HC Deb 20 December 1934 vol 296 cc1369-77

4.36 p.m.


I beg to move, in page 4, line 14, at the end, to insert: Provided also that any such agreements which have already been entered into by the board shall not be extended beyond the original period for which these were made unless the. Electricity Commissioners are satisfied by the board in accordance with the provisions of this sub-section. I move this Amendment, which also stands in the name of my hon. Friend the Member for South West Hull (Mr. Law), and my hon. Friend the Member for South Croydon (Mr. H. Williams), and I hope that the Minister will be able to treat us a little more generously than he did on the last Amendment. It will, no doubt, be admitted that this is a reasonable proposal, as a number of these agreements are already in operation. It might be inconvenient to say that these agreements should not have been entered into at all, and that they should lapse, but I think that it is only reasonable that they should be reviewed when the present terms lapse. On the Committee stage an Amendment was made to the effect that the commissioners should review agreements made prior to the passing of the Act, and I think that they should not be extended beyond their original purport unless the commissioners are satisfied that they conform to the provisions of the Act. I move the Amendment in good faith and hope that the Minister will accept it.


I beg to second the Amendment.

4.38 p.m.


This is the Clause which enables the Board to stand behind the authorised undertaker who wishes to supply a special customer asking for exceptional quantities of electricity at a special price and under special conditions. We have opened to the review of the Commissioners such agreements in the future, and in the Committee stage my hon. Friend proposed that we should open up the existing agreements to review. I pointed out to the Committee how difficult that would be. I accepted an Amendment, it is true, on the first Clause in that sense, but when we come to Clause 2 a different principle is at stake, because we are concerned not only with authorised undertakers, but with industries who might be disturbed if they found that arrangements which they had made were to be submitted to scrutiny. My hon. Friends accepted at once the force of that argument and withdrew their Amendment upon the understanding that I would further consider the position to see if anything could be done to meet it.

My reflection did not lead to any practical or operative result, but I saw upon the Order Paper yesterday this Amendment, which says in effect that, if you cannot open up the existing agreements for review, for the reasons that you have stated, at any rate, you should subject them to review at the end of their period and before renewal. I have not taken legal advice on the exact word- ing of the Amendment, which seems to be reasonable and to implement the undertaking I gave to look into the matter again between the Committee and Report stages, and if it will satisfy my hon. Friends I shall be only too glad to accept the Amendment. I do not want to quibble with them about the words, but I can accept the principle upon the understanding that if the words should not quite meet the case, the sense of them will not in any way be changed, and the small alterations necessary can be made in another place. In those circumstances I should be ready to accept the Amendment.

Amendment agreed to.

4.41 p.m.


I beg to move, in page 4, line 44, after the words last inserted, to insert the words: Provided also that in the event of a refusal by the board to any application by an authorised undertaker for a supply as aforesaid the authorised undertaker may make representations to the Electricity Commissioners who shall consider the matter and if, in their opinion, such refusal by the board imposes hardship the commissioners may require the board to afford the supply required on such terms and conditions as they may direct, subject to the provisions of this section. This Amendment is based upon accepting the principle in the Clause. There are two views with regard to the desirability of the principle, but the principle having been accepted, there ought not to be any undue preference in this matter also. Therefore, if for any reason circumstances arise involving a case of exceptional circumstances where a rate at special terms is justifiable under Clause 2, the Board, in every such case, ought to be willing to give a supply, and if for any reason they refuse, there ought to be some appeal, and I suggest that the appropriate body of appeal are the commissioners. It is common knowledge that the board have acted in the past on the assumption that the power proposed in Clause 2 is the power which they already possess, I think that the fact that some doubts have arisen is the reason why Clause 2 has been inserted in the present Bill. They are already, in fact, granting these special terms.

Two or three days ago my attention was drawn to a case of an electricity supply undertaking. In this particular case the company had been approached by the municipality in an area in which they were the authorised undertakers, to supply a load on special terms in connection with some very large swimming baths. This was a most desirable form of electric load, because it was practically a steady demand all round the clock, which is the most desirable kind of load from the electrical point of view. This scheme was turned down by the Central Electricity Board, but I also understand that the Central Electricity Board, on the application of the local authority at Epsom, have recently granted exceptional terms where the supply is from the London and Home Counties Joint Electricity Authority, an organisation which, I think, is looked upon with peculiar affection. They have granted a supply on these exceptional terms for a housing estate in the Epsom area, although the load at Epsom is electrically not nearly so desirable as the load in respect of which permission was refused.

