more you generate, the cheaper will be the price. I have always been a great believer in generation in bulk and have always thought that many of the small companies should confine their activities to distribution. I have always said that many of these small undertakings would have to be shut down, but I want to join with my hon. Friend the Member for Moseley in drawing attention to the fact that this scheme is not an unmixed blessing with regard to London, and that, on the contrary, London will be called upon to bear a very large proportion of the cost of standardisation.

§ Mr. BURMAN
The passage of this Amendment will remove, so far as Birmingham is concerned, the chief objection to this Bill. Many years ago we deliberately adopted a standard of frequency which has been very successful, and if we are compelled under this Bill to change it, it is only reasonable that the whole country should share in the expense of so doing. We are perfectly satisfied to go on as we are. I fully sympathise with the protests of the London representatives. The charges will be very heavy, and I believe that they will be much heavier than is anticipated by some of the experts. The 1165 charges will be so heavy that if some provision of this sort were not made it would be impossible for a single district like Birmingham, for instance, to bear the enormous charges brought about by the standardisation of frequency. I am very grateful to the learned Attorney-General for having brought this Amendment forward. I appreciate the delicacy of the position and also the difficulty that the Government have found in framing the Amendment fairly. At the same time, I must repeat that it will remove, so far as Birmingham is concerned, the chief objection to this Bill.

§ Sir J. NALL
I beg to move, as an Amendment to the proposed Amendment, in line 2, after the word "meet," to insert the words any such expenses or advances as aforesaid including. I agree that if the thing that is proposed in the Bill is to be done at all, this is probably the most equitable way of doing it, and I said something of the kind in Committee. Hon. Members who have spoken have indicated the kind of difficulty which will have to be incurred even under this, which is admitted to be the only possible, way of carrying out the Government's proposals. Birmingham is relieved, but London is feeling perturbed at the prospect of paying for other people's advantages. There is no reason at all why Manchester or South-East Lancashire should have to pay for the conversion of the North-East Coast, and one of the extraordinary anomalies of the whole thing is that the North-East Coast, which has some 20 stations leading into a locally standardised common system, has the cheapest supply in the country, and is admitted to be the most highly developed and the most efficient area in the country, and yet is one of those parts of the country that is singled out in the Weir Report to be changed over to some other frequency at the cost of the whole country. Even in America, which has been so often quoted, they have two frequencies. In the city of New York there are two frequencies, and no proposal has been made to change them to one, yet here, if this is to be done at all within the meaning of this Amendment, possibly two of the most efficient areas in the country are to be upset. Obviously it cannot be done at their own expense. 1166 It must be done at the general or national expense, and to do such a thing is one of the elements of nationalisation which creeps into this scheme.
I say it with great respect and without any desire to misrepresent or mislead anybody's opinion, but nothing but a national scheme, forced by a national Government, could be imposed in such a way. The whole of the consumers of electricity in this country are to be charged with an expenditure which in certain small cases will improve the supply in the area and in other cases will involve no improvement in the locality, and no evidence has been adduced, either in Committee, in Debate, or in any other way, to show that there will be any advantage accruing to the consumers of electricity generally as a result of this expense. The Weir Report does state that they believe it can only be done at the cost of the National Exchequer, but the Government quite rightly ran away from that, and we are now faced with the only possible way of doing this thing, if it is to be done at all. There are cases where a change over is necessary. I am informed by the South-East Lancashire Advisory Board that in their area there are some four small undertakings which in due course ought to be changed over if they are to be efficiently supplied, but they only produce some 5 per cent. of the total consumption in that district. To do it would be an advantage for the undertakings concerned and their consumers. The cost is not a big thing, and if that district were treated for purposes of this kind as an entity and charged only for the expenditure which is properly incurred by the Board in relation to that district, that district would reap advantages which would defray the cost incurred. There would be no need to spread over the whole of the consumers of the country the cost of standardisation of the few remaining parts of the South-East Lancashire district, and there would be no need, as my hon. Friend the Member for Hampstead (Mr. Balfour) has pointed out, to charge consumers all over the country with the cost of standardising an undertaking which has been quoted on several occasions in this House.
This Amendment is necessary, sound as it is in the circumstances, because one of the fundamental principles of the Bill 1167 is ridiculous and has been shown to be ridiculous, to all who are actively, and not merely theoretically, engaged in the electrical industry. That is where the House is going wrong on this Bill. Too much attention is being paid to the theorists, who are not directly engaged in the daily running of these undertakings. Those are the people to whom chief attention is being given. They are the people to whom the Government have risen from first to last, but to those who, like the hon. Member for Hampstead—I do not profess to be an expert of any kind—who has devoted a life's work to the development of this kind of thing, who knows these difficulties at first hand, and has told the House time after time what are the facts experienced by himself and by others who are engaged in a similar way, the Government say, "No, we prefer the theorists of Victoria Street to the practical men of the Provinces," although the consumers in London, Manchester and other parts of the country are going to pay for the so-called standardisation, which has not been shown by any fact or argument so far produced to be necessary or to offer any consequential benefit.
Having said that in the circumstances the Amendment proposed by the Attorney-General is unfortunately the only thing that can be done, I would ask him to round it off, and make it a little more complete, by accepting the Amendment in my name. I think that can be shown to be necessary from the point of view of drafting, because earlier in this Clause the Board may meet the expenses or they may make advances for the purpose of the Clause, and it is not quite clear that those expenses or advances would really be covered by interest and sinking fund on the money borrowed. It is, quite obviously, a drafting point, and if these words are not put in, my right hon. Friend will find that his intention is not fully covered, because his Amendment only relates to borrowed money, and it may be that certain general funds of the Board might be brought into play.

