§ Mr. WOMERSLEYI beg to move, in page 39, to leave out lines 12 to 39, inclusive.
The object of the Amendment is to leave unimpaired the existing statutory Regulations With reference to the application of the revenue arising from electricity supply undertakings owned by municipal authorities. Under the Act at present in force, the Electric Lighting (Clauses) Act, 1899, provision was made for certain divisions of revenue as follow:—(a) In payment of working and establishment expenses and maintenance costs; (b) In payment of the interest or dividend on any mortgages, stock, etc.; (c) In providing any instalments or sinking fund required for repayment of burrowed money; (d) In payment of other expenses. Then it provided for the creation of a reserve fund, if those operating a particular municipal undertaking thought fit to accumulate it, at compound interest, until the fund amounted to one-tenth of the aggregate capital expenditure on the undertaking, and any net surplus in any year was to be carried to the relief of local rates, or, at the option of the undertakers applied for the improvement of the district or in reduction of the capital money borrowed for electricity purposes. It was provided, also, that if the surplus in any year exceeded 5 per cent. per annum on the aggregate capital expenditure the undertakers should make such a rateable reduction in the charge for the supply of energy as in their judgment would reduce the surplus to that maximum rate of profit. Certain municipal authorities contend that those provisions were quite enough to safeguard the interests of all concerned. The present Bill seeks to alter that, first by limiting the amount which may be applied in aid of the local rates in any year to a maximum of 1½ per cent. of the aggregate capital expenditure on the undertaking, and, after the 31st of March, 1930, by prohibiting any payment in aid of the local rates 1398 unless the reserve fund amounts to more than one-twentieth of such aggregate capital expenditure.
As one who has had considerable experience in the working of municipal electrical undertakings, I submit that the old provisions were ample protection both for the ratepayers and the consumers, and I would ask the Minister of Transport whether his Department has received any complaints as to the manner in which these provisions have been carried out in the past. In point of fact, ratepayers have complained that in the case of certain authorities, where the engineer in charge has had more control than the committee themselves, no relief has been given to the rates at all, and in this connection it ought to be remembered that in many cases losses were incurred in the early stages of municipal undertakings and had to be borne out of the rates. Further, even where there were no losses, the credit of the ratepayers was pledged to raise the capital necessary to carry on the station, and surely the ratepayers have some right to relief in cases where, according to the provisions as laid down in the Act, there was ample with which to give relief. It is contended that this prohibition against passing any profits to the relief of rates is one that is not equitable as between the ratepayer who is not a consumer of electricity and is therefore, in no sense a partner in the concern, and those who are consumers. I hope the Attorney-General will say whether he has received any complaints as to the working of the system and tell us why this change is proposed. Many of us think that it is something that ought not to be included in the Bill
§ Colonel ASHLEYThe question the House has to decide is what is going to be done with the net surplus remaining in one of these undertakings during the year. At present the position is that the surplus may be placed to the credit of the local rates, then to the improvement of the district or in reduction of capital moneys borrowed for electricity purposes, then after that a small sum may be allocated to reduction of charges for electricity in the district. We propose to reverse the position, and instead of making a reduction of the local rates the first charge, 1399 we want to make the first charge a reduction of charges for the supply of energy. I think the House will agree that that is fair and right. We are dealing now with an Electricity Bill, the object of which is to cheapen electricity. We say that the first charge on the benefits which are received from this Bill, on the net surplus, should go to the consumers who provide the profits, and not to the local rates as heretofore. We have taken steps in the Bill to restrict the profits of the company so that the consumer may be protected, and the House will think it only fair and right that the consumers should get the benefit of the Bill and not the ratepayers as a whole.
§ Mr. ATTLEEI am glad the Government are resisting this Amendment. It has been put forward as a special desire of municipalities in general. There is, however, a division of opinion, and I think the better point has been put by the Minister. It is rather a pernicious form of indirect taxation. It is favouring those other forms of power at the expense of the electricity users. I think that is thoroughly unsound. It is capable of all sorts of manipulation. In London, where, we have triennial elections, it has happened that the party in power, just at the end of their term, in order to make a good impression, have raided the electricity undertaking and claimed credit for a reduction of rates. That is a most, undesirable thing. I hold that the principle pot here is perfectly correct, that the sound thing is to apply it to reduction of prices, to an extension of the undertakings and only then, and then to a limited extent, to aid the local rates. The losses are extraordinarily few, taking the country as a whole, and have mostly been made up long ago. The sound municipal principle is embodied in the proposals set out here.