There may be another side to the case. One hears one side of a case and does not necessarily hear the other side. Superficially, however, this is a case where there has been an undesirable form of discrimination, and the authorised undertaker has no appeal against this decision which the board has taken in these exceptional circumstances. As this seems a very undesirable form of unfair discrimination—which I imagine conflicts with the overriding Section in the Act of 1882, but at any rate that is what has happened—appropriate words ought to be put into the Act so that if any authorised undertaker, whether company or municipal, feels that the case which they have put up has been improperly turned down, they should have the right of appeal to the Electricity Commissioners.


I beg to second the Amendment.

I have been supporting Clauses 1 and 2 all the way through, and this is the first time that I have supported any Amendments moved by my hon. Friends who sit near me. The Amendment appears to raise something which ought to be looked into, and I shall be interested to hear the reply of the Solicitor-General on the point that has been raised.

4.47 p.m.

The SOLICITOR-GENERAL (Sir Donald Somervell)

If in any particular case there were transgressions of the over-riding provision to which my hon. Friend the Member for South Croydon (Mr. H. Williams) referred, and preferential charges were in fact granted, that is dealt with under the old Act. I appreciate what my hon. Friends have said, but we cannot accept the Amendment, for this reason, that the Clause is a permissive one, enabling the board to stand behind an undertaking which is supplying electricity in special circumstances on special terms. That will be done by agreement, as in the past, and in our view the proper body, the only proper body, to decide as to the terms of these agreements must be the board. They are a body of business men who are entrusted by Parliament with the carrying out of these functions.

It may be said that some inroad has been made on that principle by the proviso as to financial loss, which has been inserted in deference to the views expressed in certain quarters. What the Amendment seeks to do is that in any case where the board thinks, whatever may be their reasons, that a certain agreement is not an agreement that should be entered into, there shall be an appeal of a very curious kind, to the Electricity Commissioners, whose functions are quite different from those of the board. To ask the Electricity Commissioners in such circumstances to say to the board: "You must enter into a contract on these terms," would be a most anomalous kind of appeal, and would be contrary to the principles of the Act in general and to this Clause in particular. The board is and must be the proper body to decide under what terms and in what circumstances they will enter into contracts under this Clause. I hope that that explantion will appeal to my hon. Friends.


What redress has an authorised undertaker in a case where he wants to grant a supply, and the circumstances seem desirable, and he believes that such a supply has been granted in another area? How can he take the appropriate steps to insure against the unfair discrimination which the Act of 1882 prohibits?


One can put border-line and hard cases if one assumes that a body like the board is not going to play the game. If there are cases where a person feels that there has been undue preference, he has a statutory remedy, and we do not think that it would be right to go beyond that. There may be hard cases in this as in other circumstances, but in this matter we want to enforce a principle and we believe that the principle is sound. To accept the Amendment would impinge upon that principle and would be inconsistent with the general scheme of the Bill.

4.51 p.m.


The learned Solicitor-General says that in these cases we must fall back on the "undue preference" provision of the old Act. At the same time, the Government try to maintain that there is no undue preference in the provisions of this Clause. The Solicitor-General talked about the business and functions of the board as though it were an ordinary business house entitled either to accept or to refuse business. It is nothing of the sort. Public utility companies are granted a charter, they accept their charter and proceed to set up their undertaking and to give supplies, and they are in duty bound to give a supply when consumers make a demand upon them. Therefore, if the board are empowered to make special agreements at rates which are variations from the general rates, it is only following the lines of general legislation that in turn the consumers who require a supply should be able to demand a supply on terms not less acceptable to them than to their neighbours in the same industry, although they may be in another area adjacent to the authorised undertakers.

