HC Deb 13 December 1934 vol 296 cc689-701

10.48 p.m.


I beg to move, in page 5, to leave out lines 20 to 33.

I think it will shorten the proceedings if, in moving this Amendment, I explain it, and most of the subsequent Amendments on the Paper dealing with a group of questions which I know the Minister has been considering since the last sitting of the Committee. The main point with which these Amendments are concerned is that the supply given to railway companies for traction purposes should not be used for any other purposes for which ordinary supplies are now being given or may hereafter be given such as lighting and use in workshops, docks and harbours, and other purposes which are relevant to the local supply, but not really traction purposes. Perhaps if the Minister would indicate, as I think he endeavoured to indicate at the last sitting of the Committee, that he hopes to consider this subject before the Export stage, I need not take up time in moving these Amendments separately. It would also be convenient if he could give us some information as to what will be the position regarding existing traction contracts—whether he intends that the Board should be in the position to take over existing traction supplies under existing traction contracts; or whether it is his intention that those should be preserved. I raise these important matters without going into detail, and, if the hon. Gentleman will give me some reasonable assurance, I will ask those associated with me in these Amendments not to pursue the matter to-night.

10.51 p.m.

The Minister of TRANSPORT (Mr. Hore-Belisha)

My hon. Friend has raised matters of great and far-reaching importance in connection with this Clause. He wants to be assured—and that has been the purpose of all the Amendments on the Paper I think—that authorised undertakers shall not be deprived of their ordinary legitimate business because of the power which we confer on the board to supply railway companies direct for traction purposes. I do not think he would contend that it was unreasonable if electricity supplied by the board for traction purposes were used for the ordinary purposes of the railways, such as lighting, heating, signalling, shunting, and so forth. But I can see the force of the objection which he has in his mind to electricity so supplied being used, let us say, for the purpose of lighting hotels or offices, or other premises belonging to the railway companies. I can, indeed, see that there would be cause for complaint if under cover of this Clause electricity supplied for traction and ancillary purposes were directed to these other purposes. I do not know whether I am able to cover the whole of the hon. Member's objection, but because I see the force of it, I will undertake to try betwen now and the Report stage to discover an Amendment which would meet his point, and which, as he says, would free him from the necessity of moving the numerous other Amendments on the Paper. I hope it will be possible between now and the Report stage to meet that point, I will not say in every detail, but at any rate in principle.

With regard to the hon. Member's other argument, that nothing in this Clause should be allowed to interfere with any contract which may be subsisting, contracts under which existing authorised undertakers give supply to railway companies for purposes of traction and haulage—I can on that point positively assure him that no power is given under this Clause to break any existing contract. I think that these are the two assurances which the hon. Member requires of me and I am glad to give them, I hope in a manner which meets with his satisfaction, and which will make it unnecessary for him to move the other Amendmnets to the Clause. I am much obliged to the hon. Gentleman for having so early in the discussion put these two questions to me, and I hope I have satisfactorily answered them.

10.55 p.m.


I am obliged to my hon. Friend, because he has made the position clearer. He will appreciate that other hon. Members may take a different view and that I can only suggest what course should be pursued, but what he says goes a long way to meet what I have in mind. There is an Amendment at the bottom of the page regarding compensation for existing supplies which may be discontinued, and perhaps we ought to see on the Report stage what kind of Amendment will be acceptable to my hon. Friends on that matter, because where a supply exists to-day, although the contract in fact may not be broken immediately, it may contain a provision which would lead to a discontinuance of the supply and leave the undertaker stranded with his plant. So far as I am concerned, I do not wish to pursue the matter further, subject to the reservation which I have made.

10.56 p.m.