§ Mr. BURMAN
I beg to second the Amendment to the proposed Amendment.

§ The ATTORNEY-GENERAL
I am advised that this Amendment to the pro- 1168 posed Amendment is not necessary, and, indeed, might lead to difficulty. The House will realise that the whole of the expense which the Board incur in connection with standardisation of frequency will be paid out of the moneys which they get under Clause 24, and, therefore, the only charges to be recovered will necessarily be the interest and sinking fund charges in respect of money so borrowed. If it be intended by my hon. Friend's Amendment to put any other part of the Board's expenses in this matter on to the general consumers, that does not seem to be reasonable, because we propose that all expenses other than these sums incurred in defraying the actual cost of standardisation are to be part of the expenses of the Board to be borne as proposed in the Bill. For that reason, the Government are advised that the Amendment to the Amendment is not necessary to achieve the end which, I think, my hon. Friend has in mind, and might open the door to a wider construction than I think he intends, and certainly I intend.

§ Sir J. NALL
I beg leave to withdraw the Amendment to the proposed Amendment.
Amendment to proposed Amendment, by leave, withdrawn.
Question again proposed, "That those words be there inserted in the Bill."

§ Mr. BALFOUR
We are now, I take it, back to the Amendment of my right hon. Friend. I would like to say that this Amendment raises the whole question dealt with at some length by my hon. Friend, which I do not intend to pursue, because if I went over the whole question of standardisation, it would probably take me beyond the Rules of Order. But I should like, in passing, to indicate on that problem the whole difficulty with which the House will be faced over a series of years. It is only a few years ago that I remember Sir Eric Geddes standing at that box, and referring to the grave necessity of having standardised frequency for the railways.
Yet we have in this Bill the words: Notwithstanding anything in this Section, a railway company shall not be required to alter the frequency employed by them. I only give that illustration. Hon. Members must remember that we were 1169 weighed down in those Coalition days by Sir Eric Geddes who was the Minister of Transport, or designate Minister of Transport—I forget which—on this question of standardisation. To-day we find a special provision in this Bill that it shall not apply to railways. My reason for introducing that point is simply to illustrate the expenses to be distributed over all authorities are for purposes, many of which to-day are irreconcilable with the needs of the community. Given the test of time, the arguments which have been adduced upstairs and in this House, and are being adduced by me now in connection with this, will be found to be in the main true, that we are putting on the Statute Book a mass of complicated details which will hamper rather than help those things which would facilitate the peace, comfort and prosperity of the people.
Amendment agreed to.

§ Mr. SPEAKER
The next two Amendments on the Order Paper [in page 10, line 38, after the word "expenses," to insert the words "losses or damages," and in line 39, after the word "incurred," to insert the words "or sustained"] are consequential.

§ The ATTORNEY-GENERAL
I beg to move, in page 10, line 42, to leave out from the word "Commissioners," to the word "be" in page 11, line 6, and to insert instead thereof the words or at the option of the authorised undertakers or owners. This is an Amendment designed to remove a difficulty indicated in Committee owing to an Amendment there moved, and accepted by myself. Under the Bill as it now stands, a decision as to the amount of the expenses has to be given by the Electricity Commissioners, and then there is an appeal from the Commissioners to the arbitrator appointed under the Bill. That is an undesirable position, we think, in which to put the Electricity Commissioners. On the other hand, as we did accept the principle of an appeal in this Clause, I do not think it would be right or fair that I should ask the House to go back upon it, and, in order to meet that difficulty, we are asking the House to give to any aggrieved person the option of either going to the Electricity Commissioners or the arbitrator, whichever he prefers, but to which- 1170 ever he goes, he is bound by the decision arrived at. I think that is a fair way out of the difficulty.