Mr. SANDEMAN ALLENI am not prepared to say whether or not, on the whole, throughout the whole country, this may be wise or otherwise, but I am perfectly certain, speaking for the city I represent, that it would be a very great mistake. We have in the last two or three years given to our ratepayers £120,000 a year back in connection with the electricity undertaking. It has been a very valuable thing to the ratepayers 1400 generally. We have supplied the poorer houses in the community with an electricity supply. We feel it is not right to lay down a hard and fast rule. Progressive municipalities should be able to exercise their own judgment. I do not ask for the elimination of the whole Clause, but the matter might well be considered before the Bill goes forward, and I hope it will be realised that it interferes materially with the very careful foresight of certain municipalities concerned in these matters. I would also point out the argument that the whole undertaking has been rendered possible and carried out owing to the credit of the whole of the ratepayers in the city, and they are surely entitled to reap some reward for their energy and foresight. It seems to me that this Bill in certain cases is going to make general ratepayers suffer in a way that is hardly fair.
§ Amendment negatived.
§ Mr. ATTLEEI beg to move in page 39, line 32, to leave out the words "aggregate capital expenditure on," and to insert instead thereof the words "outstanding debt of."
This Amendment is intended to put back the position to what it was before this Bill was introduced. In Committee upstairs the words "aggregate capital expenditure" were substituted for "the outstanding debt." The effect is to give power to a municipality to add a larger amount in relief of the rates. Those who represent the Incorporated Municipal Electrical association are of opinion that it would be wiser to take the outstanding debt. In one case aggregate capital expenditure was £1,500,000 and the outstanding debt was £900,000. This seems to be opening the door too widely for making an electricity undertaking the milch cow of the municipality.
§ Mr. HARDIEI beg to second the Amendment.
§ Colonel ASHLEYI agree that second thoughts are best, and the Government are able to accept this Amendment.
§ Amendment agreed to.
§ Mr. ATTLEEI beg to move, in page 39, line 38, to leave out the words "such aggregate" and to insert instead thereof the words "aggregate expenditure on the undertaking."
§ Amendment agreed to.
§ Amendment proposed: In page 39, to leave out line 40.—[Mr. Viant.]
§ Mr. ATTLEEThis really is an invasion of the right of municipalities to deal with their own highways. It is not very germane to the Bill, but there is a strong feeling that this particular part of the Schedule should come out.
§ Colonel ASHLEYThe Government think that this is not quite so reasonable an Amendment as it might have been, but on the whole there is a, considerable body of opinion in favour of it, and we are prepared to accept it. On the whole I think it is best to trust the local authorities as much as possible.
§ Amendment agreed to.
§ Mr. FIELDENI beg to move, in page 39, line 40, at the end, to insert the words
s. 20. After the words 'electric signalling communication,' wherever they occur, there shall be inserted the words 'or electrical control of railways.'In the Act of 1889, protection was given with regard to signalling on railways. Since that date very material improvements have taken place in the system of signalling, and it is considered by those who have to deal with this matter that in the new Bill these words would not cover the same protection that they did in the Act of 1899. An Amendment was moved in Committee with the object of bringing about this desirable result, but the words of the Amendment were objected to by the Government as being too wide. This Amendment is drawn up with the object of meeting, as far as we can, the views of the Government. I do not think it is necessary for me to enlarge upon the question beyond that.
§ Major GLYNI beg to second the Amendment.
§ Colonel ASHLEYIt is quite true, as my lion. Friend says, that an Amendment was brought forward in Committee and was withdrawn until we had further considered the position. We have now given further consideration to it, and find that the protection outlined in this Amendment is justified. Accordingly, we are prepared to accept it.
§ Amendment agreed to.