I am sure we can only welcome the courteous offer of the Minister to consider before the Report stage the important issue raised by my hon. Friend opposite. I would only express the hope that he will not, on the one hand, go into so vexed and contentious a question as the giving of compensation when an ordinary business contract comes to an end, whether a railway company changes from one undertaker to another, or from an undertaker to the board, because that would raise an untenable line of argument. In the same way, I am sure the Minister will carefully consider that nothing shall arise under this proviso under which the legitimate interests of undertakers should be damnified by a railway company drawing from the grid electricity for other purposes than those directly ancillary to railway traction, yet I hope, on the other hand, he will not do anything to prevent, where convenience makes such a course desirable and where no injury arises to any undertaker, such a thing being done. I should have thought the proviso as it stood gave effective protection to undertakers in respect of these matters, and that the consent of the Minister would clearly not be given if injury would be caused to undertakers. I hope the Minister will not do anything to restrict the most convenient use of electricity for the purposes for which it may be wanted, as long as no injury is caused to the undertakers.

10.59 p.m.


I have on the Paper an Amendment, on page 6, line 2, at the end, to insert: Notwithstanding anything in this section where, at the passing of this Act or any time thereafter, electricity is supplied by authorised undertakers to a railway company for purposes other than the haulage or traction of vehicles or for the lighting of such vehicles, no electricity supplied under this section shall be used in the area of supply of such undertakers for the purposes for which electricity was supplied by them to the railway company except with the consent of such undertakers, so, however, that such consent shall be deemed to have been given if on the application of the Board the Electricity Commissioners determine that the withholding thereof is unreasonable. It is very much more limited in its scope than are those of my hon. Friend, and it appears to be covered by the undertaking of the Minister, and, subject to that undertaking, I should not propose to move it, but while he is considering the matter between now and the Report stage, I would ask if he will not consider whether my Amendment does not go a very long way to meet the point. He spoke of existing contracts, but it is not entirely a question of existing contracts; it is a question of existing sources of supply. A contract may come to an end, and an undertaker may still be left with his plant and so on without the opportunity of making other contracts. The point is a limited one, but I hope the Minister will consider the wording of my Amendment.


In reply to the right hon. Member for Sparkbrook (Mr. Amery) we must remember that under the existing law railways must be supplied at cost price. This Clause deals with the case of railways being supplied by arrangement at something less than cost price. There must be some limit of this extension of the system of supplying at less than cost price, otherwise it will react on anybody else.

11.1 p.m.


I hope the Minister will keep in mind that the kind of proposal which is made in the Amendments put down by my hon. Friends seeks to give perpetuation of contracts to individual undertakers. That does not happen in ordinary life. There is no right to a perpetual contract on the part of any person, as far as I know, in ordinary business, and it is an unconscionable suggestion that contracts between the railways and electricity undertakers should be perpetual. If people who are interested in electricity really consider their own interest, I hope they will realise that there are other forms of power than electricity. Every temptation ought to be given to the railway companies to move by electricity rather than by other forms of power, but let me remind my hon. Friends that even steam has still great potentialities, and new uses are being found for it which, if they are more economical and more adjustable, will be widely taken up. There is also a form of traction, which is very well known now, by Deisel engine. It offers great attractions to the railway companies, and if people who supply electrical power are going to be oblivious to their real interest, and it is made difficult for the railway companies to take electricity, I am afraid they will be forced to take up other forms of power which are available to them. I advise my friends to adopt a spirit of more sweet reasonableness in this matter than they appear to be doing, and I beg the Minister to keep in mind these suggestions when considering this matter.

11.3 p.m.


I am glad that the question of the consumer has been mentioned. The consumers in question on the railways are the travelling public. They are those who do not travel for pleasure but who are commercial travellers who use the railways and the hotels run by the railways. They live away from home in these hotels for a great part of their working week. The expenses to which they are put in travelling are a heavy item to business men. The hotels kept by the railways are not primarily pleasure hotels, and I hope that the Minister in considering the claims of the various undertakers will not feel himself to be bound to consider any particular undertakers, but will as far as possible supply cheaply the needs of the British travelling public.

11.4 p.m.