§ The ATTORNEY-GENERAL
I beg to move, in page 11, line 13, at the end, to insert the words Provided that nothing in this Section shall prevent the Board and the authorised undertakers or owners concerned from entering into an agreement fixing the sum to be taken in discharge of the liability of the Board to the undertakers or owners under this Section. This is only a drafting Amendment, in order that what we have just done should not have any effect which is not intended. I am merely proposing the proviso in order to allow the Board and the authorised undertakers to come to an agreement. It is not amending the Bill.

§ Mr. HARDIE
I would like to ask what will be the position in regard to the case of Ealing, which I have been asked to bring forward?

§ The ATTORNEY-GENERAL
If the hon. Gentleman refers to a liability that has already arisen owing to a change of frequency already ordered, that will not be affected by the Bill. It will remain under the Act of 1919.

§ Mr. SPEAKER
The subject of this Amendment, I think, has been settled.

§ Sir J. NALL
This is in relation to conversion which took place before the provisions of this Bill operate.

§ Mr. SPEAKER
Then it would hardly come within the scope of the Bill.

§ Sir J. NALL
The scheme may require a certain standardisation in a particular area. Some of that may have been carried out just prior to the promulgation of the scheme, and the intention of this Amendment is that those who have done that should not suffer in consequence.

§ Mr. BALFOUR
I think you, Sir, will see that this is quite in order. The object is that where, under the 1919 Act, voluntarily there has been carried out standardisation in a given area, the authorities who have just carried out that standardisation should not be called upon to contribute to the standardisation of all the other authorities in the country where the frequency has to be changed. There are two alternatives in the Amendment, which leaves it open as to the method in which it is to be treated. There is, obviously, great injustice in having to make provision over many years to pay off debt incurred in standardisation, and at the same time have to pay for the standardisation of others.

§ Colonel ASHLEY
Is it not outside the scope of the Bill to discuss an Amendment proposing that money shall be paid for expense incurred by standardisation in 1920?

§ Mr. BALFOUR
That has already been covered. It will only relieve those people who are still paying the debt which they have incurred in effecting standardisation, so that they will not be called upon to pay for the standardisation of someone else. I think it is one of the gravest injustices that could be perpetrated, and certainly the matter ought to come within the scope of the Bill. I quite agree that the direct payment to relieve this or that particular undertaker under the first paragraph may be outside the scope of the Bill.

Sir F. HALL
Might I suggest that the hon. Member would be in order if he moved this Amendment without paragraph (a)?

§ Sir J. NALL
I shall be quite willing to strike out that paragraph, and move the Amendment in that form.

§ Mr. SPEAKER
I think that must be done, and it will then be in order.

§ Mr. SCURR
On a further point of Order. I desire to submit that this proposed Amendment, if carried, would have the effect of benefiting certain undertakings. I also submit that the hon. Member for Hulme (Sir J. Nall) is a director of an undertaking which has already carried out this work and that his connection in this matter does not entitle him to move.

§ Mr. SPEAKER
That does not raise any question. A Member is entitled to move an Amendment which is in order. The question of voting is another matter. Moving is quite in order.

§ Sir J. NALL
I think the speeches have already explained that point.

§ Mr. BALFOUR
On a point of Order. I think the Amendment would require to leave out the words "either of" in line 6, and "those" in paragraph (b). "The following provisions" remains, and "as the Board may determine" goes out. In paragraph (b) it will then read "the undertakers shall be".

§ Sir J. NALL
I beg to move, in page 11, line 13, at the end, to insert the words () Notwithstanding anything in this Section where any authorised undertakers have, between the passing of the Electricity (Supply) Act, 1919, and the passing of this Act, altered the frequency employed in the whole of their undertaking to such frequency as may be the standard frequency provided by the scheme within the area of which that undertaking, or any substantial part of the undertaking is situate, those undertakers shall be relieved from contributing to any sums paid by the Board under the foregoing provisions of this Section towards or on account of the expenses referred to in Sub-section (1) of this Section. It was suggested that this is to relieve undertakers. The object is to relieve the consumers who have to pay according to the costs incurred by the undertakings. In districts where the present charges are based upon the expenditure already incurred by the undertaking, it is obviously unfair, where those charges are imposed through some recently carried-out conversion, it is unfair that those consumers should pay a second time for a conversion elsewhere. This Amendment is simply common fairness. Suppose that under the operation of the 1919 provisions 1173 some district is required to carry out a minor change over at its own expense by order of the Commissioners. Suppose it is shortly afterwards called upon to pay a contribution to the Central Board or the Commissioners in respect of conversions carried out elsewhere. As that district has had to pay the cost of its own change over it is obviously unfair that it should be charged with a share of other people's change over while not participating in relief from the general fund.