I am surprised that the Solicitor-General should have adopted the attitude that he did. There are cases already of people who are in the same industry, particular persons of a particular class, who are getting an advantage over the rest of the persons in that class, although geographically they may not be in the same area. In order to get the safeguard against undue preference the Solicitor-General suggests that we should be satisfied with the long and involved procedure which would be necessary in order to get at the central board who are authorised undertakers all over the country and who must not give undue preference in any part of the country. It would be much simpler and would facilitate matters in many instances if consumers who found themselves placed at considerable disadvantage compared with other members of the same industry were enabled by this Amendment to say to the board through the Electricity Commissioners: "Here is a special case; here is something which requires special provision similar to the special provision you have already given to somebody in the same industry, either in the same area or in another area." I am at a loss to understand why the suggested procedure cannot be followed, and I hope that before the Bill is disposed of in another place the Solicitor-General will think again about this matter. Once the Government have adopted the principle of this Clause, the principle of the Amendment would seem to be a perfectly reasonable, essential and consequential change.

4.54 p.m.


We could accept the Solicitor-General's assurances the more readily if we knew on what principles the board would act. He speaks as though the board would make contracts on the same basis as business people do. The trouble is that we do not know whether there is any general principle at all behind the board's actions. Are they going to haggle with each individual and do the best they can with each. Even when the bargains are made we get no opportunity of seeing what has been done. We shall remain absolutely in the dark and simply be referred back to the 1882 Act for our undue preference remedy. This is not going to help the board in its work with corporations and companies any more than it will help the electrict power production industry.

4.55 p.m.


I listened to the speech of the Solicitor-General and, as one who is not a lawyer, I confess that I am still in a little confusion in regard to the situation. He said that on the case put up there should be an appeal but that an appeal to the Electricity Commissioners was something to which the Government could not accede.


I am not conscious of saying—if I did I gave a wrong impression—that I conceded there should be an appeal. What I did say was that the board was the proper body to decide these matters and that if there was to be an appeal the appeal suggested in the Amendment was a very odd sort of appeal.


I thank the Solicitor-General for his explanation. I did get the impression that I have stated. We are in a difficulty in this matter. What is the Statutory situation when dissatisfaction arises in the kind of case quoted in the Amendment? The Solicitor-General said that he hoped we were not accusing the board of not playing the game. I think he used the words "playing the game" in connection with the board's activities. One does not desire to use rash phrases about the board, but it is common knowledge that there has been certain dissatisfaction. Two cases were mentioned by my hon. Friend the Member for South Croydon (Mr. H. Williams), which I think occurred at Bournemouth and Epsom. We are told that there is reference to this matter in the Electric Lighting Act of 1882. Section 20 of that Act appears to be the section which gives such statutory appeal as there may be, and I will read it, because it is very relevant to this Amendment. The undertakers shall not, in making any agreements for the supply of electricity, show any undue preference to any local authority, company or person, but, save as aforesaid, they may make such charges for the supply of electricity, as may be agreed upon, not exceeding the limits of price imposed by or in pursuance of the licence, order or special Act authorising them to supply electricity. The difficulty that I am in, as one who is not a lawyer, is to find how under that section there is facility for any appeal with a view to any remedy being given.

4.58 p.m.


It seems to me that the position is highly unsatisfactory. I admit the complications and I do not pretend to think that I have grasped every detail in the Bill; probably very few people have done that. The principle underlying the Amendment is that, first of all, you have your special agreement, to which the board is a party, or it is very near to being a party to it. Then some outside person is aggrieved by this special agreement. What happens then? This outside person appeals to the board, which has already made the agreement. That seems to me a very unsatisfactory position. The Solicitor-General says that to clear up the matter you must go to law. We want to legislate not for the purpose of making it necessary for people to go to law but to make things easier without resort to the law, by inserting an Amendment whereby there would be an appeal to some other body, in order that there would be arbitration when people are aggrieved. For that reason I should think that the Amendment would relieve the board from the very difficult position of having to decide these questions themselves, and would allow the aggrieved person to go to the Electricity Commissioners. If we do that we shall be placing the board in a much better position in the long run. It will not leave anyone with a feeling that the board are judging a case in which they are themselves interested.

If the Minister cannot accept the Amendment, which to me seems a perfectly reasonable proposal and does what many of us consider the right and proper thing, I hope he will consider the question between now and the later stages of the Bill so that should any difficulty arise there shall be an appeal to some other body which is not in the same position as the board. It is unfortunate that the Government are not in a position to accept the Amendment. The Minister has been extremely kind and courteous, and if he would accept it—although it may not be favourably received by the Front Opposition Bench—it would be in the interests of the country as a whole. It would not reduce the powers of the board to any extent nor would they be in any less unenviable position than they are under the Bill at present.

Amendment negatived.