There is a matter arising out of what my right hon. Friend the Member for Hillhead (Sir R. Home) has said that I should like to put to the Minister. We agree that normally when a contract comes to an end, there is no onus upon the other side to renew it, but we would draw the attention of the Minister to the fact that in 1926 settled principles were laid down, as the undertakers were led to think, for very long periods. Consequently they undertook great capital expenditure. It is hardly fair of Parliament to alter these principles without considering some measure of compensation to them when they are superseded through no fault of their own. It is not so much on the contract that we base our claims, but on the fact that the undertakers have been led to put their plant down under the principles of the Act.


I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

11.5 p.m.


I beg to move, in page 6, line 19, at the end, to add: (5) Where the Central Electricity Board give a direct supply of electricity to a railway company under this Section, the provisions set out in the Fourth Schedule to the Electricity (Supply) Act, 1926 (which relates to compensation for deprivation of employment), shall, with the adaptations hereinafter mentioned, apply in relation to officers and servants of the railway company as they apply in relation to officers and servants of authorised undertakers. The said adaptations are as follows, that is to say—

  1. (a) for any reference to authorised undertakers there shall be substituted a reference to the railway company or, where the context so requires, to any railway company;
  2. (b) for any reference to the closing, or the imposition of restrictions on the working or use, of a generating station, there shall be substituted a reference to a generating station which belongs or belonged to the railway company ceasing to be used to generate electricity for the railway company, or to be so used to the same extent, and any references to the acquisition of a generating station or the whole or part of a main transmission line shall be omitted;
  3. (c) for the words 'under or in consequence of this Act,' wherever they occur, there shall be substituted the words 'by reason of the giving of the direct supply of electricity by the Central Electricity Board to the railway company.' "
This Amendment is in keeping with the terms of the Electricity Supply Act, 1926, under which authorised undertakers were permitted to compensate, in one direction or another, persons who became redundant through the closing down of an electricity station. We are now asking that the same provision should apply to railway companies who may close down generating stations in order to take their electricity from the Central Electricity Board. It will be the railway companies who will close down the stations and not the board. We ask that the provisions of the Bill shall be extended so that the Fourth Schedule of the Act of 1926 may apply to railway companies. It may apply only to a limited extent, but it is a provision on which we place great store, and I understand that it has been sympathetically received by practically all concerned. All we ask is that railway officers and servants who lose their employment through the closing down of these stations shall receive compensation. That would be in keeping with the provisions of the Act of 1926. It is a reasonable request and I shall not take up more time in putting it forward, because if the Minister accepts the Amendment I am sure that the railway companies will do all they can, in common fairness to their employés, to give them the same satisfaction as is given to redundant employés of authorised undertakings.

11.8 p.m.


I beg to support the Amendment. The principle which we ask should be accepted has been established on two or three occasions, namely, in the Railway Act, 1921, in the Electricity Supply Act, 1926, and in the London and Passenger Transport Act, 1933. This Bill proposes to supply electricity to a railway company under a single contract covering the whole system, and we are convinced that the effect of that will be to make redundant men who are at present employed in railway generating and sub-stations. In winding up the Debate on the Second Reading the Minister said: There is a compensation Clause in the Bill and I think it has been clearly shown…that there is no generating station on a railway that is likely to be closed down."—[OFFICIAL REPORT, 29th November, 1934; col. 1134, Vol. 295.] I would draw attention to the fact that the compensation Clause referred to is only for the officers and servants of authorised undertakers, and does not affect any of the officers or servants of a railway company. Secondly, I believe the Minister will admit that there is a chance of a good number of stations being closed down, and of railway employés being made redundant or having the conditions of their employment adversely affected. I have one or two examples during the last two or three years which I should like to give to the House. The Great Western Railway have closed down a power station at Fishguard; the London and North-Eastern Railway have closed down power stations at Methil, Stratford, Woodford and Leicester; and the London Midland and Scottish Railway have closed power stations at Clifton and Glasgow Central. In connection with the closing of the power station at Woodford, the London and North-Eastern now obtain their supplies in bulk from the Northampton Power Supply Company. At Stratford they obtain supplies from the West Ham Corporation, which obtained authority to supply from Parliament. At Glasgow the London Midland and Scottish Railway obtain supplies from the Glasgow Corporation. Some of the men displaced were found employment, many of them at a reduction of wages amounting to as much as £1 per week. Some of the men lost their work entirely. Because of that we are very anxious to protect as far as possible the position of redundant men or those who will be adversely affected. There are many places where stations may be closed, and those of us who are closely associated with the men want to do everything in our power to help them. We believe that we have a sympathetic Minister and House on this occasion.