§ Mr. MacLAREN
There are no such cases.

§ Sir J. NALL
Yes. A change over is now taking place in Ealing. [An HON. MEMBER: "Where is the right hon. Member for Ealing?"]

§ Sir HERBERT NIELD
The right hon. Member for Ealing is here, and in communication with the town authorities who have not mentioned this matter to him at all. This is a purely voluntary interference.

§ Sir J. NALL
I am sure the right hon. Member for Ealing would make himself heard if there were any cause for complaint. If a change over is now taking place in that locality at the expense of the local undertaking, reimbursed by a refund levied on the consumers, is it fair to those consumers in the near future to have to pay a share in the cost of change overs in other districts? Either they should be reimbursed, which Mr. Speaker has ruled out of order, or they should be relieved from contributing. It is perfectly obvious and common justice

§ Mr. BALFOUR
I beg to second the Amendment.
There can be no question as to the fairness of the proposal made. To ask people to accept the burden imposed under this Bill of changing over frequency—let us say, in parts of Glasgow or Birmingham or North-East counties—where one undertaking, having entailed a burden in an endeavour to be progressive, is to have again to pay, is something in regard to which I hope the Attorney-General will feel he has no difficulty whatever in acceding to this simple request for common justice to tens of thousands of people who have invested their money in these undertakings. It is quite immaterial to me as a personal matter whether this 1174 Amendment is accepted or not. Hon. Members do not come here to press things in which they are interested by some personal motive. A case has been mentioned of an area in which a change over was made rapidly, and having done this service in that area and shown the greatest progress, is it to be said that that undertaking is to be saddled, in addition to that cost, with another area altogether such as the Clyde Valley or the North-East areas? I do not think that that can be suggested by any hon. Member who can at the same time stand up for common justice and equity.

§ The ATTORNEY-GENERAL
Although the hon. Member who has just sat down said that no Member in this House could state the arguments against this proposal and yet admit either equity or justice, I am going to essay what he looked on as such a difficult task. If it were a fact that any undertaker had been compelled to change his frequency under the Act of 1919 and had had to do so at his own expense, then there might be something for the view that, inasmuch as other people were now being differently treated, lie ought to be in some way recouped.

§ Mr. BALFOUR
The Amendment does not ask for recoupment at all. That has been struck out. All it asks is that these various systems which have already changed should not be asked to pay again for a change-over in other systems.

§ The ATTORNEY-GENERAL
I perfectly understand the Amendment. If any authorised undertaking had been compelled against its will to change its frequency and bear the expense of so doing, there might be something to be said for its having a claim to be recouped. But, in fact, there is no such undertaking in existence, because it has never happened that any undertaking has been compelled to change its frequency by the Commissioners under the Act of 1919. What has happened is that there are various undertakers who have seen financial profit to be gained by changing their frequency. They have then applied to the Commissioners because it was a profitable thing to do and have obtained that leave and carried out the change they desired. I have no doubt that their business acumen will be justified in the result. But why they should be in a different position from any other undertaker who always had the frequency 1175 which is to be the standard one and did not have to change over—why they should be in a different position from other undertakers I do not see. In order to benefit not one area but all areas, not one undertaker but all undertakers, there is to be a change in certain specified areas. Therefore, it is fair that the cost of effecting the change against the will of the undertaker in the one area shall be equally borne by all the undertakers. If that be a logical proposal—and the House has already accepted it—there can be no reason for saying that out of all the undertakers who are to benefit by the change those undertakers who happen to have started with the wrong frequency and have had to change over should have no share in the cost to the community as a whole. The only question is how ought you to spread the burden of changing frequency where you are compelling it to be changed over for the purpose of the scheme? The view we take is that it should be spread over.