According to the returns of the Electricity Commissioner, there are electricity generating stations on the Great Western Railway at Fowey, Park Royal, and Port Talbot, employing a staff of 114 men, on the London Midland and Scottish Railway at Formby, Stonebridge Park, Derby, and Oakham, employing a staff of about 470; on the London and Northern Eastern Railway at Immingham, Parkeston Quay, Mallaig, and Silloth, employing a staff, and on the Southern Railway, at Durnsford Road, with a staff of 310. The Mersey Railway has a generating station at Birkenhead employing a staff of 28. The London Passenger Transport Board have generating stations at Greenwich, Lots Road, and Neasden, employing a staff round about 944 men. I believe the total staff in railway generating stations and substations is about 2,000 men. In finishing his Second Reading speech the Minister said that the House felt that no injury was done to anyone by giving the Bill a Second Reading, but I ask the House to remember that a number of the men who will come under the Bill will be 60, 55 or 60 years of age. Our experience is that the men who become redundant stand very little chance of getting employment in industry. I hope that the Minister in the goodness of his heart will be prepared to accept the Amendment.

11.15 p.m.


The speech of the hon. Member who has just sat down makes it necessary to be quite clear about the principle which underlies this Amendment. It introduces an entirely indefensible and impossible principle to suggest that, whenever a commercial undertaking, whether in connection with electricity or in any other connection, so reorganises its work as to economise labour—if, for instance, a steel works ceases to generate its own electricity and purchases electricity from an authorised undertaker, or a railway company wishes to concentrate its works in one place rather than in another—that should form a ground for compensation laid down by Parliament. The only reason, as I understand it, why compensation is included in this Amendment—and I do not object to it here—is that, in so far as the giving of a direct supply of electricity by the Central Electricity Board to railway companies, under paragraph (c) of the Clause, is an extension and modification of the conditions laid down in the Act of 1926, it is only in the event of this particular specific statutory alteration displacing labour or staff that any question of compensation could arise. As I ventured to say on the Second Reading, as far as I know in the case of the Southern Railway, as the electricity is already drawn direct from the grid, no conceivable change of organisation or case for compensation will arise. I do not consider that the Amendment is likely to make any substantial difference, and should not see any objection to it as long as it is clearly understood that the compensation is strictly confined to that which may arise directly out of a change in the law introduced in Clause 4 of this Measure.

11.18 p.m.


It is true that the employés of authorised undertakers who are displaced as a result of the provisions of the Electricity (Supply) Act, 1926, can claim compensation, and the purpose of this Clause is to give a similar right to employés of a railway generating station who may be displaced as a result of the railway company taking supplies direct from the board. We have heard from my right hon. Friend the Member for Sparkbrook (Mr. Amery) that the railway companies have no objection to the acceptance of this principle, being anxious, as we know they all are, to be perfectly fair to their employés. In these circumstances I see no reason why this Amendment should be resisted, and I have much pleasure in accepting it.


I should like to thank the Minister for his favourable consideration of this matter. I am sure it will give great satisfaction to the people concerned.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

11.19 p.m.


Before the Committee part from this very important Clause, there is just one point on which I should welcome the guidance of the Minister. This question of the supply of electricity to railways through the Central Electricity Board may well prove to be the basis of important developments in the future, and I think the House should be rather careful before it parts with the Clause, on a certain matter of finance.