§ Mr. ATTLEE
I am glad that the Attorney-General is resisting this Amendment. We all know that there is more joy over one sinner that repenteth than over 99 just persons, but I do think that there is a little hardship on the just persons under this Bill. I am a member of a local authority where we have always had the right frequency and we are prepared to assist in bearing the cost. I think, however, it is simply outrageous that we should be asked to pay for the mistakes of these other people. We may have to do it in this case, because it is a matter of necessity, but that we should have to go back to past mistakes and reward them is perfectly outrageous.

Mr. HERBERT
The hon. Member for Limehouse (Mr. Attlee) can scarcely have realised the alteration that has been made in the Amendment before the House. We are not asking that those who have changed their frequency should be paid the cost of making the change, but merely that they should be relieved of their proportion of the cost of making the change in the case of other undertakings. It must be obvious to the hon. Member that the amount of benefit which an undertaking which has made the change already will receive under this Amendment must be very much less than 1176 the cost of making the change, which would have been paid to them if they had made it under this Bill.

§ Mr. ATTLEE
Does not the hon. Member also realise that the benefit to those who have made the change will be a great deal less than the amount they have to pay for the mistakes of other people?

Mr. HERBERT
I think it is quite clear that the hon. Member's suggestion that this is outrageous is ridiculous—if we are to use words of that kind. But may I come to the Attorney-General's arguments against this Amendment? They are, if I may say so with respect, as clever as we should expect them to be from him, but if a perfectly plain man may try to state the matter in perfectly plain words, the real fact is that in resisting this Amendment he is proposing to handicap very severely indeed those who have had the foresight to do what he is proposing to force other people to do and is going to pay them to do. That is a perfectly simple proposition, and I think, as a matter of pure equity, that the ordinary man in the street is much more likely to sympathise with this view than to adopt the somewhat elaborate argument of the Attorney-General. There is one question I would like to have answered from the Treasury Bench. I understood the Attorney-General to say that no undertakings had made this change under compulsion. A few minutes before that the Minister of Transport, when Ealing was referred to, interjected the observation that they were doing it under compulsion.

§ The ATTORNEY-GENERAL
No; the Minister of Transport said just the opposite. He said they were not doing it under compulsion.

Mr. HERBERT
Then I apologise. If those people who have made the change have made it for good business reasons, surely that is not an argument for penalising them. The object of this Bill, I understand, is to improve the business of electrical undertakings generally, and it is a poor sort of encouragement to those engaged in the industry if the man who fails to do the right thing is to be made to do it and to be paid for doing it, whilst the man who has done the right thing is left to bear the expense of it 1177 himself. I can only sincerely hope that if, under the peculiar circumstances of this House at the present time, the Government successfuly resist this Amendment, that when the Bill eventually does become law it will be found to have received a greater measure of equity and justice in another place.

§ Mr. HARDIE
The hon. Member for Hulme (Sir J. Nall) made a reference to Ealing a few moments ago. Happening to be a practical man, I have been requested by a number of people in Ealing to bring forward the case of Ealing in relation to this point. The change there will be made in sections, and all lamps and plants on consumers' premises will be changed free of cost. The Attorney-General has said already that that will not come into the purview of this Bill, but what the Ealing people who have written to me are concerned about is what is to happen next? A deputation of Ealing people came to me in the Lobby to ask whether, after the change had been made, there was any likelihood that they would be compelled to make yet another change, because in that case the cost was going to prove pretty heavy. Mr. J. D. Knight, the Borough Electrical Engineer of Ealing, has given the assurance that the cost of everything to the individuals concerned is going to be met by the Council, but there will he the cost to the ratepayers generally. Though I do not represent Ealing, I have been asked by the Ealing people—I have the misfortune to live in Ealing, and to be misrepresented there—to put this point, that if there is to be another change-over in frequency in the course of another year or two, the rates in Ealing will certainly go up.

§ Sir H. NIELD
I have listened with amazement to a cunningly devised speech which should try to assume, or lead this House to assume, that I am oblivious to the wants of my constituents— —

§ Mr. HARDIE
Not at all.

§ Sir H. NIELD
—and that Ealing has to depend upon the activities of the hon. Member for Springburn (Mr. Hardie), whose own Division, I should have thought, ought to be quite sufficient for his activities. Some weeks ago I had occasion to meet the Chairman of the Electricity Committee of the Town Council 1178 of Ealing, and it was I who asked him whether or not the Council had any views on this Electricity Bill which they desired me to put before the House. Some time afterwards I received from the Town Clerk a letter, which I have here, in which he said he had no communication to make to me other than to ask me to support the recommendations of the Association of Municipal Boroughs. Therefore, any interference on the part of the hon. Member for Springburn is totally—

§ Mr. HARDIE
On a point of Order. I want to know if it is in order to say that it is interference by an hon. Member when he brings before the House a point which he has been requested to put forward—for though the point concerns the people in one particular part of the country, it is a question of national interest we are discussing? I have the misfortune to live at 55, Barnfield Road, Ealing, and I submit that it cannot be said that I am interfering, or "shooting my neck out" as he calls it, though it is a strange thing that a Member for Scotland has to be appealed to to get things attended to in England.

§ Mr. DEPUTY-SPEAKER (Captain FitzRoy)
It appears to me that the whole of this discussion is entirely out of order.

§ Sir H. NIELD
I repudiate as warmly as a human being can repudiate the suggestion of the hon. Member for Spring-burn, and I question his authority to mention the case of Ealing in this House.

§ Mr. HARDIE
I wish to protest against—

§ Mr. DEPUTY-SPEAKER
This point is not relevant to the Amendment.

§ Mr. HARDIE
Might I be allowed to read to the Members of the House one letter only which I have received on this question, and I will give the names and addresses?

§ Mr. DEPUTY-SPEAKER
The hon. Member must select another occasion.

Sir F. HALL
I am a little disappointed that the Attorney General is not in a position to accept his Amendment in its modified form. The right hon. and learned Gentleman said that those who had received benefit from standardisation of frequency should pay. May I point out 1179 that some of these people are not receiving any benefit at all because they have to change their frequency, and the standard will probably be that which has already been referred to. If those who are to receive the benefit have to pay how about the authorised undertakers who have decided the frequency which is to be adopted? Those who have in operation the same frequency which is to be standardised are not going to receive any benefit at all. I suggest that those who have the frequency in operation which has been accepted as the standard should not be called upon to pay.
I am rather surprised that a Government such as we have in power at the present time should turn a deaf ear to the suggestion which has been made in this Amendment, because I have always recognised that the present Government is prepared to act honestly and justly by all parties. Therefore the manner in which this Amendment has been received is rather disappointing to many of us, as it lends colour to the idea that the whole of this Bill is nationalisation or tending towards it; at any rate it is a first cousin if it is not actually nationalisation. Therefore, I think that the proposal contained in this Amendment might be accepted. This is one of the most reasonable Amendments which could he brought forward, because we are only asking that those who are not going to have any benefit shall not pay.
Amendment negatived.
Amendment made: In page 11, line 28, at the end, insert the words (c) Where a scheme under Section four of this Act has come into force as respect any area, the powers of the Electricity Commissioners under Section twenty-four of the Electricity (Supply) Act, 1919, so far as they relate to the amendment or alteration of frequency, shall not he exerciseable within that area."—[The Attorney-General.]

§ Sir J. GRANT
I beg to move, in page 11, line 28, at the end, to insert the words (c) no authorised undertaker from whom any tramway company derives a supply of electricity for the purposes of haulage or traction, shall be required by the Board to alter the frequency of the supply delivered by them to the tramway company unless and until regulations have been previously made by the Minister of Transport authorising the use of electricity of such altered frequency on the undertaking of the tram- 1180 way company, which regulations the Minister of Transport is hereby authorised to make in like manner as any regulations which may be made by him with reference to the working of the traffic on the said undertaking by electrical power. I hope that the Attorney-General will be able to accept this Amendment, the object of which is to secure that tramway companies shall be treated in the same manner as railway companies.

§ Mr. BALFOUR
I beg to second the Amendment.
I think a similar Amendment to this has already been accepted with regard to railways. In many districts on the North-East Coast and in the Clyde Valley there are a number of rotary converter machines operating at 40 cycles and 25 cycles which will all have to be changed unless this Amendment is accepted. A similar proposal to this has been accepted for the same reason in the case of railways.

§ The ATTORNEY-GENERAL
I think this Amendment is quite unnecessary. It is true that there is special treatment in regard to railway companies because they are already under statutory obligations with regard to changes of frequency, and that fact has to be recognised and safeguarded. I would like to point out, however, that tramway companies are under no such obligation, and in nearly every case the tramway company works on a direct current, and, therefore, no question of change of frequency arises.

§ Mr. BALFOUR
There is one railway at any rate which works on alternating current carried on overhead wires although in other cases the current is converted from the alternating to direct current.

§ The ATTORNEY-GENERAL
I am not sure how many of such railways there are but at any rate special provision is made for them under the Railway Act.
Amendment, by leave, withdrawn.