I want to put to my hon. Friend the question of the interest and sinking fund upon the cost of the grid and the manner in which it would be borne should this Clause stand part of the Bill. If the system proposed under the Bill be adopted, it will be possible for the Board to sell a supply to railway companies remuneratively without passing on this overhead charge of interest and sinking fund. If that were the case, that charge would naturally be borne by someone else and that someone else, no doubt, would be the consumer. I hope I am wrong in my reading of the Clause but in any case we have to be careful that we do not set up a system under which, whenever concerns like railway companies seek statutory powers, they would be able to quote this Bill as a precedent for passing on an unfit overhead charge like that right over the heads of the railways or whatever it might be to the consumer. I do not want to make anything on the point that has been urged by some of my hon. Friends that this is a Socialistic Measure. The right hon. Gentleman the Member for Hillhead (Sir R. Home) said it left him perfectly cold whether it would or not. It leaves me equally cold so long as justice is done in a matter like this to the consumer. In the days in which we are living, of a National Government, that is not a very good argument that, because some proposal in some particular text book comes within the ambit of one of the 429 different definitions of Socialism at present extant, it is a bad thing for a Government containing Conservative Ministers to adopt. The 1926 Act lays down very clearly the intention of Parliament that this procedure is not to be adopted. This Clause is a direct reversal of that Act and, when we recall that there was an Amendment moved when that Act was going through the House on behalf of the railway companies to do this very thing which was resisted by the then Attorney-General, the present Secretary of State for War, we should be quite clear upon this financial point and I should be very grateful if my hon. Friend would say a word on it before we part with the Clause.

11.24 p.m.


The matter that the hon. Member raises has been discussed at some length on earlier stages of the Bill. Perhaps I should give the most concise answer by drawing his attention to the first Sub-section of this Clause and to the first proviso. He will there see that the Central Electricity Board may supply electricity direct to any railway company upon such terms and at such prices as may be agreed, provided that the Commissioners are satisfied that the price will not result in any financial loss to the Board. Therefore, I do not think he need fear that this Bill will be used as a precedent for other boards subsequently to be constituted selling their supplies, whatever they may be, at a loss without any regard to the charges that they may have to meet for interest or sinking fund. I do not think there are any words in this Clause to justify his apprehension, and I trust, brief though my answer may have been, that it gives him the satisfaction that he asks.

11.25 p.m.


I hope that my hon. Friend the Member for Hillsborough (Mr. Braithwaite) will forgive me adding to the answer which has been presented by the Minister. I did not say that it left me cold whether it was a Socialist Measure or not, but that the argument that it was a Socialist Measure left me cold, because this was nothing more nor less than a matter of business. I would remind the Committee and my hon. Friend who asked the question so courteously, that the argument proceeds as if the railway companies were already customers of these various undertakers for electricity and that all railway companies were having a large supply of power for traction from those various electrical undertakers. There is nothing of the kind. There is only one railway company which has a supply which is appreciable. If you wish to get other railway companies as customers, you have to tempt them just as any other person with something to sell has to tempt purchasers. It is no good putting up conditions which are going to be repulsive to us and are not attractive. If either the Central Electricity Board or the undertakers along with them are able to make the supply of electricity attractive to the railway companies they will be doing something for the whole electricity industry in this country. But if the railways choose to take some other form of power, by so much will be diminished the amount of electricity which will be required for power in this country. On the other hand, if they make their conditions such as to attract all railways to come in for large supplies of power, the overhead costs of all electricity undertakings in this country will be reduced and everyone will benefit. That is my answer to the question of my hon. Friend with regard to the result to the consumer. He can only benefit from the fact that large supplies are being taken and consequently that costs are being assisted.


When that happens, it will be a very good thing for everybody, but under the Bill as drafted it is not likely to happen.

Clause 5 (Short title, citation, interpretation and extent) ordered to stand part of the Bill.